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Transparency International clarifies the debate, deplores attacks on Till Bruckner

Editor’s note: Transparency International Georgia submitted this contribution to the debate originally sparked by Till Bruckner’s post The accidental NGO and USAID transparency test.

We at TI Georgia have closely followed this debate about whether and to what extent USAID and its NGO contractors should make their budgets public. Till Bruckner began his quest for answers while he was working with us in 2008-09, although his pursuit of the NGO budgets via FOIA requests to USAID was not conducted under the auspices of TI Georgia.

Mercy Corps’ response to the debate begins by stating, “it is unfortunate that the discussion has devolved into insinuations about NGO motives rather than an open discussion of what constitutes meaningful accountability in aid work.” Yet nowhere in this debate has TI Georgia witnessed an attack against the motives of aid workers. Transparency can open up a discussion on the global aid system and how to better address problems that lack of openness can lead to in ANY organisation:  waste, inefficiencies, redundancies and, sometimes, fraud and corruption. As Scott Gilmore points out in his post, the impact is what matters.

The discussion on the blog has been engaging, open, honest and productive. But we do not agree with attacks against individuals who speak up against problems that they see. To call someone a “self-appointed watchdog” misses the point. Others would call Till a whistleblower – exactly the practice we should encourage and protect if we are serious about delivering on our development promises, protecting aid funds and transforming the aid system.

Mercy Corps proceeds to make an ad hominem attack against Bruckner by drawing attention to problems in an assignment he did on behalf of TI Georgia in 2009. Mercy Corps’ criticisms of the unpublished report are fair. That is why TI Georgia chose not to publish the report. But we fail to see how problems in drafting that report are relevant to the question of whether NGOs should publish their budgets or not.

Further, claims that raw budget data are not useful to measure NGO effectiveness are misguided. The question of aid effectiveness is tied up inherently with having access to ALL the information behind aid programs, allowing for comparison and analysis. While releasing project budget documents may not be a catch-all indicator for transparency of an NGO or donor, it is certainly a meaningful one.

Even if conditions are precarious, such as in humanitarian assistance work, there should be a clear NGO or donor policy on transparency, and organisations need to be open about which information cannot enter the public domain – and why. TI, in its handbook, recommends that financial information should only remain secret if its publication endangers staff or beneficiaries.

Mercy Corps argues:

NGOs have different cost structures and different methodologies, and budget documents reveal little about which are most effective.  Certain types of projects – such as technical assistance or gender-based violence prevention – tend by their nature to be heavy on labor costs and light on capital items, while food distribution or micro-lending tend to be lighter on labor costs and heavier on capital requirements.

There are two separate arguments above. The second is about differences between types of assistance projects. No one advocating for aid transparency has implied that one kind of cost structure is inappropriate. Let us see the numbers, assess them and discuss our concerns with you.

The first is an argument we hear from NGOs over and over again: that publishing their budgets will erode their competitiveness. This argument has not gotten the attention it deserves in this exchange. The most sensitive information in those budgets, even before salaries, is the Negotiated Indirect Cost Rate Agreements (NICRAs) that every NGO competing for USAID funds has, as Counterpart’s post highlights. NICRAs arrive in sealed envelopes and are carefully guarded secrets within the industry, differing widely in structure from one organization to another. Perhaps someone can explain why USAID contracting uses this system – presumably if all NICRAs were the same (or if they were all public), NGOs would be slightly more willing to disclose their budgets

In its current state, USAID’s system rewards secrecy and discourages public accountability. We applaud Bruckner for his efforts to raise these serious questions and we look forward to the viewpoints of more NGOs, USAID, and others on the topic.

Related posts:

The accidental NGO and USAID transparency test
Till Bruckner Responds to Critics on Meaningful Transparency
NGO Response: CNFA Reaffirms Commitment to Transparency
World Vision responds on transparency
USAID and NGO transparency: When in doubt, hide the data
Response from Mercy Corps on Transparency
NGO Transparency: Counterpart International to release budget

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5 Comments

  1. didier wrote:

    This is great. Maybe you guys at TI Georgia could get the ball rolling on openig things up by posting your detailed financials for 2009 (balance sheets, income statements, etc.) either on you website or here – it might atually be on your website someplace but I couldn’t find it). Also would add to the spirit of things if you posted your detailed operating budget for 2010 here and the detailed project budgets for the five ongoing projects you have listed on your website.

