Tuesday, May 20, 2003

Open Accounting Systems One thing the internet could do for us is open up the finances of various public organizations. Right now the New York Transit Authority is being accused of manipulating its books to create debt and budget shortfalls; the stated goal is that they wanted to justify a fare increase. From the perspective of such an organization it's great to get an increase; more salary for everybody, more equipment, more everything! Everybody wins but the guy who needs to get on the subway in the morning. There is a serious lack of transparency in the financial world. There really shouldn't be. At the federal level, a FOIA request will (eventually) get you just about anything you want to know. For certain kinds of well structured data, like accounting data, a FOIA request shouldn't be necessary. This kind of information should routinely be placed in well-defined data formats and in well-defined locations. Part of the public charter of a quasi-state agency like the Transit Authority ought to be the rule that its finances be placed on the web on a reasonable schedule, say once per month. This would enable any third party to inspect what's there. Many eyes are better than a few -- you can be sure that there will be people out there who will take great delight in scrutinizing every single transaction. This kind of information should be very inexpensive to provide...modern accounting packages should be capable of emitting simple XML-based reports with ease. The Semantic Web is something that has been discussed for a long time. We've all wanted to enable machine understanding of the web, and there's been a lot of research devoted to structuring the kinds of information we humans can easily deal with -- the conceptual stuff. Pushing something like accounting data onto the web is comparative child's play. The accounting profession in this country should request help in creating the right set of standards, in conjunction with the software vendors who work in this area. Once those standards are assembled, it should be mandatory to participate, if you're any kind of public agency. I would predict that any costs involved in producing this information would be more than paid for by the resulting savings that would accrue through independent review of the information. Once proven in the public space, we could levy the same requirement against public corporations, requiring them to participate as well. The glossy "everything is beautiful" accounting preparations mailed to stockholders are based on the opinions of auditors. We now know what the opinions of those auditors are really worth. Let's get the accounting information out there on the semantic web, and let open democracy begin. 7:09:12 PM