Haitian recovery needs accountants

On January 12, Haitian accountant Kenny Laforest, 32, was having a normal day
in Port-au-Prince. He had just started driving home having left his office when
the earthquake that devastated his country struck.

Speaking to Accountancy Age from the Haitian capital, he recalled: “I had
just finished working. I was driving in the street to go to my house. It was
terrible. I thought it was a bomb.

“It was the first time I had seen something like that: there was a lot of
noise and afterwards there was [clouds of] dirt, so I could not see anything. I
thought to myself, ‘I know what’s happening: in this country, there might be
another political problem’. Those were my thoughts.

“I stayed calm and then I realised it was an earthquake. The buildings [near
me] had fallen down. The noise I had heard was the noise of buildings falling
down, but I couldn’t see anything.

“People
were crying; people were yelling out.”

His office had not collapsed, however, but he did suffer tragedy that day.
His assistant had driven home 20 minutes earlier, and her house collapsed in the
quake, killing her.
Other Haitian accountants died too of course. Among the highest profile victims
– already reported in Accountancy Age – was the director general of the
Direction Générale de Impôts (DGI) Jean Frantz Richard.

There were others. L’Ordre des Comptables Professionnels Agréés d’Haïti
(OCPAH) member and accountant Chantale Landrin Rosarion died in a building
collapse.

Many accountants’ offices, especially those in the centre of Port-au-Prince,
collapsed or were damaged.

“Yes, some accountants are dead,” recalled Laforest, a certified public
accountant, who has been working with the World Bank as it helps the Haitian
government restore its financial controls.

He said some of his surviving colleagues have since “left the country – they
are in the US or Canada.”

Some left to protect their families from the chaos that followed the
disaster.

“They have children; they have moved their families to take care of them,” he
explained. “The situation has been difficult. Even if they have a good job,
there was no infrastructure; no good conditions for health…”

Now, however, Laforest said the country’s accounting and financial systems
are recovering. At first, it was a disaster. “During the first 15 days following
the earthquake, communications did not work. No one could talk on the phone
after the earthquake. For the banks, it was very difficult. Nobody could get to
the banks – no one had cash.”

But now, he said, “the situation is getting better.” The central bank (the
Banque de la République d’Haïti) is operating effectively. And the finance
ministry’s financial controls and systems are now being restored after its
headquarters were destroyed. The World Bank has helped this critical process,
placing accounting experts with the ministry.
As for the private sector, Laforest said many companies’ financial systems had
survived thanks to accounting software packages, whose data had been uploaded to
cloud computing remote data sumps on the internet. But bills, receipts and other
paper records vital for making tax returns had been lost where offices
collapsed.

Looking ahead, accountancy will loom large in Haiti as the international
community spends a pledged $5.3bn (£3.7bn) to fund the initial phase of Haiti’s
reconstruction over the next 18 months, including a contribution of $479m
(£333m) by the World Bank. Its president Robert Zoellick has told a donor
conference at the United Nations headquarters in New York that the bank would
serve as fiscal agent for a multi-donor trust fund handling the money.

This, bank officials said, would “ensure strong fiduciary control and
accounting assurance that the funds will reach their intended destiny”.

Zoellick added: “This is not just about how much money is raised, but it’s
about delivering real results on the ground for the Haitian people, through good
governance and effective cooperation by donors.”

Non-governmental organisations and aid agencies – many now working inside
Haiti – know only too well the importance of financial controls for their work.
With many local accountants leaving Haiti or being harmed or killed in the
disaster, it has not been possible to rely on the remaining quality local
accountants, such as Laforest. As a result, some NGOs have been flying in
foreign accountants, preferably those with experience of working in emergency
situations.

Christopher
Fyfe, 43, a CIPFA-qualified divisional financial controller at the University of
Oxford, is one such professional. He was appointed a Haiti emergency finance
manager with children’s charity Woking-based Plan International, working out of
the capital Port-au-Prince and the southern city of Jacmel.

