Ciaran Connolly

The Actual Implementation of Accruals Accounting: Caveats from a case within the UK Public Sector

Purpose – To ascertain the principal benefits and drawbacks that have been experienced in implementing accruals-based resource accounting in the UK public sector. Design/methodology/approach – In a unique study, which presents case research of the Northern Ireland experience within the wider UK context, semi-structured interviews were held with key actors involved in the implementation, maintenance or oversight of resource accounting in Northern Ireland. This paper looks at the operation of a newly introduced system through the eyes of those who are in a position to understand and evaluate the impacts (accountants). Findings – It finds that the actual implementation of accruals accounting is very different, in effect, in cost and in terms of timing, to that presented in pre-implementation government publications. The result is a complex, expensive system that has provided few benefits to date. What is found is a story of overoptimistic claims and obfuscation of costs. The very best that could be suggested from this research is that a lengthy continuum of accounting change is underway. Research limitations/implications – This research is a case study within the wider UK public sector and therefore any generalizing of the conclusions beyond the Northern Ireland context should be undertaken with care. However, although Northern Ireland departments are relatively small compared with Westminster departments, there are significant similarities between the modes of operation of all departments within the UK (whether in Westminster, Scotland or Wales). Furthermore, both the implementation of resource accounting and the challenges that it presents are common to all public sector bodies in the UK. Originality/value – Gives some thought-provoking arguments into the benefits and drawbacks of implementing accruals-based resource accounting in the UK public sector which will provide interest to those in the field.

A Comparative Study on the Impact of Revised SORP 2 on British and Irish Charities

Charities constitute an important sector in the economies of Britain and Ireland. However, despite their economic importance, charity external financial reporting has been characterised by a diversity of accounting practice and a lack of standardisation. Over the last 20 years an attempt has been made to improve this situation by the publication of a Statement of Recommended Practice (SORP) for charities in 1988 and its revision in 1995. It is argued that inconsistencies in the financial statements of charities and the adoption of dubious accounting practices make it difficult for users of charity accounts to understand (and therefore use) the information provided. Previous studies have mainly looked at the impact of the original SORP (1988) on large charities in Britain. Little is known with respect to the impact on Irish charities. This paper presents the results of a comparative analysis of over 200 financial statements of Irish and British charities with respect to the recommendations contained in the revised SORP (1995). The results provide evidence that the accounts of Irish charities are considerably less compliant with the recommendations made in the revised SORP than their British counterparts. Possible reasons for this are discussed.

The Private Finance Initiative

Abstract This article considers the development of the Private Finance Initiative (PFI) and contends that it is now deeply embedded and intertwined in policies to renew and modernize the United Kingdoms public services. After briefly reviewing prior research based upon the themes proposed by Broadbent and Laughlin (1999), this article suggests a new research agenda to reflect how the PFI has matured and developed in recent years.

Towards Charity Accountability: Narrowing the Gap between Provision and Needs?

Abstract Although charities currently play a rich and varied role in modern society, their continued success is dependent upon the publics trust. With respect to charity accountability, two key questions emerge: to whom is a charity accountable; and what form should that account take? Despite the widespread acceptance that charities should discharge accountability, there is limited knowledge of the relative importance of different stakeholder groups and whether the information currently being disclosed meets their needs. Using extensive document analysis and a survey of stakeholders, this research explores these issues in the context of the top 100 UK fundraising charities. Furthermore, it compares the results with much earlier research to identify changes over time.

Charity accountability in the UK: through the eyes of the donor

Purpose - – The purpose of this paper is to explore accountability from the perspective of charity donors. Design/methodology/approach - – The research utilises semi-structured interviews with a range of donors. In addition, it summarises the main findings from key related research (that uses document content analysis and questionnaire surveys) as a basis for better appreciating donor engagement. Findings - – This research offers evidence that while donors are viewed as the key stakeholder to whom a charity should be accountable, the relevance of the information commonly disclosed in formal charity communications is questionable. This is viewed as significant in terms of small dependent donors, although less critical in the case of non-dependent large donors who have power to demand individualised information. However, although all donors do not particularly engage with these formal communications, they are viewed by them as having significance and their production and publication serves as an important legitimising tool in the sector (enhancing trust and reputation). Research limitations/implications - – This research is based on semi-structured interviews with individual small donors and large institutional donors to large UK charities and therefore any generalising of the conclusions beyond large charities, and beyond the UK, should be undertaken with care. In addition, it focuses solely on the perceptions of donors, and other stakeholder groups are also important in this process. Originality/value - – Despite the widespread acceptance that charities have a duty to discharge accountability to their stakeholders, there is limited knowledge of their information needs and whether the performance information currently being disclosed fulfils them. This study provides a unique insight into the perspective of a key stakeholder group (donors) with respect to accountability.

