Showing papers in "Financial Accountability and Management in 2006"

Accrual Accounting in the Public Sector: Experiences From the Central Government in Sweden

Abstract: Introduction of accrual accounting is an important component in the New Public (Financial) Management reform movement that has been sweeping over many western countries during the last decades (Olsson et al., 1998). Several studies show that the trend towards accrual accounting is likely to continue during the years to come (OECD, 2000; and Luder and Jones, 2003b). Furthermore, international organisations like the International Federation of Accountants Public Sector Committee (IFAC PSC) and the OECD Public Management Committee (PUMA) directly or indirectly support such a move. For example, IFAC PSC has used the International Accounting Standards (IAS), which are developed for private companies, as a basis for the development of their International Public Sector Accounting Standards (IPSAS). They argue in the following way for this choice:

Modernising Government: The Calculating Self, Hybridisation and Performance Measurement

Abstract: No abstract available.

Performance Management In Practice – the Norwegian Way

Abstract: In this paper we will examine how the Norwegian system of performance management, Management-By-Objectives-And-Results (MBOR), has been adopted in civil service organizations. We will look at MBOR as a type of regulation within the state. There is a growing focus on self-regulation inside government used by a variety of public agencies that set standards and use different forms of performance management and compliance measures to audit government organizations’ work (Hood et al., 1999). We will examine how it is practiced by analyzing data from a comprehensive survey of state agencies. The main research questions are first, how the agencies perceive the performancemanagement system in practice, and second, how we can explain variations in performance-management practices between different agencies. MBOR is a performance-management tool encompassing three main components (Laegreid, 2001a). First, the leadership must formulate clear goals and targets and give subordinate bodies leeway and discretion in their daily work. This technique is based on the requirement that the objectives are precise, concrete, specific and hierarchically structured with primary and secondary objectives followed by performance indicators. They must be operational, consistent and stable in order to function as concrete and binding criteria for evaluation. Second, subordinate agencies must report on results using a well-developed system of performance indicators. Emphasis is given to the measurement of performance and in reporting information relating to the functions of the agencies. Improved methods for monitoring results and for measuring efficiency and goal achievement are needed. This includes

Managerial Responses to Externally Imposed Performance Measurement in the NHS: An Institutional Theory Perspective

Abstract: Due to the limitations of financial performance measurement (PM) adopted inthe public sector (Hopwood, 1984; and Pollitt, 1985 and 1986), some havesuggested the use of a multi-dimensional approach for delivering organisationallong-term objectives and fulfilling key stakeholders’ interests (Jackson, 1993; VanPeursem et al., 1995; Atkinson and McCrindell, 1997; Ittner and Larcker, 1998;and Kaplan and Norton, 2001). Indeed, several studies have demonstrated howmulti-dimensional PM can be used for internal control in various public sectororganisations (Ballantine et al., 1998; Chow et al., 1998; Kloot and Martin,2000; and Aidemark, 2001). Brignall and Modell (2000) argued that thosestudies, based on rational instrumentalism, have neglected conflicting interestsand power relationships between stakeholders in the public sector (e.g., the statevs. professions) (see also Modell, 2001). This study adopts an institutional theoryperspective (i.e., Oliver’s, 1991; and Brignall and Modell’s, 2000; conceptualframeworks) to investigate the responses of local health authorities’ managers toperformance requirements imposed by central government in the NHS.In the literature there has been an increasing attention paid to the study ofmanagers’ interaction with key stakeholders in order to enhance our under-standing of the implementation processes of multi-dimensional PM. Adopting aninstitutional theory perspective, Brignall and Modell (2000) argued that powerrelationships between various constituents faced by a public sector organisationmight have a significant impact on the implementation of a multi-dimensionalperformance measurement system (PMS). In order to preserve balance amongconstituents of unequal power, local unit managers may have to decouple theaspect of PM needed to satisfy a more dominant constituent for legitimacyseeking purposes from those required to meet other constituents’ interests.According to Oliver (1991), when facing external institutional pressures, man-agers might have various responses, from passive compliance to active manip-ulation of influential constituents’ values and criteria (p. 152). Local managers

