Miguel
That is not the problem. Maintaining a billion dollar accounting in excel sheets is really unbelievable. In some sense there is that part of me that says this snapshot from that blogpost could be fake.
It’s really bad. I mean if some policy was in place to ask for audited financial statements, that could have shown some hint of what had transpired now....
I don’t know if what I saw was a real record? It’s just a balance sheet on excel. Not even a proper accounting system generated financial statement.
Very much agree on everything you said. I have shared my opinions on this a lot in the past days and happy to see that more and more people see the issue with scaling without a structure built around
Fraud 101
Ow okay, missed that. Thank you.
Great post! A hard read but very much worth digesting. Thank you.
This is actually related to what Dr. Jordan Peterson is telling as it is very difficult to live a life without an overarching belief that can guide one to do the moral good. That involves believing in powers greater than us—the gifts we got that enables us to understand and create solutions in the process is something to reflect that we did not created it, it was handed to us by God, Fate, The Maker, A Creator.
Denial of our destructive capacities is like in jungian context of the shadow as ignoring that part of you that can damage or hurt someone or society at large. In the event that you lose control of yourself (eg. drunken state, anger or madly in-love) demons that you denied that exists in you will take a life of its own.
Again thanks for this fascinating post.
Miguel
Hi Tobias,
I believe the good governance mentioned in this post and the context of it is not for public or government institutions but is for organizations that is geared for delivering services and is privately managed.
All the best,
Miguel
I’m getting the same read Liv.
I expected when I came here to be honest that a movement as big as this has some notion of best practices as far as governance is but unfortunately it was not, what is installed seems erring on the side of investigation and rather than detection or prevention.
EA has to add some parts of how scaling issues had been addressed by big multibillion industries. I understand that the movement is still new to this but again, fraud has been there forever where money is in play and human nature is involved.
Hi Trish,
Risk management as a field (or component of internal auditing) has ground rules where it can determine the key areas of how a certain organization should function and what are the areas where such org may fail. At its basic form, it will Risk managers are assessing inflows and outflows of cash and the policies behind those functions. They will also see how the management process is being performed and potential conflicts of interest issues.
Setting up an internal audit function that regularly assess the risk landscape of any EA org the soonest can help avert future fraud. As I have mentioned in my other posts, fraud is very hard to detect especially when collusion is in play—yet I again strongly point out that this is the best practice in traditional systems of conducting transactions when large sums of money are involved. Not following best practices will always leave possibilities for gaps to where fraudulent actors may exploit.
All the best,
Miguel
Suggestion: EA execs in positions of power should sign a conflict of interest disclosure memo on a regular basis (annual or semi-annual). This in effect can help signify that EA as a community is emphasizing the need of unbiased work delivered and any other than work relationship should be avoided at all cost.
Hi Aris,
I’m new here but have done unstructured altruistic pursuits in the past. Unfortunately, the nature of EA is quite difficult to parse for what we are tackling collectively here are high level, highly technical problems in the future which is probably as worst as anyone can get to tackle with impostor syndrome mechanic.
However, having done multiple projects that work and do not work, I have found that you over deliver always in anything you do in life so that you do not end up feeling lost when sudden mishaps or walls popping out of nowhere.
Some that got faster to goal had luck with them in favor. Most of us will not have that right situation and timing and have to do the grind.
All the best,
Miguel
Hi Fods,
This is a great post with historical accounts from within EAs previous issues which somehow shows a trend that needs reviewing.. Thank you for sharing this.
Let me add that reviews of decision making policies and accounting controls plus declaration of conflicts of interest on a regular basis are deemed best practices in preventing large scale fraud or errors. When large sums of inflows and outflows of funds are involved any organization should strongly advocate systems that can help prevent future mishaps and not seek to correct them when such unfortunate events happens....
All the best,
Miguel
No Jim, financial audits are done quarterly, semi-annual or annual. Non-profit orgs doesn’t need to request financial audits for them—if the donor is complying with IFRS or American Standards, they just need to submit or share the most recent copy of the Audited Financial Statements. If they do not have it, that is a major red flag.
Thank you Molly for sharing this. This is an area of interest on my mind for the past days and your post answered them. Thank you.
Great post! As most religious practices that still exist have similar start points as to what EA is trying to achieve: the best future for humanity, an aspiration for a better future for their people...
Hmmmmm just curious of what representation of A God Ideal would look like though, in the EA perspective....well just thinking out of the nature of this post though as the Idea of A God is always existing as a foundation of any religion and how they spread their ideas...
Okay point taken, better join those two paragraphs so it will not be separately read as stand alone ideas...But to your point, the devil is always in the details and hypothetical scenarios are very difficult to analyze. Probably add a better example to your argument as I cannot understand why there was jobs lost in the first place.
Conflict of interest is the issue my friend. Unbiased decisions cannot happen when one has an other-than-work-relationship with the persons they are dealing with.
Any relationship that is, or appears to be, not in the best interest of the organization. A conflict of interest would prejudice an individual’s ability to perform his or her duties and responsibilities objectively.
IIA Standards Glossary of Terms, Conflicts of Interest.
Abandon Expected Value Calculations: Or, continue to assign numbers, but skip the math. Unlike money, most things we care about in the world are not fungible. People are not fungible. Aspirations are not fungible. Gains in one place do not neatly cancel out or substitute losses in the other.
Unfortunately my friend the need to measure things cannot be avoided as fundamentally we should streamline information so that decision makers can assess the viability of a certain decision. Hard calculations & estimates are still required at the most responsible way in order to ensure that funds are distributed and utilized properly or eliminate the possibilities of errors and fraud (the reason why most of us are concerned as of the moment).
I do not think so, if he has an accountant (presumably given the amount of money involved) he will not state that that represents the totality of accounting records in his company through an unstructured excel monitoring. Or yeah, this might been the case which goes back to my recommendations in various posts to request audited financial statements from donors so that its faster to detect if one is not involved in shady transactions…