, UNIVERSITY OF BUEA

FACULTY OF SOCIAL AND MANAGEMENT SCIENCES: DEPARTMENT OF ECONOMICS AND

MANAGEMENT

Accrual Accounting as a New Public Management Tool on

the Performance of Councils in Cameroon.

Thesis for a PhD in Management

by

SUSANA YENE CHIMY AWASOM

(SM15P144)

Date: 20/AUGUST/2018

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 TABLE OF CONTENT

Chapter 1. General Introduction

1.1. Background......................................................................................3
1.2. Problem Statement..........................................................................10
1.3. Research Question...........................................................................13
1.4. Objective of study............................................................................14
1.5. Importance of the study.................................................................15
1.6. Hypotheses.......................................................................................16
1.7. Methodology...................................................................................17
1.8. Scope of the Study…………………………………………..........19
1.9. Outline of the Study……………………………………………...22

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 1. GENERAL INTRODUCTION
1.1.Background
The performance of the public sector in different parts of the world has become a serious topic of
debate among scholars, practitioners, researchers and other stakeholders. Prior to the post reform
era, there have been considerable fuzziness as to how the performance of the public sector should
be measured as well as which tools/techniques are appropriate for the management of the public
sector. In recent times, the public sector around the world has now come under serious scrutiny
and its reforms have always been of paramount importance to key stakeholders such as the

government, the public and researchers. The effectiveness and efficiency of a country’s public

sector is critical to the success of development activities such as sound financial management, an
efficient civil service and administrative policy, efficient and fair collection of taxes, and
transparent operations that are relatively free of corruption all contribute to good delivery of
public services. It is commonly believed that the quality of the public sector – accountability,
effectiveness and efficiency in service delivery, transparency and so forth contributes to a

country’s development. The failure of the public sector around the world to respond to some

financial crisis especially those in the 1970s and to the problem of maintaining steady economic
growth has made reforms inevitable.
Public sector organisations have always been pressured by a number of different
factors to improve the service provided to the community (administrative, social,
economic, technological, and political). But the failure of the public sector to
respond adequately to financial crises in some countries in the late 1970s as a
result of the oil and dollar crises and the phenomenon of ‘stagflation’.
Stagflation is where countries suffer simultaneously from high inflation and stagnation
making reforms inevitable. In addition, rapid changes in global socio-economic, political
and technological environments dictated that the public sector be transformed into
a more active and responsive entity to assist governments in their quest for
sustained economic growth and social development. In this regard, governments
around the world have supported the reform process by issuing several initiatives
adopted from the private sector, as it was viewed to be more effective and
efficient. These initiatives aimed to give the public sector a ‘commercial’ nature

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like the private sector, through commercialisation, corporatisation and
privatisation.
The pressures and initiatives for the reform have created a context within which
new management and accounting approaches had to be developed. Consequently,
public sector organisations had to reassess their management practices to become
more accountable and efficient in their use of public sector resources (Ferlie at al.,
1996; Funnell & Cooper, 1998). In this regard, accounting was expected to play a
major role in providing financial information to improve the performance and
accountability of the public sector in order to achieve the efficiency, effectiveness
and economy that drove NPM (Aucoin, 1990; Barzelay, 1992; Hood, 1991,
1995a).
The relatively large size of the public sector was viewed as a major reason for most of the
recorded failures and therefore the increase in the private sector investment was perceived as a
remedial necessity. This view was influenced by the increasing belief that the private sector was
more efficient and responsive than the public sector. In this regard, many countries have adopted

new forms of organisational designs, such as privatisation and outsourcing to “reduce the role of

the government and increase the role of other institutions of society in producing goods and

services” (Savas, 2000. p3). These new organisational designs have gained much popularity as a

remedy with the intention of helping promote economic growth, and have raised a discussion
about the public/private sector service provision, and what services are better provided under the
private sector and what services have to remain under the provision of the government. The
perspective that the private sector is more efficient and effective than the public sector has
extended to the management of the public sector itself in all facets. In this regard, the last three
decades have seen a new wave of management techniques/tools which mirrored those used in the
private sector. The new wave was referred to as the New Public Management (NPM) and was
defined by the infusion of market principles into the government (Savas, 2000) based on the
justification that they are necessary to improve government performance (World Bank, 1995).
New Public Management (NPM) is a collective term used to classify broadly similar public
sector reforms that have been introduced in many Organisations for Economic Co-operation and
Development (OECD) countries since the late 1970s. These reforms include the adoption of