Institutional Pressures for Adopting New Cost Accounting Systems in Finnish Hospitals: Two Longitudinal Case Studies

Abstract: This study explores the motivation and rationale of cost and management accounting change in two Finnish university hospitals More specifically, the management accounting change studied is the implementation and the adoption of activity-based costing systems, and how these systems, as well as the motivation to implement them, have changed over time A new cost accounting system is implemented, ie an idea is conceived, a project is started and solutions are found The initiative for the implementation may be intraorganisational or extra-organisational, and the motivation and rationale a combination of economic argumentation and institutional pressure The actual benefits gained by the adoption of a new costing system will most probably be intangible and non-quantifiable in both industrial and non-profit settings More properly, the benefits of adopting ABC are seen to relate to the belief systems of organisational actors Therefore, it may not always be a fruitful approach to study the actual benefits of adopting ABC, but of the belief systems related to the benefits Speciality health care in Finland is tax-financed Hospitals are organised in hospital districts, owned by municipalities A public university hospital finances its operations through patient fees, state subsidies for education and research, and the per-case reimbursement from the municipalities referring the patient (see Figure 1) The municipalities purchase speciality health care through the managed care mechanism, which is also intended to align the municipal speciality health care spending budgets to the hospital district budgets, so as to synchronise the demand and production of speciality health care services This does not mean that the sum of the health care spending in municipal budgets equals the hospital district’s sales budgets, since municipalities may purchase

Is there a nordic perspective on public sector performance measurement

Abstract: This paper reviews Nordic research on performance measurement that is relevant for the public sector. The purpose of the paper is to identify a possible Nordic perspective on performance measurement and discuss potential implications of such a perspective for performance measurement in public management. The ‘Nordic model’ is a distinct way of organising society, managing institutions and conducting politics. It is characterised by a large public sector financed with high taxes, redistributive welfare services and extensive collaboration between unions, trade organisations and the state. The Nordic model seems to have achieved good results regarding flexibility and competitiveness in the economy, relatively high employment, and prudent public finances. Therefore, the model has received renewed attention in public policy debates where one question is how the role of the public sector is contributing to the Nordic model’s success (European Policy Centre, 2005). A Nordic perspective on public sector performance measurement may be linked to public management practices, which could affect the outcomes of the Nordic model. There is at present no evidence for claiming that public sector performance measurement and management in the Nordic countries are distinct or have delivered major effects for the success of the Nordic model. To investigate such a claim is in any case a very ambitious project. The purpose of this paper – to identify a possible Nordic perspective on public sector performance measurement – is much more modest, but could be interesting for the overall picture. The identification of a Nordic perspective on public sector performance measurement is obviously dependent upon what is meant by performance measurement. If a broad notion of performance measurement is used, the Nordic research is fairly rich in terms of the number of papers and research

A plea for dialogue driven performance-based management systems: evidence from the dutch public sector

Abstract: In the Netherlands performance-based management systems are at the core of changes denoted as New Public Financial Management (Olson et al., 1998, p. 18). In local, regional and central government very similar objectives of performance management underpinned initiatives in the 1980s and 1990s; namely the Policy and Management Instruments project in local and regional governments (ter Bogt and van Helden, 2005) and the Result-Oriented Management Control initiative in central government (van Helden and Mol, 2001). Also, performancebased management techniques have been introduced in professional organizations outside core-government but within the public sector, such as hospitals, universities, courts and the prosecution service. This paper aims to explore and examine those factors that explain the success or lack of success of performance measurement systems in the public sector. The paper will review three studies on the adoption of performance measurement systems in the Dutch public sector. The introduction, implementation and use of these systems will be evaluated according to several criteria, such as their goals, design principles, content (types of performance indicators included), as well as incentives and disincentives for their success. Our main claim will be that performance measurement systems in the public sector will be successful if these systems are developed and used in an interactive way between managers and professionals. The remainder of the paper will be structured as followed. We will first provide some theoretical reflections regarding the adoption and use of performance measurement systems. These reflections will lead to the formulation of research questions which will be subsequently used to interpret and evaluate three cases

