In the bank or on the ground : an examination of financial reserves in Australian international aid organisations

This study contributes to the understanding of the contribution of financial reserves to sustaining nonprofit organisations. Recognising the limited recent Australian research in the area of nonprofit financial vulnerability, it specifically examines financial reserves held by signatories to the Code of Conduct of the Australian Council for International Development (ACFID) for the years 2006 to 2010. As this period includes the Global Financial Crisis, it presents a unique opportunity to observe the role of savings in a period of heightened financial threats to sustainability. The need for nonprofit entities to maintain reserves, while appearing intuitively evident, is neither unanimously accepted nor supported by established theoretic constructs. Some early frameworks attempt to explain the savings behaviour of nonprofit organisations and its role in organisational sustainability. Where researchers have considered the issue, its treatment has usually been either purely descriptive or alternatively, peripheral to a broader attempt to predict financial vulnerability. Given the importance of nonprofit entities to civil society, the sustainability of these organisations during times of economic contraction, such as the recent Global Financial Crisis, is a significant issue. Widespread failure of nonprofits, or even the perception of failure, will directly affect, not only those individuals who access their public goods and services, but would also have impacts on public confidence in both government and the sectors’ ability to manage and achieve their purpose. This study attempts to ‘shine a light’ on the paradox inherent in considering nonprofit savings. On the one hand, a public prevailing view is that nonprofit organisations should not hoard and indeed, should spend all of their funds on the direct achievement of their purposes. Against this, is the commonsense need for a financial buffer if only to allow for the day to day contingencies of pay rises and cost increases. At the entity level, the extent of reserves accumulated (or not) is an important consideration for Management Boards. The general public are also interested in knowing the level of funds held by nonprofits as a measure of both their commitment to purpose and as an indicator of their effectiveness. There is a need to communicate the level and prevalence of reserve holdings, balancing the prudent hedging of uncertainty against a sense of resource hoarding in the mind of donors. Finally, funders (especially governments) are interested in knowing the appropriate level of reserves to facilitate the ongoing sustainability of the sector. This is particularly so where organisations are involved in the provision of essential public goods and services. At a scholarly level, the study seeks to provide a rationale for this behaviour within the context of appropriate theory. At a practical level, the study seeks to give an indication of the drivers for savings, the actual levels of reserves held within the sector studied, as well as an indication as to whether the presence of reserves did mitigate the effects of financial turmoil during the Global Financial Crisis. The argument is not whether there is a need to ensure sustainability of nonprofits, but rather how it is to be done and whether the holding of reserves (net assets) is an essential element is achieving this. While the study offers no simple answers, it does appear that the organisations studied present as two groups, the ‘savers’ who build reserves and keep ‘money in the bank’ and ‘spender-delivers’ who put their resources ‘on the ground’. To progress an understanding of this dichotomy, the study suggests a need to move from its current approach to one which needs to more closely explore accounts based empirical donor attitude and nonprofit Management Board strategy.

"Food For Thought" Selected Design Installation DIA Homegrown 2011 Life In the Slow Lane Exhibition: Little Stanley Street, South Bank, Brisbane

'Homegrown is an initiative of the Design Institute of Australia–Queensland Branch to promote the collaboration and cultivation of local design talent in Queensland and strengthen the connection between design, plate, planet, people and culture.' Homegrown 2011 Exhibition Catalogue Excerpt

Grameen Bank's social performance disclosure : responding to a negative assessment by Wall Street Journal in late 2001

Purpose – The aim of this paper is to establish a linkage between negative global media news towards Grameen Bank (GB), the largest microfinance organisation in the developing world, and the extent and type of annual report social performance disclosures by GB, over the nine-year period 1997-2005. Design/methodology/approach – Content analysis instruments are utilised to analyse GB annual report social disclosure. Findings – The study finds that GB's community poverty alleviation disclosures account for the highest proportion of total social disclosures in the period 1997-2005. The results of this study are particularly significant in relation to poverty alleviation – the issue attracting severe criticism from the Wall Street Journal (WSJ?) late in 2001. The community poverty alleviation disclosures by GB are significantly greater over the four years following the negative news in the WSJ than in the four years before. The results suggest that GB responds to a negative media story or legitimacy threatening news via annual report social disclosures in an attempt to re-establish its legitimacy. Originality/value – This paper contributes to the literature because in the past there has been no research published linking global media attention to the social disclosure practices of major organisations in developing countries

Bank audit fees and asset securitization risks

Using the lens of audit pricing, we provide insights into auditors’ behaviors in relation to the risk of asset securitizations to bank holding companies in a period encompassing the Global Financial Crisis (GFC) and the introduction of the accounting standards FAS 166 and FAS 167. Using US bank holding company data from 2003 to 2011, we find significant and positive associations between asset securitization risks and audit fees. We find that auditors appear to focus on different aspects of asset securitization risks after the onset of the GFC, and increase their attention to the systemic risks facing bank holding companies in general. After the implementation of FAS 166 and FAS 167, which removed the discretion to treat asset securitizations as sales and required the consolidation of the accounts of special purpose entities, asset securitization risks no longer have a significant effect on audit fees.

