Public services and charities: Accounting,accountability and governance at a time of change

This special issue is based on a selection of papers initially presented at the conference on ‘Public Services and Charities: Accounting, Accountability and Governance at a Time of Change’ (Centre for Not-for-profit and Public-sector Research, Queen's University Belfast, January 2017). ‘Public services and charities’ is a distinctive grouping that includes organisations that are not-for-profit and often have wide social and cultural goals that drive mission and actions. These organisations operate in a very fluid environment. Expectations of the public at large and of government are changing; economic pressures bear down on them particularly acutely; performance metrics and a push for marketisation reflect a spirit of the age; ‘business practices’ are frequently afforded a reputation of being ‘good’ and applicable in all settings; while news reporting and social media often amplify any perceived shortcomings. The papers included in this special issue present an opportunity to reflect on some of the key changes taking place with respect to accounting, accountability and governance in this setting. Such opportunities to reflect can support evaluation of the stated objectives of implemented and proposed changes, and also help to inform policy making within government and elsewhere. Key arguments made in these papers, and the overarching themes of this special issue, are explored in this editorial.     

Accounting for promises: The impact of SFAS No. 116 on charities

SFAS No. 116, Accounting for contributions made and contributions received, issued in 1993, requires that nongovernmental organizations, both proprietary and nonprofit, recognize unconditional promises to give as current period revenue. This study examines whether charities—organizations that rely heavily upon contributions—are affected by SFAS No. 116 adoption along two dimensions: whether an accounting effect exists, and whether a subsequent economic, or behavioral impact is felt by charities reporting positive adjustments to net assets when adopting SFAS No. 116.First, this study documents the effect of SFAS No. 116 adoption on receivables, and considers whether increases in pledges that result from adoption persist in post-adoption periods. The evidence suggests that the accounting effect of SFAS No. 116—that is, the recognition of unconditional pledges—persists in the post-adoption regime.Second, the economic effect of SFAS No. 116 is considered by examining, for charities affected by adoption, whether cash contributions decline in post-adoption periods, whether fundraising increases, and whether reliance on cash contributions decreases in post-adoption periods. Results indicate that cash contributions decrease, that fundraising increases, and that reliance on cash contributions decreases for these organizations.     

Exploring de-facto accountability regimes in Muslim NGOs

This paper aims to deepen and advance our understanding of the de-facto accountability processes and practices within Muslim non-governmental organisations (NGOs). We employ a three-fold accountability framework of felt, imposed and adaptive accountability, supported by insight from the Islamic perspective to elucidate our empirical findings. We adopt this framework because it enables us to localise the notions of accountability, allowing a more complete understanding of the de-facto nature of Muslim NGO accountability to emerge within the context of religious ideals and between accountabilities that are externally imposed and those that are internally generated.     

The governmentality and accountability of UK national museums and art galleries

This study furthers our understanding of the role of governmentality mechanisms in relation to other-forming and self-forming accounts of art organisations, by using empirical data collected from interviews with senior managers of UK national museums and art galleries (MAGs) and from secondary published sources. The findings highlight how governmentality mechanisms had power-effects through the creation of knowledge about MAGs and the resistance strategies of MAGs. Whilst the governmentality mechanisms were expected to ensure the automatic functioning of disciplinary power, in some instances the government directly intervened to over-ride decisions taken by senior managers when these conflicted with political imperatives.     

Using freedom of information laws to frustrate accountability: Two case studies of UK banking frauds

Freedom of information laws can arguably enhance public accountability of policymakers and check unethical and corrupt behaviour by the state and corporate elites. This paper provides case studies relating to the affairs of two fraud-infested banks in the UK. The information was secured through a direct engagement with ministers, courts, judges and the state apparatus via freedom of information laws. The cases draw attention to the politics of public accountability and show the difficulties encountered by anyone seeking information about banking frauds. The cases show that the state apparatus goes to considerable lengths to shield elites from public scrutiny.     

