Web-Based Accountability in an Islamic Non-Profit Organization: A Case Study of Badan Amil Zakat National in Indonesia

Transcription

1. Advances in Economics , Business and Management Research, volume 89 1st Asia Pacific Business and Economics Conference (APBEC 2018) Web-Based Accountability in an Islamic Non-Profit Organization: A Case Study of Badan Amil Zakat National in Indonesia Irsalina Rizka Nurfadhilah Department of Accounting Faculty of Economics and Business Universitas Indonesia Depok, Indonesia irsalina.chika@gmail.com Abstract—The increase of zakat (alms or tithes) receipts by zakat organizations in Indonesia in recent years is still very low compared its potential for zakat receipts nationally. There are various factors that can affect the low absorption of zakat by zakat organizations, one of them being the trust of zakat payers to pay zakat through the zakat organization. Badan Amil Zakat Nasional (BAZNAS) is one such zakat organization in Indonesia that has the same problem. To increase public trust in the zakat organization, the organization’s accountability must be augmented through disclosure of information related to the fulfillment of their responsibilities. One easy way in disclosing information is through websites. The research design of this study is a case study, in which mixed methods are used. This study provides assessment of web-based accountability practice in BAZNAS and suggestions for its improvement. The BAZNAS web-based accountability assessment method is done by content analysis of information within the BAZNAS website and is then scored it based on web-based accountability indices for a nonprofit organization, considering previous studies and PSAK 109 for accounting issues. There is still some information that needs to be disclosed on the BAZNAS website to improve its accountability. By increasing the disclosure of necessary information, it is expected that the level of public trust can be improved so that it may change its zakat payment behavior through zakat organizations, especially BAZNAS. Keywords—Web-based accountability, nonprofit organization accountability, zakat organization, disclosure I. INTRODUCTION As a country with a very large Muslim population, Indonesia has a huge potential for garnering zakat funds that can be collected from its people [1-3]. In 2016, zakat potential in Indonesia reached 104 trillion rupiahs (USD 6.85 billion) when calculated based on 0.8% of Indonesia’s gross domestic product in 2015. This figure is the most pessimistic result of various calculations of zakat potential based on several studies conducted in Indonesia [3]. With this amount, zakat funds are expected to help alleviate poverty in Indonesia by increasing individuals’ purchasing power [1, 4]. Nevertheless, zakat receipts that have been collected so far by all zakat organizations in Indonesia are very small compared to the collection potential [3, 5]. In 2015, the Catur Sasongko Department of Accounting Faculty of Economics and Business Universitas Indonesia Depok, Indonesia catur_sasongko76@yahoo.com national zakat receipt stood at only 2.3 trillion rupiah and total collections in 2016 were 3.7 trillion rupiah [6]. In other words, zakat collections nationally only reached about four percent of zakat’s potential for Indonesia if it were calculated with the lowest result of all research related to zakat potential. Various factors influenced the low levels of zakat raised by zakat organizations in Indonesia, one of them is because muzaki (the payer or giver of zakat) in Indonesia pays it directly to mustahik (i.e., allowed zakat recipients according to Islamic law), without going through a zakat organization [7]. However, paying zakat through zakat organizations is better than paying zakat directly to mustahik, both in terms of Islamic teaching and economic usefulness. From the religious side, the distribution of zakat through zakat organization is more in line with Islamic teachings because at the time the Prophet was on the earth (peace and blessings of Allah be upon him) and several generations of Islam thereafter, zakat was collected from the community by a party appointed directly by the leader of the state [8]. Moreover, from the economic side of things, paying zakat directly to mustahik minimizes the effectiveness of zakat as an instrument of poverty alleviation because its distribution is not targeted, not recorded, and does not use planning and [2]. Knowing that fact, Efendi [9], Chairman of Forum Zakat (FOZ) Indonesia, stated that the accountability and professionalism of a zakat organization are important elements that can motivate muzaki to entrust their zakat funds to zakat organization in Indonesia to be distributed to mustahik. This is also in line with many studies that have been done both abroad and in Indonesia which examine that trust in zakat organization is one of factors that influence the behavior of muzaki to pay their zakat through zakat organizations. In previous studies regarding zakat, the intentions and willingness of a muzaki to pay zakat through the zakat organization is driven from their trust regarding the zakat organizations [10-14]. The trust is formed from the perception of the muzaki on various matters related to the zakat management in zakat organizations, such as the reputation of the zakat organization, the reputation of the amil (i.e., persons appointed by the state to collect zakat), accountability, information disclosure practice, effectiveness of zakat fund management, and muzaki satisfaction regarding the service Copyright © 2019, the Authors. Published by Atlantis Press. This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/). 252