    Finally, I was struck by te fact that your code of conduct states that “TI Georgia lists all donations over € 1,000 and publicly discloses them, including in its Annual Report and on its website” but I could not find that either in the annual report or on the website. Again, maybe it’s there somewhere, but I could not find it.

    Thanks for taking the lead on this!

    Posted August 28, 2010 at 3:18 pm | Permalink
  2. Camrin wrote:

    TI Georgia wrote: “While releasing project budget documents may not be a catch-all indicator for transparency of an NGO or donor, it is certainly a meaningful one.” I also might note that this is not a measure of effectiveness, and it would be great to have access to program evaluation information.

    In terms of NICRA, organizations are not as successful as they want to be (as suggested here) in keeping this information secret. If an organization collaborates on a USAID bid, then this information will be shared among NGOs. Also, regarding salary information, I recently shared the information from my employer with an INGO (and competitor on USAID bids) to complete a salary survey. I received the results of this survey, and therefore have an idea of what at least local staff positions are across the sector in Georgia. While this doesn’t have COP or DCOP info on there, there is also a pretty acceptable range that exists and most people know already. (At the same time, I feel slightly uncomfortable with the idea that my salary and benefits would be posted for everyone to see.)

    Regarding the donation policy for TI Georgia, does that relate to private and corporate sponsors providing private donations or is more broad? My understanding when I read that was that it was more relevant to private and corporate donations, not grants received.

    For full disclosure, I will note that I am a former TI Georgia employee and a friend of Till Bruckner, but obviously am responding on my own behest.

    Posted August 29, 2010 at 2:13 am | Permalink
  3. Mike wrote:

    Nicra is indeed a particularly sensitive issue, as TI says, particularly because it is calculated very differently between organizations in terms of what are considered “indirect” and “direct” costs. Because of this variation, it is also difficult to compare budgets across organizations without taking it into account. Some org’s put their whole accounting staff salary into their NICRA; others even count their annual board meeting as a direct cost. Both approaches are perfectly legal under some circumstances. While it is shared between NGOs in proposals, as Camrin commented above, it rarely is shared beyond that. They aren’t state secrets, but aren’t public information either (at least at present). It is also important to note that NICRAs are not specific to USAID but gov’t wide. Perhaps USAID would be better off doing like the EU where there is a max allowable indirect cost rate.

    As for Camrin’s comment about access to effectiveness, shouldn’t all of the program documents be in the DEC? (development experience clearinghouse). In some ways that is a much more interesting trove of competitiveness information, as well as a good indicator of a commitment to transparency by USAID and the NGOs that actually submit…

    Posted September 1, 2010 at 10:02 am | Permalink
  4. Margarita Sarishvili wrote:

    The only instinct I would have other than being a campaigner for doing the right thing and bringing to the open the lack of transparency is this a conservative agenda against wasteful government spending, even as a tool of foreign policy. I don’t see why such an agenda would be in place today, though, as much of the spending was approved and took place during the Bush years. Are they just striking where it is easy to strike and noisiest, simply to discredit the Obama administration for continuing with the same out of control policies from the last crowd in the White house.

    Posted September 1, 2010 at 1:07 pm | Permalink
  5. Caitlin wrote:

    Re: didier’s request for TI Georgia’s budgets… We are inconsistent, but do try to post them and will make a better effort to do so. You can see the total figures for all projects here: http://www.transparency.ge/en/ongoing-projects. And some projects have detailed budgets attached, see for example the document attached at the bottom of this project description: http://www.transparency.ge/en/project/making-aid-work-georgia-phase-ii-0 However, it is true that we are not consistent in posting project budgets. And we have chosen to reduce the salaries to a single figure, rather than breaking it out for all staff. On other detailed budget line items, we keep the figures intact. Ultimately, it doesn’t mean as much as it could because every organization and donor calls things by different names. Money is fungible, even when you publish your budgets.

    Posted September 1, 2010 at 1:57 pm | Permalink

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  1. [...] International Weighs in on Bruckner Debate AidWatch published this commentary from Transparency International, defending Till Bruckner’s search for [...]

  2. [...] This post was mentioned on Twitter by William Easterly, Linda Raftree, Chris Michael, Sydney Carter, Leon Kukkuk and others. Leon Kukkuk said: In its current state, USAID’s system rewards secrecy and discourages public accountability. We applaud Till… http://fb.me/HfPFjfzY [...]