Relative Performance Evaluation in Swedish Local Government

Abstract: The aim of this paper is to describe and analyse how Swedish municipalities conceptualise and apply RPE (Relative Performance Evalutaion). Swedish municipalities are of principle interest because they operate in a context of ample freedom of action and local self- governance where RPE has become a popular method initiated by the munici- palities themselves. The scope of the description and discussion is limited to how popular RPE is compared to other performance management models, how local governments choose to work with RPE, and how they exercise their freedom of action in order to choose different working methods and adapt RPE to local requirements and conditions. The article describes Swedish RPE practices on the basis of a questionnaire distributed to all Swedish municipalities in autumn 2005

Victoria's accrual output-based budgeting system - delivering as promised? Some empirical evidence

Abstract: In 1998, the government of Victoria, Australia implemented a comprehensive, state wide accrual output based budgeting (AOBB) system. This initiative represented an important element of a stream of new public financial management (NPFM) type reforms introduced in Victoria from 1992 onwards, including the adoption of accrual based accounting and financial reporting and the implementation of a capital charging regime. Promoters of AOBB systems, predominantly government central financial agencies, have claimed that the implementation of AOBB systems represents best practice and should stimulate material performance improvements across the public sector. This paper presents empirical evidence pertaining to the structural characteristics of Victoria's AOBB system together with analysis of that evidence which suggests that the impact of Victoria's AOBB system in practice has not fulfilled the expectations which accompanied its introduction. In particular, an analysis of the structural characteristics of Victoria's AOBB system shows an increasing rate of change in the system's architecture in each year since implementation. This poses serious questions as to the quality of the management information being produced by the system, and thus its capacity to support enhanced decision making and resource allocation.

The Institutional Construction of Consumerism. A study of Implementing Quality indicators

Abstract: ................................................................................... 5 SAMMENDRAG................................................................................ 6 INTRODUCTION .............................................................................. 7 HOW CAN A PATIENT BECOME A CONSUMER? ............................................. 8 GLOBAL TRENDS INFLUENCING CONSUMERISM ........................................... 10 RESEARCH METHOD ......................................................................... 13 CONSUMERISM IN THE NORWEGIAN HEALTH CARE SECTOR ............................. 14 Introduction of a new view on quality in the Norwegian health sector............................14 Dominating arguments.............................................................................................................17 THE CONSTRUCTION OF CONSUMERISM ................................................... 19 Antecedents to the quality indicators – Phase 1 ...................................................................19 Challenger’s rhetoric coming in – Phase 2 ............................................................................19 Other groups react to the new rhetoric – Phase 3 ...............................................................20 Quality indicators concur in the field – Phase 4...................................................................21 CONCLUSIONS ............................................................................... 22 References ..................................................................................................................................26

The Private Finance Initiative (PFI) in Schools: The Experiences of Users

Abstract: The Private Finance Initiative (PFI) offers an alternative to the conventional procurement of public sector infrastructure. Typically under a PFI contract, a consortium of private sector organisations is responsible for designing, building, financing and operating buildings and facilities and associated services that are then used by a public sector organisation for the period of the contract, normally 25 to 30 years. A PFI contract is regarded as the provision of a bundle of services which are paid for year by year by the public sector user, rather than the provision of assets. Since the UK's introduction of the PFI in the early 1990s it has become a widely adopted means of acquiring asset based public services, with over 600 projects entered into by April 2004.1 However, before a PFI contract can be approved it has to be demonstrated that the project will provide value for money (VFM).

The Integration of Clinical and Costing Information: A Comparative Study Between Scotland and Sweden

Abstract: No abstract available.

Leadership, Accounting, and the Reform Process of a Public Sector Agency: A Narrative Analysis

Abstract: No abstract available.