Category: Accountability

Types, Examples And Organisation Of Responsibility Centers

INTRODUCTION

There are two types of accounting and these are Managerial Accounting and Financial Accounting. Distinguishing these quickly, managerial accounting deals with activities within the company while as Financial accounting deals much with external information of an organization. Managerial accounting is what this assay will be discussing and mainly to do with management control systems. In management control systems, the main focus will be discussing what responsibility centers are, then later on we will be looking into the types of responsibility centers along with examples of those responsibility centers and how these responsibility centers operate in an organization. There are four types of Responsibility Centers (ABE, 2011). Namely, (1) Cost Center, (2) Revenue Center, (3) Profit Center, (4) investment centers, (Drury, 2001).

RESPONSIBILITY CENTERS

Traditionally, the owners of the organizations, companies or an entity, were divided into functional divisions/segments. A segment is defined as a fairly autonomous unit of company defined according to function or product line. As segments or rather put it simply, departments are organized along functional lines to perform specific function such as marketing, production, finance, purchasing, and shipping. Therefore responsibility center, is a department or segment or division of an organization for which a particular executive is responsible (Rutgers Accounting, 2020). In addition to this definition, Drury, define it also as the unit of a firm where an individual manager is held accountable for the performance of the unit under his or her control, (Drury, 2001).

TYPES AND EXAMPLES OF RESPONSIBILITY CENTERS

COST CENTERS

Accountability of a manager is limited to only costs under their control (Rutgers Accounting, 2020). Cost Centers are divided into two areas and these are (a) Standard costs and (b) Discretionally Costs. With Standard Costs is where the outputs can be measured and input required to produce each unit of output can be specified. In order to control this, it is expressed through making a comparison of the cost of inputs intended to be used in the process of production against the actual cost incurred, (Drury, 2001). The variance becomes the difference that is observed between the standard cost and actual cost. Later, is discretionally cost where outputs cannot be measured in monetary forms. There is no clear and observable relationship between inputs and outputs consumed and achieved. Managers control using cost centers come function in the following forms; actual expenditure has to be tarrying with the budgeted expenditure and this has to be for each expense category. Secondly, ensure that tasks allocated to each center have been achieved and successfully. Examples where cost centers are used are as follows; cost centers are used in (a) advertising and publicity, (b) research and development departments. Care should be taken into consideration here especially in research and development. Managers need not to underspend with intention of cutting cost. According to Drury, (2001, p.326-329) explained that “underspending in research and development could mean bad results since that may bring about undesirable outcome. Therefore the problem with discretionally is measuring of effectiveness. On expenditures, advertising using less expenses in marketing does not mean that advert expenses have been effective, (Drury, 2001). It could be due to poor timing, also may be directed to the wrong audience, wrong message and this tends to be a biggest challenge in cost centers under discretionally management control.

REVENUE CENTER

Mangers are made accountable for only financial outputs. Their full contribution is eyed at generation of sales revenues. Examples of revenue centers could be as follows, regional managers accountable for sales only within their regions. Selling and distribution of finished goods in case of manufacturing companies. Performance evaluation is based completely on sales target. The main challenge here is that since their concentration is only on sales, they do not have concern on profitability since they consider that not being their responsibility (Rutgers Accounting, 2020). This occurs when sales are not equally profitable and managers can achieve higher sales revenue by promoting low profit production. They are held accountable for selling expenses such as sales person salaries, and order getting costs.

PROFIT CENTER

According to Association of Business Executives (ABE, 2011 p.13-29) profit center, is defined as areas of organization for which sales and costs are identifiable and attributable. Both revenues are received and expenditures are controlled in this responsibility center. There is limited decision making authority. Defining profit center, Drury, (2001, p.326-329, are units or segments within an organization whose managers are accountable for revenues and costs. When mangers are given authority both in production and sales, there is a significant increase in managerial autonomy (Rutgers Accounting, 2020). Doing so, gives the managers freedom to set selling prices, choosing which market to sell in, make product mix and output decisions as well as selecting suppliers.

INVESTMENT CENTERS

Managers are responsible for both sales and revenues and costs. They have responsibility and authority make working capital and capital investment decisions. Good examples on this are ROI (Return on Investment), and Economic Value added (Drury, 2001). These measures are influenced by revenues, costs and assets employed and therefore reflect the responsibility that managers have for both generating profits and managing the investment base. There is highest level of management autonomy. They include company as a whole, operating subsidiaries, operating groups and divisions, (Drury, 2001). Here inputs are measured in terms of expenses and outputs measured in terms of revenues and in which assets employed also measured the excess of revenue over expenditure then being related to assets employed, (ABE, 2011).

CONCLUSION

Responsibility centers are established in order to ensure that every department or segment should be controlled using this centers. This helps the organization to device the course of action should there seem to be some disparities from the established goals. Therefore, the following are served as main reasons for establishing management controlling measures according to Drury, (2001); “express and aggregate the results of the wide range of dissimilar activities using a common measure, profitability and liquidity are essential to the success of all organizations and financial measures related to these and other areas are closely monitored by stakeholders and hence the managers will wish to monitor performance in monitoring terms, course of action benefits an organization only if it results in an improvement in its financial performance, managers need full autonomy for them to perform their duties properly as long as their acts are ethically proven.” Responsibility centers as control measures, are very important looking at the reasons for their existence. Monitoring performance in the form of conducting audit becomes easy since they deal with one segment from the other thereby pinpointing exact weak managers.

Necessity of Education System to Raise School Accountability and School Autonomy: Argumentative Essay

“An education system needs both school accountability and school autonomy to raise attainment.” Do you agree? Explain your reasons.

The state of the school system has increasingly become a concern for societies. The questioning on which systems work more efficiently to advance the cognitive and non-cognitive skills of students has installed the endeavour to seek reforms that increase attainment. Thus, Institutional measures have taken a centre stage: accountability and autonomy. The tenor of findings of the impact of autonomy has differed over time, and the introduction of reforms that favour accountability; like the No Child left behind act (NCLB) and 1988 UK reforms, has posed an intrinsic debate of which system is the right one. Whether there should a clear favour to a particular system or an interplay of both. Therefore, the presented paper evaluates the current evidence to determine whether accountability and autonomy are mutually inclusive factors in a school system to raise attainment. This essay will….

The process of evaluation of school performance on the basis of student performance measure, is known as school accountability. Centralized reporting in school-wide examination has been occurring, and measured, in the United Kingdom for decades (Burgess et al., 2005) and in Chile (Mizala et al. 2007). Likewise, accountability measures have been a distinctive feature of educational policy for both Democratic and Federal administrations since the 1990s (REF). School accountability operates on a set of principles and under various implementation strategies. There are three main types of accountability: 1) compliance with regulation, in which educators were accountable for adherence to rules and accountable to bureaucracy; 2) adherence to professional norms, in this system, educators are accountable for adherence to standards and accountable to their peers; 3) result driven, within this system, educators are accountable for student learning and accountable to the general public. Educators often ought to work on these systems of accountability simultaneously, attempting to balance the requirement of each. However, at present accountability systems focus less on compliance and more on showable results. The rewards and sanctions that stem from accountability can be straight forward, like bonuses for educators in high performing schools and punishment for low performance, such as closure of schools or restructuring. Accountability can also occur subjectively by community pressure on schools to improve. Thus, school accountability incentives can work through direct government action or through the provision of information.

One of the most notable accountability system is the federal No Child Left Behind Act (NCLB), which requires states to test students in reading and mathematics in grades three through eight, as well as one in high school grade. NCLB also requires science testing in at least one grade per traditional school level and states to determine what it means to be proficient on the state assessment. Then schools are evaluated based on whether students are progressing adequately toward the goal of 100% proficiency. The aim of these type of reform is the idea that making available detailed school-specific information on test performance, and linking performance to direct consequences can improve productivity in schools. Evidence suggest that NCLB had a positive effect in mathematics on elementary student performance, particularly at lower grades and typically disadvantaged population. However, this effect was not observed in other subjects. The impact of NCLB was also visible on educators, as it appears it led schools to devote more time to maths and reading, there was a particular increase in exam preparation activities. Lastly, there’s compelling evidence that NCLB increased per-pupil school district expenditure on direct instruction, a mediation mechanism that may explain the corresponding achievement gains. The relative gains of NCLB can be attributed to the direct consequences it imposes on low performing schools, as the pre-NCLB literature suggested accountability policies that simply reporting accountability measure that were unconnected to exomplicit consequences did not drive improvements on student achievement (Hanushek and Raymond, 2005).

Furthermore, much like the American system accountability in the UK relies on publicising information to hold schools accountable and thus penalise direct or indirectly that don’t perform according to standard. This occurred after the 1988 introduction of greater accountability, were schools have to publish information on their performance. However, this information was only partial. Schools report the proportion of students that achieve above a certain level in national test taken at age 16. This information is then used by the government to rank schools in a nationally published school ‘league table’ This information used by the government to sanction poorly performing school and by parents choosing a school for their child. A key issue of accountability systems is that of fairness as when measuring the impact of accountability, the distribution of pupil ability and so the proportion of marginal pupils may be endogenous. The pupil level analysis denotes that the lowest ability are the losers of this type of system. In most schools as the number of marginal pupils increases, the pupil gets less value added and have a lower chance of getting the needed qualification to continue in academia or to access reasonable school leaver jobs. The marginal pupils don’t appear to gain either except when their schools are in competition. Reback (2004) finds similar findings in a study of the US were it was examined the distributional effect of accountability at pupil level, it was found that the relative importance of a student’s performance within a school has only a very small, positive, effect on that students performance relation to his or her peers. The same study, however, discusses how the distributional effect is larger when schools have strong incentive to improve their performance. The incentives in the United Kingdom are weaker if compared to the studies carried on in the US.

A meaningful ranking of school could improve education service delivery, from transmitting incentives to educators to enhancing parental school choice. However, it ought to be recognised that it appears to be more complex to produce the right accountability system than originally thought. This is true for Chile, that has focused its education reforms on the provision of education choice, incentives and publicized school information in the form of ‘league table’. On a time, series study of the standard measure of relative performance in Chile from 1997-2004. Using several cross section to calculate commonly-used school performance measure, it was found that there is a clear trade off in the extent to which ranking generated using these measure: 1) can be shown to be very similar to ranking based purely on students socioeconomic status and 2) are very volatile from year to year. Thus, there is the possibility that while using information improve education in certain aspects of the structural system, it might not improve educational quality more broadly.

Alternatively, in recent years educational systems have moved to a more autonomous organisation and become accountable to students, parents and the public for their outcomes.

School autonomy is broadly defined as the authority of school communities to improve student learning outcomes through formal governance structures. Although there is a strong literature surrounding policies to assign more autonomy to schools, and the number of education embracing school autonomy is growing (Arcia et al. 2011; Eurydice European Unit 2007; OECD 2013; OECD 2015; The World Bank 2007), its value continues to be debated both in ideological terms and empirically. The idea that school improvement is linked to autonomy stems from the school-based decision making and restructuring reforms of the 1980’s (David & Shields, 1991; Elmore, 1990; Newman, 1991).

The literature surrounding autonomy tends be more favourable in the post-2000 era, although one pre-2000 study was particularly optimistic regarding the impact of autonomy. The Australian longitudinal study of principals’ attitude to the major Victoria reform (Department of Education 1998) laid the foundations for school autonomy in that state for the subsequent decades. Previous to the 2000 era, student performance data were limited. The pattern of results on school’s autonomy from student’s achievement test is that students perform significantly better in schools that have autonomy in process and personnel decision. This decision often involves hiring and rewarding of teachers, purchase of supplies and budget allocation within schools and curricula content.

The OECD’s current analytical framework for assessing the impact of school autonomy on performance compromises two composite indices development from survey that accompany the Programme for International Student Assessment (PISA) test. Firstly, there is an index of school responsibility for resource allocation and secondly and index of school responsibility for the curriculum and assessment. Correlation analysis with the OECS’s 2012 PISA performance allows the comparison among education systems and within country. The first analysis shows that where schools in systems that are more autonomous for decision over curricula and assessment, they tend to yield better outcomes in student performance than in systems that have less autonomy for deciding on curricula. This is also true for when considering national income – showcasing a correlation of 0.58. The later, within-country relationships between schools’ autonomy In resources are far more complex and the differences are slight. Moreover, the relationship is influenced by other factors as socioeconomic level, status as a public or private school and the systems management environment – in particular its accountability framework. On the other hand, greater responsibility in managing resources appears unrelated to a systems performance.

