Academic journal article Australasian Accounting Business & Finance Journal

Accounting for Heritage, Cultural and Community Assets - Alternative Metrics from a New Zealand Maori Educational Institution

Academic journal article Australasian Accounting Business & Finance Journal

Accounting for Heritage, Cultural and Community Assets - Alternative Metrics from a New Zealand Maori Educational Institution

Article excerpt

Abstract

In the 1980s, with the rise to dominance of governments with neoliberal economic and social agendas, the public sector in major western countries underwent a process of fundamental reforms. A key aspect of the change imposed was the implementation of a market-oriented, cost-efficiency focus towards the management of public sector organisations, described collectively as the New Public Management (NPM) model (Kelsey, 1995; Boston et al, 1996; Easton 1996; Barton, 2002, 2005a, 2005b; Carnegie & West, 2005; Ball & Grubnic, 2008; Davis, 2010). This reform process included the imposition of regulatory measures requiring public sector organisations to provide annual financial reports prepared on an accounting basis comparable to those for the private sector, and incorporated an obligation to disclose (at economic values) all assets held. For public benefit entities holding heritage, cultural and community assets (HCA), this reporting requirement has been particularly problematic, entailing substantive changes to public accounting policy.

This paper critiques the political ideologies and practices of the NPM model, and challenges its assumptions that private sector financial reporting requirements, based on international accounting standards and Generally Accepted Accounting Practice (GAAP), are appropriate for universal application to public benefit and other not-for-profit entities holding HCA. In particular, the paper argues against the NPM assumption that reporting all HCA in economic terms improves accountability in public benefit entities. Instead, the paper proposes an alternative reporting model based on a set of cultural rather than economic values for reporting HCA. It suggests as an exemplar the 'Wellbeing of Communities' reporting and accountability framework devised for application by an indigenous New Zealand Maori educational institution, Te Wananga-o-Raukawa.

Keywords: Accountability; Accounting; Heritage and cultural assets; Maori; Public benefit entities. JEL Code: M40.

Introduction

Heritage, cultural and community assets (HCA) comprise a very valuable tangible and intangible component of the economic, social, cultural and natural capital of many public sector entities. They contribute a significant qualitative value to communities in the form of enhancing social cohesiveness and national identity. They make a direct and indirect regional and national economic contribution (for example in attracting tourism revenue), and augment an international reputation (ACT, 2008; Carnegie & West, 2005; ASB, 2006a; IFAC, 2006; Easton, 1997).

There is no definitive accounting or legal definition of HCA, and these vary widely in different contexts. Various classifications have included: collections of art, artefacts and specimens held in public galleries, museums, libraries and scientific and educational institutions; public gardens, iconic landholdings such as national parks, historic trees, streetscapes, vistas and landscapes; civic and historic buildings, public memorials, statues, fountains and sculptural works; historical memorabilia; and other tangible and intangible items which represent publicly expressed social and cultural interests and activities (IFAC, 2006; ASB, 2006a; ACCA, 2006; NZ IAS 16, para. 5.1; NZ Treasury, 2002).

Some analysis (for example Pallot, 1990, 1992; Micallef & Peirson, 1997; ACT, 2008), introduces a further sub-category of HCA, that of community assets. Community assets are items of property, plant and equipment (PPE) that are provided by public benefit entities (PBEs) 'essentially for general community use or service' (ACT, 2008, 2.1.2). Such assets include: tangible assets such as rural recreational reserves and picnic/camping areas; nature reserves; national parks; urban parks and sports grounds; public infrastructural assets, land under public roads and rail systems (ACT, 2008, section 2.1.2); and intangible assets including copyrights and trademarks over publicly accessible creative works. …

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