A proposal for Budgetpedia’s advocacy position: modern accounting
When the Budgetpedia project started in 2015, our self-created mandate was to make the Toronto budget more accessible to people so support informed debate about the budget. Trouble is, it’s pretty much impossible to explain in its current state, owing to a number of deficiencies. So our mandate has expanded to include advocacy for improvements. I want to try to articulate that advocacy position here, so that it can be critiqued. Here it is:
Modern accounting, including
- A dedicated funding model
- Accurate, automated reporting
- Granular (cost-centre level) disclosure
A dedicated funding model
We already pretty much have this — it’s called budgeting. It’s what makes taxpayers and service users comfortable with public spending, if supported by the other two planks, together with modern management (but that’s another story).
Accurate, automated reporting
We’re not even close on this one. The current City budget contains conflations, errors, omissions, and idiosyncrasies that make it virtually impenetrable. See A restatement of Toronto’s 2018 budget using natural categories for an example of what a more modern budget report could look like. Simple and elegant, and most important, understandable! It basically means moving toward an accrual-based budget. Put another way, it means using conventional accounting standards. This is just design, and is very attainable.
For reports to be accurate, they must be automated. But the City still relies heavily on transferring and aggregating information by hand-made spreadsheets. That’s just nuts. And it’s 20 years after amalgamation. As a software developer I can say that such automation is not that hard to do. Automation would obviously make reports more timely as well.
Granular (cost-centre level) disclosure
I doubt that this is even possible right now. From what we can tell the City’s basic book-keeping is, broadly speaking, in something of a disarray. But it’s not rocket science. It’s really just asking for good book-keeping, designed to support feedback loops and engender some pride in accurate meaningful results. There are about 13,000 cost centres in the City. We should be able to get financial and management results for these (budget, actual, staffing, performance) at the push of a button. My best judgement is that moving aggressively toward offering this data through Toronto’s open data portal would help to focus minds and move as quickly as possible to getting this area modernized.
So there it is. Nothing radical; nothing crazy. Just focus on the basics, use conventional methods, and everyone, in my opinion, from staff to management to councillors to the public would be well served by the improvements. Decisions and outcomes would almost certainly improve.
Henrik Bechmann founded the budgetpedia project in 2015, and is currently the project lead (see budgetpedia.ca). The opinions expressed here are his own.