Ethics and accountability: from the for-itself to the for-the-other

Expanding global markets have resulted in renewed concern with accountability by transnational corporations and other economic agents. Reflections on economic accountability, however, often inadequately theorize necessary ethical presuppositions regarding the moral status of economic collectivities, including the scope of the moral community and the good that this community seeks. This essay addresses these ethical considerations. Taking as my starting point Schweiker's [Schweiker, W. (1993). Accounting for ourselves: accounting practice and the disclosure of ethics. Accounting Organizations and Society, 18(2/3), 231–252] claim that economic entities are properly accountable to a wider scope of good than their own by virtue of the accounts that accountants render of such entities, I argue that the discourse in terms of which the accounts are rendered serves to negate the very relation of obligation from which this accountability derives. Specifically, I argue that the discourse of neoclassical economics that informs accounting practice constructs the identity of the accountable entity such that it is obligated to pursue only its own good. Consequently, extant accounting practices are inadequate to meet the demands for accountability that are legitimately entailed by the act of rendering an account. I explore the implications of this conclusion for understanding economic accountability and related social accounting practices, and I propose the ethics of Emmanuel Levinas to establish a broader accountability on the part of economic entities.     

Enterprise risk management and continuous re-alignment in the pursuit of accountability: A German case

COSO defines ERM as a set of activities that lead to organizational alignment and accountability, given structured work with stable, mobile and combinable information objects. This study argues against this representation by offering three insights developed from case research. We observe ERM as a practice that oscillates between IT-based representations and social interpretations, which never “adds-up” but creates circulation and movement instead. Rather than to produce a common understanding of corporate affairs, ERM communalizes the process of identifying risks and chances and promotes a quest for accountability. Thus, ERM does not focus on improving performance or compliance. Nevertheless, by separating subjects and objects in the organizational context, ERM creates space for otherness and heterogeneity. To the extent that these are mobilized as resources, ERM might offer “intelligence” beyond the coherence and homogeneity, which accounting systems represent.     

Hull House: An autopsy of not-for-profit financial accountability

Analyzing financial information for Hull House, an iconic not-for-profit organization, students are asked to explore the clues to its unfortunate demise. Hull House filed for bankruptcy in 2012 after 123 years of service to the Chicago community. Evaluating the reported financial data from Internal Revenue Service (IRS) Forms 990, we seek to determine causes for this event and identify issues the board of trustees might have addressed in the years leading up to Hull House’s ruin that may have changed the outcome for this not-for-profit organization and its 60,000 clients. We also investigate the changing responsibilities of an organization’s leadership as it enters the “zone of insolvency.” This case requires real-life application of financial analysis to the not-for-profit accounting data provided by IRS Forms 990, which are publicly available on the website www.GuideStar.org.     

Academic entrepreneurial hybrids: Accounting and accountability in the case of MegaRide

The current paper focuses on how multiple values shape accounting and accountability practices in hybrid organizations. It concentrates on the complex domain of academic spin-offs, more fully described as hybrid knowledge-intensive organizations, aiming to understand how accounting and accountability practices can be constitutive of hybrid academic entrepreneurial logics and identities and how these, in turn, favor the development of accounting and accountability practices. The study employs a theoretically informed in-depth single case study of the academic spin-off MegaRide of the University of Naples Federico II (Italy) for the period January to May 2021. The findings show how, in MegaRide, hybrid academic entrepreneurial identities emerged at both the individual and organizational levels, leading to successful technology transfer, with an undeniable impact on the local context and society.     

Unveiling the role of identity accountability in shaping charity outcome measurement practices

Internationally, charities are grappling with the challenges of measuring their service outcomes for accountability purposes. This study employs recent developments in institutional theory to examine the role of identity accountability in shaping these outcome measurement practices. Semi-structured interviews with staff and managers in two New Zealand charities are drawn on to understand their perceptions and experiences of outcome measurement. The findings reveal that charity actors engage in institutional work aimed at discharging both identity accountability and upward accountability via their outcome measurement practices. However, they face challenges in achieving and balancing these two forms of accountability. Policy-practice and means-ends decoupling result, creating the potential for mission drift and other unintended consequences of outcome measurement practices.     

