The new accountability revolution in government
The new accountability revolution in government
--------------------------
Marc Robinson
Technical Advisor
Badan Pengawasan Keuangan
dan Pembangunan (BPKP)
Jakarta
--------------------------
The first rule of business is to keep your customers happy. If
you produce products which are poor quality or too expensive,
you'll go out of business. If you produce products the customer
doesn't want, you'll go bust even faster. But for government,
it's been different. If a government agency produces a poor or
inappropriate service, so what? The funding comes from the
taxpayer, and taxpayers have to pay irrespective of the quality
of the service they receive.
But things are changing. There is a new accountability
revolution under way in the public sector. It is about results.
Government agencies are being required to measure and report
publicly on the results they are delivering to the community.
Their access to budget funding is increasingly being made
dependent upon the results they deliver, and upon how efficiently
they deliver those results.
The manifestations of this revolution are everywhere,
including Indonesia. In the U.S., President George Bush has
recently demanded that all government agencies prove that they
are delivering results for the public. He has committed himself
to cutting the budgets of agencies that don't or can't
demonstrate that they are giving the public value for the tax
funding they use. His actions build on the provisions of the
Government Performance and Results Act passed by Congress in
1993.
In Australia, for example, budget funding for many government
services takes the form of a "price" paid by the government per
service delivered by the government agency to the community.
Centrelink, the government organization that administers income
support and similar payments, is paid a certain amount of money
for every benefit application it processes. If it doesn't deliver
the product, it doesn't earn the revenue.
Performance measurement and reporting is fundamental to this
accountability revolution. Across the world, government agencies
are being required to measure and report publicly on the outcomes
and outputs they deliver. "Outputs" are services provided and
"outcomes" are the social benefits produced by those services.
For example, the outcome of the government education is well-
educated children, and it is clearly both possible and desirable
to measure the educational achievements of school students. There
is no reason why the performance of government agencies should be
shrouded in darkness.
The emphasis upon reporting and managing for outcomes fits
naturally with a new respect for the people the Governments
serve. Traditionally, the attitude of some government agencies to
the people the Governments serve was that they should be grateful
for whatever service they receive, and should wait patiently
until it was provided. Now, the view is that clients are entitled
to prompt and courteous service. The results have, in many
countries, been impressive.
Two of the key challenges behind this accountability
revolution are fiscal pressures and demanding democratic
electorates. From the mid-1970s, fiscal pressures upon western
government became intense. If you're facing serious fiscal
pressures, it becomes absolutely crucial to know where tax funds
are being spent effectively and efficiently, and where they are
not. It is essential to get budgetary expenditure priorities
right.
Electorates, on the other hand, have become more informed and
less tolerant of waste and incompetence. They have sent
governments a clear and loud message: Use our taxes well, or
you'll pay the price by losing office at the next election.
Both of these factors are highly relevant to Indonesia.
Indonesia's difficult budgetary situation leaves absolutely no
scope for ineffective and wasteful expenditure. Every rupiah of
tax revenue must be used in the way that will yield maximum
benefit to citizens. Indonesia's citizens are, moreover,
increasingly aware of the power that they hold in a democratic
system, and can be expected to use that power to demand real
performance from their leaders and from the civil service.
The accountability revolution is the second great
accountability revolution in the public sector. The first took
place mainly in the nineteenth century, and was concerned with
financial propriety and accountability. It led to institutional
structures which were designed to ensure that public monies were
used only for public purposes which had been authorized according
to law. It was, in short, an anti-corruption revolution.
Essential parts of this revolution included requirements for full
public reporting on the use of public funds, with auditing by
fiercely independent public officials (such as the Australian
Auditor-General and the U.S. Government Accounting Office). These
types of structures are also now being put in place in Indonesia.
Indonesia now has an opportunity that was not available to
countries like Australia and the U.S. It can combine the two
accountability revolutions and realize their synergies.
Eliminating blatant corruption would, of course, be an impressive
achievement. However, ensuring that public money is only spent
for public purposes does not prevent it from being spent
wastefully. To ensure that public money is spent well requires
the reforms designed to create results-oriented government
agencies.
One organization working to achieve these objectives in
Indonesia is the BPKP. In 1999, a new Presidential Instruction
was promulgated requiring performance accountability of
Indonesian government organizations. To implement this
requirement, the BPKP has been developing a system called AKIP,
applying to all regional and central government organizations.
Under this system, there are three things all government
organizations are required to do. They must undertake strategic
planning. They must measure their performance. And they must
report on their planning and performance to the government,
through the BPKP.
The broad principles of the AKIP system are firmly in accord
with the new accountability revolution. Of course, the system is
new, and will take time to implement fully and to fine-tune for
maximum effectiveness. As elsewhere in the world, it will take
time for government organizations to develop the skills and
experience needed to meet the new accountability requirements.
This is an important start and it is essential now that the
momentum is carried forward with the support of the broader
community.