2. provided by zakat organizations [15-17]. Because accountability is one of the factors that affects muzaki’s willingness to pay zakat, this paper intends to provide research regarding the accountability practices in a zakat organization. Accountability can be interpreted as the need for fair and transparent reporting to all reported users covering both financial and nonfinancial information [18-20]. Yet in terms of Islam, the implications of the concept of reporting and accountability are more than reporting accountability to users of the report. These things are not merely for mundane purposes only, but can also be intended as a form of worship that will be carried over to the Day of Judgment in Islam. Therefore, a Muslim will be motivated to become an accountable person because of the promise of reward or punishment given by Allah in the hereafter [21]. Therefore, accountability becomes one of the most important principles to be applied to institutions driven by Islamic law. Implementation of accountability today can be helped by the existence of information technology, namely the Internet. In Indonesia, internet users has been increasing annually. According to the Association of Internet Network Providers Indonesia (APJII), in 2014 there were 88 million Internet users and the number increased to 132.7 million users in a survey conducted in 2016 by APJII. With the increasing number of people accessing the internet, the accountability process that organizations run, such as the disclosure of financial statements, performance reports, and the organization interaction with the stakeholders [22] becomes easier through the website so it is expected that the organization can gain more public trust. The existence of internet technology is also expected to increase the efficiency of zakat management because zakat payers can pay zakat more easily via virtual payments [23]. To regulate the management of zakat in Indonesia, the Indonesian government issued Law N°23 (2011) regarding the management of Zakat so that it would fall in line with public expectations and, most importantly, be guided by Islamic law. It is stated in that law that one of the tasks of zakat organizations is to report on the function and accountability of the implementation of zakat management. Accountability is needed in order to improve the effectiveness of zakat management. Accountability, based on that law, has a meaning of the management of zakat that can be accountable and accessed by the community. It is stated in Law N°23 (2011) that the Indonesian government mandated Badan Amil Zakat Nasional (BAZNAS) to be an institution that performs zakat management nationally. But in addition to BAZNAS, the government of the Republic of Indonesia also permitted the establishment of the Lembaga Amil Zakat (LAZ), in case the public wishes to establish a unit of its own zakat collection (non-governmental). BAZNAS was chosen as the object of this study because BAZNAS has the same problem that other zakat organizations face in Indonesia, i.e., low levels of zakat funding from all potential muzaki. Although every year zakat funds collected by BAZNAS grow, the growth has a relatively long-term declining trend. Moreover, most of the previous studies on zakat focus on factors that influence the muzaki’s trust to zakat organization and their compliance behavior in paying zakat. The research on zakat organizations’ accountability from the adequacy of information disclosure and ease of information access by the public through their websites in Indonesia is still small. Therefore, this study is expected to contribute to the discussion regarding that practice. In the following section, this paper will undertake a literature review, profile BAZNAS, present results and discuss them, and provide a conclusion. II. LITERATURE REVIEW A. Zakat in Islamic law Zakat in Islamic law means share of wealth determined by God to be distributed to the rightful categories. This word is also commonly used to refer to the payment of the determined share of wealth. All Muslims who have wealth that have fulfilled the requirements of the obligation to pay zakat, must pay zakat out of his wealth [8]. Only the following eight categories of people are entitled to receive zakat, which are the poor and the needy, zakah workers (amil), those who revert to Islam, liberated slaves, persons in debt, the man who strives for the sake of God, and the wayfarer (Al Qur’an 9:60). The poor and the needy are the first two categories mentioned in the verse. This indicates that these two categories are the first targets for obtaining the distribution of zakat. Therefore, the main purpose of zakat in Islam is to alleviate poverty [8]. Amil zakat are workers who are given the task by the state leader to collect and distribute zakat. The reason for amil zakat is categorized into the category of recipient of zakat is to avoid the amil collecting additional fees to the zakat payers for their own benefit. Amil are mentioned as one of the categories of recipients of zakat, which also has implications for the collection and distribution activities of zakat—that they should not be run independently by individuals or private entities, but run through the functions of the organization implemented by the state [8]. B. Trust of Zakat Payers to an Organization of Zakat Management Research conducted by Muhammad [15] provides an initial framework on matters that may affect a muzaki’s intention to trust their zakat distribution to the zakat organization. The study was based on issues similar to those in Indonesia, that is the low level of zakat collection in Nigeria. Muhammad [15] analyzed the content of previous studies that have been conducted in the field of zakat. From these studies he can formulate an initial framework that the intention of a muzaki paying his zakat to a zakat organization is influenced by the level of muzaki’s trust in the zakat organization. The level of trust is influenced by the quality of governance, accountability, and the effectiveness of zakat management conducted by the zakat organization. The research on muzaki’s trust in a zakat institution is also done by Mustafa [16]. The study examined four variables that 253
