The Excel Macro That Ran a Multi-Million Dollar Program
Published on: Tue Jan 10 2023 by Ivar Strand
The Excel Macro That Ran a Multi-Million Dollar Program
When we discuss technological risk, the focus is typically on large-scale enterprise systems. Yet, in many organizations, some of the most critical financial processes are not run on sanctioned platforms. They are run on Microsoft Excel.
The complex, multi-tabbed spreadsheet—often with intricate macros written by a single user—is a ubiquitous feature of modern finance and program management. While an indispensable tool, it can also become a high-stakes “black box,” operating entirely outside of formal IT governance and creating significant, unacknowledged risk.
The Rise of End-User Computing as “Shadow IT”
This phenomenon is a form of “Shadow IT,” where business units develop their own technology solutions to meet needs not addressed by corporate systems. A finance team may need a flexible financial model for a new program, or a monitoring and evaluation (M&E) unit might require a custom tool for data aggregation.
What begins as a simple spreadsheet often evolves into a mission-critical application. Over time, layers of complex formulas, macros, and links to external files are added. The result is a bespoke piece of software, developed without formal requirements, testing, or change management. It is, in effect, an un-audited program driving auditable outcomes.
The Inherent Risks of Spreadsheet-Driven Processes
From a governance perspective, relying on such tools for core functions is operationally problematic. The risks are not theoretical; they are a frequent finding in our assurance and monitoring work.
- Absence of Version Control: Without a centralized, controlled repository, multiple versions of a “master” spreadsheet inevitably circulate. This creates a high probability of decisions being made based on outdated or incorrect information.
- Undetected Logic Errors: A misplaced cell reference, an incorrect range in a VLOOKUP formula, or a flawed macro can lead to material miscalculations. Unlike in production software, there is no mandatory code review or quality assurance process to detect these errors before they impact financial reporting or beneficiary payments.
- Key-Person Dependency and Opacity: Often, the spreadsheet’s intricate logic is understood by only one person: its creator. If that individual leaves the organization, they take the institutional knowledge with them, leaving behind a critical system that no one can confidently operate, validate, or debug.
- Lack of an Audit Trail: Spreadsheets do not possess the immutable, timestamped audit logs of enterprise-grade systems. It can be difficult or impossible to reconstruct why a figure changed or who altered a critical formula, undermining accountability.
From Acknowledgment to Active Governance
The solution is not to prohibit the use of Excel. That is an impractical objective. The solution is to bring these critical End-User Computing (EUC) applications out of the shadows and into a structured governance framework.
This requires a monitoring approach that is platform-agnostic. The principles of verification should apply equally to a custom macro and a module in an ERP system. This means identifying all spreadsheets that are critical to a process, subjecting their logic to independent review, and implementing controls to validate their outputs.
The Excel sheet managing a multi-million dollar program is the most relatable “black box” in modern finance. True transparency and fiduciary assurance demand that we have the frameworks to look inside it, ensuring its logic is sound and its outputs are trustworthy.