Furthermore, the existing cross-country evidence indicates that there is an important interaction between school autonomy and the accountability introduced by external exams (cf. Wöbmann, 2007b). The evidence shows that school autonomy is beneficial in system with external exit exams (Wöbmann 2005; Fuchs and Wöbmann, 2007). Across decision-making areas, external exams turn an initially negative autonomy effect into a positive effect, for example, in TIMSS and in PISA 2000. Thus, it can be argued that in order for autonomy to serve its purpose in a school system certain level accountability ought to be introduced, as results suggests that school autonomy is better for students’ achievement when external exits exams are introduced.

Impact of Accountability in Australia: Critical Analysis

Over the years , Australian federalism ‘cake’ has become more and more marble like under the banner of collaborative or cooperative federalism leading to more overlapping , ambiguity, duplication, bureaucracy and accountability deficit .

The theoretical merit of decentralised power and therefore decentralised responsiveness had created an accountability deficit.

Accountability in simple terms is to account for ones actions to those affected by them.

According to Management Advisory Board/Management Improvement Advisory Committee (MAB/MIAC) report,

‘In the context of the relationship between public servants, secretaries of departments and ministers, and ministers and the Parliament, accountability is defined as existing where there is a direct authority relationship within which one party accounts to a person or body for the performance of tasks or functions conferred by that person or body “

At this junction, it is imperative to talk about the effect of federalism on government accountability in its policy-making and solving modern day complex problems such as climate change, homelessness, indigenous welfare and so on.

Policy makers & Governments around the world have realised that lot of these that wicked problem need some form of networking such as public private partnerships , ‘ whole government approach’ where range of portfolios, departments, organisations and jurisdictions come together to deliver better quality outcomes , increase citizen participation & improve government’s responsiveness towards these issues .

However this collaborative problem-solving policy implementation creates an accountability gap

Lynelle Briggs in her paper ‘Delivering performance and accountability ‘acknowledges that these new collaboration ways can be unstructured, messy …

“It points to accountability gaps that have emerged as the new modes of policy implementation have failed to achieve the standards of transparency and accountability that the public expects from governments” (Lynelle Briggs, APSC, 2008)

Such a gap don’t exist in countries like New Zealand which follows unitary style of government where one government is ultimately responsible and accountable.

Closely linked term, which often revered as virtue, is ‘competitive federalism’ whereby different governments compete for private and public funds & resources based on their performance, utilisation, returns, and state legislation and rules their device.

There are 9 governments and 15 legislative chambers in Australia for a population based off just fewer than 25 million.

Hypothetically, if we were to construct Australian constitution afresh, will we create 9 governments (Greg Craven, 2005)… to compete vertically and horizontally amongst themselves for resources on the lame excuse that it boosts creativity?

As Dr Peter Long questions the virtue of competitive federalism (during Workshop for Unit 1), if this was the case why is it that we look up to UK and New Zealand for most of our reform ideas.

Also the theoretical advantage of competing leading to best utilisation of resources have, in reality , become ‘ race to the bottom’ in many cases driven by parochialism .( John Brumby , 2014) . US has competitive federalism which has resulted in poor states to generally stay poor and keep their people poor (Michael Pascoe, 2014).

Thus it can be again be concluded that Australia would be better governed without both cooperative and compititive federalism

Fiscal Imbalances created due to running Australian Governance as a Federal

Let’s now look at now the financial aspect of governing as no discussion is complete without a mention of fiscal impact.

The costs of running multiple tiers of governments, & the cost of managing their imbalanced roles and responsibilities interactions, compliance etc. is staggering. It was estimated to be around $40 billion in 2002. The per capita cost as of today would be much higher compared to per capital cost of running unitary style of governments like UK or New Zealand. When experts concludes that costs of running unitary style UK Government is more than that of Australia , they often forget that UK is 3 times in population to Australia .

Commonwealth raises about 82 % of tax revenue in Australia .States are responsible for at least 40% of national expenditure. This means that states are reliant on commonwealth grants to meet their obligations of delivering services such as schools, hospitals, police and public transport. (Anne Twomey 2008)

This imbalance between revenue generation and expenditure is often enough referred as Vertical Fiscal Imbalance. (VFI)

Australia has the biggest VFI in the world where nearly 40% of state and local revenue is contributed by Commonwealth grants

No state at present in Australia has the ability to raise its on revenue/taxes to just charge it on duties or tasks. .

The well-known Vertical fiscal imbalance (resulted due to central monopoly over major taxes,), Commonwealth grants, tied or untied, (SPP), Horizontal fiscal equalisation (HFE) perils, are all the creations of our flawed federal system.

This section further demonstrates that Australia would be better governed if it was not a federation. The later section makes case for alternative form where these perils will cease to exists if not completely, then at least to a greater extend

With centralisation of major taxes and revenue and its distribution to state using SPP, grants HFE principles it seems states are mostly the middleman. They are reduced to mere service delivering agencies for Commonwealth programs (Jonathan Pincus, 2008)

Commission of Audit reports acknowledges that the current Federation operations poses fundamental challenge to delivery of good, responsible government in Australia

Recommendation: Australia as Unitary or two tier government

The flaws in the Federal systems have been well recognised and various governments have tried to fix them by changing the intergovernmental arrangements or relations. The white paper on Reforms of the Federation 2015 under Tony Abbott’s government highlighted lot of the above listed issues. It recognised the imbalance and ambiguity in roles, responsibilities and revenue. It then suggested that Centre does too much, it talked about defined roles, responsibilities and some reforms around revenue and making state more sovereign on principle of subsidiarity

However it failed to answer if federalism is still fit for the purpose?

Australia is a relatively new nation compared to the rest of the world, with one of the least population mass compared to the landmass.

It is recommended the current three tie of government be reduced to two by abolishing states. Australia does not need States.

States in Australia, unlike in other countries are not formed on the basis of culture, race, religion or language but evolved from colonies for merely geographical and economic activity.

Bob Hawke repeated advocated for centralism and abolishing of state government.

This will mean that we will have one parliament with all law making powers .This will save billions of hard earned tax earners money which can be better utilised every year in modernising government with latest technology

The idea of abolishing three tiers of government was also discussed in 2020 summit however they suggested to abolish local government and replace with creation of more ( as many as 40 ) states ( future of Australia Governance in Australia 2020, Canberra 2008).

Centralism or unitary style which is criticised as lacking flexibility or subsidiarity is not always true. Unitary Governments can also have local government in the form of regional , city or district councils which are more closed to the ground to look after the needs and interests of specific groups or communities thereby providing subsidiarity.

Our twin neighbours New Zealand (who we mimic while devising lot of policies) shows that unitary style works better than federation for economies like ours. New Zealand is better and effectively governed than Australia. Look at the last decade – while we changed five prime ministers and not much changed apart from declining economy , dwindling public services , New Zealand in the same period managed to increase GST to 15% , reduced top income tax by 6% to 33%, .

It also managed to commercialise number of public enterprises.

Imagine an Australia where there is no more bucks passing, no duplication or overlapping or roles and responsibilities… No more complexity of compliance with different legislations.

That Australia will have only one department each for health, agriculture education and so on supported by regional councils devising uniform yet flexible policies and services. Therefore the best of staff from all abolished state departments will come together to form intellectual central nucleus departments whilst administrative wings / divisions may exist in the regions to deliver the policies and customise those to regional requirements.

There will be no more vertical fiscal imbalance; there will be no differential state laws and business in the country will experience a ‘seamless national market’ with the uniform laws and regulations

Lawmaking authority could be devolved to large number of regional councils ,just like state government currently delegates to local government, except this will eliminate the middle man ( state government ) leading to more efficiency, responsiveness, transparency, customisation and subsidiarity.

In conclusion, as former Prime Minister Bob Hawke once said, the time has come to rewrite the constitution and do away with federalism in its current form.

Keep it simple – is the new mantra going around the world and same applies to our government too. Any tinkering reforms to current federation such as realignment of roles , responsibilities and revenue , whist still keeping three tiers due to fear of changing too much or pragmatism , will only act as a bandage to the bleeding economy and political system. As long as the States exists, the powerful cashed up Commonwealth will always be tempted to obstruct the state affairs for electoral advantage or in the national interest as it sees “(Jonathan Pincus, 2008)

Australians are ready for change as indicated by various surveys and polls.

A survey conducted by Griffith University in 2014 reported 71% of respondents want the current system to change. Further survey instigated that year by a lobby group called Beyond Federation also found that 78% of respondents were in favour of single set of laws for the nation.

Lot of harm has already been done .The time has come to stop it. Australia will surely be better governed if it is federation no more but instead adopt compact, simpler, straightforward forms such as unitary form.

Review of Literature and Research Methodology on Accountability

Literature 1

Sowmya Kidambi (2012), studied on “Why It Is Important for NGOs to establish their credibility when every sector is under the scanner?”

In this study, she described that as civil society organizations, nascent political formations increasingly demand transparency and accountability from the political establishment, and executive, it is ethically necessary that they develop institutional structures and systems for their own transparency and accountability. Amid this widespread call for transparency, there are many questions being raised about public resources, their use and potential misuse by non-governmental organizations (NGOs). The study suggested public auditing system should be developed so that the beneficiaries can monitor the use of funds meant for them.

Literature 2

Godwin Awio, Deryl North, Stewart Lawrence (2011) studied on “Social Capital and Accountability in Grass Roots NGOs: the case of the Ugandan community-led HIV/AIDS initiative”.

In this study, they analyzed how grass-root NGOs account for their actions and expenditure and how this accountability is disclosures to and benefits the citizens they serve. This study was based on a case study of an NGO that delivers welfare services to a Ugandan committee affected by the HIV/AIDS pandemic. The research found that by harnessing the attributes of social capital grass root NGOs can supplement format accountability obligations to funders with effective bottom-up accountability. This research addressed the lack of empirical studies of NGOs in accountability.

Literature 3

Gloria Agyemang, Mariama Awumbila, Jeffrey Unerman, Brendan O’Dwyer(2009)

They studied on “Accountability and Aid Delivery” the aims of the research project had been to investigate, through the experiences of those operating on aid projects at the NGO fieldwork level, the impact of different accounting and accountability mechanisms on the effectiveness of aid delivery. By investigating this issue and identifying the types of accounting and accountability mechanisms that enhance aid, effectiveness and those that have a potentially dysfunctional impact on aid effectiveness.

This study aims to contribute to the formulation of NGO accounting and accountability policies that will be effective in improving the efficiency and effectiveness with which aid funding is transformed into a reduction in human suffering in impoverished nations. The insights provided throughout this study, and the recommendations outlined above, provide and suggest many avenues of further research into the impact of accountability mechanisms on the effectiveness of aid delivery and the development of new accounting and accountability mechanisms.

Literature 4

Edward Mac Abbey (2008) studied, “Constructive regulation of non-government organizations”

This study found that a key role of Civil Society Organizations, such as NGOs, is to develop community capacity to link with formal sector institutions. Regulation of NGOs themselves can legitimize their role, improve their professional standards, and assure accountability to the public. Care should be taken not to excessively regulate, which restricts innovation and outreach of NGOs. Constructive regulation should include simple registration, self-help regulatory mechanisms, and formal regulation of important services such as microfinance. Drawing on experience in Bangladesh and Dominican Republic, the author demonstrated how regulation can improve the effectiveness of development intervention of NGOs.

Literature 5

Brendan O’Dwyer, and Jeffrey Unerman (2008), studied on “The paradox of greater NGO accountability: A case study of Amnesty Ireland”

In this study, they analyzed that despite mounting public, governmental and corporate interest in issues of non-governmental organization (NGO) accountability, there were few academic studies investigating the emergence of accountability mechanisms in specific advocacy NGO settings. Drawing on the theoretical constructs of hierarchical and holistic accountability, this paper addressed that research gap by investigating recent developments in accountability practices at the Irish section of the human rights advocacy NGO Amnesty International.

Through analysis of a series of in-depth interviews with managers in Amnesty Ireland, supported by extensive documentary scrutiny, this study examined reasons why Amnesty’s historical reliance on internal forms of accountability had been augmented with a range of ad hoc external accountability mechanisms. It was widely perceived that this trend could, somewhat paradoxically prove counterproductive to the achievement of Amnesty’s mission. The paper considered the possible implications of these findings for the development of NGO holistic accountability practice more generally.