3. were considered to have an effect on the level of trust of a muzaki to a zakat organization . The four variables are the perception of muzaki on the board capital of zakat organization, the perception of muzaki on zakat institution’s information disclosure practice, muzaki perception toward stakeholder management model, and muzaki perception on the nature of the zakat institution, whether government or private. The study found that only three of the four variables influence the level of trust of muzaki in a zakat organization, that are muzaki perceptions of the board capital of zakat institutions, muzaki perceptions on zakat disclosure practices, and muzaki perceptions on stakeholder management models. Mustafa [16] describes the board capital of zakat organization that have a good reputation in terms of competence, effectiveness, and fairness of their relationship to the stakeholders of zakat organization affect the perception of the zakat payers to the zakat organization. Disclosure of the report is the main source of information used by the zakat payers to legitimize the zakat organization activities. The stakeholder management model of a zakat institution will show what is considered important by zakat institution. The sustainability of a non-profit organization depends on how far the organization can satisfy what is important according to the stakeholders’ assumptions so that they are willing to donate their funds to the organization. If the activities of the zakat institution are consistent with the zakat payers’ expectations, the zakat payer will believe that the zakat institution has been fair in treating all its stakeholders and guarantee their legitimacy. Furthermore, research conducted by Saad & Haniffa [24] tested the factors influencing the compliance of a Muslim in paying zakat with the theory of reasoned action (TRA) approach. The study took samples of 227 businessmen in one state in Malaysia. The results of the study show that in the industry of zakat, the industry that is not strictly regulated, behavior and subjective norms affect one’s intentions towards their compliance in paying zakat. The implication of this is that even though zakat is an obligation in Islam, zakat is still classified as a voluntary activity. Therefore, the zakat organization must focus its attention on that two factors that can encourage a Muslim to pay zakat according to this research. So, in order to encourage them to pay zakat, zakat organizations must improve the image, reputation, and transparency of their organization regarding management of zakat. The organization must be able to convince the muzaki that they have distributed zakat funds fairly to all mustahik. Research conducted in Indonesia related to this matter has also been done, among others, is a study by Mukhlis & Beik [12]. The study was conducted in Bogor Regency. The results of the study consist of several points. There are several dominant factors that affect the compliance of someone in paying zakat: faith, social, response, self-satisfaction, religious understanding, and the zakat organization. Then, the factor that can encourage someone to pay zakat through zakat organization is because that zakat organization is transparent, professional, easy to pay zakat, and providing satisfying service. Muzaki who pays their zakat directly to mustahik without going through zakat organization have a poor assessment regarding zakat organization. The things that influence muzaki in choosing what zakat organization where he will pay his zakat are the easiness offered by zakat organization, muzaki’s perception of the zakat organization’s performance which is reflected in the zakat organization ‘s transparency and professionalism, and the socialization of the zakat organization. C. Web Based Accountability for Nonprofit Organization According to Saxton & Guo [22], web-based accountability in non-profit organizations is a practice of accountability in terms of reporting, providing feedback, and/or stakeholder engagement mechanisms conducted online in order to run or improve accountability. The use of the Internet can provide additional benefits to both sides, i.e., from the side of the stakeholders and from the side of the organization being held accountable. From the stakeholder side, the internet can improve the ease of accessing the required information about the nonprofit organization. From a non-profit organization’s side, providing information over the internet can improve the ability to disclose information about the organization’s performance and finances. As stakeholders increasingly interact with organizations through online tools, this will further decrease participation costs. Therefore, nonprofit organizations will be increasingly asked for accountability by stakeholders. According to them, there are two dimensions of network-based accountability, namely disclosure and dialogue. The dimensions of disclosure in network-based accountability are subdivided into two types, namely disclosure of performance and disclosures about finances. As for the dialogue dimension, Saxton & Guo [22] divide it again into gathering stakeholder input and interactive engagement