Introduction

• “Winthrop’s management had devoted a significant amount of time [in it’s program managers]…to become more financially accountable and financially literate, with limited success.”

The Australian Not-for-Profit Sector

• Increasingly “managerialist’ focus

• Under increased pressure by both State and Federal governments to provide greater ‘value for money’ and to be more accountable for monies received

• State government made funding for future programs tied to performance in relation to service level agreements

• With number of key performance indicators (typically financial)

• Welfare organizations are having to demonstrate to Government and potential alliance partners of their financial viability

• But may be making themselves less likely to receive funding from philanthropic interests, who may perceive less financially viable organizations as being more in need of funds

• Government is increasingly assigning funds to the alliance rather than a specific organization

• So NGOs are having to decide how to position themselves within inter-organizational alliances and who to partner with

• In order to maximize the receiving of these competitive funds

Budgetary Issues

• Managers and operational personnel had not been concerned with the levels of costs and financial management in general

• Winthrop was no longer in a position to fund cost overruns in the divisions

• For the first time, program co-ordinators were being help accountable for their program’s budgets

• Previously were working in an environment where operational managers were free to focus on operational issues

• They didn’t have to be concerned with the financial implications

• Winthrop had arranged training for program co-ordinators

• But received a luke-warm reception from some

• Felt that the accounting issues were unimportant

• Adding to their overloaded work schedule which was focused on providing services to clients

• Winthrop were trying to use the budget as a means of stimulating discussion about financial matters and their connection to operations

• Largely unsuccessful

• Program co-ordinators instead used the budgets as vehicles for questioning the allocation of costs from Winthrop to the divisions

• Blamed the poor financial performance on the allocation of head office costs

• Were Winthrop management providing ‘value for money’ themselves?

Financial and Non-Financial Performance Measures

• There were formal and informal controls in place at Williams

• Formal controls:

• Used to ‘signal’ sound financial management to the Government and other agencies in the sector

• Helped establish the legitimacy of Williams in the...

Buy the full version of these notes or essay plans and more in our Accounting in Non-Governmental Organisations Notes.