The new twist in governmet accountability

The new twist in governmet accountability

Marc Robinson, Technical Advisor, Development Finance, Comptroller (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 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
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 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
their power 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 19th century, and was concerned with
financial propriety and accountability. It led to institutional
structures designed to ensure that public monies were used only
for public purposes which had been authorized according to law.

It was an anti-corruption revolution. This included
requirements for full public reporting on 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 be impressive. 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
(accountability and performance of government agencies) 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 above 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, 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.