The New Zealand government has released their most recent Benchmarking Administrative and Support Services (BAAS) data. What is interesting about this data is the ability to analyse spend, not at a highly detailed level, but certainly in more detail than previously possible. The information is provided in Excel. What is interesting is what you can do with the Excel data for analysis and, better, display of information graphically, to derive meaning.
I highly recommend taking a look at how this, relatively high-level, information can be presented.
http://zyanbass.appspot.com/
Before discussing they need for a more detailed taxonomy, I'll make the following observation: The information is available in Excel, against a single set of line-item names, and columns for periods and spend. It is simple, it is easy to use and import, and absolutely ZERO specialist XBRL knowledge is required to import, analyze and gain meaning from that data. There is much to learn from such initiatives.
The need for a more detailed taxonomy
The need for a more detailed taxonomy of ICT and other government expenditure
Financial reporting and analysis provides value only when
used to compare performance against either targets, benchmarks or
competitors. Fundamental to the ability to perform effective
analysis is the presumption that all reported line items are equivalent
across reporting entities. Equivalence of meaning
is the critical point, and without adequate definitions, there will be
no clarity.
Therefore, there needs to be an agreed taxonomy of reporting
terms, at sufficient levels of deconstruction to allow the reporting
of exactly the information that the entity wants to report, at the
level of detail they want to report, linked to a definition that is
accepted as the only definition for the reported level of
information.
Granularity is also
required to ensure that there is minimal overlap between reported items,
and little opportunity to report items in one
of multiple categories or line items. When considering a Balance Sheet
(for example) the first and most obvious question may be "is the
reported item an Asset or a Liability?" It cannot be both, or either.
Cash is not a liability (unless you are a bank), as is Property
Plant and Equipment. Likewise, Accounts Payable and Long Term Debt are
liabilities. There is no overlap, and therefore the information,
unless you are Worldcom, should only be reported on one side of
the ledger of the other.
How does this relate to BASS? While there are over 800 line items in the
BASS spreadsheet (many are either summation or calculated
lines and not actual reportable line items) there can be overlap or
alternative interpretation of how and where information will be
reported. This reduced inter-agency or entity performance and
expenditure comparisons.
Too often interpretive differences in the meaning of scope of potential
meaning of a reported line item can lead to multiple entities
reporting the same line item, while defining the detailed content
differently. For example one agency could include a software charge
as 'Software' while another records it as 'Outsourced' because, while
the agency licences it, it is only used to enable an outsourced service.
Neither are necessarily wrong.
Such use of a common element with slightly different interpretation
increases the complexity of comparatives,
and increases the amount of manual intervention required to gain
meaningful insights from what is theoretically the same information.
Any taxonomy does not need to be complex in and of itself, but it does need to represent an agreed set of line items and associated
detailed descriptions. The ICT section of the BASS reporting framework have approximately 125 line items, many of which are summation items.
What is required for effective reporting is not an ever expanding list
of potential line items against which to report, but a set of line
items elements with very clear definitions. For example, the US-GAAP
"Generally Accepted Accounting Principles" taxonomy (in XBRL, which I
do NOT recommend) has over 18,000 possible reporting elements, growing
every year. In addition, companies can add additional custom items,
only increasing the complexity and reducing comparability.
Imagine if each BASS reporting entity could choose to add line items.
Instead, keep the list as tight as meaningful, and clearly define the
boundaries of each item. In this way is it is possible to reduce the
ability to select from any of a number of items depending on your
individual interpretation. The benefits? Simplified reporting, greater
clarity, and easier comparability between entities, and greater value in the information reported and analysed.
