The accountability mechanisms of government contracts are considered less than effective by both the government officials that monitor them and the voluntary organisations that deliver on them. This paper reports on doctoral research that explored what accountability relationships voluntary organisations perceive themselves to be involved in and which relationships they prioritise. The implications of these perceptions of accountability for current mechanisms of contracting are considered. Current mechanisms are modelled on agency theory, which assumes that voluntary organisations have different goals to government agencies. Accountability mechanisms aim to control voluntary organisations' activities to ensure they deliver what government requires. The research findings suggest that the assumed misalignment of goals does not exist, and that both government official and voluntary organisations aim to provide high-quality services and outcomes for clients. This provides an opportunity for exploring a new approach to accountability for contracts.
Ministers, officials, voluntary sector managers and board members are generally in agreement that the relationship between the government and the voluntary sector is less effective than it could be. The previous and current administrations have sought to improve this relationship (Maharey 2003). Initiatives have included the establishment in 2000 of the Community and Voluntary Sector Working Party (a group of government and voluntary sector representatives tasked with making recommendations on improving the relationship), the government's 2001 Statement of Intentions for an Improved Community-Government Relationship (2) (which outlines how government will approach the relationship), the establishment of the Office for the Community and Voluntary Sector (which has the aim of improving government's performance in interacting with the voluntary sector), and guidelines issued by Treasury for departments contracting with voluntary organisations.
Contracting and funding practices are a focus of the initiatives. These practices are a major source of disquiet from the voluntary sector perspective (Community and Voluntary Sector Working Party 2001). A recent high-profile "contract failure" also highlighted the risks to government of contracting with voluntary organisations (Office of the Auditor General 2003).
Accountability for government contracts and funds is often at the core of disquiet and risk. From a voluntary sector perspective, for example, small organisations find the compliance costs of reporting (such as purchasing a computer for the required word-processed reports) particularly onerous. As a result, newly established voluntary organisations that provide services addressing emerging needs (such as refugee communities) can be excluded from funding and contracting processes (Ashton et al. 2004, Majumdar 2004). Changes in department structures and personnel often result in changes in reporting and information requirements, which, again, can be costly for organisations (Ashton et al. 2004).
From a government perspective, social services and the outcomes to be achieved by them are difficult to specify in a contract and even more difficult to hold an organisation to account for (Klijn and Teisman 2000). Contract outputs risk becoming checklists for delivery and, as such, are not linked to the effectiveness of the service or the outcome desired (Schick 2003) and create opportunities for "creaming" the "easiest" clients and tasks (Klingner et al. 2001, Hill and Lynn 2003). Voluntary organisation employees and volunteers are not state servants. That those delivering the service cannot be controlled by officials through an employment relationship is thought by many commentators to reduce accountability (Behn and Kant 1999). Commentators have also debated how accountable Ministers are to Parliament for vote-funded services that are delivered by organisations that are not part of government. Such debate challenges the notions and boundaries of Ministerial responsibility (Martin 1995, Mulgan 1997).
Arguably, if any revision of current contracting practices is to be sustainable, it will have to be appropriate for both parties. The Public Accountability System requirements of contracting processes are relatively well documented. The System has been modelled by the State Services Commission (2002) and reviewed (Advisory Group on the Review of the Centre 2001), and its reform in the early 1990s was subject to academic scrutiny (Gregory and Hicks 1999). In contrast, voluntary organisations' accountability systems are less well acknowledged. To whom, for what and why the staff and board members of voluntary organisations are accountable has been given...