How are poor record keeping and bad financial management connected? Is the one a symptom of the other? To what extent does accurate financial information prevent corruption and fraud? An International Records Management Trust study examined the link between record management and financial accountability in sub-Saharan Africa. How do different record keeping systems reflect government and donor agency strategies for financial control and accountability? Are they related to success in reducing economic crime?

Financial systems have deteriorated in sub-Saharan Africa meaning that managers have become far less accountable. Consequently, efforts to strengthen controls have failed because the fundamental structures, such as record keeping, often do not exist. Research in The Gambia suggests that records are used as evidence in investigations and help ensure accountability in financial management practices. However, as the study makes clear:

• Organisations rarely see the connection between the breakdown of record systems and larger failures of financial management.
• The World Bank’s financial accountability framework fails to take account of record keeping issues.
• There is a direct relationship between strengthening internal regulation and more accurate recording of government decisions.
• Strengthening internal regulators may be enough to make improved financial management systems work.
• Well-managed records are vital to the success of anti-corruption strategies as they act as a cheap and credible deterrent.
• Demand for public information is very important in sustaining improvements.

The study suggests that greater success in ensuring financial accountability could be achieved by:

• Encouraging a culture of creating, maintaining and using records.
• Strengthening current records legislation and drawing up legislation where it does not exist.
• Implementing records related controls and introducing or strengthening the record keeping components of accounting and auditing standards.
• Developing financial management systems that explicitly incorporate record keeping.
• Training consultants, donor and lending agencies to evaluate the capability of government record-keeping systems to support financial management requirements. They should be able to determine whether the records systems are vulnerable to corruption and fraud, and to advise government anti-corruption agencies on how to use records in their investigations.
• Supporting the role of national archives as a records management regulator.

Source(s):
'Accountability and Public Sector Management: The Management of Financial Records in sub-Saharan Africa' report to the UK Department for International Development by K. Barata, P. Cain and A. Thurston (1998).

Funded by: DFID, Economic and Social Research Management Unit (1998)

id21 Research Highlight: 9 February 2001

Further Information:
Anne Thurston
International Records Management Trust
12 John Street
London WC1N 2EB
UK

Tel: +44 (0) 171 831 410
Fax: +44 (0) 171 831 7404
Contact the contributor: info@irmt.btinternet.com

International Records Management Trust, (IRMT), UK

Other related links:
The Investor Responsibility Research Centre provides information on corporate governance and social responsibility issues

The International Development Department hosts further details from the Governance, Partnerships and Poverty workshop of February 2001

The Africa Business Network provides an information service for investors

Search the pages of the Organisation for Economic Co-operation and Development for further research

Search the World Bank for further financial research

More from the Management and Governance Network from the UNDP

APIC provides information and analysis to influence African public policy