Understanding Accountability in Social Enterprise Organisations: A Framework

Purpose – Social enterprise organisations (SEOs) operate across the boundaries of the public, private and not‐for‐profit (NFP) sectors in delivering public services and competing for resources and legitimacy. While there is a rich literature on accountability in the private and public sectors, together with the wider NFP sector, SEOs have received comparatively little attention and remain a relatively under‐researched organisational form. Drawing on accountability, legitimacy and user‐needs theories, the purpose of this paper is to develop a practical framework which can be used to explore how accountability within SEOs is constructed and discharged.Design/methodology/approach – This paper draws on user‐needs, accountability, legitimacy and impression management theories expounded in relation to the private, public and NFP sectors.Findings – A framework to better understand how accountability can be discharged by SEOs is developed and discussed.Research limitations/implications – While a framework for bet...

The global financial crisis and UK PPPs

Purpose – This paper seeks to examine how Public Private Partnerships (PPPs) have been affected by the global financial crisis (GFC). After briefly discussing PPPs and the GFC, the paper considers whether the latter has been a contributing factor in the declining number of projects reaching financial close.Design/methodology/approach – The paper employs document content analysis to compare the time between notification of a project in the Official Journal of the European Union and its financial close in order to assess whether this period has increased since the beginning of the GFC. Two case studies are also presented.Findings – Apart from a very small number of projects, the time between official project notification and financial close is lengthening, with the case studies providing some possible explanations for this.Originality/value – Whilst Burger et al. provide some general statistics on the impact of the GFC on PPPs in a number of countries, this paper examines over 600 PPPs in the UK and supplem...

Value Capture: A Valid Means of Funding PPPs?

This paper considers the use of value capture (VC) as a means of financing public-private partnerships (PPPs) in the United Kingdom (UK). Although some VC techniques are used in the UK, they are employed more widely in the United States of America. After considering the traditional approach to financing UK PPPs, this paper describes the main VC finance instruments. The findings of a series of case studies are then presented and conclusions drawn. While VC financing may prove unpopular with those bearing the cost of infrastructure improvements, it is recommended that such instruments are considered by UK policy makers.

The donor-beneficiary charity accountability paradox: a tale of two stakeholders

Using stakeholder theory, this paper explores the motivations of charities in discharging accountability and the interplay of donor and beneficiary accountability needs. It considers the extent to which concentration on one group may disadvantage another. The authors found that stakeholders commonly perceived as more salient, such as donors, cede power and impute saliency to beneficiaries.

Implementing IFRSs in the UK devolved administrations

Purpose - – Utilising concepts drawn from the governmentality literature, the purpose of this paper is to examine the adoption of International Financial Reporting Standards (IFRSs) in the UK’s devolved administrations of Northern Ireland, Scotland and Wales in order to assess why they were adopted and how their introduction has been governed. Design/methodology/approach - – This research applies a combination of three different approaches, namely: a content analysis; an anonymous online questionnaire; and semi-structured interviews. Findings - – These include: the transition has had minimal impact upon policy setting and the information produced to aid budgeting and decision making; IFRSs are not entirely appropriate for the public sector; the time, cost and effort involved outweighed the benefits; public sector accounting has become overly-complicated; and the transition is not perceived as part of a wider privatisation programme. Research limitations/implications - – As this study focuses upon the three UK devolved administrations, the findings may not be applicable in a wider setting. Practical/implications - – Public sector change must be adequately resourced, carefully planned, with appropriate systems, trained staff and interdisciplinary project teams; accounting change should be based on value for money; and a single, coherent financial regime for the way in which government uses budgets, presents estimates to Parliament and publishes its resource accounts should be implemented. Originality/value - – This study highlights that accounting change is not just a technical issue and, while it can facilitate a more business-like environment and enhance accountability, all those affected by the changes may not have the requisite skills to fully utilise the (new) information available.