between stakeholders and the organization. In line with Saxton and Guo’s [22] studies, further research conducted by Dumont [25] resulted in a clearer output for measuring web-based accountability, the nonprofit virtual accountability index (NPVAI). Within the index, Dumont [25] incorporates five key components that need to be on the websites of nonprofit organizations to maximize their virtual accountability, they are accessibility, engagement, performance, governance and mission. According to Dumont [25], the components of performance, governance, and mission are components that non-profit organizations have to account for based on the literature discussing accountability for nonprofits, while accessibility and engagement components are unique components that only exist in webbased accountability. The latter two components are in line with the concept of network accountability according to Saxton & Guo [22] regarding the need for tools for dialogue between stakeholders and non-profit organizations provided by the organization’s website. The accountability index for nonprofits is also discussed in other studies by Tremblay-Boire & Prakash [26]. Their accountability index is processed from CSR literatures and reporting standards from the Global Reporting Index (GRI). However, there is a difference in the accountability index they propose with the NPVAI proposed by Dumont [25]. The 254
4. difference lies in the fewer components to measure the effectiveness of the site in the dialogue function between stakeholders and the organization , not as detailed as the indicator of the dialogue function offered by the NPVAI. According to them, based on existing studies on networkbased accountability of nonprofit organizations, most nonprofit organizations use sites only for information disclosure, few use them for dialogue with stakeholders. The accountability index proposed by Tremblay-Boire & Prakash [26] refers more to accountability in the concept of stakeholder theory. Detailed indicators of each component are listed in the following table I and II. In a study conducted by Dainelli, Manetti & Sibilio [27] on accountability for nonprofit organizations, accountability is divided into three dimensions based on Brinkerhoff [28] and Jordan & Van Tujil [29]: financial accountability, performance accountability and political accountability. Financial accountability can be defined as matters relating to tracking and reporting activities of allocation and utilization of financial resources by organizations using audit tools and management controls. Performance accountability refers to showing and calculating organizational performance in accordance with previously agreed performance targets that focus on inputs, outputs, outcomes, and impacts. Political accountability, specific to the profit organization, has the sense of being the procedures and mechanisms used to ensure that the organization can fulfill the public’s trust, engage stakeholders, in order to respond to their expectations and needs to the organization. The following are the indicators of the accountability indexes prepared in this study. TABLE I. WEB BASED ACCOUNTABILITY INDEX PROPOSED BY TREMBLAY-BOIRE & PRAKASH (2015) Indicators Navigation bar format consistency Navigation links notably clickable Font color and formatting Target audience links Font color, and size between titles and text Site updates Newsletter/community updates Use of other media to inform Online donations Blog Number of social networking sites Search Annual report Financials Performance results By-laws Board of directors minutes/summary Board of directors members Strategic plan/ goals Employee directory Performance measures Mission Components Accessibility Accessibility Accessibility Accessibility Accessibility Engagement Engagement Engagement Engagement Mission Engagement Engagement Engagement Performance Mission Performance Performance Mission Governance Governance Governance Mission Mission Mission Mission Mission and TABLE II. NON-PROFIT VIRTUAL ACCOUNTABILITY INDEX PROPOSED BY DUMONT (2013) Indicators Information on evaluation of program effectiveness and impact Performance report (other than financial) Information on management of relationships with beneficiaries Mechanisms for beneficiary feedback Ethical fundraising requirements Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses Statements in compliance with the law Statement/policy on diversity Information on training and benefits Code/policy/guidelines concerning employment and employees (e.g., code of conduct, conflict-of-interest policy, and code of ethics) Mechanisms for workforce feedback and complaints (e.g., whistleblower policy and hotline) Any information on environmental impact (e.g., greenhouse gas emissions) or on initiatives to become greener Environmental report Unit dealing with environmental issues (e.g., environmental committee) Current annual report Archive of past annual reports Current IRS Form 990 Archive of past Forms 990 Sources of funding by category Expenditures by category List of major contributors Composition of board of directors Composition of leadership Bylaws and/or letter of determination Contact for general information/feedback form Mission statement Description of programs/activities News/press release archive Ratings by charity watchdogs (e.g., Better Business Bureau, Charity Navigator, etc.) Purchasing policy Statement on supplier diversity Locally based suppliers Screening of suppliers on human rights Accountability Dimensions Beneficiary responsibility Codes and standards Employment responsibility Environmental responsibility Financial responsibility (donors) Public responsibility Supplier responsibility and and and D. Accounting Standard for Zakat Organizations in Indonesia The Indonesian Institute of Accountants (IAI) has accommodated the accounting guidance required by the zakat organizations as an amil in Indonesia in recording the activities of collecting and distributing zakat, that is SFAS 109. In this study, the only disclosure criteria that will be discussed are found in the financial statements of BAZNAS. Disclosures governed by SFAS 109 include policy points on the disbursement of zakat, such as priority scales covering the percentage of distribution, reason and policy consistency; 255