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private sector managerial techniques, the development of market mechanisms and the break-up
of government into smaller quasi-autonomous units. Research indicates that some countries have
implemented NPM-style changes at a quicker pace and more enthusiastically than others, with
Hood (1995) identifying high- (Australia, New Zealand and the UK), medium- (Austria, Italy
and the RoI) and low-intensity adopters (Greece, Japan and Spain) and most recently third world
some third world countries.
The adoption of the NPM by the government is aimed at giving the public sector a more
commercial orientation by making use of economic market models for political and
administrative relationships such as the purchaser/provider model, and by contestability( that is
the introduction of competition in the provision of public services) through subjecting
government services to competition. It is widely believed by the government that competition

plays a vital role in improving agencies’performance by making them more cost conscious and

pressuring them to improve their cost management, especially as they become more dependent
on self-generated revenues as a result of decreasing funding from the central governments. Also,
in adopting the purchaser/provider model, government wanted to imitate the relationship that
govern private sector businesses with their customers, in such a way that the government
becomes the purchaser of goods and services and the agencies became the provider, with
important implications for the responsiveness of government activities to citizens as customers,
clients and beneficiaries. This commercial orientation or the public sector was not only limited to
competition and the purchaser/provider model, but it also included several other concepts such as

“performance-base contracting, service delivery, customer satisfaction, market incentives and

deregulations” (Savas, 2000, p318) all of which were justified on the basis of improve efficiency,

effectiveness and accountability that would result (Hood, 1995a, 1995b; March & Olsen, 1989;
Savas, 2000).
Accounting was at the heart of the NPM agenda with the objective of improving efficiency,
effectiveness, transparency and accountability of public sector management. The role of
accounting in providing financial information was perceived as an essential aspect of the reform
process and as such the traditional cash accounting base system was seen as inadequate in
providing the comprehensive financial information required supporting the reform process and
hence a new system of accounting was required. Subsequently, governments introduced into the

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public sector accrual based accounting, budgeting, and reporting practices that were in use in the
private sector (Guthrie et al., 1999; Hood, 1995b; Olsen et al., 1995). These new accrual-based
practices were believed to provide better management of cost and revenues, greater focus on
output rather than inputs, more efficient and effective use of resources, better performance
management and enhanced accountability and transparency. Overall, these new practices were
believed to lead to a better public sector performance (Hopwood 1992, 2000; Miller, 1992,
1994).

Accrual accounting may be defined as a basis of accounting where “assets, liabilities, equities,

revenues and expenses are recognised in the periods to which they relate, regardless of whether

cash is received or paid”(AARF, 1995, para. 8). The importance of this definition lies in the ‘time

factor’recognition of revenues and expenses and the accounting for the non cash expenses such

as amortization or depreciation provisions and accounting for long term assets and liabilities,
which will all produce more reliable and objective figure of the full cost of goods and services
provided by public sector organisations and therefore will be more relevant for informed
decision making. Overall, governments expected that the adoption of accrual accounting would
result in better decision-making, especially in asset management, receivables management and
liabilities management which are likely to result in improved efficiency, effectiveness and
accountability of public sector agencies (Greenhall et al., 1988; Rowles, 1992). In this regard,
one of the objectives of this research is to measure the extent to which the practice of accrual
accounting in the public sector can lead to effective and efficient management. Also, in the
course of public sector reforms, the governments became interested more in the results achieved
and aimed to achieve value for money for its citizens by emulating the functioning of private
companies in competitive markets. The emphasis of the government because of this has now
shifted from cash budgeting to accrual budgeting. They have aimed through the accrual
budgeting approach to achieve a number of objectives including enhance performance and
accountability. Under the accrual budgeting, government purchase outputs from agencies and
fund them for the cost of production of these outputs. To ensure that agencies do not try to
manage cost at the detriment of quality and quantity, governments specify certain output
performance measures (quality, quantity and timeliness) and demands that these agencies deliver
the output according to these measures. At the same time, agencies are given the managerial

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autonomy to use their funds in the best way possible in order to achieve pre-determined targets
or outputs. Such an accrual budgeting system would then shift the focus from managing inputs to
managing outputs. This research will tend to focus on the extent to which such system would
impact accountability and transparency, the effectiveness and efficiency of management as well
as the dividends that would accrued from using the accrual base accounting system in selected
local councils in Cameroon.
Furthermore, government financial reporting was affected by the public sector reform process.
As most governments become more interested in results achieved rather than cash spend and
local governments or government agencies are been funded for outputs rather than inputs, the
importance of reporting has extended from its internal use by management to discharge
accountability by local governments to the central government and by government to parliament
and the people. Subsequently, accrual output reporting was introduced
where financial information and performance information became required to be
reported to discharge accountability. In this regard, cash reporting was replaced by
accrual reporting in correspondence with the accrual use of accounting and
budgeting, and performance reporting has shifted from where cash has been spent
to what has been achieved with it through the use of output reporting where
local governments reported their performance in terms of their performance measures used
as the basis of their funding, generally these are quantity, quality, and timeliness.
Most Less Developed Countries including Cameroon were at the heart of this worldwide reform
of public sector practice. In this perspective the government of Cameroon after haven identified
state’s governance and strategic management mechanisms as central to the implementation of
this project, engaged in a series of public management reforms similar to those of the IMF Code
of Good Practice in matters of public finances ( IMF, 2007; MINFI1,2013), in the spirit of
accountability and good governance. These reforms consequently are in consonance with the
New Public Management (NPM) agenda designed to achieve a more business-like and
performance-focused public sector. Generally NPM movement reforms are articulated in
response to the charges against governments for being too bureaucratic, inefficient, wasteful, and
morally bankrupt. To banish bureaucracy, reinvent and fix the problem of governments (Hood,