Literature 6

Glen Lehman (2007) studied on “The accountability of NGOs in civil society and its public spheres”

In this study, the author analyzed that in the past two decades, globalization had brought about many unexpected changes in the assumed role of governments. Part of this had included the role and rise of non-government organizations (NGOs) that had grown in number and power to fill services that governments were either unable or unwilling to provide. The prominence of NGOs in third-world countries fills a void of humanitarian services that were often lacking, but in all nations, they had increasingly become potential vehicles for ideology instead of assistance, subject to capture by both sides of politics. In this respect, a new question and a new challenge face those who look for the accountability of NGOs in the public sphere—Are NGOs doomed to fail by the environment that made them necessary? The possible role for NGOs can be evaluated by examining alternative of ways of thinking about the “civil society”. More particularly, NGO contributions involve examining connections with accountability in a world in which public intervention and social awareness had been trivialized. A reinvigorated civil society can help to reconcile the role of NGOs to an authentic and effective accountability.

Literature 7

Brendon O’Dwyer, and Jeffrey Unerman (2007), worked on “From functional to social accountability: Transforming relationship between funders and nongovernment development organization”.

The purpose of this paper was to analyze the evolving nature of the accountability relationship between a group of Irish non-governmental development organizations (NGDOs) and their primary governmental funder. The empirical content of the paper was derived from a series of in-depth interviews with senior individuals working within the Irish NGDO sector, along with a comprehensive analysis of documentary sources. The study find out that lack of resources, organizational commitment, guidance, and expertise from the governmental funder had contributed to an attitude of skepticism among many NGDOs towards both the partnership rhetoric and the accompanying adoption of the central tenets of social accountability, particularly downward accountability to beneficiaries. The limitation of study is that research was based on a detailed analysis in a specific context which may limit its wider applicability. Nevertheless, it added insights to the developing academic literature on NGO accountability, with particular reference to their broader social accountabilities.

This study provided in-depth, highly informed insider perspectives on the evolving nature of these relationships, especially in the context of attempts to promote more partnership-based approaches to the delivery of development aid.

Literature 8

Jeffrey Unerman, Brendan O’Dwyer, (2006) ‘Theorising accountability for NGO advocacy’, Accounting, Auditing & Accountability Journal, vol. 19 Iss: 3, pp.349 – 376

The purpose of this study was to develop a staged theoretical argument regarding whether NGO can be considered, responsible and accountable for the direct and indirect consequences, on a wide range of stakeholders flowing from their advocacy activities. The paper found that the advocacy activities on NGO may be considered to cause widespread and often unintended negative impact upon the lives of many either stakeholders who are close to or remote from.

This study was primarily theoretical so it can be benefit from empirical studies to assess its applicability in practice. It also has the scope to be applied in assessing the responsibility and accountability of a range of other entities for their advocacy – such as businesses, religious bodies, political parties, and academics.

Literature 9

Rob Gray, Jan Bebbinqtan, and David Collison(2006), studied on “NGOs and civil society accountability, making the people accountable to capital”.

The research finds that the essence of accountability lies in the relationships between the organization and the society and/or stakeholder groups of interest. The nature of this relationship allows us to infer much about the necessary formality and the channels of accountability. In turn, this casts a light upon taken-for-granted assumptions in the corporate accountability and reminds us that the essence and basis of success of the corporate world lies in its withdrawal from any form of human relationship and the consequential colonization and oppression of civil society.

Literature 10

Andrew Goddard, Mussa Juma, Assad (2006), conducted study on “Accounting and navigating legitimacy in Tanzanian NGOs”

This research established the importance of accounting in the process of navigating organizational legitimacy. Two principal strategies were employed by organizations in navigating legitimacy – building credibility and bargaining for change. The paper contributed to the limited empirical research into accounting in NGOs in developing countries and to grounded theory, accounting research.

The principal finding that in the NGOs studied the primary purpose of accounting was its symbolic use in navigating legitimacy and that it had a minimal role to play in internal decision making, was an important finding for practice as well as for understanding and knowledge. Finally, the paper sheds light on accountability in NGOs by narrating how the phenomenon is constructed and perceived by organizations and stakeholders.

Literature 11

Rob Dixon, John Ritchie, and Juliana Siwale (2006), studied on “Microfinance: Accountability from Grassroots”.

This study focused on accountability at the grassroots in microfinance NGOs with a social mission. It reveals potential for further personal, community and socially constituted accounting research within microfinance in particular. This study was based on a series of semi-structured interviews and live observation of the client-loan officer interface and internal meetings provided triangulation on accountability relationships in the midst of crisis. Data were analyzed using NVIVO, a qualitative computer software package.

The findings showed that tensions between vertical and horizontal accountability in practice can be directly translated into heightened pressure and stresses on both the non-governmental organization (NGO) and its loan officers, which constrain overall accountabilities to other stakeholders and disguise other potential dysfunctions.

Literature 12

Alnoor Ebrahim(2003), studied on “ Accountability In Practice: Mechanisms for NGOs”.

This paper examined how accountability is practiced by nongovernmental organizations (NGOs). Five broad mechanisms were reviewed: reports and disclosure statements, performance assessments and evaluations, participation, self-regulation, and social audits. Each mechanism, distinguished as either a “tool” or a “process,” was analyzed along three dimensions of accountability: upward–downward, internal–external, and functional–strategic. It was observed that accountability in practice had emphasized “upward” and “external” accountability to donors while “downward” and “internal” mechanisms remain comparatively underdeveloped. Key policy implications for NGOs and donors are discussed in this study.

Literature 13

Paul Jepson, Governance and accountability of environmental NGOs, Environmental Science & Policy, Volume 8, Issue 5, October 2005, Pages 515-524

The issue of the governance and accountability of environmental non-government organizations (ENGOs) is gaining in prominence in academic and public discourse. Ideally each sector of society should be characterized by a distinct accountability regime, but faced with calls for greater accountability there is a risk that ENGOs might apply accountability regimes uncritically from the business or private sector. This could undermine the independent change-agent role of ENGOs and therefore weaken aspects of the democratic system.

This paper argued that ENGOs and the NGO sector in general, need to develop and debate a distinct and credible accountability regime that strengthens and defines their role in society. In support of this goal a framework for conceptualizing a legitimacy-based approach to accountability is described. This was based on the observation that NGO capacity for impact was founded on different types of legitimacy that together establish and maintain public trust. One role of governance is to maintain and strengthen these legitimacy assets by establishing and over-seeing accountability streams that recognize that public trust is built on the cumulative evidence of legitimacy.

Literature 14

Glen Lehman, “The accountability of NGOs in civil society and its public spheres, Critical Perspectives on Accounting”, Volume 18, Issue 6, September 2007, Pages 645-669.

In the past two decades, globalization has brought about many unexpected changes in the assumed role of governments. Part of this has included the role and rise of non-government organizations (NGOs) that have grown in number and power to fill services that governments are either unable or unwilling to provide. The prominence of NGOs in third-world countries fills a void of humanitarian services that are often lacking, but in all nations they have increasingly become potential vehicles for ideology instead of assistance, subject to capture by both sides of politics.

In this respect, a new question and a new challenge face those who look for the accountability of NGOs in the public sphere—are NGOs doomed to fail by the environment that made them necessary? In other words, are they doomed to fail because they are unelected and unaccountable, and unlikely to rise above the limitations of the current system that made them necessary in the first place? The possible role for NGOs can be evaluated by examining alternative of ways of thinking about the “civil society”.

This draws together interpretative strategies from philosophers such as Stanley Aronowitz, Carl Boggs, Craig Calhoun, Timothy Luke, Randy Martin and Charles Taylor. From their work, an on tic dialectical thinking is developed and can be used to assess whether NGOs can truly fill the democratic vacuum, and contribute towards the good society. More particularly, NGO contributions involve examining connections with accountability in a world in which public intervention and social awareness have been trivialized.

Literature 15

Sanjaya Chinthana Kuruppu (june, 2015) submitted a thesis on “The accountability trap: understanding meaning, practice and stakeholder salience in an NGO”.

In this study the researcher had studied that There is a great concern for “what forms of accountability are manifest and hence privileged” (Gray and Laughlin, 2012 p. 241). At the heart of these questions are issues of power and how through the operationalisation of accountability, certain aspects of accountability are elevated over others. As such, this thesis adds to theory in a number of ways. This study extended on mainly philosophical expositions of accountability in terms of a relationship between a ‘self’ and an ‘other’ (Roberts, 1991; Messner, 2009). Contextualized empirics from a Sri Lankan case study highlighted how certain forms of accountability will inherently dominate because of underlying and generally taken for granted notions of how to be accountable and who really matters. The way in which DEVPA (name of an NGO) created a sense of self within a diverse stakeholder context demonstrated how the ‘self’ is always a reflection of an ‘external other’. A core theoretical insight provided by the case evidence is the extent to which stakeholder salience matters in shaping DEVPA’s sense of self. Future theoretical explorations may observe how other NGOs and different types of organizations may be influenced by stakeholder salience in different ways; thus highlighting how accountability can be manifested in diverse forms.

Stakeholder salience has been discussed in this work (implicitly, at least) in terms of discussions of how ‘upwards’ stakeholders are prioritized and catered to, implicitly and explicitly subordinating the concerns of ‘downwards’ stakeholders (see, for example, Goddard and Assad, 2010). This thesis extends present studies by adopting a stakeholder salience lens to explain some of the dynamics of changing power, legitimacy and potentially urgency (Mitchell et al., 1997; Neville et al., 2011) has driven changes in the way that DEVPA interacts with its stakeholders.

Fundamentally, the thesis adds to theory by discussing stakeholder salience as a key driver of DEVPA’s evolving role. In doing so, the thesis again elucidated a distinction between an ‘organizational self’ and an ‘other’. In addition to highlighting the dynamics of ‘self’ and ‘other’, this study also adopted a theoretical framework based on Bovens’ (2010) exposition of accountability as a virtue and as a mechanism. In this study it is argued in chapters how the logic of accountability and governance at DEVPA were shaped by salient stakeholders and their demands.

Subsequently, discussed how the processes of accountability and governance were also driven by salient stakeholders’ concern. Explained in a chapter how logics, processes and practice at DEVPA were bound by the fundamental calculative nature embedded within operationalisations of accountability. These calculative practices are responsible for creating and perpetuating power differences among stakeholders by capturing the language and the means by which NGOs relate to their stakeholders. As the ‘language’ of accountability and governance (e.g. logics and processes) is constructed by powerful stakeholders, as discussed earlier, the voices of ‘downwards’ stakeholders are automatically subordinated. Governance studies have tended to concentrate on private sector structures and processes and government/public institutions (Brennan and Solomon, 2008).

Work exploring governance at NGOs remains much more limited (Steffeck and Hahn, 2010; Steffeck et al., 2010), this despite accountability and governance being considered as interwoven (Tandon, 1995) and important to examine concurrently (Buriss et al., 2008).

This study adds to the literature by unpacking governance structures and systems alongside and with accountability systems. Despite a significant transformation in DEVPA’s role, governance structures are relatively hierarchical despite a proclaimed need for being more nimble. Furthermore, despite a willingness to adopt and integrate a participatory approach to decision making and project interventions, ultimately, the demands of powerful stakeholders pressured DEVPA into more centralized control structures.

Ultimately, the thesis confirmed theoretical findings from prior studies and shows how NGOs are caught in an ‘accountability trap’ to satisfy demands of ‘upwards’ stakeholders. The strength of this conclusion lies in the empirics of the case study. It is also discussed that the process of DEVPA’s evolving role within the Sri Lankan context from a ‘direct implementer’ to a ‘policy advocacy’ based NGO. Despite a significant change in the organization’s operational focus and interventions, the underlying form of DEVPA’s accountability and governance did not transform, restricted by the necessity to ‘calculate’ impact and justify the NGO to external stakeholders (see, for example, O’Dwyer and Unerman, 2008).

Literature 16

S. S. Ghonkrokta and Anu Singh Lather (February, 2017) “Identification of Role of Social Audit by Stakeholders as Accountability Tool in Good Governance”

In this study the authors studied that in the recent years social audit is being viewed as a promising approach to improve the performance and social accountability in private as well as in public sector. A number of state governments have also initiated social audit exercise and government of Delhi is probably the pioneer in social audit. Organizations have developed procedures, standards and methods to achieve social audit as it has been useful in many ways in improving performance and accountability, but it is only the stakeholders who can truly appreciate the benefits and role of social audit.