Breakdowns of accountability in the face of natural disasters: The case of Hurricane Katrina

Hurricane Katrina, which struck the Gulf Cost of the United States at the end of August 2005, was one of the most costly and deadly natural disasters ever experienced by the United States. A breach of levees and the subsequent flooding of the city of New Orleans resulted in the displacement of more than 250,000 people. The death toll exceeded 1800 persons and total damages were estimated to exceed $125 billion. The response to the hurricane by city, state and the federal governments has been severely criticized by many commentators. The purpose of this paper is to examine breakdowns in accountability during and after the storm which were manifested by a lack of communication between government officials and a failure on the part of officials to act responsibly on behalf of victims, many of whom were poor, black and elderly. We also examine whether the breakdown in accountability may be traceable to institutional racism embedded in the history and geography of the city of New Orleans. Following McKernan's (2012) argument, the paper reinforces the need to go beyond a “calculative accountability” toward “the potential of accountability to enhance levels of responsibility for the other” (p. 259). It is this moral aspect to the concept of accountability that was sorely lacking in the response of government officials to Hurricane Katrina.     

Budgeting—the Role of Trust and Participation: A Research Note

Prior studies have found a combination of an evaluative style with high budget emphasis and high participation to be associated with better behavioural outcomes (e.g., lower job-related tension) than all other combinations of budget emphasis and participation. Yet there has been little research to investigate the theory on why this particular combination of budget emphasis and participation is associated with better behavioural outcomes. A path analytical model, which investigates the intervening effects of trust and participation on the relationship between budget emphasis and job-related tension, was used. Senior Norwegian managers were selected as subjects for this study. The results indicate that budget emphasis has an insignificant direct effect on job-related tension but a strong indirect effect through trust and participation. Trust also has an intervening effect on the relationship between budgetary participation and job-related tension. It is therefore possible to conclude that high budget emphasis is associated with high budgetary participation and high trust. High trust, in turn, is associated with reduced subordinates' job-related tension.     

Budgetary governance and accountability in public sector organisations: An institutional and critical realism approach

This paper analyses the impact of the institutionalisation of governance and budgetary policies on the accountability of organisational actors from an institutional and critical realism perspective. The study extends the framework by Burns and Scapens (2000) to critical realism. Findings from field studies conducted in two public hospital districts in Finland show two institutions of budgetary governance: the political and the technical. Accountability practices depend on how the institutionalised policies have reduced or increased the gaps between the real, the actual and the empirical domains of reality of the organisational actors involved and the governance policy that prevails at a given domain of reality. The use of budgetary information as a tool of governance and accountability in the empirical field of the study cannot be taken for granted.     

Institutionalising multiple accountability logics in public services: Insights from Australia

This paper reports on a field study of how a range of inter-institutional and inter-organisational forces shape the evolving rhetoric and practice of multiple accountabilities in public services. Drawing on the institutional logics perspective, we carried out a qualitative field study in the Australian Commonwealth Public Service involving semi-structured interviews, two focus group discussions, and the examination of internal accounting, management reports, and government archival records. The findings suggest that emphasis on conventional instrumental mechanisms and reporting tools, such as budgeting and accrual-based reporting, support managerial (instrumental) accountability through compliance logics. We conclude that an emphasis on public (relational) accountability through public dialogue is central to the public sector accountability debate, and that more attention needs to be paid to the question of how to balance the dual logics (instrumental and relational) in public services. The findings provide practical insights for public sector managers, policymakers and governments responsible for designing and implementing reforms, accounting tools, and accountability practices.     

The role of accountability in determining the relationship between financial reporting quality and the performance of public organizations: Evidence from Vietnam

Drawing on the new public management and agency theory, this study examines the mediating role of accountability in the relationship between financial-reporting quality and the performance of public organizations. The research model and hypotheses tested with a survey of 177 responses obtained from accountants and managers working in the public sector in Vietnam. Our analysis shows that accountability has a mediating role on the relationship between financial-reporting quality and performance, with significant implications for public organizations seeking to improve both their financial-reporting quality and their organizational performance with better designed systems of accountability.     