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1991; Osborne and Plastrik, 1977), this movement emphasises that government should be more
result oriented by inculcating a business like entrepreneurial culture in order to enhance
performance, effective and efficient management.(Osborne and Gaebler, 1992; Barzelay, 1999;
Thompson and Jones 1999). As lessons learnt in Africa by ECA (2004 identified a selected
application of NPM comprising cost-recovery user fee, accrual accounting, performance
contracting, ICTs in public service delivery as well as the necessity of decentralization to
improve the quality of service delivery to customers. Others like Watkins and Arrington (2007)
contended that NPM entails a new conception of public accountability with a different style of
accounting where public servants are evaluated and monitored through sophisticated accounting
techniques. Accrual accounting was therefore acknowledged by NPM proponents as the most
appropriate accounting technology adopted from the private sector, that provides more
appropriate information for decision makers and ultimately leads to a more efficient and
effective public sector governance (Hyndman & Connolly, 2011). Some of them even argued
that without accrual as an accounting technology, some of the changes brought by NPM reforms
would be weakened (Olson, Humphrey& Guthrie, 1998). According to FEE (2007), the move to
accrual accounting is a normal part of wider set of public management reforms where delegation
is increased, departments are governed in ways that ensure service delivery to citizens rather than
follow strict bureaucratic rules. In establishing the link between accrual accounting practice and
NPM, Deloitte (2015) FEE ibid, reiterate that there is increased openness in terms of reporting
and performance measurement brought by accrual accounting technology accompanied by a
broader NPM reforms. Accounting practice in Cameroon is generally characterized by a heritage
of Franco-German uniform accounting model, which is code-base and statutory regulated by the
state. As in a macro-economic oriented tradition, accounting is used as an administrative device
for national economic planning, fiscal control, performance evaluation and supervision of
activities of all states entities, with focus on stakeholders’ interest in financial reporting (Elad,
2005). It is in this perspective that the Public Sector Accounting Standard Board for the
Economic and Monetary Community of Central Africa (CEMAC) referred to as “
Comitéd’Experts en Gestion Publique” was created as a supra national body legislating on
public sector financial management issues within this sub-region of Africa. On 19 December
2013, this supranational legislative body reiterated to its CEMAC member states (predominantly

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of the uniform code-base accounting system), the importance of adhering to International Public
Sector Accounting Standards on an accrual basis.

Though implementing experiences on the adoption of IPSAS on accruals in Europe and some
developing countries reveal this to be problematic, complex, costly and time consuming
(Cavanagh, Flynn,& Moretti, 2016; Hyndman & Connolly, 2011; Wynne, 2007;
Cohen&Karatzimas, 2016), trends in the application of accruals accounting have been visible in
the budgetary and accounting legislation for local governments in Cameroon since 1998. Its text
of application was however enacted in 20062, eight years later. This decree of 1998 and its text
of application of 2006 officially introduced the private sector accounting model, with its double
entry and accrual accounting concepts to be practised by local government entities in
Cameroon.The decentralisation machinery was reinforced by promulgating several laws in the
year 2004 for Councils3, referred to as laws for Regional and Local Authorities(RLA)in
Cameroon. These laws mapped out more financial horizons for councils by announcing the
gradual promulgation of an autonomous fiscal system and financial regime for RLA4. In fact,
article 88 of this financial regime of 2009, reemphasizes that the General accounting for RLA in
Cameroon should be based on the principle of recognition of rights and obligation, where all
transactions are recorded in the financial year they occur, their cash payment or receipt
notwithstanding. These principles have some similarities to the IPSAS Conceptual Framework
for General Purpose Financial Reporting (2006), on Accrual base.

With this decentralization drive, Local Governments (LG) in Cameroon has been notoriously
interrogated for their incompetence and depleting staff strength, poor infrastructural and
organizational set-up (Akoafane, (2009); Tchoumbia, (2004). They have a herculean task to
comply with this new accounting reforms, their infrastructural deficiencies notwithstanding. In
this regard, the supervisory ministry of councils in Cameroon, the Ministry Territorial
Administration and Decentralisation (MINATD) as well the Ministry of Finance (MINEFI) in

2
The Prime Ministerial Decree no 98/266 /of 23rd August 1998, and the joint instruction (MINATD/MINFI)
oncouncil accounting and budgeting of 2006.
3
The three Decentralisation laws of 2004, no 17 on the Orientation of Decentralisation; no 18 on Rules Applicable to
Councils; and no /19 on Rules Applicable to Regions.
4
Law nº 2009/011 of 10th July 2009, The Financial Regime of Decentralized Local Authorities in Cameroon.