In this study the construction of a standardized Likert scale questionnaire undertaken to assess the role of social audit as perceived by stakeholders. In the process of constructing the instrument, this paper attempted to clarify the actual role of the society and civic engagements as is perceived and expected by stakeholders. Social audit creates confidence in society regarding government initiatives, promotes transparency and efficiency, improves social, ethical and environmental performance, enhances inclusion, facilitates monitoring and ensures accountability.

A Clarion Call for Inclusive Responsive Leadership Accountability: Analytical Essay

A Clarion Call for Inclusive Responsive Leadership Accountability

For centuries, leaders have been lauded for their excellence. Whether decision-making, driving execution, or pursuing results, their collective expertise has helped the world successfully navigate industrial and technical revolutions, world wars, economic recoveries, and a multi-generational workforce (among other notable achievements).

However, as globalization expands, many of those acclaimed leaders have failed to cultivate inclusive work environments; inspire and empower talent; and foster employee congruence, engagement, and belonging.

This behavioral contrast reveals that several of these leaders operate under “self-perceived effectiveness” or, an (over)estimate of the degree to which one perceives his/her/their positive impact on the workforce and workplace. Meaning, they believe that their vocal, ideological, and/or perhaps financial support of/for/toward diversity and inclusion wholly and equally equates to being behaviorally invested and/or possessing agency in the same. As such, leaders expect beneficiaries (or stakeholders) of said support to perceive them in a favorable light and view their effectiveness likewise.

Psychologists remind that self-perception and others’ perceptions of self can differ significantly. An overestimate of influence on leadership’s part can undermine their credibility from the beneficiaries’ part. Thus, creating mistrust, distrust and skepticism — key hurdles in the quest to build an inclusive ecosystem.

Leaders must be reminded that great leadership is shaped by, and interdependent on, followership.

“The world is moved not only by the mighty shoves of heroes, but also by the aggregate of the tiny pushes of each honest worker.” — Helen Keller

Stakeholders today expect more from their leaders. They require leaders to exercise more connectivity and responsiveness to diversity and inclusion than ever before — not in terms of lip service or feigned action — but true dedication and sustained commitment. Inclusivity requires greater accountability.

Leadership accountability, especially as it relates to diversity and inclusion, must be 360 degree and multi-dimensional if it is to truly be effective. Mono- and dual-dimensional accountability (or top-down, 90 degree and lateral, 180 degree) tends to omit the voices and feedback of a fully diverse constituency. Leadership governance in a traditional sense reinforces historic, systematic, and institutionalized beliefs and repeats behaviors that work counter to truly inclusive environments and ecosystems.

To appreciate where this call for inclusive responsive leadership accountability derives, one must examine closely the symmetric relationship between diversity and leadership.

Diversity and Leadership

The spread of globalization has given rise to a number of diversity-related issues within the workplace. Driven by internal as well as external pressures to do something — anything — to appropriately address said issues, diversity practitioners and their human resources counterparts, draft leaders to take both proactive and reactive action in redress of the same. Sadly, at times, this is done with little to no lasting effect.

This is because diversity (in whatever its implementation: diversity and inclusion; inclusion and belonging; valuing, inclusion, belonging and equality, etc.) suffers from a crisis of identity. For decades, it has sat juxtaposed between moral obligation and punitive scourge; from “the right thing to do” to “do what is right, or else (no bonus, raise, promotion, etc.)”. Since then, it has been sanitized, gentrified and weaponized; becoming a target of resentment for some, a profit generator for others, a symbol of pride for a few.

Leadership, like diversity, is also fluid in its definition, role, and execution. In fact, its nearly 400 definitions, approaches, concepts, and theories makes it, too, a contest to assign sufficient weight to the obligatoriness of it.

Together, their fluid identities present a ‘wicked problem’ in that they are complex yet enduring issues of indeterminate scope and scale. They are both difficult to explain, inherently impossible to solve, and evenly create a struggle for diversity stewards and diversity-adjacent gatekeepers to accurately assess and measure.

Struggle notwithstanding, great leadership in diversity is necessary. As such, systems and solutions that help leaders move from saying the right things to behaving differently is correspondingly needed.

Leadership’s Disconnect with Diversity

Before design of inclusive accountability frameworks can take form or shape, some hard truths must first be acknowledged.

Organizational culture begins and ends with leadership.

Leaders talk favorably of a positive workplace culture, but are perceived as inauthentic and disingenuous when their words and actions contradict.

Inauthenticity leads to prolonged mistrust and distrust, leaving stakeholders feeling psychologically unsafe and emotionally taxed.

Psychological unsafety leads to fear; emotional taxation leads to withdrawal. Both lead to exclusion.

Exclusion over time and en masse leads to litigation. (Thus, putting the organization and all of its stakeholders at risk and/or crisis.)

Research by the Boston Consulting Group echoed these truths, in part.

“…Most company leaders — primarily white, heterosexual males (age 45 or older) —still underestimate the challenges diverse employees face (across the entire employee life cycle, from recruiting and retention to advancement and leadership commitment). These leaders control budgets and decide which diversity programs to pursue. If they lack a clear understanding of the problem (how big the problems are or where those problems lie), they can’t design effective solutions.”

“When asked if they see obstacles to diversity and inclusion at their company, more than a third of diverse employees said yes. Half of all diverse employees stated that they see bias as part of their day-to-day experience at work. Half said that they don’t believe that their companies have the right mechanisms in place to ensure that major decisions (such as who receives promotions and stretch assignments) are free from bias.”

The 2019 Edelman Trust Barometer revealed that

“Employees are ready and willing to trust their employers, but the trust must be earned through more than ‘business as usual.’”

Stakeholders want and expect their leaders to not only speak up or out, but to proactively take action and lead change. Therefore, accountability frameworks must be built to not only be inclusive (to incorporate the ‘voice of the stakeholder’) but responsive and introspective, to meet the needs and expectations of constituents as well.

If accountability systems and solutions were tailored accordingly then, psychological safety would be established, trust would be integrated into the fabric of the organization, and diversity would be more uniformly applied throughout the organization.

A Leader’s Stakeholders

Accountability, by definition, means “answerability” (or the “justification of one’s actions”). Leaders have six core constituencies to which they must answer: employees, customers, communities, investors, regulators, and self. Individually, they have specific value needs and wants from leadership. Collectively, they have expectations around and accountability requirements for the same (as identified in the following table).

Mining feedback from each stakeholder can help leaders identify the attitudinal, behavioral and action-based blindspots that have rendered them unsuccessful at fostering inclusive ecosystems. The activity can also inform diversity and human resources practitioners’ efforts in (re)structuring leadership accountability in a way that delivers more stakeholder-expected value. However, culling this information alone will not drive leadership behavioral change.

The Leadership Intelligence Vacuum

One of the greatest misconceptions about leaders is that they intrinsically know how to lead. Various studies support this posit.

• 44 percent of managers felt unprepared for their role (Grovo)
• 47 percent of managers don’t receive any training when they take a new leadership role (Inc)
• 60 percent of new managers underperform or fail in their first two years (ATD)
• 71 percent of companies do not feel their leaders are able to lead their organization into the future (InfoPro)
• 87 percent of managers wished they’d had more training before becoming a manager (Grovo)
• 93 percent of managers feel they need training on how to coach their employees (Globoforce)

Because promotions and successions are traditionally based on the achievement of results, moving up the ranks through hard work, smart decision-making, and consistent delivery without ever having any people management or development requirements attached is not abnormal. Yet, upon reaching the pinnacles of leadership, leaders are idolized as being prolific at leading the workforce as they are the workplace. To match this myth, they adopt a stylized persona, image and language of leadership to present the appearance of seamlessly fitting into the role. Over time, these leaders come to perceive (and inevitably believe) themselves to be effective (hence, perceived effectiveness). In contrast, others (stakeholders) view them as being inauthentic and untrustworthy — “talking the talk” rather than “walking the walk” — especially in relation to diversity. Moving leaders from saying the right things to behaving differently ought to begin and end with Leadership intelligence (LQ).

LQ qualifies leadership figures to serve self, others, and organizations with more unvarying success. When exercised in concert, the amalgam of LQ traits, characteristics, qualities and acumen architect the heads (consciousness), hearts (emotions), hands (behaviors), and feet (actions) of leaders in meaningful ways. Ways that naturally align with stakeholder needs, wants, expectations and requirements of/from leadership.

Moreover, marrying these quotients with existing accountability measures creates Critical Success Factor (CSF) and Key Performance Indicator (KPI) benchmarks that target specific aspects of leadership performance and track the full scope of impression and impact for improvement.

For example, adding a Communications Quotient (CoQ) and a Social Quotient (SQ) to the leadership accountability framework can assess a leader’s ability to read, listen, and relate to others, while simultaneously weighing their capacity for using inclusive language. Further, incorporating the Appearance Quotient (AQ), Behavior Quotient (BQ) and Situation Quotient (SQ) into the framework ensures that leaders are seen as speaking, behaving, and acting situationally appropriate (particularly in times of conflict and crisis). Finally, including Networking Quotients (NQ) and Culture Quotients (CQ) as accountability metrics can serve as indicators that a leader’s lack of exposure to diverse people and perspectives perpetuates systemic bias.

Once areas of improvement are highlighted and identified, diversity and human resources practitioners can then inform, train, and coach leaders on specific interpersonal and intrapersonal development (using Leadership Intelligence as a rubric). As these leaders self-actualize, they will likely accept and willingly invest in an inclusive responsive accountability framework that helps them align their words, actions, and behaviors with stakeholder perception.

Applying Inclusive Responsive Accountability

It is widely understood that what is learned is rarely applied. Raising awareness of an area of improvement does not automatically mean said improvement will actually take place. For accountability to adhere, it should be positioned as a tool of empowerment and effectiveness. It should inspire ownership of personal and professional growth, development and improvement.

Activation of the aforementioned recommendations requires a connection to — and must work in tandem with — the execution of organizational strategy, goals, and objectives. There should be clear linkages between the health, wellbeing, and overall success of the organization and the maturation of leadership. Addressing the latter will directly underwrite the former. When leaders are fully realized so, too, are the organizations (as well as the people) they lead and serve.

To date, leader effort has been the primary benchmark of inclusive leadership. Historically, awards received, events sponsored, conferences attended, speeches given, photo ops taken, and press mentions have indicated the level of investment leaders have made toward inclusion and likewise, how far the proverbial diversity needle has moved. Firstly, because endeavors toward inclusion tend to be synonymized with engagement in the same, this type of accountability evaluates promises and attempts equally (rather than accurately weighing pledges in comparison to behaviors and actions). Secondly, the measurement is one-dimensional; giving organizations and leader stakeholders false positives of leadership sentiment, commitment, and delivery of outcomes. Finally, the practice gives little to no pause for individual self-reflection or emotional/behavioral course correction if/when needed. Inclusive leadership is best achieved when leaders operate through a filter of mindfulness and reflection.

The suggestion here is to incorporate the whole of the individual leader — thoughts, emotions, behaviors, and actions — into the accountability equation. Marrying this new formula to developmental, remedial, and preventive practices codifies the requirements of diversity and inclusion into the shared culture of the leader, leader stakeholders and the organization. Moreover, it rebalances performance scorecards to appropriately respond to the ever-changing yet codependent demands of the workforce, workplace, and marketplace.

Case in point, introducing the tenets of LQ in the early stages of the leadership journey establishes a code of inclusive conduct by which leaders can be expected to think, emote, behave, and operate in relation to others, especially those of difference.

Embedding LQs as CSFs and KPIs throughout leaders’ immersive tenures creates performance milestones which leaders and their accountability partners may use to signal progress (or lack thereof) against stakeholder engagement and experience objectives as well as strategic, operational, administrative goals.

Using LQs to flag asymmetric changes in organizational performance and stakeholder sentiment as they occur in real-time can assist leadership oversight in correspondingly addressing and correcting disconnects between leadership thoughts/emotions and behaviors/actions that adversely affect operational outcomes.

As illustrated, the new formula builds clear outlines of expectations, capabilities, measurements, feedback, and consequences for inclusive responsive leadership accountability. It combines the traditional assessment of strategic execution and follow-through with mindfulness and self-reflection, engagement and experience, behavior and action; collectively functioning to better align leaders’ words with their actions (not efforts).

