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Tracking Stimulus Money: Fad, Fashion or Trend?


June 4, 2009

“Follow the money.” Great advice from the movie, All the President’s Men.  And, this has become all the rage with the American stimulus package.  Conferences, blogs, tweets, CNN – all a-buzz.  Software vendors are announcing products to track the stimulus.

Is this an important trend?

The reaction by software vendors is reminiscent of the “compliance” industry. Topical. Possibly lucrative for vendors. Essentially recasting existing software products to do new things.  Business intelligence and grant management software repositioned as stimulus tracking. Magic? No.

Accountability in government is much more than stimulus tracking. Governments around the world will be spending unprecedented amounts to stimulate economic development. Yet, these expenditures are far less than government procurement and human resources. Transparent and accountable government is the trend. Stimulus transparency is the fad.

There are ideological discussions about the size of government in the United States and elsewhere. Most citizens can support the notion that governments should be more effective.  More effective every day of the year. Not just for the stimulus package. And, citizens are interested in results, not just how much money was spent in a particular region.

Much of the discussion about tracking the stimulus program relates to where the money is going rather than whether it will have positive economic benefits. This is where the developed world can learn from emerging countries. Emerging country governments report project expenditures and provide monitoring and evaluation data to donors.

What is the technical problem that needs to be overcome to enable stimulus tracking?

Certainly not reporting. There are established commercial and open source reporting, analysis and dashboard software. And, grant management software is also available. The problem is classification. More than the traditional classification problem in data warehousing. Why? Data warehousing taxonomy is oriented for internal purposes.  For people who understand the business or government domain. Not for the public.

Transparent government means accessible government. Citizens are not familiar with the complexities of government charts of accounts. Performance classification codes can differ among government organizations.  Stimulus fund classifications may be different among federal departments. Funds transfered from a federal to State department can change classification.

Emerging country governments leverage international standards for statistical tracking (IMF Government Financial Statistics), government functions (UN Common Functions of Government) and performance objectives (typically following Millennium Development Goals).  And, the American Federal Government developed a performance classification in the previous administration known as the President’s Management Agenda.  Governments need to track the economic purpose and objective for each stimulus expenditure.  Consistently.

Classification is the first step. Explanation is the second. Transparent government requires clarity. Classifications must be explained and accessible.

Where is this leading?

Transparent and accountable government is a worldwide trend. Citizens want to participate in making government work. This is particularly evident in Latin America where participatory budgeting has been widely adopted.

Many observers believe that the stimulus money will not be spent quickly enough or executed by recipients for the purpose intended. So they should. This is more than compliance. (Or Compliance 2.0). This is about Government 2.0. About citizens participating to improve government results. Imagine how effective the American stimulus package will be if it is accessible and leverages the social network energy used in the most recent election.

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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