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partnership with national and international bodies, engaged in a series of specialised training for
council finance and accounting officials from the year 2003.

It has been reckoned that changes in the organisational composition of the public sector
introduced by New Public Management-style reforms, leading to corporatisation, contracting-out
and privatization in their various forms have led to an increased decentralisation of
responsibilities in accounting in the public sector. (Osborne and Gaebler, 1992; Christensen and
Laegreid, 2007).The budgetary year of 2010 marked a turning point in the
decentralisationprocesses with regards to more financial and accounting reforms. Given that
RLA were endowed with a mission to promote the economic, social, hygiene, educational, sports
and cultural development within their municipalities, more powers and financial resources were
devolved to them to this effect. This mission was consequently backed by a rigorous financial
policy with strategies of inter-ministerial transfer of financial resources to councils. A new
harmonised budgetary nomenclature and accounting Plan5 still on accrual basis were
promulgated to accommodate the new resources transferred to RLA. Other structural changes
such as the introduction of organisational charts with specific job profiles became eminent with
the quest for more professional competences to meet the exigencies of this new financial and
accounting technology. The government once more through its supervisory ministries organised
a series of informative and formative seminars for council officials, in partnership with resident
international bodies6. All of these reform strategies put in place was to ensure the efficient and
effective management of states resources for a balanced and participatory development as spelt
in the 2035 growth and employment strategy of the Cameroon government and reiterated in the
decentralisation goals of RLA in Cameroon.

For almost two decades, the state has been experimenting with New Public Management for
strategic development within the context of decentralisation in Cameroon, with accrual
accounting technology at the helm of this reform. The relevance of this reform is yet to be
acknowledged, given that council officials are still entangled with the problem of managing
human, material and financial resources that is perpetually not commensurate to the task
assigned to them. Financial constraints on local authorities and more importantly limited
capacities of man power still impede the achievement of the decentralization goals. Can the
5
Decree of 1998 modified by that of 2010,
6
National Training Seminars for council officials, UN HABITA, 2003, German cooperation GIZ, 2009 etc.

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practice of accrual accounting as a NPM reform tool designed to salvage inefficient and
ineffective management, transform this depleting situation in councils into a better municipality?

1.2. Statement of problem

Some studies have raised concerns over the adoption of a private sector reporting model (i.e., the
accrual-based accounting model) by public sector organisations (GASB, 2006; Tyrone, 2005;
Wynne, 2008). It was argued in some of these studies that accrual-based accounting model is not
consistent with the accountability reporting model relevant in the public sector (Tagesson, 2009;
Arnabolldi & Lapsley, 2009). Even though several studies on accrual accounting in the public
sector have focused on developed economies (Adhikari & Mellemvik , 2010;Timoshenko &
Adhikari, 2010), Ghana, as the first Anglophone country in Africa to embark on the World Bank
and IMF experimentations, has been at the forefront of many reforms which have had far-
reaching impact on several practices in the public sector. The adoption of accrual as a major
accounting reform in the Ghanaian public sector was seen as an expensive venture and little has
been done to surmount the implementing challenges (Nana and Simpson, 2012). In South Africa,
the accrual standard is enshrined in the constitution of 1996, and promulgated by acts to align
with international standards since 2003. It was opined that though all the acts and standards are
in place the transformation process is slow and will still take several years. The Nigerian
experience of accrual accounting as a basis for accountability and transparency at the helm of
NPM reforms (Ofoegbu, 2014), has been equally too slow in its implementation. To this effect,
Babatunde (2017) accuses the Nigerian government for double standards with regards to the
incessant failures to institute IPSAS accrual in Nigerian public sector, whereas the same
government didn’t experience any delays in implementing international Financial Reporting
Standards ( IFRS) in private sector. Despite several efforts made to sensitise the public, train and
educate practitioners there were lots of inconsistencies in the implementation process. According
to Babatunde (2017), political-buy-in as well as cultural factors account for the delays in
practically implementing IPSAS accrual. He reiterates that such failures and delays may impede