A Clarion Call

Regardless of political rhetoric, changing laws, or civil debate, diversity and inclusion are societal mainstays. According to Pew Research Center, within 25 years, America’s population will be its most heterogenous in history. By mid-century, there will be two billion elderly and two billion young people in the world, living and/or working under the same roof. Each representing one of five races, seven generations, 63 genders, 4200 religions, over 5000 cultural ethnicities, and nearly 6000 languages. As such, in today’s (and tomorrow’s) highly intersectional workplace and marketplace, inclusive leadership is a non-negotiable.

The more diverse the world becomes, the greater the responsibility to and expectation of the people and systems connected to it. In its 2017 Corporate Social Responsibility Study, Cone Communications reported that nearly 80 percent of Americans believed organizations “had an obligation to take actions to address and improve important social justice issues, regardless of their relevance to everyday business”. Further, of the ‘Top 10’ concerns Americans expect organizations to support, racial equality, women’s rights, immigration, and LGBTQ rights were respectively ranked #2, #3, #5 and #8 in greatest significance. Collective sentiment is so strong that an average 82 percent of Americans are recorded as “willing to reward or punish organizations based on their response to said issues.”

Although, organizations do not operate on their own accord. The degree and extent to which they internally and externally respond to matters of diversity and inclusion is largely — if not wholly — reliant on leadership. (The body follows wherever its head leads.) Without thoughtful, emotionally-engaged leadership putting in work to align values, build mindful strategy, and take socially responsive actions, organizations fail. Without practices and systems in place to ensure said leaders respond appropriately to and deliver on their commitments to cultivate inclusive ecosystems, society fails.

A clarion call has been issued: “Stand up. Speak out. Be real. Be true.” Is your leadership equipped to answer?

Oversight and Financial Accountability of the EU Budget: Analytical Essay

Conclusion and Recommendations

The primary objective of this research is to analyse how the EP oversight role in the EU budget discharge enhances accountability. After assessing the 2017 EU budget discharge, a number of conclusions have been drawn; these conclusions are rooted on two ends; the accountability elements and the oversight tools employed by the EP in executing the 2017 budget discharge procedure. A mixture of both theoretical and empirical findings.

Overall, ex-post oversight of the budget allows parliaments to hold the executive accountable for the use of public resources and promote improvements in their management. Financial accountability is enhanced by the alignment of parliament’s legal powers, oversight tools and EP mobilization of all EU institutions, their roles and contributionsto the ex-post budget evaluation; as keys to the promotion of checks and balances. The budget discharge procedure itself serves as an independent accountability mechanism; a determinant of EU financial accountability; and a distinguished stand-alone parliamentary oversight tool; as it enables the EP to effectively oversee, scrutinise, supervise and control the implementation and management of EU budget. The 2017 discharge entails that the EP has successfully exercised its control over EU budget.

The 2017 discharge procedure by the EP providesa platform for the researcher to mirror through trends of past budget discharges carried out by the EP as well as reflecting on the future discharges. In the record of EP discharges so far, the current discharge (2017) presents a considerable decrease in the levels of errors. This is highly reflected in the ECA’s audit report which shows a ‘clean opinion’ regarding the EU accounts as the expenditure error levels have declined in 2017; ranking as the lowest as compared to all other years. Regarding revenue, no error was detected. All policy departments have implemented their specific budget allocations correctly and with great success in accounting for revenues and expenditures. It is with no doubt that such positive developments are primarily triggered by more viable resolutions given by the EP whenever they issue a decision for each discharge year as well as by the EP (mainly CONT)’s ability to issue follow up on the previous discharges to verify that implementation for the particular year has taken into consideration the previous observations and recommendations into practice. Also, cooperation, and checks and balances between various MEPs committees enable the EP to fully exercise its budget oversight role. The Commission have shown high levels of compliance by taking heed of the EP requests for information and a call by EP on additional information (responding to questions posed by CONT – hearings). Taking from the 2017 results of discharge, one would conclude that, the present state of EU financial accountability is good and that the EP is doing well in its budget oversight performance.

The oversight tools mostly used by the EP in 2017 budget discharge include the committee system, questions, debate, CONT hearings and plenary hearings and vote in Plenary. In requesting for information, the EP utilized the Committee system and questions. In the discussion phase, the EP employed hearings in Parliament and debates in CONT and in Plenary. The EP’s multi- streams scrutiny tools make it possible for the EP to extricate political oversight from administrative issues; thus, its function becomes more relevant in guaranteeing accountability.

Results show that, theCommittee system within the EP exists as an essential aggregate oversight instrumentused in all the phases of discharge (information, discussion and consequence phases. These committees’ offers an administrative input revealed in MEPs specialized committees in different policy departments. Henceforth, the interaction between the EP and ECA plays a significant role in enhancing EU budget accountability, and in strengthening EP’s capacity to deliver its oversight function. Findings in the 2017 discharge show that, the committee arena is the key driver to EP-initiated accountability; with the CONT playing a leading role. Different Standing committees within the EP Plenary provide checks and balances for each other by giving opinions, exchanging views, voting, debating and making amendments.

Regarding the information element, the audit report by ECA is the most powerful document that the EP uses in determining the EC position in accounting for EU finances and budget implementation. The EP work closely with ECA. The technical input by ECA and other internal audit institutions is a valuable tool that is often utilized by the EP when carrying out 2017 budget discharge.

Discussions in the form of hearing procedures and parliamentary debates were the powerful tools by the EP Committees as they demonstrated their oversight capacity in requesting for further clarification and justification from the executive (hearings); as well as coordination between committees in which provision of checks and balances is inevitable through debates. This proves that EP worked independently.

Consequential, the EP granted discharge of the EU budget to the EC and other 6 bodies, after observing EU ‘Consolidated Accounts’ and ECA audit opinion; debates and hearings and questioning the Commissioners; ‘Council recommendation’, and vote in parliament. EP demonstrated its full oversight capacity by giving their opinions and recommendations for future budget, most importantly the next financial framework. The EP through its responsible Budget Control Committee; the CONT emphasised more on the ‘enhanced budgetary performance information’ in the budget; increased participation of all EP committees; a more transparent and streamlined Member States financial accounting mechanisms to avoid further drawbacks; and enhanced cooperation among all MEPs committees.

However, apart from a more positive view in EU budget accountability and effective EP oversight role on the 2017 discharge, some shortcomings has been observed. Errors have been identified in some Member States financial accounts. ECA identified errors that were not identified by National Internal Auditors. This lagging behind in Member States compromises the entire EU budget performance as actual implementation is primarily the duty of EU Member Countries, with almost 75% EU funds in the hands of states.

Concerning the problem identified in 2017 budget implementation; which is the lagging behind of Member States in terms of budget implementation; the blame was laid to indirect involvement of Member States in budget implementation. The ultimate implementation responsibility lies in the hands of the EC; thus, the EP held the EC responsible not the Member States. It is therefore, recommended that the EP has to partly shift the implementation responsibility directly to the Member States and also to introduce tight measures against non-compliers and Member States’ annual financial statements (EU funds) has to be directly audited by independent external auditors. Also the EP could possibly oversee and carryout a discharge function for each Member State independently, as a way of enhancing compliance by Member States.

The 2017 budget discharge by the EP, and its positive developments would be a lesson to the Member States governments,parliaments, and internal auditors, for them to draw lessons from the EP, EC and ECA; in order to enhance financial accountability in their respective national budgets. Since there is a lagging behind in Member States, it could be possible that most of these democracies are not doing well in terms of their own national budgets implementation, oversight and discharge.

For improvement of oversight and financial accountability of the EU budget, there is need for strengthening cooperation between the EP and Member States parliaments and Internal Auditors. This would improve the EP’s oversight capacityand would enable easier detection of shortcomings in budget implementation and financial accounts, especially, Member States accounts. These parliaments and auditors could also offer supplementary resolutions and recommendations, to redress the shortcomings and errors identified in order to improve budget scrutiny, budget discharge effectiveness and soundmanagement of public funds.

A number of limitations have been encountered in developing this thesis. Firstly, there is data limitation. Because of time, the researcher could not collect as much data as intended; as such, this thesis relies onlyon content analysisand not on interviews and survey questions. It would be best if the researcher had a chance to interview MEPs, EC officials, members of ECA and some Member States citizens as they would give their view points based on their experiences and this allows for the verification of the information provided in the EP website. This is important since documents may sometimes provide biased opinion of the writer and only the good of the organization. However, the use of data from the EP official website produces more likely authentic data since the website is not private but public and it is subject to public scrutiny.

Secondly, focusing on one discharge year enables good data presentation since it is more focused and directed to only 2017 discharge making it manageable, however, it limits the analysis of the data and it becomes more difficult to draw conclusions for only 2017 discharge year.

Thirdly, developing more specific measures of accountability proved to be difficult. Accountability concept is much easier to conceptualize than to operationalize due to a wide array of existing theoretical literature on the subject than on the actual measurement. However, merging common accountability elements with oversight tools make it possible to successfully measure accountability.

Alternatively, the limitations encountered reflect into the expansion of the study. As the value of this thesis is clearly to set a concrete foundation into the emerging future studies in the similar subject and case. The expectation would be of a more integrated researchwhich allows for a deep understanding of the EP oversight and accountability in the budget discharge case. Hence, amore comprehensive and in-depth longitudinal comparative EP discharge analysis for several years, probably from 2013- 2018 discharges would be important and interesting to analyse the changing trends of EP discharge function in different years and to see if there is a variation in these years and developments that came as a result.

Research Proposal and Ethics Application on Accountability of People’s Actions in Society

Individuals in the UK can be held criminally responsible from the age of 10. As such, perceptions that are held by the public regarding individuals at this age can differ hugely and is an important topic regarding the accountability of people’s actions in society. In addition to age, the gender of a perpetrator may very well also have an effect on people perceptions of accountability in an individual. In this study, participants will read 1 of 4 possible novel scenarios about a perpetrator who commits a crime. 2 between subjects factors were manipulated, age of the perpetrator (age 12 vs 30), and gender (Male vs female). Each participant will respond to these scenarios using a likert scale to show how accountable they thought the perpetrator was and to show this by suggesting a sentence. Here, we hope to find a main effect of age on accountability and a main effect of gender on accountability, as well as an interaction effect of both facts on accountability.

Literature Review

Accountability is defined as “being answerable to audiences for performing up to certain prescribed standards, thereby fulfilling obligations, duties, expectations and other charges” (Schlenker, Britt, Pennington, Murphy & Doherty, 1994). Tetlock developed the initial concepts of accountability and proposed that accountability is vital in linking the individual levels of behaviour to social systems, as it binds people to collective social norms, letting people know who to answer to and for what, and the grounds for their accountability (1985). Vance, Lowry and Eggett (2013) explain that accountability can be viewed in two ways, the first as a virtue and the second as a mechanism. When viewed as a virtue, they explain accountability as a quality in which an individual is willing to accept responsibility, which is a positive desirable behaviour for those who hold a position of power in the public and in government. When viewed as a mechanism, Accountability is seen as a process in which an individual is obligated to explain his/her actions to someone who can pass judgment on them i.e. prosecution, as well as subject them to the potential consequences of their actions.

Early work by E.D. Smith and Hed showed that younger defendants were more likely to receive more lenient sentences than defendants. This was further supported in Bergeron and McKelvie (2004) where both type of crime and defendant age were manipulated. Here, participants read about either a murder or a theft, and the defendant was either 20, 40 or 60 years old. In the results, they found that there was an inverted-U in the results, where 20 and 60 year old defendants were given less harsh sentences than the 40 year old defendants for the murder scenarios. In addition, Pozzulo, Dempsey, Maeder, & Allen (2009) found that female victims were perceived as more credible than male victims and this was exemplified further when the defendant was male and older. They express their concerns later on as the findings in the study suggest that female perpetrators are not held as accountable as male perpetrators and also do not received sentences that are equal in severity. They concluded that victim age, defendant age as well as crime type may influence verdict decision making. Ghetti and Redlich (2001) supports the idea that age does play a key role in perception of accountability. They found that college students perceived younger offenders as less accountable for their actions as they rated them as less culpable and less able to understand their legal situation. This is further supported in a study conducted by Varma (2006) which found that in general having any information about a young offender, regardless of the details, resulted in the public giving more favourable ratings.