--------------------------
Marc Robinson
Technical Advisor
Badan Pengawasan Keuangan
dan Pembangunan (BPKP)
Jakarta
--------------------------
The first rule of business is to keep your customers happy. If
you produce products which are poor quality or too expensive,
you'll go out of business. If you produce products the customer
doesn't want, you'll go bust even faster. But for government,
it's been different. If a government agency produces a poor or
inappropriate service, so what? The funding comes from the
taxpayer, and taxpayers have to pay irrespective of the quality
of the service they receive.
But things are changing. There is a new accountability
revolution under way in the public sector. It is about results.
Government agencies are being required to measure and report
publicly on the results they are delivering to the community.
Their access to budget funding is increasingly being made
dependent upon the results they deliver, and upon how efficiently
they deliver those results.
The manifestations of this revolution are everywhere,
including Indonesia. In the U.S., President George Bush has
recently demanded that all government agencies prove that they
are delivering results for the public. He has committed himself
to cutting the budgets of agencies that don't or can't
demonstrate that they are giving the public value for the tax
funding they use. His actions build on the provisions of the
Government Performance and Results Act passed by Congress in
1993.
In Australia, for example, budget funding for many government
services takes the form of a "price" paid by the government per
service delivered by the government agency to the community.
Centrelink, the government organization that administers income
support and similar payments, is paid a certain amount of money
for every benefit application it processes. If it doesn't deliver
the product, it doesn't earn the revenue.
Performance measurement and reporting is fundamental to this
accountability revolution. Across the world, government agencies
are being required to measure and report publicly on the outcomes
and outputs they deliver. "Outputs" are services provided and
"outcomes" are the social benefits produced by those services.
For example, the outcome of the government education is well-
educated children, and it is clearly both possible and desirable
to measure the educational achievements of school students. There
is no reason why the performance of government agencies should be
shrouded in darkness.
The emphasis upon reporting and managing for outcomes fits
naturally with a new respect for the people the Governments
serve. Traditionally, the attitude of some government agencies to
the people the Governments serve was that they should be grateful
for whatever service they receive, and should wait patiently
until it was provided. Now, the view is that clients are entitled
to prompt and courteous service. The results have, in many
countries, been impressive.
Two of the key challenges behind this accountability
revolution are fiscal pressures and demanding democratic
electorates. From the mid-1970s, fiscal pressures upon western
government became intense. If you're facing serious fiscal
pressures, it becomes absolutely crucial to know where tax funds
are being spent effectively and efficiently, and where they are
not. It is essential to get budgetary expenditure priorities
right.
Electorates, on the other hand, have become more informed and
less tolerant of waste and incompetence. They have sent
governments a clear and loud message: Use our taxes well, or
you'll pay the price by losing office at the next election.
Both of these factors are highly relevant to Indonesia.
Indonesia's difficult budgetary situation leaves absolutely no
scope for ineffective and wasteful expenditure. Every rupiah of
tax revenue must be used in the way that will yield maximum
benefit to citizens. Indonesia's citizens are, moreover,
increasingly aware of the power that they hold in a democratic
system, and can be expected to use that power to demand real
performance from their leaders and from the civil service.
The accountability revolution is the second great
accountability revolution in the public sector. The first took
place mainly in the nineteenth century, and was concerned with
financial propriety and accountability. It led to institutional
structures which were designed to ensure that public monies were
used only for public purposes which had been authorized according
to law. It was, in short, an anti-corruption revolution.
Essential parts of this revolution included requirements for full
public reporting on the use of public funds, with auditing by
fiercely independent public officials (such as the Australian
Auditor-General and the U.S. Government Accounting Office). These
types of structures are also now being put in place in Indonesia.
Indonesia now has an opportunity that was not available to
countries like Australia and the U.S. It can combine the two
accountability revolutions and realize their synergies.
Eliminating blatant corruption would, of course, be an impressive
achievement. However, ensuring that public money is only spent
for public purposes does not prevent it from being spent
wastefully. To ensure that public money is spent well requires
the reforms designed to create results-oriented government
agencies.
One organization working to achieve these objectives in
Indonesia is the BPKP. In 1999, a new Presidential Instruction
was promulgated requiring performance accountability of
Indonesian government organizations. To implement this
requirement, the BPKP has been developing a system called AKIP,
applying to all regional and central government organizations.
Under this system, there are three things all government
organizations are required to do. They must undertake strategic
planning. They must measure their performance. And they must
report on their planning and performance to the government,
through the BPKP.
The broad principles of the AKIP system are firmly in accord
with the new accountability revolution. Of course, the system is
new, and will take time to implement fully and to fine-tune for
maximum effectiveness. As elsewhere in the world, it will take
time for government organizations to develop the skills and
experience needed to meet the new accountability requirements.
This is an important start and it is essential now that the
momentum is carried forward with the support of the broader
community.