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potential benefits of accountability and transparency to the disadvantage of the Nigerian citizens.
In Benin,( Lassou et al 2017)perceived a successful implementation of accrual accounting within
the context of NPM financial reforms thanks to the support of German Development agency
(GIZ7). With the application of a computer software called “WMONEY” a participatory,
pragmatic, and incremental approach reinforced by conditionality imposed to the neo-
patrimonial leadership was instituted. This decentralized donor-driven developments within
communities granted Local civil servants and municipal stakeholder’s ownership over the
technology and its whole implementation process. An increased commitment and sense of
accountability that laid the bases for greater civil society credibility and participation in the
accounting and budgetary processes, produced better outcomes. In Cameroon, Mukah (2016)
acknowledges that new public financial management reforms introduced by the law on the
orientation of decentralization appears to be too slow for lack of resources, this he says, may
jeopardize the decentralization processes in Cameroon. Nsangou &Awasom (2015) opine that
there was a significant momentum by council officials to implement the accrual based financial
reporting system even though they lacked the expertise to meet up with the exigencies of this
new accounting technology in councils of Cameroon. With the several implementing difficulties
recorded such as high cost, lack of professional skills and the understanding of the accrual
concept, the extent to which the practice of accrual accounting has impacted on NPM reforms on
Councils ‘performance remains still to be acknowledged.
The problem statement of this study can be articulated at two levels; first there is knowledge gab
on the implementation and practice of accrual accounting in the public sector and specifically the
local government of Cameroon. In mapping the spread of accrual accounting in the public sector
by countries8, Cavanagh et al (2016) Ibid, presents the government of Cameroon as one of the
57% of countries of the world still operating under pure cash-based system. Even Muka (2016
Ibid) thinks that there is still need to study the factors determining the adoption of accrual
accounting in Cameroon given that the existing public sector cash based and fund accounting
system is considered inadequate. The opinion of these scholars shows that there is no empirical

7
Gesellschaft für Internationale Zusammenarbeit (GIZ), established by the German Federal Ministry for Economic Cooperation
and Development. GIZ seeks international cooperation for sustainable development in more than 130 countries (including 39 African
countries).
8
OECD and IMF staff estimate, based on public information, in Cavana et al (2016). Implementing Accrual
Accounting in the Public Sector. IMF Fiscal Department.

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research documented on the practice of accrual accounting in Cameroon, whereas this much
applauded accounting technique was statutorily adopted at the local government level in a prime
ministerial decree of 1998. In fact the application of accrual in financial accounting was
reiterated in the article 88 of Financial Regime of Council (2009) as in phrases below;

“La comptabilité générale de collectivité territorial décentralisée est fondée sur le principe de la
constatation des droits est des obligations. Il est tenu selon le principe de la comptabilitéả partie
double.

It should be noted that the above statement emphasizing the application of accrual accounting
runs across all legislative texts that govern finance and accounting practices within the CEMAC
states and Cameroon public sector specifically. The CEMAC Directive no3 on the Accounting
Plan of the state ( 2011) article 2, and the financial Regime of the Cameroon ( 2018) article 75,
pick on this common phrase with emphasizes on accrual accounting that

“Les opérationssont pris en compte au titre de l’exercice auquel elles se rattachent ,

indépendamment de leur date de paiement ou d’encaissement.”

The development of accrual accounting at all tiers of Governments in Cameroon, is a forgone

ordeal whose practice have hardly been subjected to empirical scrutiny. Since the adoption and
existence of accrual accounting practice in councils, little or no research has been undertaken to
assess the impact of the implementation and practice of accrual accounting on the quality of
financial reporting, accountability and transparency, efficiency and effectiveness in council
management performance as a whole. What are the NPM reforms adapted for an accountable and
efficient local government in Cameroon? Is there any effect of the practice of accrual on New
Public Management performance in councils since its adoption in 1998?

1.3 Research questions

The objectives of this research would be achieved by addressing a number of questions which
will remain paramount to this study. To satisfy the motivations of this study, the following
research questions are discussed by this study:

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 1. What are the NPM reforms adapted for an accountable, efficient and effective management
in local government of Cameroon?
2. Is there any effect of the practice of accrual on New Public Management performance in
councils
i. Has accountability in councils improved with the practice of the accrual method of
accounting?
ii. Is management efficient and effective with the practice of accrual accounting?
iii. What are the benefits and challenges experienced in accrual accounting practice?

To address these questions and to meet the research objectives, this study takes
the view that accounting is a social construct which is subject to institutional
pressures and therefore the study of accounting change is best addressed in its
context (Scapens, 1990). Therefore, an interpretive case study approach is used as
a suitable approach for understanding accounting change in the public sector and
the outcomes of this change. The importance of this approach is that it goes
beyond the description of reality and allows for an understanding of the
underpinnings of accounting change and its implications for performance in local councils.
This case study approach uses a qualitative methodology for data collection,
where primary data consisted of semi-structured interviews with staff from
different levels of the hierarchy of the subject organisations in addition to some
key senior managers and public officials across the local councils in selected areas and
secondary data was obtained from government publications such as budget papers
and annual reports.

1.4 The Objective of study.

Public Management scholars and practitioners have identified a handful of common

characteristics of NPM reform practices including inter alia budget cuts, privatisation,
decentralisation, strategic planning and management, competition, improved accounting and
financial management, personnel management and professionalism as well as the use of

14
information technology (see Osborne & Gaebler, 1995; Hood 1991; Gruening 2001; FEE 2007,
ECA 2004).