When looking at Rape myth Acceptance (RMA), very few studies have looked at how blame attributions change based on the perpetrators gender. This is because it is generally assumed that most perpetrators are male and the victims are female. However, Gerber et al (2004) had a couple of findings which were interesting. The first being that both male and female offenders generally received more blame when the victim was female. The second being that female offenders appear to be more likeable than male offenders, regardless of the gender of the victim.

Evidently, previous studies on accountability have failed to look at an interaction between the two factors on defendant accountability. As they mainly focus on looking at either Gender or Age as a main effect and not an interaction, it is clear that this interaction is worth exploring and could prove to be practically beneficial. The rationale behind this study will be to see if both age and gender both affect how regular individuals perceive accountability in offenders. In contrast to crime type and outcome, which are usually expected to affect perceptions of accountability, we decided to introduce two other factors that could possibly alter perceptions of accountability further. So, this study will be looking at the effect of age on accountability in offenders in different scenarios, as well as looking at an effect of gender on accountability in the same scenarios. This study will also hope to find an interaction between age/gender and accountability in the same scenarios. This will be measured using questionnaires where participants will rate the offender’s accountability in the scenario as well as how serious they thought the crime was and to justify it with a suitable sentence. The first main hypothesis for this study is that defendant age will influence participants’ perceptions of accountability in a novel scenario. The second main hypothesis for this study is that defendant gender will influence participants’ perceptions of accountability in a novel scenario. The last main hypothesis for this study is that there will be an interaction between Defendants age and gender on participant’s perceptions of accountability in a novel scenario.

Research Plans

The main objective of this study will be to investigate what factors affect/determine the extent to which people hold others accountable for their crimes. This study will also be looking at the potential age and gender biases involved when looking at offender accountability and the sentences given to the offender due to the age/gender of the perpetrator in the scenario given to the participants. Although lay people are not usually required to decide upon a sentence for the crime given, we decided that having participants give a sentence based on the scenario would be a useful way to measure perceptions of deserved punishment. This would also be useful as it would act a second measure of accountability in participants and so if the participants perceives the defendant as more accountable, the sentences that are suggested should be harsher.

Participants

The proposed number of participants will be a minimum of 128 participants. In each condition, there will be a minimum of 32 participants. This sample size is based on Cohen (1992) where in order to detect a moderate effect size (f=.25) with a 2 X 2 between subject design with α of .05 at 80% Power, 128 participants are required. . The intended sample for this study will be mainly English speaking undergraduate students, who are mainly between the ages of 18 and 22, from a number of ethnic background representative of the general population. Only participants who complete the questionnaire will be included. Also, participants will need to be over the age of 18 and be a UK resident to take part, this will be stated in the social media advert for the study which will include the link to the questionnaire. Participants who do not will have their data destroyed and data will not be used in analysis. Participants will be recruited using a social media advert that will be shared using Facebook and Twitter, with a link being provided leading participants directly to Qualtrics.

Design

Here, 2 parallel and 2 different scenarios will be created and assigned to different participants. Participants will only receive one scenario each. Here, 2 factors will be manipulated in each scenario. The first was the perpetrators age, which was either 12 or 30 years old. These ages were chosen because in the UK, offenders can be held criminally responsible from the age of 10. The first age was chosen as it is tends to represent a midway point between pre and mid adolescence, indicating that the offender may not be fully aware of their actions and naïve. The second age was selected as it will be a fully grown adult who is often aware of the consequences of their actions and will often have a rationale for offending. The second factor that was manipulated was the gender of the offender being either Male or female. The reason for this being looked into is because most studies focus primarily on age regarding offender accountability and the majority of studies looking at gender are often RMA studies. Here, adding a factor of age as well as gender could perhaps be beneficial in looking at an interaction effect on accountability. This study will be conducted using a questionnaire/survey on Qualtrics where each participants will take part in a different condition with only 1 scenario. The 2 independent variables (IV’s) here are Gender (Male/Female) and age (12/30 years old) with 2 levels each. The dependant variable (DV) here will be offenders’ accountability i.e. how accountable people hold others for their crimes and seek to punish them. Both quantitative and qualitative data will be gathered here at an interval level. This will all be analysed using 2 X 2 complex between subjects ANOVA.

Materials/Measures

Written Scenarios

Each participant taking part in the study will be presented with 1 scenario which will be randomised for every participant. An example of a scenario is presented below with the different possible variation in brackets.

Jack (Male or female name) is a 30 year old (12 or 30 year old) male who was arrested following a fight which resulted in the victim being hospitalised with various injuries including a broken nose, fractured ribs and considerable bruising (Crime ranging from very serious to not very serious).

Questionnaires

The questionnaire will include a brief demographics section where participants will have to state their age, gender and occupation. This will be before the scenario is presented. After reading the scenario presented to them, participants will give their answer on how accountable they hold the offender using a 7 point Likert scale, where they indicated their agreement or disagreement with the statement from 1 to 7 (1= Strongly disagree and 7 = Strongly agree). For example, how much do you agree with this statement – “The crime given for this crime was completely fair and appropriate?” Participants would then express their agreement or disagreement using the 7 point scale. Participants will then be asked to give a suitable sentence to the offender in the scenario given. Participants will be asked to give a sentence as it a second measure of accountability, so if participants hold the person in the scenario more accountable, the sentence given here will reflect it as it is harsher. Qualitative data will be used to assess how appropriate participants think the punishment is and how accountable they hold the offender.

Procedure

A short social media advert will be shared on social media platforms such as Facebook and Twitter where participants who want to take part simply do so by clicking on the link attached to it. Each participants will have a random scenario presented to them. After reading the information sheet and consent form, participants will read the written scenario and questionnaires to themselves and answer the questions alone.

Participants will first answer questions about themselves, such as their age, gender and occupation. Qualtrics will randomise the scenarios given for every participant and so each person will read 1 of 4 possible scenarios. After reading the scenario, participants will decide how accountable they hold the offender and decide upon a sentence for the offender, dependant on the scenario. Participants will then be fully debriefed at the end of the questionnaire where there will be helplines to contact. Qualtrics will collate all the data before it will be analysed using SPSS.

Sustainability Accounting and Accountability in Sainsbury’s Group PLC: Analytical Essay

Introduction

There is an emerging trend in large and small companies around the globe on sustainability reporting since the “early part of the 1990’s, when it became the focus of academic and skilled accounting” (Lamberton, 2005). This trend is a result of more people becoming aware of the importance of sustainability development and the benefits and impacts it brings to businesses and society at large. Additionally, sustainability is becoming a way of life mainly in developed countries as businesses endeavour to be responsible and sustainable at the same time (GRI, 2015). The thrust of this case study will focus on sustainability, accounting and accountability and on the social and environmental impacts of human activities around the globe by analysing the 2018/19 Sainsbury’s Group PLC sustainability report. From this premise, a theoretical framework for analysing the place for sustainability development as a galvanising ethos in multiple policy frameworks and its pivotal role in a variety of scales (Bebbington & Larrinaga, 2014) will established.

The case study will also explore and discuss the misconceptions and arguments on public accounting practices as a form of corporate self-reporting and explain systematic failures to open up substantive critique. Spence (2009) posits that “rather than rendering transparent the contradictions within capitalism, corporate social accounting primarily obfuscates these”. The case study will further advance accounting and academic theories such as agency, legal and stakeholders and the Global Reporting Initiative, AA100, ISO2600, SA8000 frameworks, focusing on different aspects of the Sainsbury’s Sustainability report. Furthermore, literature on sustainability development and reasons why most business reports on sustainability are deemed unsustainable will be utilised. Lastly, the essay will explore sustainability, accounting and accountability with the main focus of linking them to theories highlighted within the Sainsbury’s Sustainability Report.

Sustainability is a complex field with a lot of uncertainties and everyone has a part to play to avoid unforeseen circumstances in the next decade or so (Holland & Wielgus, 2013). For example, breathing air, food, global warming, carbon foot print, waste and environment impact, including the social aspect of life. All these factors have to be looked at in detail when analysing and reviewing sustainability development. The European Union (EU) defined “corporate and social responsibility as a concept whereby companies integrate social and environmental concerns in their business operations and their interaction with their stakeholders on a voluntary basis”. This definition shows that in order to be sustainable, global partnerships must be maintained with other nations, and all stakeholders are to be educated by utilising technology and available sustainable learning tools. The United Nations (UN), for example, developed 17 Sustainable Development Goals (SDGs) and set a target to be achieved by 2030. The SDGs include “no poverty, no hunger, good health and well-being, life below water, responsible consumption and production etc.” (UN, 2015).

All the above goals can be adopted by Sainsbury’s Group PLC as one of the big four retail supermarkets in the United Kingdom. There has been negative press on large organisations that outsource their operations to less privileged countries where they pay workers salaries that still put people in poverty. The research by the United nations revealed that approximately half of the world’s population live on a salary of about $2 a day. Hence, there is a need for societies to create decent working environments to ensure that poverty is eradicated. The Business World Council (BWC) defined sustainability development as, the commitment of a business to contribute to sustainable, economic development, working with employees, their families, the community and society at large to improve their quality of life’The BWC places much emphasis on stakeholders, a theory that can be applied in this case study. This theory looks at those stakeholders who have a direct influence on decision making or affected by the organisation. According to Deegan (2014), stakeholders were divided into primary and secondary. In simple terms, primary stakeholders are the owners of the business or those who ensure that the company will continue operating on an ongoing concern basis whilst secondary stakeholders are defined as those who influence or affect, or those who are influenced or affected by the organisation. This shows that in order for organisations to be successful and act sustainably, they must ensure that all stakeholders that have an interest either directly or indirectly get involved in one way or the other in order to attain the complex issue of sustainability development.

Stakeholder theory looks at the power and interest that each stakeholder has. For example, shareholders have high power and interest in the businesses and wants to get all the positive returns of their investments and employees have less power and interested in the business for job security. Care must be taken not to dissatisfy to third parties like the government, trade unions and NGOs and they might either promote or negatively impact the reputation of the organisation (Geegan & Unerman, 2011).

Likewise, the World Commission for Environment and Development (WCED, 1987, P54) views sustainability development as development that meets the needs of the present, without compromising the ability of future generations to meet their own needs. This definition has been used interchangeably with corporate and social reporting. In exploring the WCED definition, it becomes clear that every decision that we make now has either a positive or negative impact to present and future generations. A study of the Sainsbury’s 2018 update on sustainability shows a reduction in the clothing carbon footprint by over 8,600 tCO2e and saved over 11 million m3 of water since 2012. However, there is still more work to be done as most of Sainsbury’s products where not sustainable and certified by environmental standards. In criticising sustainability reports within businesses, it is not mandatory for every company to produce one, and these reports are not audited. As a result, companies tend to cherry pick the areas of interest to their stakeholders so that they are seen as being socially and environmentally sustainable. The more interesting definition of corporate social responsibility comes from Horrigan (2002) who postulates that “a responsible corporation is one which produces and sells only safe and beneficial products; does not accept government subsidies or special tax breaks, provides secure jobs and a living wage, fully internalises its environmental and social costs, and does not make political contributions or otherwise seek to advance legislation or policies contrary to the broader public interest”. This is more relevant to Sainsbury’s as a retail supermarket. There must be an understanding and integration by all stakeholders from the inception of the product to the final output, and all the production process must be done through sustainable means to ensure the present generation does not consume everything now without looking to the future and taking into consideration the risks involved. This is why the UN came up with their 17 SDGs to ensure that no one is disadvantaged by 2030.

On the other hand, accounting is the process of identifying, Measuring, recording, processing and communicating information to users of the business. Using Sainsbury’s report. Sainsbury’s Annual financial statements report has been prepared in accordance with the International Financial Reporting Standard (IFRS), International Accounting Standards (IAS), United Kingdom (UK) Company Act 2006 and Generally Accepted Accounting Practice (GAAP) in line with the UK company law (Sainsbury’s Annual Report, 2019). Accounting is linked to accountability. Deegan (2014) defined accountability as a duty that must be rendered by those appointed to run the affairs of the business on behalf of the third party and then give a report on their findings to those that have an interest either directly or indirect to the business.

