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FAR-flung 1102

Accountability Might Need a New Name

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Audit readiness and information reporting are the reasons for more and more of the things we are called upon to do as stewards of a vast public trust. There seems to be an air of inevitability about it...a kind bureaucratic mission creep so easily sets in and there are new reasons to ever add new tasks, new considerations, and new demands to our day. It has come to dominate the landscape around us. 

With new tools we may be able to query most any question about government spending and get the answer immediately. 

Blockchain, the technology behind Bitcoin should enable us to uniquely label (or perhaps instead of "label" call it "name" if you like, in a nod to personal finance and budgeting authority, Dave Ramsey) every single dollar to spend and add to that label for every event involving that dollar. To conduct an audit or obtain a report (they become the same thing done by different people) read the label for every single dollar spent at any time during the acquisition cycle and compile the result to your heart's content.  In Real Time. Every single dollar will carry its complete history: Appropriation data, time and date infirmation, the personnel making approvals and  authorities cited  award data, socio economic data, acceptance and chain of custody, associated RFID identification,  physical inventory results and emergent ideas not yet considered. 

I wouldn't get concerned over things this idea isn't. This isn't a budget process; and it isn't a new currency; and it isn't using Bitcoin to pay vendors; it isn't using bitcoin at all. It is a new tool to track the flow and use of dollars in government in real time.  

What's more there will be ways to reliably and permanently obscure proprietary information so that it will have proper and determinable boundaries. 

We don't have to do what we have always done. Without statistical sampling we can query the dollars themselves and learn anything we want from those dollars about government spending in real time. Who da thunk it?

Insight into uses of blockchain technology is growing now:

http://www.businessinsider.com/bitcoin-blockchain-tech-leaders-according-to-morgan-stanley-2017-6?utm_medium=email&utm_source=newsletter&utm_term=170616&utm_campaign=moneystuff

A daily watcher of blockchain technology, Matt Levine can be found here: 

https://www.bloomberg.com/view/topics/money-stuff

Thoughts? Predictions? Reality Checks, anyone? 

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Thank you Mr.  Fleharty. The resources you linked are clear eyed and helpful. 
 
Yes, I see the features of this effort fitting nicely in the early implementation described by the authors in the linked HBR article. 
 
Namely, the initial effort I envision is:
One customer, that being DoD or one of its components;  limited scope, that is accountability systems (accounting & property); simplistic regulatory framework, that is mainly Congressional oversight instead of being a commercial sector concern which may face many multi-level considerations in a GAAP/SEC/FNRA/FED/IRS/shareholder/congressional oversight environs; a long cherished elusive and difficult to achieve goal, that is achieving and maintaining audit readiness; the prospect of fulfilling the promise of improvements in doing government business , that is the essence of this effort to re-envision government accountability; overall improvements in cost avoidance, cost visibility, responsiveness to oversight, and decreased management burden, these are 
major incentives with obvious appeal both in and out of the executive branch. 

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PepeTheFrog thinks this method of transparency and accountability is a fantastic idea.

Reality check: DoD and Intelligence will claim "national security implications" to avoid using blockchain accounting. The real reason will be (a) some actual national security implications for a very small amount of the spending and (b) a convenient excuse to avoid accountability for the gigantic remainder.

Congress and its constituents might really like this idea because it will put tighter strings on the appropriations. Hopefully, Congress will legislate a requirement to use this method if it is proven to be secure, reliable, and useful in a few test cases.

One day before September 11, 2001, SECDEF Donald Rumsfeld announced the Pentagon cannot track $2.3 trillion of transactions, supposedly due to outdated and incompatible systems. 

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The 2018 NDAA, at Section 1646, includes a requirement for a DoD briefing to committees of Congress on Blockchain Technology within 180 days:

https://www.congress.gov/bill/115th-congress/house-bill/2810/text#toc-HBA0AA81CFC4F410E95EF87129909DC2AR

Will that Blockchain Technology Briefing nclude the topic of  Blockchain’s potential for major advances  in Government Reporting/Accounting Systems? 

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From a recently received National Institute of Standards and Technology (NIST) Draft Report (January 2018) :

"Blockchain technologies have the power to disrupt many industries. To avoid missed opportunities and undesirable surprises, organizations should start investigating whether or not a blockchain can help them."

Here's the link I just received, NIST Draft Report (Draft NISTIR 8202) on Blockchain Technology, dated January 2018: https://csrc.nist.gov/CSRC/media/Publications/nistir/8202/draft/documents/nistir8202-draft.pdf

It's quite readable, somewhat lengthy (59 pages),  and is intended to introduce the topic to its readers and give an overview.  Up front in the report, NIST provides an email address and notes a public comment period running through 23 February 2018. 

NIST gives use case examples including supply chain (not unlike a portion of this whole Accountability System idea); NIST also made mention of permissioned systems which is what I suppose would be desirable in a Blockchain based DoD Accountability and Reporting system.   NIST has a public comment period on the Report - through 23 February 2018.  

Keep in mind the idea is to know (manage) the use of every dollar in near real time.  Essentially, every dollar will have a name, that you can call and learn not only where it is now, but its whole history, all in what is essentially real time. If combined with RFID it becomes a seamless property accountability and lifecycle tool as well. 

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