An investigation into the performance reporting practices and accountability of Malaysian local authorities : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Accountancy at Massey University (Wellington) New Zealand
Within the context of New Public Management (NPM), the research aims to investigate the practices of annual reporting of performance-related information and accountability of Malaysian local authorities and whether such practices meet the local authorities' stakeholders' expectations of information necessary for assessing and monitoring the performance of local authorities. The aim is to make recommendations about the future direction of external performance reporting of Malaysian local authorities. To achieve this and associated aims, the research addresses the following research questions: (1) What do stakeholders of Malaysian local authorities understand by the term 'accountability' with regards to local authorities? (2) What type of information do the stakeholders expect and consider necessary for assessing and monitoring the performance of local authorities? (3) How important is it for each informational item to be disclosed in annual reports of local authorities to the stakeholders? (4) What type of information items do expert stakeholders agree is necessary for assessing and monitoring the performance of local authorities and what is the importance of such items for disclosure? (5) How can the information and its importance for disclosure, as agreed by the experts, be organised as a disclosure index for assessing the extent and quality of information disclosure? (6) What is the extent and quality of disclosure of information within the annual reports of Malaysian local authorities? (7) Does the information being disclosed in the annual reports meet the expectations of stakeholders? (8) To what extent is accountability being discharged through annual performance reporting of local authorities? The research employs a questionnaire survey, a Delphi exercise (a means of seeking consensus of expert opinions), and a content analysis of annual reports. Both descriptive and analytical approaches are employed to support the analysis of the results. The findings of the research indicate that despite a strong interest amongst stakeholders for greater accountability of Malaysian local authorities, a standard definition and scope of accountability has not emerged. The need to give an account has been recognised by the stakeholders with an emphasis on performance reporting within the context of NPM. The findings also show that the extent and quality of annual reports of Malaysian local authorities is relatively low in that the information disclosed lacks detailed information and is insufficient for the assessment and monitoring of the performance of such authorities. Further, the findings suggest the discharge of accountability by local authorities through external annual performance reporting should and could be improved. The findings contribute to our understanding of accountability as interpreted by key stakeholders of local authorities located within the context of a developing country. In addition, the findings contribute to the body of literature that documents aspects of NPM, namely performance reporting, accountability for performance and public accountability. With regards to Malaysia specifically, the findings could potentially assist public sector administrators and will be of significance to policy makers interested in improving the performance management of Malaysian public entities, particularly that of local authorities.