The general objective of this research is to evaluate the impact of the practice of accrual
accounting on NPM performance in Councils of Cameroon. In the specific objective we shall
examine the effect of the practice of accrual on four of the above features qualifying NPM
practices such as improved accounting and accountability, efficiency and effectiveness;

i. Assess the impact of Accrual accounting practice on accountability and

transparency.
ii. Examine the extent to which management is efficient and effective with the
practice of accrual accounting.
iii. Explore the benefits and challenges in the practice of accrual Accounting

1.5 Importance of the Study

There are myriads of importance envisage for this study. First, although there have been
several studies that discussed the adoption of accrual accounting in the public
sector, none of these studies has addressed the usefulness of accrual accounting in
an environment where competition and market forces are limited or largely do not
exist. As mentioned in the previous section, accrual accounting was perceived to usher in a new
dimension into the public sector as it offers comprehensive information that is necessary for
operational management and full cost pricing that became necessary as
governments subjected their businesses to contestability as part of their influence
by the successfulness of the private sector. For this reason, the interest in
addressing the usefulness of accrual accounting to local councils that are not fully
subjected to contestability and market forces constitutes the first motivation motivation for this
study. Whilst there has been significant research enriching our understanding of how
accounting has influenced public sector reform (see for example, Broadbent &

15
Guthrie, 1992; Burns & Scapens, 2000; Carnegie & West, 2003; Christensen,
2002, 2003; Dixon et al., 1996; Evans & Bellamy, 1995; Funnell & Cooper, 1998;
Guthrie, 1998; Hoque & Moll, 2001; Hoque et al., 2004), this study’s main
contribution stems from the acute shortage of previous case study research in local councils in
Cameroon. A number of papers have been written in the context of
local governments and some have discussed accrual accounting in the broader
context of the public sector in general, but few have conducted an in-depth
analysis of its workings in the context of local councils in Cameroon (see for
example, Carpenter, 1986, 1990; Cavalluzzo & Ittner, 2004; Guthrie & Carlin,
1998; Christensen, 2002; Hoque et al., 2004). The second motivation of this study
is therefore to address this gap in the public sector accounting literature.
The third motivation of this study stems from the lack of similar research in the
context of the local councils. Whilst other jurisdictions in Cameroon may have been
subject to research in regard to the contribution of accounting change to public
sector reform, the local councils have been mostly excluded, even in studies that address the
wider Cameroon public sector. This limitation of research to local councils extends to the
information available about the local councils across different municipalities.
An extensive literature review of many accounting studies that are connected with
the reform of the public sector revealed that no study has discussed practically and
in-depth how accrual accounting impacted the performance of local councils in Cameroon in
terms of accountability, transparency, effectiveness and efficiency. Filling this gap constitutes a
major driving force for this study.

The importance of this study stems from its contribution to the paucity of research
about the working of private sector accounting practices in the public sector. It is
therefore expected that this study would expand the growing body of knowledge
available for a review of the appropriateness of applying private sector accounting
practices in the public sector in general and in the non-contestable public sector in
particular. In addition, this study is important as it provides a rich analysis of the
working of accrual accounting in local councils in Cameroon within selected municipality.
Also, this study could provide a basis for future research in the area of public
sector accounting in local councils in Cameroon by discussing the applicability and usefulness of

16
 accrual accounting for councils that do not have a market interaction,. In addition, the
paucity of similar research in the wider context of the Cameroon public sector,
and the nonexistence of research in the context of the local councils have made this study
important and unique in filling this gap in the literature and in becoming a
valuable reference to future research in this context.
Finally, it is expected that the findings of the study may prove to be useful to
professionals, policy makers, and others concerned with policy issues in public
sector.

1.6 Hypothesis.

Given that public sector accounting reform has become central in the rise of NPM, resulting to a
broader shift in views regarding public accountability and public financial management and
administration, our expected outcome for the practice of accrual in councils on NPM reforms,
shall be captured with the following hypotheses.

i. Management is not efficient and effective with the practice of accrual accounting
ii. There is no impact of accrual accounting practice on accountability.
iii. There are more challenges than benefits in the practice of accrual accounting

1.7 Methodology.

The central theme of this study is to carefully examine and analyse accrual accounting as a New
Public Management tool on selected councils in Cameroon. For this purpose, the study takes the
view that accrual accounting is an important tool for measuring the performance of public sector
organizations such as councils. Our research will adopt a mix of qualitative and quantitative
research, in triangulation with case study methodology on local government entities in
Cameroon. Cresswell’s (2015) looks at mix method of research as the collection, analysis and
integration of both quantitative/qualitative data enhances a better understanding of research
problem, as well as responding to research questions. He however distinguishes between
methods and methodology with regards to the mixed method research concept as in the caption
below;

