Page 22 - ACCA P1 slides 2017-18
P. 22
Public Sector Governance
The problem of agency in the Public sector
• Those that manage a business (the agents) do not own that
business but manage the business on behalf of those who do own
it (the principals), hence the concept of agency.
• In the public sector, the principals are different and rather than
being for example shareholders are often those that fund and/or
use the activity.
• Funders and service users are therefore sometimes the same
people, but often they are not, giving rise to disagreements on how
much is spent and on what service provision
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