[OpenSpending] open finance practitioners/speakers/experts

Wed Mar 14 10:56:09 UTC 2012

Hi
Chris makes a really interesting point about the mismatch between cash
spending data and other (often accruals based) accounting data. Trying to
link them (especially in cases like the UK where the cash spending data
that has been released does not include really significant items such as
loan repayments and staff salaries) is tough. If we had full details of all
cash transactions this would help as we could reconcile the cash
payments/income to the published cash flow statements (in effect
reconstruct a cash flow statement for each body using the direct method
http://en.wikipedia.org/wiki/Cash_flow_statement#Direct_method ). This in
turn allows a check to be made that the published accounts are supported
and verified by the cash transactions. All possible but a lot of work.
You'd have to be very sure there was a use for the analysis to justify it.

Chris has done a great job of tracking cash items from spending data to
recipient organisations but to make this more useful (and transparent) is
going to be tough. Questions people might realistically like answers to,
such as how much profit did company X make from contracts with government
bodies in country Y, cannot really be answered from any data available yet.
As things stand we can see spending items and perhaps question their
probity but we cannot make value for money judgements about the spending.

The predictive value of spending (actually all accounting data) is
questionable. Altman z-scores for bankruptcy prediction have been found to
be accurate for some types commercial organisation but not for financial
organisations. Some equivalent for public bodies might be useful but again
you'd need to be pretty sure there was a use for the output to justify
developing it.

The release of monthly cash spending may have predictive potential if it
covered items other than spending with suppliers. The information is
current in a way that end of year accounting information isn't. As I
understand it the credit rating of public bodies includes measures of their
financial management and uses their ability to stick to budgets as a proxy
measure of this. The possibility of measuring cash spending and hence the
likelihood of sticking to budgets would be useful. When we have several
years of cash spend data it will become possible to profile spending over
the annual cycle and make outurn predictions against budgets (in exactly
the same way that organisations would do this for their internal use).

Dan

On 14 March 2012 09:32, Chris Taggart <countculture at gmail.com> wrote:

> Sam
>
> All good questions. I'll leave the first question to others in this group,
> but on the second I think the critical thing is linking the spending data
> to recipients, and through that to other sources of data. (There's also the
> job of categorising the spending types, but because spending data is
> transactional, and thus cash accounting, it makes comparison almost
> impossible, even if the categorisation).
>
> OpenSpending and OpenCorporates (of which I'm the co-founder), already
> have a close relationship to match recipients to legal entities, and these
> can act as a nexus for other data (environmental or health & safety
> violations, official filings, lobbying records).
>
> Of course there's still a long way to go yet -- although we've now got the
> best part of 40 million companies in nearly 50 jurisdictions, there's lots
> more to go, and we're also improving the way for joining the individual
> legal entities into the corporate groupings, which is critical in
> understanding who gets public money, and how. Would be happy to discuss
> further, and we've already been in contact with Tariq (and with the World
> Bank's INT & STAR teams).
>
> Re the predictive power, I think we're just getting glimmers of some of
> the potential. Met with the EPA in DC last month and asked them what the
> leading indicators for problems were and the short answer was (at the
> moment) not many, and I think in part because of the siloed nature of their
> data. I also had an interesting discussion with a credit reference agency
> yesterday, in part discussing leading indicators, and my gut feel is that
> we have quite a long way to go, because by the time events become part of
> the public record (e.g. official filings, violations) they are already
> trailing indicators of problems, although they may be leading indicators of
> much bigger problems to come.
>
> Hope this helps
>
> Chris Taggart
>
> -------------------------------------------------------
> OpenCorporates :: The Open Database of the Corporate World
> http://opencorporates.com
> Blog: http://blog.opencorporates.com
> Twitter: http://twitter.com/OpenCorporates
>
> OpenCorporates is published by Chrinon Ltd, a company dedicated to
> improving and publishing public data under an open licence that allows and
> encourages reuse, including commercially. Registered in England, number
> 07444723
>
>
> On 14 March 2012 03:23, <slee23 at worldbank.org> wrote:
>
>> Hi OpenSpending Group,
>>
>> Just wanted to see if I might tap into your collective
>> expertise/knowledge for a brief moment.
>>
>> Trying to identify some interesting open finance/spending "data"
>> experts/practitioners for an Open Data panel event, around the theme of
>> "What's Next for Open Financial Data: Beyond Transparency." I think it
>> would be interesting to focus the dialogue around three themes: 1. building
>> communities around data (kind of like this Open Spending Group), 2. linking
>> data for greater impact/perspective (again like one of this group's goals),
>> and 3. finally on the predictive potential of data.
>>
>> Would love to spur some lively debate, and was curious if you had any
>> suggestions for interesting speakers for these themes, a financial/spending
>> angle preferred.
>>
>> Grateful for any input/insight you might provide, and look forward to
>> working more closely with the group as well.
>>
>> Sam Lee
>> ______________________
>> Samuel S. Lee
>> World Bank Finances
>> Controller's Vice Presidency
>> Knowledge Dissemination Division
>> World Bank Group
>> 1818 H Street, N.W.
>> Washington, D.C. 20433
>> tel: (202) 473-9056
>> e-mail: slee23 at worldbank.org
>> twitter: samuelslee1
>>
>>
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>>
>>
>
>
> --
> -------------------------------------------------------
> OpenCorporates :: The Open Database of the Corporate World
> http://opencorporates.com
> OpenlyLocal :: Making Local Government More Transparent
> http://openlylocal.com
> Blog: http://countculture.wordpress.com
> Twitter: http://twitter.com/CountCulture
>
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