17
« Mixed methods research is a research design with philosophical assumptions as well as
methods of inquiry. As a methodology, it involves philosophical assumptions that guide the
direction of the collection and analysis of data and the mixture of qualitative and quantitative
approaches in many phases in the research process. As a method, it focuses on collecting,
analysing, and mixing both quantitative and qualitative data in a single study or series of
studies… » MacHarrie (2016) on the other hand expands on the triangulation in qualitative
research method as a multi-method approach to data collection and data analysis. The basic idea
underpinning the concept of triangulation is that the phenomena under study can be understood
best when approached with a variety or a combination of research methods. Rothbauer Paulette
(2008) identifies four types of triangulation as theory triangulation, data triangulation,
investigation triangulation and methodological triangulation. She also explains that case study
triangulation involves illuminating a case (unit of study) from different research angles, so as to
capture the complexity of a single case. In professional practices like architecture, economics,
accounting as well, cases are based either on personal experience or model cases established
within the profession. The ability to act within professional practice becomes based on
knowledge of a repertoire of case (or cases) studied (Rothbauer 2008 Ibid).

Our Case study will come from selection councils under the Ministry of territorial administration
and decentralisation (MINATD), which accrding to the law on the orientation of Decentralisation
(2004), are refered to as regional and local authorities in Cameroon. At least 10 councils selected
from four regions demarcating the Anglophone and Francophone sectors of Cameroon. This
selection shall constitute a mix of city, urban and rural council as delineating by the
decentralisation laws of 2004 as in the table that follows

Table 1. Selection of Case study.

Categorisation City Council Councils at Sub-Divisional Total number

of Council divisional level Councils 0f councils
Anglophone 1 06 8 15
Francophone 2 12 16 20
Total 04 68 25 35

18
Figure 1. Triangulation of Research Data

Published legal
texts & journal
reports on council
accounting

Data validity with case study.

Financial Primary research ;
accounting questionnairesintervie
documents from ws with council
councils stakeholders.

Process in Triangulation of research method.9

So far, there are no established measures for quantifying the benefits of the accrual accounting
system. Our study has also chosen a number of performance measures such as accountability,
transparency, effectiveness and efficiency that we shall evaluate vis-a-vis accrual accounting as a
tool. We shall be employing a number of techniques in this study such as interviews,
questionnaires or representative samples of councils and their financial statements.

9
Sources : Adapted from Laura McHarrie (2016). Triangulation Research Technique.
https://www.youtube.com/watch?v=kV4givrNzdI retrieved on 06/02/2018.

19
1.7.1. Data collection:

Several data collection techniques are used in qualitative research such as ethnography,
projective techniques, participant observation, role playing, focus group interviews and cartoon
completion to name but a few. In this study, the nature of the research questions will warrant the
selection of case study as the primary technique for collecting and analysing data. Primary data
shall be collected from questionnaires, interviews as well as face to face discussions with key
technocrats and actors involved in the accounting processes, to gauge their perception with
regards to accounting and accountability, professionalism benefits and challenges with the use of
accrual accounting technology.

- Secondary data shall be collected from desk research on published legal texts and
journals, and as well as financial accounting documents produced by selected local
government entities, to tract the application of accrual accounting technology in
Councils of Cameroon.

1.7.1 Data collection tools. The concept of triangulation in data collection shall also be adopted
for this study. This means that more than one source of data shall be use wherever possible.
These sources are the archival records of councils, observation and interviews. Questionnaires in
form of likert scale shall be instituted to gauge the application of accrual accounting with
financial statements on accrual basis. In other words a usability scale for the assessment of
financial statement for accountability purpose shall be collected through likert scale
questionnaires.

Structured interviews as supplement the questionnaires, tape recorders as well as contingency

tables shall be conceived to collate and categorise important phrases from technocrats involved
in the reporting and management of council economic and financial accounting activities.

1.7.2 Data analysis.

- The analysis of primary data shall be done quantitatively and qualitatively.
- Qualitative analyses describing and drawing inferences on responses gathered from
the structured interview and discussions.

20
 - Quantitative analysis of numerical data categorised in a contingency table, on time
series mode covering the period of about ten years from 2012 to 2017, on the practice
of the accrual accounting in councils.
- A contingency table shall be constructed to analyse the expected and observed
practice of accrual accounting as recommended by the law covering a period of at
least five years.

1.8 Scope of study.

The study shall cover a period of 05 years spanning from 2013 to 2017, under which accrual
accounting should have been practiced in councils. Accounting documents, financial reports and
statements studied shall be selected within the frames of this period.

The case study will come from selection councils under the Ministry of Territorial
Administration and Decentralisation (MINATD). At least 100 councils selected from five
regions demarcating the Anglophone and Francophone sectors of Cameroon. This selection shall
constitute a mix of city, divisional and sub divisional council as delineating by the
decentralisation law of 2004.

Table3.Summary of Research Approach.