5. method in determining fair value used for zakah receipts in the form of non-cash assets ; details of the amount of zakat fund distribution for each mustahik; the use of zakat funds in TABLE III. WEB BASED ACCOUNTABILITY INDEX FOR NON-PROFIT ORGANIZATION PROPOSED BY DAINELLI, MANETTI & SIBILIO (2013) Indicators Accountability Dimensions Financial statement Account notes Financial accountability Management comentary Auditor report Vission/mission statement Governance structure Human resource organization Strategic plan Results of research activities Performance accountability Key performance indicators Risk report Visitor survey Results of educational activities President/director statement Management of collection and acquisition of work of arts Political accountability Voluntary work report Management remuneration Report on donation and benefactors the form of asset under management which is still controlled by zakah organizations or third parties controlled by zakah organizations, if any, disclosed the amount and percentage of all fund disbursement as well as the reason; related parties transactions between zakah organization and mustahik; the percentage of each of the assets disbursed from the total distribution of zakat during the period; performance of the zakah organization on the receipt and distribution of zakat funds; and the existence of non-statutory (non-halal) funds, if any, disclosed regarding the policies on the receipt and disbursement of funds, reasons and amounts. III. RESEARCH METHODOLOGY This research uses mixed method with research design of case study. The case study was selected because this approach was able to help people to understand and analyze the problems occurring within BAZNAS management that will be discussed in this study. This research uses primary sources of secondary data, that is all the information disclosed on the BAZNAS website. Secondary data are used to assess the web-based accountability conditions that BAZNAS implements by comparing them with Islamic accountability concepts and the non-profit organization’s accountability indices that have drawn from previous studies discussed in the foregoing literature review section. Secondary data is processed by doing content analysis, then it is assessed by binomial value scoring. A value of 1 is assigned if information required in the indices exists on the website, 0 otherwise. Then, the total score is divided by the total indicators required by each of the indices, and the score is summed to assess the conditions of web-based accountability practices that have been met by BAZNAS. Furthermore, this study also used primary data obtained by interviewing BAZNAS staff related to disclosure on the BAZNAS website. This interview aims to clarify if the researcher is erroneous in the scoring, that is assuming information is not uploaded or not disclosed inside the BAZNAS website but rather the information has actually been uploaded or disclosed within the website database itself. This interview also aims to find out the cause of why an information indicator that should be disclosed according to the non-profit organization’s accountability indices is used as a reference in this study, while it is not disclosed on the BAZNAS website. IV. RESULT Based on the discussion regarding accountability practice of BAZNAS website using the above methodology, the following is the result of the assessment. It can be seen from Table 4, there are two indices that score above fifty percent and there is one index that scores less than fifty percent. The explanation of the findings regarding information indicators that are not disclosed in BAZNAS website is as follows. A. Web-based accountability BAZNAS based on TremblayBoire & Prakash There are no indicators met by the BAZNAS website regarding the disclosure of information pertaining to its responsibility to beneficiaries. In fact, information on distribution of zakat programs and activities has been disclosed on the BAZNAS website, but the information disclosed does not specify the effectiveness and the impact of the programs and activities. Information is disclosed only about the description of the program or activity, for example program objectives, the amount of zakat distributed, who the beneficiary is, and where the aid is distributed. So far, the performance measures of BAZNAS revealed on its website are only a percentage of the number of fund disbursements compared to the amount of funding received per period that visitors can see in their monthly report. The other indicators regarding responsibilities to beneficiaries are not disclosed. Related to code and standard dimensions, the code of ethics of amil has not been made by the organization or nationally in Indonesia, so management cannot upload it to website. In the dimensions of employee responsibility, BAZNAS website does not disclose any information 256
