The Role of CMAs in Voluntary Sector Accountability
November 15, 2004
By Chris Markham
Canada's 161,000 voluntary sector organizations provide
community and
social services; organize cultural, educational and
recreational activities;
and lobby for social, political and economic change. The ability to
assess and evaluate the impact and effectiveness of their activities
is often hampered by the absence of appropriate measures, frameworks,
and baseline data. Given the considerable amount of trust invested in
the voluntary sector, the need for enhanced accountability continues
to receive a significant amount of attention.
With the help of Certified Management Accountants (CMAs), some
voluntary sector organizations are taking steps to ensure that their
accountability frameworks drive comprehensive performance management
toward their vision and mission. A discussion document
produced by the
CMA in July 2002, entitled The World of Work in 2010, states
that the workforce will demand "multi-disciplined professionals who
have a strong financial management orientation and are
experts in strategic
performance management." In a very real sense, the sustainability of
the voluntary sector will rely on professional CMAs to lead
and implement
strategies that are aimed at doing this. Otherwise, as the
paper states,
"if the public sector and the voluntary sector
organizations that work
with them, fail to meet expectations that the public is
setting in terms
of quality and value, the pressure will increase to
privatize more and
more public service operations."
A case study
The Ontario Physical and Health Education Association (Ophea)
is one voluntary
sector organization that has successfully implemented some of the new
techniques outlined within The World of Work in 2010 paper. In
fact, since adopting a process driven model in 1998, Ophea
has grown close
to 100%, and now executes over $3 million annually worth of
projects with
a staff of 20. Ophea is a new brand of innovative
not-for-profit organization
that looks to tools such as the balanced scorecard, process
reengineering,
and total quality management as a both a competitive advantage and an
accountability framework.
ISO implementation
Ophea looked to a variety of models that would support the
standardization of processes across the organization. In doing this,
the ability to benchmark indicators would eventually support a
continual improvement cycle. Research and information gathering
pointed to the ISO quality management system as the most effective
way to meet this objective.
ISO registration is not just for big companies like Ford or GM.
Since quality management systems are about how the business is
managed, they can be applied to all sizes of companies and to all
aspects of management, such as marketing, sales and finance, as well
as the basic business. ISO specifically concentrates on four key
areas within a business: management responsibility; resource
management; production management; and measurement and
analysis.
Management responsibility requires that top management provide
evidence that they are committed to the development and
implementation of the quality management system and continually
improving its effectiveness. Resource management speaks to the
organization's efforts to establish, document and maintain a system
for the provision of resources (human, infrastructure and work
environment). Product realization outlines how the organization will
plan and develop the processes needed for product or service
realization. Finally, measurement, analysis and improvement are
aimed at planning the implementation and monitoring/measurement
required within a quality management system. ISO system is
essentially about evaluating how and why things are done. Looking at
it another way, it is about writing down how things are done and
recording the results to show they were done.
A closer look at the process
The implementation of ISO within voluntary sector organizations like
Ophea follows
the same process as in any other sector.
1. The first step Ophea took was to conduct some basic research
around the benefits of a quality management system, how much work
would be involved, and the available resources of the organization.
Ophea used the ISO assessment developed by the CSAE as a basis for
determining how much effort would be required internally before
determining how to proceed. Because most voluntary sector
organizations do not have sufficient resources, they may need to
consider using external assistance. The level of external assistance
may range from purchasing "how to" books, to attending professional
development courses, or hiring consultants. Ophea made the decision
to hire consultants to guide the process as well as provide
administrative support.
Effective use of a consultant requires two-way communication.
Voluntary sector organizations are advised to be careful of
consultants offering to put a "ready-made" quality management system
in place. This is unlikely to succeed, other than for a short time,
and much time and effort will be wasted until a quality management
system that meets your needs is subsequently developed.
2. Ophea then took steps to involve personnel from all levels
and departments of the organization in the development and
implementation of the ISO quality system. This meant creating both
an ISO steering committee that represented the cross functional
nature of its organizational structure, as well as conducting a
number of full staff meetings. In one of these meetings, staff were
structured into small groups and charged with the task of defining
what "quality" meant to the organization. The outputs of this
meeting were used to create the organizational quality statement.
This ongoing engagement creates a sense of ownership that provides an
easier path for the implementation and maintenance of the system.
3. Organizations like Ophea have discovered that there is no
short way to the development and documentation of a quality system.
It takes time, effort, and commitment. A comprehensive plan was put
into place that outlined the rationale behind the ISO initiative,
internal and external environmental factors, linkages to other
systems and programs, resources required, contingencies and
timelines.
For voluntary sector organizations, implementing a quality system
costs time and money and should be looked at in the same way as any
other investment. Ultimately, for ISO and a quality management
system to be viable, organizations will have to achieve a return on
time and effort invested into the process. For an average voluntary
sector organization of 20 staff, ISO implementation and certification
can cost approximately $30,000, span 8-12 months, and consume 1.5 FTE
(full time equivalent). Improvements in marketability and/or internal
efficiency are the end goal of going through the ISO
certification.
A growing trend
The trend of voluntary sector organizations implementing ISO is
increasing, with
hospitals, school boards, health units, and government
agencies adopting
ISO - often hand in hand with the balanced scorecard, process
reengineering,
and total quality management. ISO has been successfully implemented in
voluntary sector organizations such as the Ontario
Principal's Council
(OPC), the Toronto District School Board, the Bloorview
MacMillan Centre, the Hospital for Sick Kids, and
Curriculum
Services.
Dr. Douglas H. Johnston, a director at the Bloorview MacMillan
Centre, a health care facility in Toronto, said that "the
process of preparing
for ISO registration led to simplification of the processes
and identification
of redundancies." Dr. David Kenny at the Hospital for Sick Kids
noted that their staff was able to secure early ownership of
the ISO project,
creating a more united team - something that is important in a complex
and changing time in the health care system. The successful
implementation
demonstrated by these leading-edge organizations is a trend
that is expected
to be applied to other public service bodies and voluntary
sector organizations
nationally, as citizens are expecting greater value from, and a greater
number of programs supplied by governments.
Management accounting provided by CMAs has established itself as a
unique function within voluntary sector organizations. While it is
an activity that is often located in the finance and administration
department, there is a growing trend to "operationalize" the
department to provide valuable information to all decisions in all
departments. The CMAs in these voluntary sector organizations have
training in some of these emerging techniques and tools that define
the leading edge of the management accounting profession. Because of
this, voluntary sector organizations engaging CMAs (in either a
volunteer or paid capacity) have the potential to benefit from
strategic, competitive, and accountability perspectives.
Chris Markham, CMA, is Director of Operations for the
Ontario Physical
and Health Education Association (Ophea). He can be reached
at chris@Ophea.org.
This is a condensed version of a longer article that was
first published
by the Certified Management Association (CMA). To view the
full document,
visit: www.linkpath.com.