General Objective. Evaluate the impact of the practice Data Triangulated with case study
of accrual accounting on NPM performance in Councils methodology
of Cameroon
Specific Research Hypothesis Data collection Data Analysis
Objective Question
Examine the Is accrual Accrual is not Desk research and .Descriptive
NPM reforms accounting a NPM observation on analysis on NPM

21
with accrual adapted as a NPM Application accounting laws and reforms
applications in reforms tool for documents
councils of councils in
Cameroon Cameroon?

Assess the Does accrual Management Likert Scale Contingency

impact of accrual promote not questionnaires on the use tabulation with sq
accounting on accountability, and accountable of accrual accounts and analysis on the
accountability transparency? and transparent production of accrual use of accrual in
and transparency with the based financial Financial
practice of statement for reporting, with
accrual accountability chi sq analysis
Examine the Is management Management is Likert scale
extent to which efficient and inefficient and questionnaires
management is effective with the ineffective supplemented by Multinomial
efficient and practice of accrual with the structured interviews on Logit or Ordinary
effective with accounting? practice of the efficient and effective Least square
accrual practices accrual council management. analysis
accounting
Exploit the What are the There are more Likert scale Multinomial
benefits and benefits and challenges than Questionnaires Logit or Ordinary
challenges in the challenges in benefits with supplemented by Least square
practice of accrual accounting the practice of structured interviews on analysis
accrual Ac. practice? accrual the perceived benefits
and challenges.

1.9 Outline of the Study

The remainder of this study is structured in five chapters. Chapter two present review of
literature. The in-depth review of the historical background which will focus on major issues,
controversies that will impact the study as well as all relevant variables for the research. This
chapter also examine theoretical framework that inform the research, compare and contrast
competing theories and justify the theoretical foundation of the dissertation. Empirical
literature has also been thoroughly reviewed in other to answer the research
questions/hypotheses. It will examine accounting as a key element of public sector reform,
but from an international perspective and highlights the different pressures behind public

22
sector reform around the world and the rise of NPM in response to these pressures. The
chapter then delve further to describe how some governments have responded to the reform
pressures by adopting private sector practices into their public sectors and how other
governments have failed or are slow to adopt the NPM reforms and accrual accounting in the
public sectors. In this regard, the chapter discusses how accounting became seen as an
important element of this reform process and that accounting change was needed to satisfy
the reform objectives. The chapter provide an overview of the Cameroon experience of
public sector reform and, as such, constitutes a background to inform the case study chapters.
The chapter discusses how organisational changes are important part of the process of this
reform and how accounting became seen as a mechanical tool to facilitate the reform
objectives. The chapter discusses the perceived benefits from the adoption of accrual
accounting on performance and accountability in public sector organisations local. Chapter
three concentrates on the research methodology in order to enable the achievement of the
research objectives as well as testing the various hypotheses stated. The chapter describe the
methods of data collection and data analysis, the research design in order to ensure validity.
The chapter also include the describe methods for the selection of data and the statistical
analysis to answer the research questions/hypotheses. The underlying aim of this chapter
being to set the empirical basis of the study in the context of the international and Cameroon
reform and possible impact experience addressed in chapters one and two, provides an
explanation of the appropriateness of the qualitative approach of this study. It introduces the
different concepts and theories used to explain the research phenomena in this study. Finally,
the chapter introduces the research site of this study. Chapter 4 will present the empirical
findings of this thesis. This chapter present the findings and observations from the field
study. The chapter use narratives and documentary evidence to demonstrate the research
findings. It provides an explanation of the workings of accrual accounting, budgeting, and
reporting in local councils and their impact on performance in terms of effectiveness,
efficiency, accountability and transparency. The focus in this chapter is on the benefits of
accrual accounting to local councils in ensuring efficiency, effectiveness and accountability.
Chapter 5 provides an overall analysis of how Cameroon responded to the reform
pressures in the light of the NPM and the reasons behind the accounting change.
The chapter provides for the workings of accrual accounting and its impact on

23
 management practices on selected councils and further background information about the
research site, and then discusses the specific local council organisational responses to the
reform process. This chapter provides a detailed analysis of the implication of the accounting
change in the local councils and the implication for the adoption of accrual accounting.Under
accrual accounting, the chapter discusses the usefulnessof accrual accounting to decision-
making, especially for revenue management, expense management, asset management,
receivables management, and liabilities management. The chapter elaborates on the rationale
of the full cost information resulting from accrual accounting for performance measure. The
chapter also describes the actual use of accrual budgeting in the local councils and evaluates
the benefits achieved, such as effectiveness, efficiency and accountability. Finally in relation
to accrual reporting, the chapter assesses the actual usefulness achieved from the use of the
accrual basis of accounting for financial reporting and output reporting at the local council
level and at the whole of government level, and whether this accrual output reporting has
achieved the discharge of accountability and the focus on results and the possible challenges
posed in attempting to apply accrual accounting in the public sector.Finally, chapter 6
provides a summary and discussion of the findings resulting from this study. It also presents
some concluding remarks that address the research questions and the research phenomena
under study.

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