Annual Financial Statement Users - a Critical View

Internationally, the past two decades have seen considerable changes in the management and control of public sector organisations. Ostensibly, resulting from the dissatisfaction with financial performance of public enterprises in 1980's, the state organisations embraced the rhetoric of free markets. The translation of public sector activities into private sector vocabulary calls for managers to re- present the organisations in appropriate economic terms.

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The reconstitution of the welfare state in Fiji began with the interim Government initiative in 1989. The government began to dismantle state controls that were introduced previously. The aim of the reform were to encourage the public sector organisations to run in commercially focussed manner to give government and the people of Fiji a better reward for the public funds invested in them.

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Public sector reforms in Fiji have also been initiated as a result of satisfying international obligations. The international development agencies such as the World Bank have been increasingly called upon to provide technical assistance of various kinds to its less developed member countries. Often as a condition of financial assistance, the development organisation insists on some form of restructuring of public sector organisations. Such conditions, offered as part of technical assistance require the state organisations to adopt accounting and managerial techniques more familiar in the private sector. The World Bank finances development projects once these suggestions have been implemented.

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This paper reports on such incidence of the World Bank, whereby it required the Housing Authority of Fiji to be separated from the rental estates under a new entity, the Public Rental Board. This was in line with the public sector reform policy of the State whereby it was expected these organisations be more commercially oriented. The paper further seeks to study Public Rental Board, which is in its commercialised status and has implemented managerial and accounting techniques borrowed from the private business. Such techniques encompass the economic rental charged to its tenants, sale of rental flats to sitting tenants and imposition of strategic performance measurement techniques such as those of the balanced scorecard. The Housing Authority has been set up to provide affordable shelter and mortgage finance for low and middle- income earners in Fiji. The Public Rental Board focuses, on the other hand, on the provision of affordable rental housing to the low- income earners. The study has been constructed through an interpretive study of the Housing Authority and the Public Rental Board. The data collected suggest that the state policies of public sector reform and international aid agencies such as the World Bank have been instrumental in bringing about management control changes in the organisations.

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Introduction

Increased globalisation, curtailing of spending and pressure from international aid agencies like the World Bank has enabled the Fiji government to embark on a major public sector reform agenda aimed at achieving greater economy, efficiency and effectiveness.

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The Fiji government initiated the restructuring of the economy in the late 1980's. Some of these policies were recommended by the International Monetary Fund, World Bank and the Asian Development Bank. The basic norm of this policy was to restructure the public sector, reduce its size, bring it to bear the forces of market competition and make it more efficient and effective (see Reddy, 1997). For instance, the state usually seeks assistance from the World