Perspectives on Australian bankruptcy law through the prism of the World Bank report on the treatment of the insolvency of natural persons

The insolvency of natural persons raises questions not only for a nation’s economy but also for its concern for equity. The World Bank has recently released a Report on the Treatment of the Insolvency of Natural Persons to guide nations in addressing the issues raised by an individual debtor’s insolvency. A brief review of Australia’s personal insolvency laws shows that it addresses many of the issues raised by the Report. However two areas are identified as worthy of further investigation by policy-makers and scholars to better address a concern for equity.

Indian bank efficiency and productivity changes with undesirable outputs: A disaggregated approach

The objective of this study is to examine technical efficiency and productivity growth in the Indian banking sector over the period from 2004 to 2011. We apply an innovative methodological approach introduced by Chen et al. (2011) and Barros et al. (2012), who use a weighted Russell directional distance model to measure technical inefficiency. We further modify and extend that model to measure TFP change with NPLs. We find that the inefficiency levels are significantly different among the three ownership structure of banks in India. Foreign banks have strong market position in India and they pull the production frontier in a more efficient direction. SPBs and domestic private banks show considerably higher inefficiency. We conclude that the restructuring policy applied in the late 1990s and early 2000s by the Indian government has not had a long-lasting effect.

Bank guarantees and the reasonable expectations of beneficiaries

A bank guarantee has traditionally been viewed as a cash equivalent. This view is supported by the operation of the autonomy principle. However, the autonomy principle is subject to certain recognised exceptions both at common law and under statute. One of these exceptions is commonly referred to as the negative stipulation or underlying contract exception. In recent times the operation of this particular exception has given rise to a wealth of case law. This article examines whether this recent case law appropriately recognises the reasonable expectations of the beneficiary of a bank guarantee that a bank guarantee should function not only as a security but as a risk allocation device.

Spatial patterns in the biology of the chokka squid, Loligo reynaudii on the Agulhas Bank, South Africa

Although migration patterns for various life history stages of the chokka squid (Loligo reynaudii) have been previously presented, there has been limited comparison of spatial variation in biological parameters. Based on data from research surveys; size ranges of juveniles, subadults and adults on the Agulhas Bank were estimated and presented spatially. The bulk of the results appear to largely support the current acceptance of the life cycle with an annual pattern of squid hatching in the east, migrating westwards to offshore feeding grounds on the Central and Western Agulhas Bank and the west coast and subsequent return migration to the eastern inshore areas to spawn. The number of adult animals in deeper water, particularly in autumn in the central study area probably represents squid spawning in deeper waters and over a greater area than is currently targeted by the fishery. The distribution of life history stages and different feeding areas does not rule out the possibility that discrete populations of L. reynaudii with different biological characteristics inhabit the western and eastern regions of the Agulhas Bank. In this hypothesis, some mixing of the populations does occur but generally squid from the western Agulhas Bank may occur in smaller numbers, grow more slowly and mature at a larger size. Spawning occurs on the western portion of the Agulhas Bank, and juveniles grow and mature on the west coast and the central Agulhas Bank. Future research requirements include the elucidation of the age structure of chokka squid both spatially and temporally, and a comparison of the statolith chemistry and genetic characterisation between adults from different spawning areas across the Agulhas Bank.

Deriatives disclosure in corporate annual reports: bank analysts; perceptions of usefulness

Responding to mixed evidence on the decision-usefulness of annual report disclosures for derivative financial instruments to capital market participants, and concerns identified by practice, this paper examines usefulness in a direct study of user perceptions. Interviews with analysts from Australia’s four major banks reveal essential usefulness, limited by the disclosures’ failure to reflect companies’ actual use of derivatives throughout the period, and inability of users to understand companies’ off-balance sheet risk and risk management practices from information considered generic and boilerplate. The research complements and extends existing archival and survey research and provides new evidence suggesting low-cost ways for increasing usefulness. It supports the International Accounting Standards Board’s disclosure recommendations in its recent Discussion Paper: A Review of the Conceptual Framework for Financial Reporting, but, at the same time, highlights that for these proposed measures to be successful in relation to IFRS 7, they may need to address other issues. The research increases knowledge of the informational requirements of lenders, an important class of financial information user, and supports calls from practice for companies to improve their disclosure of material economic risks.

