The time for re-building the country after the havoc caused by the Tsunami has begun. The out- pouring of sympathy to the Tsunami victims and the ready assistance to affected areas has been unprecedented. Foreign countries, international aid agencies, NGO’s, political parties, professional groups, citizen movements and many others have responded with cash, other resources and logistical support to alleviate the misery of the victims and to support the re- building effort. Huge quantums of resources have been spontaneously pledged and some parts of such assistance has already been received.

In many instances however, the influx of massive quantities of aid and donations causes tremendous stress to the fragile social, financial and management systems that are existing in the recipient countries and/or organizations utilizing such new resources. Often, the good intentions of ,donors are not fulfilled. Disappointment and disgust are the usual results. Consequently, many donors are skeptical about making donations and grants especially when it is to organizations in developing countries such as Sri Lanka, because they believe that without adequate systems, efficient management skills and sound audit procedures, such resources could be easily wasted or deliberately misused.

It is in that context, that the Institute of Chartered Accountants of Sri Lanka (ICASL) was of the view that the ICAS’s response and the contribution to Sri Lanka’s re-building effort after the Tsunami, should be to harness and direct the expertise of Chartered Accountants to the specific areas where their professional contributions would be most relevant and useful. Accordingly, the ICASL has identified three critical areas to render its’ contribution to the country, at this hour of need.

[a] The establishment of proper finance and resource control systems in agencies and/or organizations, which are providing donor funded services, is vital in order to instill financial discipline and foster accountability. Towards that end, the ICASL would design and issue a Toolkit, which would serve as a practical guide for such organizations and/or projects. This professionally developed Toolkit would contain the basic financial procedures and internal control systems, which should be implemented by project based organizations in the evaluation, procurement, contracting, implementing and monitoring of activities. It would stipulate the processes needed to be established to ensure proper fund and resources management. The Toolkit would be issued free of charge. The ICASL would also strongly recommend that donors stipulate a condition that recipient organizations should conform to the standards and guidelines as specified in the ICASL Toolkit as and when donor funds are being utilized.

(b) Persons who are involved in humanitarian and re-building efforts, although likely to possess many humanitarian qualities, may not necessarily possess the project implementation and funds management skills and competencies that are needed for the efficient delivery of relief or effective implementation of re-building projects. In order to bridge this important gap, the ICASL would, at the request of donors or recipient organizations, nominate Chartered Accountants who could be involved in such projects or organizations as independent and competent resource persons. Such Chartered Accountants would be charged with the task of improving the overall project management capabilities of the recipient organizations and would also contribute their expertise directly to the recipient organizations where 100% of the funds are passed on to the victims, at no cost to the organizations.

They would however be compensated for their services by the ICASL In the course of their duties, they are likely to initiate "out-sourced" financial management and reporting functions and/or management information systems, where the necessary financial records may be maintained under their supervision in a manner so as to establish whether the needs of the ultimate beneficiaries have been met by the respective organizations. In this manner, the services of Chartered Accountants would also be offered to serve in the many local government institutions that are to be involved in the re-building operations. By doing so, it is likely that the overall expertise and accountability levels at local government bodies too could be enhanced. This initiative, if proved successful, may serve as a model which could be implemented in all local government bodies in the country in due course, so that the nation- wide levels of resource management and accountability are enhanced].

[c] It is obvious that all donors would be keen to have a proper review and audit carried out re. the projects and/or organizations to whom they have contributed resources, in order to receive assurance that their donations have been utilized in the manner as directed or contemplated. In order to provide such assurance, the ICASL would assign Chartered Accountants to undertake audits of the organizations and/or projects, which have received substantial funds from the donors. Such Chartered Accountants would provide assurance services, where 100% of the funds are passed on to the victims, at no cost to the recipient organization/projects and their professional fees would be settled directly by the ICASL. Through this mechanism, the donors would be comfortable in the knowledge that their funds are being used in a transparent and satisfactory manner.