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Topic 5 Reading Accountability In Practice Notes

Accounting Notes > Accounting in Non-Governmental Organisations Notes

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AC310: "Accountability in practice: Mechanisms for NGOs" (Ebrahim, 2003)

"Accountability in practce: Mechanisms for NGOs" (Ebrahim, 2003) Introducton

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Over the past two decades there have been a series of highly publicized scandals that have damaged public confidence in non-profit organisations o This is coupled with the rapid growth in NGOs around the world (Gibelman & Gelman, 2001) There is a belief among donors that NGOs are more cost-effective than governments in providing social services o But there is a lack of empirical evidence to support this (Edwards and Hulme, 1996) Long-time practitioners and scholars in the field are advocating moving beyond seeing NGOs as "magic bullets" to thinking more concretely about issues of accountability (Edwards and Hulme, 1996) There are five key accountability mechanisms used by NGOs in practice

Accountability

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Accountability is "the process of holding actors responsible for actions" (Fox and Brown, 1998) Accountability is about being "held responsible" by others and about "taking responsibility" for oneself Accountability can be looked at in a dual perspective: o Internal o External Behn suggests a '360-model' of accountability that would require public agencies to shift form current adversarial modes of accountability enforcement to an emphasis on cooperative responsibility Dunn proposes increased transparency of information from public officials purporting to act in a public interest James Madison - "the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it control itself" (51 st Federalist Paper, as quoted in Przeworski et al., 1999) Accountability mechanisms are used not only by funders to keep track of NGO spending, but also by NGOs to leverage funds by publicizing their projects and programs o Multiple and sometimes competing accountability demands Edward Freeman (1984) - "stakeholder approach" Najam (1996) has observed that NGOs are accountable to multiple actors o Patrons o Clients o Themselves Avina (1993) drew the distinction between: o Functional accountability
? To patrons of NGOs is typically high in practice
? To clients and themselves is typically low o Strategic accountability
? Accounting for the impacts that an NGO's activities have on the actions of other organizations and the wider environment
? Weak towards all actors

Disclosure statements and reports

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Frequently required by federal or state laws in many countries When seeking federal tax exempt status in the US, NGOs are subject to the requirements of section 50(c)(3) of the Internal Revenue Code

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