For example, the Sainsbury’s annual reports were directed the shareholders of the business appointed to run the company on their behalf with the aim of maximising shareholders wealth. It is well known that, the aim of every business is to make maximum profit on every return invested and to ensure that the business is running on a going concern. However, shareholders do not put all their reliance on directors due to the fact that directors have their own personal interest in enlarging their profile and ensuring that they receive their bonuses when due. Hence, auditors are appointed by the shareholders who act as independent agents to the company and analyse the financial statements of Sainsbury’s in accordance with the IFRS, IAS and UK accounting standards and then report their findings back to the shareholders with their opinion as to whether financial statements prepared by those directed show a true and fair view and that the company will continue to operate in the foreseeable future. This theory is known as Agency Theory. Sainsbury’s have applied the agency theory effectively on its financial statements but unfortunately it is not clear who has reviewed or audited its sustainability report. All committee members are employees of Sainsbury’s and there are no independent members to suggest that Sainsbury’s sustainable report has been prepared in accordance with the Global Reporting Initiative as the main guideline framework for sustainability reporting. This is why organisations are seen to be a form of corporate self-reporting on sustainability as stated by Spence (2009). Needless to say, organisations cherry pick the areas of interest or current hot topics on sustainability so that the businesses are seen to be sustainable.

Being a voluntary report (GRI Framework), sustainability is not transparent and this can be explored further buy looking at the triple bottom line reporting (Sridhar, 2012). This theory explains that organisations will be acting sustainably and seen to be sustainable by stakeholders if their focus is on the Profit, People and Planet. Profit looks at the overall aim of the business which is to get a positive return on shareholders investments and this attracts potential investors. Whilst people is concerned with the social aspect of life for all stakeholders such as employees, trade unions, equality of life and gender issues and lastly the environment we live in to ensure that it is well looked after for future generational benefits (Deegan, 2014).

Sainsbury’s report has highlighted the benefits and negative impacts on sustainability reporting. The Chief Executive Officer of Sainsbury’s Mike Coupe alluded to the values they stand by that in order to be champions in the retail business, they must have a positive impact nationally and internationally with all their partners to build a sustainable future (Sainsbury’s Annual report, 2019). They have also stated that in their report Accounting for Sustainability (A4S) that their value is to remain competitive with their main rivals, have a strong brand awareness and by being efficient and effective in applying sustainable approach which leads to better integration with other stakeholders across the globe. They have adopted a prioritisation approach to tackling sustainability issues by looking at three key areas namely total impact, full business values and system thinking. This approach looks at the High Low method on value creation, business protection and also importance to shareholders and potential for sustainable impact (A4S). This type of approach is very questionable and imbalance. For example, if there is a sudden shift of sustainability impact to the environment and society after the report has been made, the reputation of the Sainsbury’s Group PLC will be held to account. This is why (Gray, 2010) stressed that “is accounting for Sustainability actually accounting for sustainability…and how do we know?”. The other thing is that been one of the large retail business, competition is very high and not intellectual capitals (Deegan, 2014) will be disclosed as competitors my carry out reverse engineering.

It is good to see that Sainsbury’s has taken full use of International Integrated Reporting Council (IIRC) as a guiding principal in their business. The IIRC looks at the six capitals that are connected namely Manufactured, Intellectual, Human, Social and Relationship and Natural Capitals (Barry Elliott and Jamie Elliott 2017). These capitals play an important role in sustainable value creation. An example here shows how these are linked, if human capital is misused, it will have an adverse impact on the environment and the reputation (intellectual capital) of the company will be at risk and in turn the brand or image of the entity will be affected. This in turn will have a negative impact on the financial capital the shareholders in generating their return and will put away potential investors. IIRC will also help Sainsbury’s in using Integrated thinking in effective decisions making and how they compete with there rivals. However, both integrated framework and GRI are voluntary guidelines and organisations have options to report on areas that they are doing well, where this is seen as self-reporting (Spence, 2009).

On the other hand, Sainsbury’s have highlighted the key importance of sustainability in their business which include, obeying the law, building their brand, to be commercially viable by cutting down on energy use and abnormal costs, attract talented people to enhance their brand image, attract potential investors in moving the business forward and to be resilient on their values that brings sustainability. They also joined The Prince’s Accounting for Sustainability Project (A4S) in 2006 to ensure that financial leaders were inspired so that they can make informed financial decisions-making to matters that affected the social and environment factors. In the report, the Sainsbury’s CEO stated that there is still a lot to be done and the business had no clear goals and understanding on what long term goals on sustainability meant to the organisation. Sainsbury’s are also seen to be adapting the 17 United Nations SDGs. However, the last UN Climate Conference held in Madrid, on 02 December 2019, called “the Conference of Parties 25 (COP25) attended by over 30000 people”, and reported by Channel 4 News highlighted a shocking revelation on tackling climate change Channel 4, 2019). The UN Secretary General, Mr Antonio Guterres asserted that “we are now confronted with global failure” and some people think that 25 years of sustainability has resulted into 25 years of failure. At the same conference, it was discovered that not all the report and information was openly disclosed as it was considered to be highly sensitive. Therefore, it makes it difficult to ascertain sustainability implications without fully disclosing information to the general public for a big institution like the UN. Another example is the speech by Prime Minister of Netherlands Mr Mark Rutte who theorised that 7 million people in his country will disappear in the near future if drastic measures on climate change and global warming are not implemented effectively. The Prime Minister was asked to create positive change in his country by stopping subsidies and fossil fuel in order to combat climate change. The prime minister’s response, however, showed that this quest for sustainability was only on paper but far from practical implementation.

Conclusion

This paper researched, analysed and discussed a case study focusing on Sainsbury, a retail organisation based within the UK. This study was deemed necessary for the purposes exploring the misconceptions accountability findings of the case study where to critically analyse the academic literature and theorical frameworks that helps businesses to be sustainable and help to eradicate the social, environmental issues around the globe. The report also highlights key achievements by Sainsbury’s in 2018/19 by following the SDGs (UN 2015) guidelines and using lessons learnt to ensure that they are ahead of the game and remain competitive. From the environmental point of view and complexity of reporting on sustainability, Sainsbury’s PLC has adopted the use of advanced technology and has joined forces with other partner so that they work collaboratively and integrate the businesses with the use of six capitals of the business (IIRC). It is still unclear and more has to be done to ensure that all organisations act responsibly and follow the guidelines and abide the law. The deadline set by the UN for 2030 is still debated with the recent findings on current issues and impact of global warming during COP25. This is why all stakeholders are to get involved at every level regardless of their demographic. Finally, sustainability reporting will be seen to be very effective if all companies are mandated to report on it. However, there are still concerns that due to the choices given to companies to report any issues they think is relevant to their business on a voluntary basis, reduces its effectiveness and audits are not carried out by third parties (GRI).

Role of Civil Society in Promoting Government Accountability in Botswana: Analytical Essay

Abstract

This paper is to discuss civil society and its role in promoting accountability in Botswana. This is to discuss the duties of civil society in Botswana and how they promote accountability. BOTSWANA COUNCIL OF NON-GOVERMENTAL ORGANISATIONS ( BOCONGO) as a civil society in Botswana is to be analyzed and assessing its role in promoting government accountability. The paper will discuss the role of the above organization in Botswana in terms of its duties with example’s focusing on how the organization promotes government accountability to ensure democracy. The paper will also look into the response of the government to the existence of civil societies i.e. does the government of Botswana see civil society as an entity to hold it accountable for certain issues.

Government accountability

This is where by government is obliged to provide information or justification of their actions or decisions on certain duties. It is there to insure that actions and decisions taken by public officials meet their stated objectives and are of the interest of the citizen or the community they service. This include reasons behind every action and every decision that include the interest of people. Government accountability is important because by evaluating the ongoing effectiveness of public officials or public bodies, it ensures that they are performing to their full potential and not using government properties on personal interest, providing value for money in the provision of public services, instilling confidence in the government and being responsive to the community they are meant to be serving.

Civil society

Civil society is the population of groups formed for collective purposes primarily outside of the state and market. This are groups of people formed outside the government and not for profit. This societies can be either recognized within the country by the law or internationally. They can also be unlawful but existing as private sectors or organizations. For example emang basadi is a civil society that is recognized under Botswana but not international, but the media is an international organization that is recognized in more than one countries. Either international or national, civil societies have the same goal the difference being the other operates within a nation and the other operates in more than one country. According to World Bank “The term civil society refers to the wide array of non-governmental and not-for-profit organizations that have a presence in public life, expressing the interests and values of their members or others, based on ethical, cultural, political, scientific, religious or philanthropic considerations. Civil Society Organizations (CSOs) therefore refer to a wide of array of organizations: community groups, non-governmental organizations (NGOs), labor unions, indigenous groups, charitable organizations, faith-based organizations, professional associations, and foundations.”

Civil society emerged during 1980s in eastern and central Europe and Latin America as a response to issues on that time. During the time citizen were denied basic rights. They was lack of civil and political liberties. This was the time when the state had the power over economic and social transactions leading to lack of participative citizenship. As people searched for an alternative in governance they organized into that could make and pursue democratic projects of all kinds of freedom from the state power. The groups will use peaceful demonstrations to send a message or to show uncertainty about different issues of democracy. People will turn to strike or do peaceful walks seeking answers from the authorities on certain issues.

Through this organizations and institutions civil society plays a vital role in running of governments and ensuring democracy. This organizations and institution support, challenge and ensure that all decisions and activities are transparent to the citizens and accounted for. They also have a say on human rights and makes sure that neither the government nor any individual violates them. Botswana has different civil society organizations that are classified basically according to their role or the main aim of the organization. They are 3 main roles:

• Organizations that promote the welfare or interests of members and the population at large- this are organizations that deals with making sure the interests of certain or specific minority groups are met. For example child line.
• Organizations that play advocacy role- this are organization that deals with being a voice and preventing discrimination against certain group of people by the government or the nation at large. For example Ditshwanelo
• Ad-hoc organizations- this are organizations which emerged to deal with certain issues and people affected by such storm. For example organizations that came about to deal with HIV/AIDS.

NB: For NGOs to be recognized by the government of Botswana it must register with the Registrar of Societies.

The Botswana Council of NGOs (BOCONGO)

The Botswana Council of NGOs (BOCONGO), a leading voice in Botswana’s civil society, is the national umbrella body for NGOs. It assists in establishing an enabling environment for the NGO sector to become a recognized partner in governance and the development process. To ensure transparency and accountability among Botswana-based NGOs, BOCONGO has set out an NGO code of conduct.

This Organizations (BOCONGO) was established in 1995 to coordinate the work of Non-Governmental Organizations (NGOs) in Botswana. The NGO Policy provides for a coordinated approach to the implementation of the national development plans and priorities as well as enhancing communication and partnerships between government and CSOs. BOCONGO also advocates for different NGOs to be recognized and their voice to be taken into consideration. BOCONGO works with NGOs and other stakeholders to strengthen the NGO sector through coordinating the sector’s contributions to the development in country and beyond. The organization works with merging the ideas of different organizations together with the government to build a better Botswana.

The organization focuses on four aspects or themes that promote accountability and democracy in the country:

1. Inclusive Social Policy
   1. Building accountable and transparent institutions at all levels.
   2. Advocating for responsive, inclusive, participatory and representative decision making at all levels.
   3. Advocacy for women’s full and effective participation and equal opportunities
   4. Strengthening sound policies and enforceable legislation for the promotion of gender equality and empowerment of all women and girls at all levels.
   5. Advocating for the rights of marginalized and vulnerable groups
2. Sustainable Environment and Resource Management
   1. This focuses on environmental damage assessment of all projects that are to be done or that exists. The organization is an advocate for the flora and fauna in Botswana concerning their use conservation.
3. Democratic Governance
   1. Civic Education and electoral processes.
   2. Building of democratic and accountable Institutions.
   3. Capacity Building for Transparency Monitoring.
   4. Engaging checks and balances.
   5. Promoting participation.
4. Economic Justice
   1. Promoting development oriented policies that support productive activities and decent jobs.
   2. Creating entrepreneurship, creativity and innovation.
   3. Promoting productivity and effective service delivery and tax justice

How BOCONGO promotes accountability

From the above themes that the organization focus on, democratic governance is the one that focuses more into promoting government accountability. As stated on the point the organization promotes transparency. This is to say every action done by the government shall be done under public notice or under the knowledge of the citizens. Through checks and balances the organization promotes accountability for example:

On July 07 2017 BOCONGO released an article titled we demand accountability and good governance. This was after the organization demanded a report from the auditor general for the year ended March 2016 and from the findings of the AG it was made to point that they was serious wastage of public funds and failure to account by senior public servants. The findings included failure to trace how the money was used together with the budget made to come to the summation of some amounts. Below are some findings from the Auditor General that the organization demanded answers on;

Department of Tertiary Education Financing (DTEF)

The Auditor General highlighted on serious misuse of the account from which the living allowances of government sponsored tertiary students are paid. The findings stated that though the auditor general had several times warned the officers responsible for monitoring the account, they still failed in offering a valid reason on why the account is not well monitored, the account which had a balance in excess of P1-billion as at March 2016. It was put to concern that even the permanent secretary did not fulfill his or her duty of attending to the matter in time

Ministry of Youth Empowerment Sports & Culture Development

The AG also questioned why about P1.5 million was spend on international trips by the Ministry during the Independence Day celebrations in September and why they exceeded the budget heavily and with no evidence of what did the excess money do.