6. regarding human resource management that runs within BAZNAS management except for the available job vacancies available on the “career” menu. However, management actually has the information in question, although it is not uploaded on their website. TABLE IV. No 1. WEB-BASED ACCOUNTABILITY SCORE OF BAZNAS WEBSITE Index TremblayBoire & Prakash (2015) Score 45.83% Informations not found in BAZNAS Website  Responsibilities to Beneficiaries: Evaluation of the program effectiveness and its impacts, performance reports, relationship management with beneficiaries, feedback mechanisms from beneficiaries. Codes and standards: Amil Code of Ethics Employment responsibilities: training and benefits information, employee codes of conduct, amil certification, labor feedback mechanism. Financial responsibility: Latest annual report, list of major donors. Public responsibility: ranking by watchdog organizations For financial responsibility dimensions, there are two unfulfilled indicator points, the latest annual report and the main donor list. The latest annual report uploaded on the BAZNAS website is the 2015 Annual Report, but the annual report only contains an executive summary. The 2016 annual report is not yet available on the BAZNAS website although this study was conducted at the end of 2017 where normally the 2016 annual report has already been completed and uploaded to the website. For the main donor indicator, BAZNAS already has the data but it has not been uploaded on the website. Besides that, there are a few more points to note regarding the disclosure of accountability in this dimension. Annual report archives for past years can only be viewed in full through the BAZNAS website. It does not provide links to download those annual reports. Then, details of funding sources and details by category cannot be seen directly within BAZNAS website but visitors must download BAZNAS financial statements first to view this information. Annual reports, performance results (performance and mission dimensions), board summary (governance dimensions), and employee directory (engagement and mission dimensions). On the dimension of public responsibility, rating by the nonprofit organization watchdog is not disclosed. This is because in Indonesia there is no organization that serves to supervise the organization of zakat management so that information about the ranking of zakat management organizations cannot be done.     2. NPVAI (Dumont, 2013) 3. Dainelli, Manetti & Sibilio (2013) 75% 66.67% need a lot of supply of goods in carrying out its operational activities because the main activities of BAZNAS are collection and distribution of zakat, infaq, and other alms. If there is a procurement activity of goods and services, these activities have small nominal cost, such as stationery and basic necessities for beneficiaries so that for the procurement of goods or services, usually BAZNAS holds a limited tender or direct appointment to suppliers who have been entrusted to BAZNAS. Furthermore, this study does not calculate these two dimensions of accountability into the BAZNAS website scoring in Table 4.    Financial Accountability: Management Discussion. Performance accountability: human resource organization, risk reports, visitor surveys. Political accountability: Statement from BAZNAS members, and remuneration of management. For environmental responsibility indicators, BAZNAS does not disclose it because it is not for all purposes that zakat funds can be used. Zakat funds are limited to distribution only to the eight categories of beneficiaries allowed in Islam. There are indeed some environmental related programs such as bathing, washing, and toilet infrastructure or natural disaster relief, but BAZNAS does not specialize such distribution activities as a form of responsibility to the environment because this responsibility is not a concern of BAZNAS as a zakat management organization. Same as environmental responsibility, responsibility to suppliers is also not one of the concerns of BAZNAS. This is because BAZNAS does not B. Web Based Accountability of BAZNAS Website Based on Index Proposed by Dumont In the table above, accessibility component in NPVAI is not included in the assessment because this study only focuses on the disclosure of information. For indicators of annual reports and performance dimension, the discussion is the same as the index proposed by Tremblay-Boire & Prakash [26]. For governance dimension, the board summary has not been disclosed on the BAZNAS website. For mission dimension, the employee directory is not yet located within the website. C. Web Based Accountability of BAZNAS Website Based on Index Proposed by Dainelli Manetti & Sibilio (2013) For financial accountability indicators, only management discussions that have not been disclosed within BAZNAS website. In the performance accountability dimension, human resource organization, risk reports, visitor surveys do not exist in the BAZNAS site. BAZNAS actually have human resource organization, but they have not disclosed it in their website. BAZNAS does not have a risk report. 257
