Accountability through reporting : the study of "foundations" in Malaysia

Abstract

The increasing number of foundations provide many advantages to national social, economic and political development. However, misappropriation of funds and falsifying the reporting information have deteriorated public trust in foundations. This research seeks to identify the accountability mechanisms of foundations in Malaysia and addresses reporting practices and its relation to accountability from legal, bureaucratic, and social perspectives. Four different legal foundations participated in this study including state-owned (Foundation A), State Religious Council-owned (Foundation B), private-independent (Foundation C) and private-corporation (Foundation D). Semi-structured interviews with account and administrative manager and document review were developed to collect data. This study uses an ‘accountability-reporting’ framework as a skeletal guide adapted from Ebrahim (2003b) and Unerman (2007). The findings indicated there are three primary groups of stakeholders to which foundations in Malaysia are accountable, namely funders, legal authorities and communities. It can be asserted that the reporting practices of foundations are varied according to their legal forms. The study found that each foundation prepared its reports to suit the stakeholders to which they are most accountable. The results also showed that foundations exercise accountability through formal reporting along with voluntary reporting to engage with the stakeholders.