Tsunami brings out Big Four’s charitable side

Accountants are suddenly being held in high esteem and it’s all because of
their work in connection with the relief effort for victims of the Boxing Day

To date, some £4.7bn has been raised worldwide for the stricken countries,
but nothing like that sum has reached the people affected. This is why the Big
Four firms have provided staff, management and professional advice and training
– a good deal of it on a pro-bono basis.

‘It is tremendous news,’ says Alex Jacobs, director of the charity Mango,
which works to strengthen the financial management of non-governmental
organisations and aid agencies.

The agencies have to make the best possible use of every pound, dollar and
euro received. ‘And that means they have to operate with really high standards
of accounting and financial management’, says Jacobs.

Some of that expertise comes from member firms of Deloitte, which pledged
14,000 hours of advisory services to come to the aid of the United Nations
Development Programme. David Williams, project principal at Deloitte, says the
firm wanted to match the contri-butions made by its own staff and was working
with the UN prog-ramme in Sri Lanka, the Maldives and Indonesia.

‘We came up with five types of services that we will help each country with,
in varying amounts depending on their needs,’ Williams says. ‘We are delivering
services to the local UNDP programme office, designed to make the office
function more efficiently given the tremendous capacity pressures. The UN would
like us to do whatever fits best, but we’ve tried to make sure the gift is of
most value.’

One example is the implementation of a new accounting and operational system,
which is designed to make systems more efficient and to customise some of the

‘The UNDP needs assistance to help that system be as effective as it can be
in the local office – knowledge management, change management and so on. These
are things we do all the time,’ he says.

Accountants in the afflicted countries need help, for example, with making
basic accounting and journal entries – there is a huge backlog of accounting
processes that needs to be worked through.

Risk management and controls, according to Williams, were areas that Deloitte
dealt with routinely and it was natural for the firm to extend its support to
these countries.

In some countries the systems were primitive, as well as the capabilities.
‘Proper work experience is not there for the type of stuff that needs to get
done to ensure this huge influx of resources is accounted for properly,’ says

‘Often, there’s more work than the staff and available people can do. This
gives us the opportunity to transfer knowledge about how to do things more
efficiently and better.’

Deloitte has now finished the first phase of the engagement, which was to put
its people on the ground, and the firm is now re-confirming and socialising the
level and amount of work that individual resident representatives in those
countries want it to do.

‘We would expect the lion’s share of the work to be completed between now and
early October,’ Williams says.

Asked about any evidence of corruption or gross negligence, he says: ‘We’ve
not seen anything specific on the ground related to any of the so-called
allegations in the media.’ But the UN, aware of the damage to its reputation
caused by the now-defunct oil-for-food programme for Iraq, has also sought the
assistance of PricewaterhouseCoopers to probe for malpractice in UN
tsunami-related projects. An agreement will see PwC contributing 8,000 hours of
pro-bono advisory services in the form of ‘loaned professional expertise’.

Specifically, the firm will work on developing the UN’s much expanded and
detailed tracking system to provide information about donor contributions to the
Tsunami Flash Appeal. Mike Ascolese, spokesman for PwC, says: ‘Specialised
software and tools will be used to help focus PwC forensic accounting procedures
so the UN will be able to gain an in-depth understanding of the nature and
purpose of the transactions.’

Third-party vendors will be interviewed and documentation examined ‘to
determine the validity and accuracy of the transaction’. He stresses, however,
that PwC will not be auditing the UN funds. The firm’s assistance will be in two
forms: IT performance improvement support for the financial tracking system and
accounting resources for the UN bodies, which have the statutory mandates for
audit and investigative services.

PwC explains that UN bodies will utilise the firm’s professional staff ‘to
address areas where they are under-resourced or where specified expertise is
desired’. Its donation of 8,000 hours ‘will be worth in the millions of US
dollars’, but the firm declines to put a specific value on it.

Elsewhere, member offices of Ernst & Young have been involved in relief
efforts in India, Sri Lanka, Thailand and Indonesia. While this mostly takes the
form of charity work and financial contributions from staff, the E&Y
practice in Indonesia is donating audit services to large-scale private sector
fundraising initiatives.

KPMG has signed an agreement with charity Mango to run financial management
training courses for NGOs and aid agencies in Sri Lanka in the context of the
tsunami relief fund.

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