IDU | Budgeting Forecasting and Reporting Solutions: February 2014

Monday, 17 February 2014

Education, not BEE, is the only way to true transformation

South Africa has been operating under a post apartheid government for 20 years. Given that all new entrants to the workforce today have been educated entirely under a post-apartheid government, are we not doing both them and ourselves a disservice by continuing to discriminate between graduates and matriculants on the basis of race as is the case with the BEE element of Employment Equity?

The race of an individual should not have an impact on their ability to perform a specific job function; surely their education and abilities should be the only criteria they should be hired on. Does the continued implementation of a policy of preferential employment not entrench discrimination and, through implication, suggest that the previously disadvantaged community remain disadvantaged?

Although Black Economic Empowerment (BEE) began as a way to redress the imbalance brought about by apartheid, it was also meant to create and stimulate economic growth in South Africa and the time has come where it is beginning to have the opposite effect.

The South African government has for years claimed to support local small business and to see these businesses as the greatest source of job creation and by extension having the greatest impact on the South African economy; but BEE policies have begun hamstringing small businesses through forced hiring practices and prejudicial BEE scoring policies.

Small businesses need to function and deliver only of the highest standard in order to remain competitive and whilst BEE has some merits, it should not be blindly implemented ignoring the skills needed by the person filling the position, as this can only result in a degradation of service. It also needs to have a timeline after which it should not apply; but clearly since the BEE scorecard has just been revised once again, putting yet further pressure on smaller local businesses, there is no potential end in sight.

The education available in this country remains largely skewed, leaving more of the previously disadvantaged less prepared for the workforce. This cannot be solved by BEE, as a business cannot be made to hire someone without the skills to perform the job, regardless of their race.

Late last year, Africa Check called into question the government’s “one school a week” project. The department of basic education claimed to be replacing a “mud school” a week in the Eastern Cape. It seemed like an impressive accomplishment, making serious inroads into the education issues SA faces, but further investigation found that the schools, although “handed over” were often largely unfinished.

Perhaps the government should focus more on really investing in education services which would empower new entrants of all races and ensure their skill sets are far more comparable, instead of paying lip service through unfulfilled promises.

There are most certainly ways in which the government could begin to redress the imbalances of the past, in a way that actually benefits future generations of South African employees and the economy, but that, in my view, is through improved education not Bullying Economic Enterprises (BEE).

Monday, 3 February 2014

Transparency – the solution to business and government corruption

Some days it feels like there is a new story of bribery, corruption or nepotism in our papers every day, but this is the case wherever there is power in the hands of a few and little or no accountability. This is sadly not only rampant in governments everywhere, but in businesses as well.

In both cases, the introduction of transparency into their financial transactions, from their budgets and forecasts to their reporting, can make the world of difference. Beyond making any anomalies open and obvious, the individuals who might be inclined to behaving in unsavoury ways would be put off knowing that their ability to hide their actions had been removed.

And with today’s technology, software and services, there is no excuse for a lack of transparency at all levels. Transparency of financial information needs to be made up of many things – real-time access to information, ensuring the information is easy to understand, being able to delve deeper into the top layer of numbers, giving people responsibility for setting their own budgets, and ensuring they are accountable for their results.  

In the past you could only examine January 1st’s expense figures sometime in the middle of February, when the books for January were closed and the monthly report became available. This could leave almost two full months for someone to cover their tracks before someone even sees anything that might raise suspicion. Today you are able to review figures in real-time, leaving very little place for anyone to hide. 

Financial information used to only be understood by financial people who then had to find the time to go through all the information and translate it for the average manager – a time consuming and expensive exercise that also made any mismanagement of funds very difficult for the average person to identify. With simplification and new systems that are user-friendly and easy to understand for even non-financial users, hiding anything becomes that much harder.

Most systems allow you to drill down into your information, which means that large lump sum “Travel” or “Entertainment” expense amount that used to be able to hide a multitude of sins becomes an open book to anyone who might be curious, revealing exactly what is being spent, for what and by whom.

Allowing the people who have to use the budgets to set those budgets makes so much more sense than letting a financial person based elsewhere set this amount for them. Nobody knows better how much they need, and of what, than the people on the ground. There is also a lot more likelihood that they will take responsibility and be accountable for the results of their own decisions than those imposed on them by others.

As you can see, all of these points could be equally applied to government or business. Transparency is easy to achieve when you have the right tools and systems in place and with these easily available, there is no excuse for anyone in power to get away with nefarious activities that land them in the media.