Serule Police Station

The Auditor General also carried out an audit inspection at Serule Police Station and discovered shortcomings in the planning and execution of projects. In one instance, a fuel point facility that was constructed in 2004 was still sitting idle in 2015/16. In another instance, a contractor who was awarded a tender for upgrading a sewerage system at the police station in February 2010 had still not completed the project six years later, despite the fact that he/she had already been paid over P1.9 million. This brought a concern on the over cost of government projects due to delay.

Botswana Innovation Hub (BIH)

Since its inception in 2010, Botswana Innovation Hub (BIH) has failed to utilize P12million set aside by government as startup capital for the Innovation Fund. Though the chief executive officer (CEO) of BIH has in previous years promised to take the matter up with the Ministry of Finance and Economic Development, he had not done so by end of March 2016. Neither had he given any reasons for the delay.

BOCONGO Responds

Below is a response of BOCONGO as said by Executive Director BOTHO SEBOKO

“As the umbrella body of non-governmental organizations (NGOs) in Botswana, BOCONGO feels obliged to respond to such alarming findings by the Auditor General. This is in line with our responsibility to forge participatory democracy in Botswana by educating government, the people and political parties about their rights and obligations as democratic citizens. As BOCONGO, we have a vision of NGOs working together for a more just, equal and integrated Botswana.

Therefore it is our responsibility to lead the people of Botswana in demanding responsiveness, accountability and transparency from government. From the Auditor General report, we have observed a worrisome trend where Accounting Officers – some as senior as permanent secretaries and CEOs – have repeatedly failed to account to the Auditor General. Public accountability is a hallmark of modern democratic governance. Therefore those entrusted with management of public resources must account fully to the Auditor General, failing which they must be relieved of their duties. The people have a right to know how public funds are being used.

Those who have been entrusted with power, or with control of state resources, cannot use them for private gain or to the detriment of citizens. Corruption can lead to abuse of fundamental human rights and denial of certain entitlements of some members of society. It is fraud and theft of public assets for public officers to authorize payment to contractors for no work done, as was the case at Serule Police Station. Public officers at DTEF should not be allowed to get away with failing to properly manage an account carrying billions of tax payers’ money meant to pay for students’ living allowances. Those students have in the past gone on strike after their living allowances were not paid and that lends credence to allegations of embezzlement of public resources and illicit self-enrichment by paying allowances to ‘ghost students.’ As BOCONGO, we cannot keep quiet while there is wanton dissipation of public resources at the expense of more pressing needs. On the one hand, government policy is flouted as millions are wasted on international frolics. On the other hand, government is cutting down on tertiary education sponsorships; children are left in limbo in schools as there are no books for them to read and no food for them to eat; while thousands of Batswana face threat of death due to rampant shortage of drugs and personnel in health facilities. We understand that there are competing needs, but government resources must be deployed based on need and deprivation. The people must come first. We demand transparency, financial prudence and good governance especially in these tough economic times.”

Conclusion

Looking at the above response BOCONGO as a civil society managed to request accountability from government authority. This information was then released to the citizens of Botswana as a whole which promotes transparency. Indeed proving that civil society play a vital role in promoting accountability. Their existence as non-governmental organizations keeps the concept of checks and balances between them and the government hence the government entities and branches may work at their best in meeting the interest of the citizens without misusing resources and with valid reasoning behind every decision the government takes. Since in Botswana not every citizen can demand accountability individually from the government civil societies like BOCONGO act as the voice of the nation in making sure that all government activities are well accounted for and those reasons are spread to the nation.

References

1. http://www.bocongo.org/index.php/home/
2. https://abhimanuias.com/state/Searchdetail.aspx?type=BL&id=4108
3. https://cdn.ymaws.com/www.istr.org/resource/resmgr/working_papers_toronto/malena.carmen.pdf
4. http://www.commonwealthofnations.org/sectors-botswana/civil_society/

Influence of Accountability and Transparency of Public Spending on Financial Management in the Malaysian Public Sector: Analytical Essay

Improving accountability and transparency of public spending can improve the financial management in the Malaysian public sector.

Transparency is operating in such a way that is easy for others to see what actions are performed. Transparency implies openness, communication and accountability.

Accountability however is an aspect of governance that has been subject to discussions related to problems in the public sector, non-profit and private sector that denotes answerability, blameworthiness, liability and he expectation of account giving.

The fall of the previous Malaysian government was due to the low levels of transparency in the government’s financial management and the alarming high levels of corruption and misappropriated funds in the government. Ever since the newly-elected government has taken its place at parliament, they are constantly speaking about how transparency and accountability should be the primary focus of the government. Back when our finance minister, Lim Guan Eng was newly appointed he opined that the public deserves to know the real state of the nation’s financial health. In more recent news, Dr Wan Azizah, the Deputy Prime Minister of Malaysia at the 5th ASEAN Supreme Audit Institutions (ASEANSAI) Summit reiterated that accountability, transparency, integrity and good governance are the norms of the current administration and is their priority agenda. Apart from that, the Prime Minister of Malaysia, Tun Dr. Mahatir has reinforced the current government’s stance on transparency and accountability of the government’s financials. He indicated that the primary reason of the Pakatan Harapan win was because the public was hopeful that the new government would be more responsible in upholding good governance, integrity and get rid of corrupt practices and the abuse of power. From the perspectives, of our country’s leaders, we could see how important transparency and accountability is the public sector be it financial accountability or management accountability.

A research on fiscal transparency and economic outcomes which was conducted based on IMF’s Code of Good Practices on Fiscal Transparency has found positive relationships between fiscal transparency and credit rating and income rank respectively (Diagram 1 and Diagram 2) proving the relationship between transparency, accountability and improved financial management.

Full implementation of accrual basis accounting

As we know Malaysia is in efforts of transitioning from cash-based accounting standards to accrual-based accounting standards by the year 2021 and currently practices a modified cash basis accounting which is the hybrid of cash accounting and accrual accounting. The main difference between accrual and cash basis accounting lies in the timing of when revenue and expenses are recognized. The cash method is a more immediate recognition of revenue and expenses, while the accrual method focuses on anticipated revenue and expenses. Both the federal and state governments are working towards the same direction in line with the Malaysian Public Sector Accounting Standards (MPSAS) which have been structured primarily based on the IPSAS with minor changes to the standards to fit the Malaysian public sector.

Globally, there is also a trend towards accrual accounting. It can be clearly seen that there is move on the spectrum of accounting practices from the more simpler cash-basis accounting and accrual accounting at the other extreme for the more effective financial management monitoring of activities. Figure 1 and Figure 2 extracted from a PwC survey on accounting and reporting by central governments depicts the extensiveness of accrual accounting in governments today and an outlook on how the adoption of accrual basis accounting will be dominating governments throughout the world. Through the complete implementation of accrual-based accounting in the Malaysian federal and state governments, the public sector will be able to provide quality and realistic information for decision-making in allocating resources. This accounting practice, also holds the government accountable for resources entrusted to them. In the context of Malaysia, resources would refer mostly to taxpayer’s money as tax revenue accounts for one of the country’s largest revenues. Accrual accounting is known to be more superior to cash accounting as it provides an accurate and holistic picture of the government’s financial position and enhance financial management transparency and accountability. Accrual accounting in contrast with cash accounting, will account for acquisition, disposal and management of government assets, liabilities and contingent liabilities which results in transparency and quality information accessible to the public.

Usage of Public Expenditure Tracking Surveys

Researches found that when information on how funds are channelled and utilised are accessible to the public, leakages and gaps in resources can be reduced. This can be illustrated by Public Expenditure Tracking Surveys (PETS) which have been used in many countries to highlight leakages and gaps in the delivery of funds to the public. In a research on the examination of education expenditures in Uganda using PET surveys found that on average only 13 per cent of the actual expenditure allocated for schools reached these schools. However, when this information was disseminated to the public through a campaign, the funds that reached the schools showed a substantial increase up to 90 per cent. The action of publicising the results of the survey had increased incentives for the local government in its oversight function strengthened the need for accountability in the government agencies.

The utilisation of PETS in Uganda have similar objectives as the FMAI in Malaysia. The FMAI or the Financial Management Accountability Index was implemented by the National Audit Department of Malaysia (NAD) to help public organisations and agencies to discharge their financial management accountability through the proper management of financial resources. As defined by the NAD, Financial Management Accountability Index is an objective, quantitative assessment of the financial management compliance of the auditees. The auditees involved are the Federal and State Government Ministries, Departments, Statutory Bodies, Local Authorities and Islamic Religious Councils. The introduction of the index is in line with the emphasis on Quality Management System and Key Performance Indicator envisaged by the Government. The NAD believes that the implementation of the FMAI would be able to create healthy competition among the parties being audited by them to improve their financial management of each body or agency which would further improve the transparency and accountability of the public service delivery. While the PETS only focused on expenditure and the transfer of funds through various levels in the public sector, the FMAI has a more broader view on control indicators in the public sector. Table 1 shows the elements of assessment that falls under the FMAI and their basis of selection.

However, the execution of both these tools and the method of communicating the findings differ vastly. In conducting PETS, the citizens are also involved in providing input through questionnaires and in the monitoring of public service delivery. The findings of the survey on the public expenditure and disseminated heavily through the use of the mass media to ensure a large outreach and a larger awareness on the whereabouts of public funds, exposing misappropriation, corruption and other sort of leakages. In contrast, the execution of the FMAI is by the staff of the National Audit Department involves very little engagement with the public in being a check and balance for the public sector. Although the outcome and findings of the accountability index is made accessible to the public, through reports published by the government. The government doesn’t intend to circulate this information to the mass public to ensure their awareness on the public service delivery. Hence, we believe that the implementation of PETS in Malaysia would create a new meaning for the public sector accountability and improved transparency of the government expenditures. The implementation of PETS in Malaysia would lead to better public sector financial management in the sense that, the legislators would be able to allocate funds to each government body and agency efficiently and any forms of corruption or mishandling of funds can be curbed.

References

1. https://www.theedgemarkets.com/article/malaysia-committed-implementing-accrual-accounting-standard
2. https://econ.lse.ac.uk/staff/rburgess/eea/svenssonjeea.pdf
3. FIGHTING CORRUPTION TO IMPROVE SCHOOLING: EVIDENCE FROM A NEWSPAPER CAMPAIGN IN UGANDA
4. Ritva Reinikka Jakob Svensson 2005 The impact of transparency and accountability on public service delivery
5. Chinedu Samuel 2018 http://www.pefa.org/resources
6. https://www.pwc.com/my/en/assets/publications/towards-new-era-in-govt-accounting-reporting.pdf
7. PwC Global survey on accounting and reporting by central governments 2nd edition July 2015 https://www.ifac.org/knowledge-gateway/finance-leadership-development/discussion/accrual-accounting-s-role-malaysia
8. Fiscal Transparency and Economic Outcomes, by Farhan Hameed; IMF Working Paper 05/225; December 1, 2005 http://siteresources.worldbank.org/INTEMPOWERMENT/Resources/486312-1098123240580/tool18.pdf
9. https://www.researchgate.net/publication/201883028_Financial_Management_Accountability_Index_FMAI_in_Malaysian_Public_Sector_A_Way_Forward
10. https://www.investopedia.com/ask/answers/09/accrual-accounting.asp
11. https://www.audit.gov.my/docs/BI/6Publication/3Guidelines/1.AIEngv4.pdf
12. http://sanitationandwaterforall.org/tool/public-expenditure-tracking-survey-pets/
13. https://www.theedgemarkets.com/article/govt-projects-scrutinised-better-service-delivery-%E2%80%94-wan-azizah
14. https://www.theedgemarkets.com/article/dr-m-graft-committed-openly-top-leaders