There he was creating controls to enable money to be moved safely from Plan’s
main country office in the capital to the charity’s emergency offices in Jacmel
and Croix des Bouquets (north-east of Port-au-Prince).

In his daily blog filed from Haiti during his posting, he said: “This is
necessary and painstaking because, without proper controls, the money that you
and your friends and your government have given might as well be left in a big
bucket in the middle of the market with a sign saying ‘biggest at the front,
smallest at the back’.”

Fyfe worked hard to create systems enabling the detection of outright theft
and procurement fraud. He explained: “Controls are needed and costly to
implement. Any charity tells you that all your money goes directly to the needy…
they are either probably lying or being incredibly irresponsible.

“So celebrate the charities that employ HR specialists, internal auditors and
the monitoring and evaluation teams that check if the project is working so that
they learn from their mistakes. That is the vital framework that is needed to
make a long-term difference…”

Speaking to Accountancy Age, he said: “It’s about getting the balance right
between rigour and flexibility.”

He found existing financial controllers in Haiti to be very cautious. “It’s
important to say what’s really important here; what controls are necessary and
what is slowing us down.”

Fyfe explained: “We can find good people with degrees from Haitian
universities, who understand the fundamentals of accounting , but they have not
had years of experience. So you get the policeman effect: they become very
cautious. They are not sure what to do, so they put in more controls.

“Newly qualified accountants can’t always make judgments – but they know how
to apply the rules.”

This is particularly the case in Haiti with its high levels of corruption. In
such instances, “people are afraid to take risks and fear that if it goes wrong,
they might get blamed”.

The result often is multiple authorisation – maybe five signatures being
required. This not only takes time, but also the avoidance of checks, because
each authoriser “thinks someone else has looked at it,” he said.

Far better to have separate and clear responsibilities – for negotiating a
deal, checking budgets and signing cheques. This creates more efficiency and
transparency, said Fyfe.

The former Oxfam head of international finance added that donations should be
spent carefully and certainly not in haste. “The amount of money donated to
Haiti since the earthquake has been astonishing. It will take a long time to
spend it, particularly if it is to be done properly. If anyone is looking for
the ‘donations sitting in charities bank accounts after one year/two years/five
years’ story I hope they find it,” he wrote in his blog.

He was put in touch with Plan by Oxford-based accounting charity Mango. Its
recruitment director, Lucy Markby, said: “We’re looking for professional
qualifications and previous international development and emergency situation
experience – particularly in crisis situations.”

She said non-governmental organisations (NGOs) find it difficult to secure
the necessary language skills alongside required professional skills. With the
Haiti disaster, the lack of professionals with adequate French language skills
has been cruelly exposed, she said – the island country’s elite speak French;
with the vast majority speaking Haitian Creole, which is barely intelligible to
many French speakers anyway.

Mango sources financial (and especially accounting) professionals with these
skills and send them to the aid agencies and NGOs which need them. The
Oxford-based charity also trains developing country professionals (it has run
accounting courses in Haiti) and also offers easily accessible training and good
practice information, including online resources.

Haitian accounting

Haiti is not an easy place for accountants to practice their profession. Last
year (even before the earthquake shattered the country’s civil society) it was
ranked 168th out of 180 countries on the Transparency International Corruption
Perceptions Index. The l’Ordre des Comptables Professionnels Agréés d’Haïti
(OCPAH) was established in 1981, alongside a national accountants council and an
accounting training council. Only the order survives today.

Haitian accountants must be graduates from a university in the country, with
a degree in administration and a specialism in accountancy. Then they must work
for five years before they gain the right to sign financial statements and
become a certified public accountant (CPS). And before that happens, they must
take an eight week course staged by OCPAH and pass its professional examination.
This can be taken either immediately upon starting work or after an accountant
has been a ‘stagiare’ for five years. It’s worth taking the trouble, said Kenny
Laforest, from his office in Haiti. “If you have the title, it’s easier to get a
job.”

Further reading:

mango.org.uk