7. Besides that , there is one point to note regarding the disclosure of performance accountability, that is the key performance indicators of BAZNAS that are not present on the BAZNAS website. Visitors must first download the BAZNAS strategic plan document containing the key performance indicators of the BAZNAS. transaction with related parties or not with related parties. This can also be attributed to the absence of an internal policy related to related party transaction. Therefore, BAZNAS should make an internal policy regarding the recording of related parties transaction then disclose it in their financial statements. In the political accountability dimension, BAZNAS website has not completed its disclosure of the president/ director’s statement and managerial remuneration system. Management of BAZNAS said that management of remuneration is confidential, so they do not disclose it on their website. For forbidden (non-halal) funds, there is already an internal policy in BAZNAS relating to the recording and management of which has not yet been disclosed in the BAZNAS financial statements. For the financial statements of the following period, it is expected that BAZNAS may add to the disclosure of such non-financial funds. D. Disclosure practice in BAZNAS Financial Statement Based on SFAS 109 There is some information required by PSAK 109 to be disclosed but is still not contained in the financial statements of BAZNAS, as follows: a. zakat distribution policy, such as determination priority scale of zakat distribution and mustahik other than amil; V. DISCUSSION b. zakat distribution policies for amil and mustahik other than amil, such as percentage of allocation, reason, and policy consistency; c. the use of zakat funds in the form of assets under management by amil or others controlled amil, if any, disclosed the amount and percentage from the entire zakat funds distribution and the reason; d. related parties informations between amil and mustahik, include: - the nature of the relationship, - the amount and type of assets disbursed, and the percentage of each of the assets distribute from the total disbursement of zakat during the period; and e. the existence of non-halal funds, if any, is disclosed regarding the policy of the receipt and distribution of funds, reasons and amounts For points a and b, regarding zakat distribution policy, BAZNAS already has an internal policy regarding it but BAZNAS does not disclose it in their financial statement. For point c, BAZNAS has made its own report, that is included in the BAZNAS financial statement. However, in that report, BAZNAS does not separate it based on its source of funds, whether using zakat funds, infaq or other alms. BAZNAS also does not separate it based on the existing channeling program in BAZNAS. BAZNAS also has not calculated the percentage of disbursed assets under management of total funds during the reporting period. It discloses only the types of assets under management, namely in the form of nominal amounts of inventories and receivables. When viewed from the website, all of the indicators of accountability regarding to public have been met by BAZNAS website, and can be illustrated by the foregoing assessment. This fact might indicate that BAZNAS is focusing its attention on the public or, in other words, to the payers of zakat and individuals which are potential payers of zakat. This conjecture makes sense because BAZNAS as well as other zakat organizations in Indonesia are trying to achieve high zakat collection rates, considering the gap between national zakat receipts compared with potential ones in Indonesia is still quite wide—only four percent. Therefore, the BAZNAS website seeks to provide links to facilitate and make zakat payments easy for zakat payers. Nevertheless, other important indicators regarding performance and beneficiary responsibility remain among many shortcomings in their disclosure. If these indicators were disclosed, it is expected that they would lead in changing the perception of zakat payers, as the key stakeholders in the zakat organizations, that the zakat organization has met their expectations regarding zakat fund management. The expectation is that zakat organization has distributed their zakat fairly and effectively to all of the zakat recipients. So, if their expectation is met, it is expected that it can affect the trust of potential zakat payers and then they change their behavior from not paying zakat or paying zakat directly to zakat recipients to pay their zakat through the zakat organization. In addition, accountability regarding information related to zakat workers, such as competency, human resource management, compliance report, and code of ethics are also important to convince the public regarding the quality of zakat management in BAZNAS. There are some indicators that BAZNAS have or can generate easily but they are not disclosed on the website. It is recommended that BAZNAS upload them to their website in order to improve their accountability. It is also recommended that the government of the Republic of Indonesia give assurances regarding compliance with sharia law and serve as a watchdog of zakat organizations such as BAZNAS, especially regarding their activities, so that the public will increase their trust in zakat organizations. For point d regarding related party transactions, management of BAZNAS has not yet attempted to distinguish the zakat transactions within BAZNAS, whether it is 258
8. VI . CONCLUSION Some important indicators have not been disclosed by BAZNAS on its website, although these indicators can affect the level of public trust in that zakat organization to encourage the behavior of potential zakat payers to pay their zakat through it, especially BAZNAS. This study has limitations on the assessment of web-based accountability, that is only assessing the presence or absence of information on the BAZNAS website. This study does not address the quality of the information disclosed on the website, whether or not the information has sufficient content so that it can meet public expectations. This study also does not assess the ease of access to information required for web-based accountability indices, such as generating a user-friendly website and also whether information needed is directly available on the website or visitors must download a particular document in order to discover the needed information. 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