What lies beneath? The pattern and abundance of the subterranean tuber bank of the invasive liana cat's claw creeper, Macfadyena unguis-cati (Bignoniaceae)

Cat’s claw creeper, Macfadyena unguis-cati (L.) Gentry (Bignoniaceae) is a major environmental weed of riparian areas, rainforest communities and remnant natural vegetation in coastal Queensland and New South Wales, Australia. In densely infested areas, it smothers standing vegetation, including large trees, and causes canopy collapse. Quantitative data on the ecology of this invasive vine are generally lacking. The present study examines the underground tuber traits of M. unguis-cati and explores their links with aboveground parameters at five infested sites spanning both riparian and inland vegetation. Tubers were abundant in terms of density (~1000 per m2), although small in size and low in level of interconnectivity. M. unguis-cati also exhibits multiple stems per plant. Of all traits screened, the link between stand (stem density) and tuber density was the most significant and yielded a promising bivariate relationship for the purposes of estimation, prediction and management of what lies beneath the soil surface of a given M. unguis-cati infestation site. The study also suggests that new recruitment is primarily from seeds, not from vegetative propagation as previously thought. The results highlight the need for future biological-control efforts to focus on introducing specialist seed- and pod-feeding insects to reduce seed-output.

Lantana (Lantana camara) Seed Bank Dynamics: Seedling Emergence and Seed Survival.

Seed persistence is poorly quantified for invasive plants of subtropical and tropical environments and Lantana camara, one of the world's worst weeds, is no exception. We investigated germination, seedling emergence, and seed survival of two lantana biotypes (Pink and pink-edged red [PER]) in southeastern Queensland, Australia. Controlled experiments were undertaken in 2002 and repeated in 2004, with treatments comprising two differing environmental regimes (irrigated and natural rainfall) and sowing depths (0 and 2 cm). Seed survival and seedling emergence were significantly affected by all factors (time, biotype, environment, sowing depth, and cohort) (P < 0.001). Seed dormancy varied with treatment (environment, sowing depth, biotype, and cohort) (P < 0.001), but declined rapidly after 6 mo. Significant differential responses by the two biotypes to sowing depth and environment were detected for both seed survival and seedling emergence (P < 0.001). Seed mass was consistently lower in the PER biotype at the population level (P < 0.001), but this variation did not adequately explain the differential responses. Moreover, under natural rainfall the magnitude of the biotype effect was unlikely to result in ecologically significant differences. Seed survival after 36 mo under natural rainfall ranged from 6.8 to 21.3%. Best fit regression analysis of the decline in seed survival over time yielded a five-parameter exponential decay model with a lower asymptote approaching −0.38 (% seed survival = [( 55 − (−0.38)) • e (k • t)] + −0.38; R2 = 88.5%; 9 df). Environmental conditions and burial affected the slope parameter or k value significantly (P < 0.01). Seed survival projections from the model were greatest for buried seeds under natural rainfall (11 yr) and least under irrigation (3 yr). Experimental data and model projections suggest that lantana has a persistent seed bank and this should be considered in management programs, particularly those aimed at eradication.

Improving information for the macadamia industry via an information "bank"

Macadamia growers are under increasing pressure to remain viable in an increasingly competitive global market. A key need is quick access to high quality information. Current industry information is poorly integrated, poorly updated, and because it is largely in hard-copy, is difficult to access efficiently. With the dramatic growth in the use of the internet by growers, as evidenced in a recent industry communications survey, an opportunity exists to address this problem through the development of a high quality, internet-based information “bank”. The bank would bring together the macadamia information resources and collective knowledge of R&D and other relevant agencies into a one-stop information shop, aligned more effectively with grower needs.

Soil seed bank longevity information for weed eradication target species

The longevity of seed in the soil is a key determinant of the cost and length of weed eradication programs. Soil seed bank information and ongoing research have input into the planning and reporting of two nationally cost shared weed eradication programs based in tropical north Queensland. These eradication programs are targeting serious weeds such as Chromoleana odorata, Mikania micrantha, Miconia calvescens, Clidemia hirta and Limnocharis flava. Various methods are available for estimating soil seed persistence. Field methods to estimate the total and germinable soil seed densities include seed packet burial trials, extracting seed from field soil samples, germinating seed in field soil samples and observations from native range seed bank studies. Interrogating field control records can also indicate the length of the control and monitoring periods needed to exhaust the seed bank. Recently, laboratory tests which rapidly age seed have provided an additional indicator of relative seed persistence. Each method has its advantages, drawbacks and logistical constraints.