Smaller business governance: Exploring accountability and enterprise from the margins

Smaller businesses now rank higher upon the corporate governance agenda. This agenda places their accountability and ‘enterprise’ particularly at issue. It is only put at issue because of just one possible problematization however. That problematization firstly assumes judicious accountability to be the crux of good governance with accounting at its hub. It secondly assumes that smaller businesses are the very seedbed of any ‘enterprise economy’, virtually irrespective of what form they take, or ‘enterprise’ they display. By then combining these assumptions together, this finally reproblematizes any relationship between accountability and ‘enterprise’, so that ‘de-regulation’ and decoupled accountability liberates smaller business ‘enterprise’ further. Others might question and challenge the very basis, as well as particular formulation, of this problematization however. A better grasp of the greater fluidity and complexity of smaller businesses would make the boundaries of their accountability and ‘enterprise’ more clear and leave their respective margins more suitably exposed. As a key potential instrument for that purpose managerial accounting research might then better inform the debate by specifically rendering these boundaries more visible while also identifying the precise scope for manoeuvre at/across their margins as well. To that end this paper uses certain enabling frameworks to construct and interpret the particular case of managerially accounting for a grown smaller business working across exactly those margins from the perspective of a ‘reflective practitioner’ acting as a field researcher for these purposes. As well as offering fresh insights into how far the boundaries of accountability and enterprise might legitimately stretch, this case calls for more critical thinking about how they might change.     

Broadband development in the European Union to 2012—A virtuous circle scenario

Along with many national governments, the European Commission has pushed broadband to the fore of social and economic policies in recent years. It has aligned broadband developments with furthering information society and knowledge economy developments.This paper presents a positive scenario for broadband-related developments in the European Union area from 2009 to 2012. The scenario, the iNetWorked Society, is one of four developed in an extensive multi-country project funded by the European Commission under the 6th Framework Programme.Before examining the scenario, however, the paper places into a critical perspective the EU's legacy of broadband policy to date. It highlights the limitations of technology-centred policy frames and broadband strategies, which privilege supply-side infrastructure and neglect demand-side issues of applications, uses and users. Such policy frames have been associated with great variations in the level of broadband rollout, take-up and use across Member States.The paper then outlines the socio- and macro-economic conditions that need to be in place in Europe for the positive scenario of the iNetworked Society to be realised. The iNetWorked Society comprises a plausible, internally consistent scenario for developments in a number of broadband-related areas: broadband adoption, e-business, e-work, e-government and digital content. It is based on a virtuous circle of technological, economic and socio-political developments, including strong economic growth, high broadband penetration, and high social engagement with ICTs.     

我国信托业市场结构与绩效关系研究

研究发现,我国信托业的经营绩效与市场份额之间存在显著的正相关关系,与市场集中度存在弱性的负相关关系,这一结论在一定程度上支持了"相对市场力量"假说.同时,研究还发现,我国信托业现阶段还处于垄断程度较低的低中占寡型市场,信托业绩效水平的提升有赖于市场份额、营业费用率、资产负债率等影响因素的进一步优化.     

The influence of accountability on overconfidence and resistance to change: A research framework and experimental evidence

This paper presents a research framework and demonstrates how commitment to a particular course of action might lead to information search that is biased in favour of the chosen alternative. The framework also incorporates accountability as a strategy for mitigating overconfidence and resistance to change.An experiment was conducted to test the predictions of the proposed framework. Results of the experiment indicate that commitment to a particular cost allocation system leads to increased desirability of the chosen system and decreased desirability of the rejected alternative. The results also show that managers who are committed to a particular cost allocation system become too conservative and overconfident in their preferred system, which leads to high resistance to change. These effects, however, were attenuated by making the managers accountable for the negative consequences of their decisions.