Value-For-Money Audit for Accountability and Performance Management in Local Government in Ghana

Public sector organizations, including local government (LG) entities, continue to resort to value for money (VFM) audit to enhance performance and accountability. Based on the analysis of the consolidated reports on the annual performance-based Functional Organizational Assessment Tool (FOAT)—VFM audit—in Ghana to determine the efficacy of VFM on performance, this article argues that VFM audits constitute a significant public management tool that could enhance LG performance. However, the FOAT reports, like most VFM audits, only provide quantitative evidence, which fails to capture the qualitative or other relevant explanatory factors behind the recorded performance improvement.     

The Effect of New Legislation on the Disclosure of Performance Indicators: The Case of Spanish Local Governments

This article analyzes the effect of new accounting legislation on the disclosure of performance indicators in the financial statements of Spanish local governments. Based on agency and institutional theories, the article also assesses whether the disclosure of performance indicators is used to make the monitoring of local government performance easier for stakeholders or merely to project an image of good management. The results show that the enactment of new legislation has only led to a partial implementation, most local governments disclosing financial and budgetary indicators but very few providing indicators related to the performance of public services. The institutional theory (symbolic value) seems to be the rationale that best explains this pattern of disclosure.     

Opportunities for Collaboration and the Adoption of Local Government Investment Pools

This study examines the determinants of state adoption of local government investment pools (LGIPs) for commingling public funds for investment. It uses aggregate local government panel data from 41 states over a 40-year period and conditional fixed-effects logistic regression. The study finds that opportunities for collaboration, the extent of interlocal collaboration, local financial/economic conditions in a state, and proximate coterminous neighbors increase the likelihood that a state will adopt an LGIP. The finding that opportunities for collaboration contribute to the likelihood of LGIP adoption is an important evidence in support of the collaboration idea and extends the theory to interlocal cash management.     

Ten years after: revisiting the determinants of the adoption of municipal corporations for local service delivery

Research on the use of municipal corporations to deliver local and regional public services has evolved significantly in the past decade. Most of this work addresses the performance of this service-delivery mode in relation to local bureaucracies. However, much less is known about the drivers for the adoption of municipal corporations in the first place. This article reviews the main determinants of adoption – service characteristics, institutional and regulatory settings, political constraints and financial conditions – and highlights the need for comparative research across countries.     

Adoption of comprehensive risk management in local government

In the aftermath of large company failures in the early 2000s, there emerged a new wave of efforts to enhance risk management (RM) and control in enterprises. The normative RM model has been promoted widely to all organisations, including public sector organisations. Using survey data, this article describes and explains the diffusion and adoption of RM innovation in local government in Finland. Our survey results support the argument that if comprehensive RM is not obligatory, it is not widely used in local government. Our analysis reveals that financial constraints explain to some extent the existence of comprehensive RM in municipalities, while structural factors such as the size of municipalities do not, even though RM is slightly more advanced in larger rather than smaller local governments. Slow adoption indicates that comprehensive RM as a managerial innovation lacks immediate benefit when assessed against the efforts and costs of its introduction and maintenance.     

From public to mixed ownership in local public services provision: an empirical analysis

There is a long tradition of companies that provide local public services, such as energy distribution or solid waste collection, being strategically important for the promotion of the development of areas where they are present and having a great influence on citizens’ quality of life. This article examines the determinants of the choice of ownership structure for Italian companies that provide local public services, and the effects that this choice has on their performance. Economic and financial data at company level was merged with economic, political, financial and territorial data on the municipality with the majority of shares in it. A two-stage multinomial selection model was employed, in order to carry out the analysis with more than two alternative ownership structures and to control for endogeneity. The empirical evidence indicates that the municipality’s political and budgetary conditions matter in the choice of ownership structure. Although the computed Average Treatment Effects seem to indicate that mixed ownership increases operating efficiency, the profitability indicators provide evidence to the contrary.     

Disclosure on Measures to Prevent Corruption Risks: A Study of Italian Local Governments

This article investigates the characteristics of the disclosures of anticorruption measures that Italian local governments (LGs) publish to increase transparency, public accountability, and citizens’ trust in public administration. The analysis of the anticorruption plans of a sample of Italian LGs shows that this type of disclosure might be a way of repairing organizational legitimacy after an occurrence of corruption. More external directors in the governing body also increase the pressure on LG managers to publish information about anticorruption measures. Finally, larger LGs demonstrate a greater propensity to provide information on the actions implemented to mitigate corruption risks.     

Pursuing Private or Public Accountability in the Public Sector? Applying IPSASs to Define the Reporting Entity in Municipal Consolidation

Private-sector accounting systems have often been heralded as superior to public-sector ones and suggested as solutions to the shortcomings of the latter. Our article aims at contributing to this debate by looking at the adoption of business-like practices where the public and private sectors intersect. Our analysis shows that the adoption of International Public Sector Accounting Standards (IPSASs), strongly inspired by International Financial Reporting Standards (IFRS), might not ensure the expected disclosure. Municipalities adopting IPSASs for preparing consolidated financial statement do not necessarily increase accountability because some relevant public service providers are not included in the reporting entities.     

Institutional and Economic Factors Affecting the Adoption of International Public Sector Accounting Standards

This article investigates the environmental factors associated with countries’ decision to adopt International Public Sector Accounting Standards (IPSAS). Based on a sample of 110 countries, the results reveal a positive influence of external public funding (coercive isomorphic pressure), the degree of external openness (mimetic isomorphic pressure), and public sector organizations’ importance on IPSAS adoption. They show a negative effect of the availability of local GAAP on this decision, whereas education level (normative isomorphic pressure) is a nonsignificant factor.

This research contributes to the international accounting literature in the public sector. The results are relevant to standard-setters, regulators, researchers, international financial organizations, and non-adopting countries.     

STRENGTHENING THE LINK BETWEEN PERFORMANCE MEASUREMENT AND DECISION MAKING

Many public agencies now face dual pressures to meet external accountability demands on one hand, and improve their internal performance on the other. This begs the question whether the demands that are made on public agencies to externally report on their performance have a limited or wide ranging impact on the utilization of performance indicators (PIs) for internal improvements. This article addresses this question via a small group of public agencies and public accountability authorities in Australia. It also examines the main factors that affect the use of PIs for decision making. The evidence suggests that the agencies use PIs more for meeting external reporting requirements than for achieving internal improvements. Various constraints on the use of PIs were identified, mainly technical problems, and to a lesser extent, political and organizational issues.     

New Public Management in Dutch Local Government

This article investigates the adoption of New Public Management (NPM) in Dutch local government. According to Hood's concept of NPM, it will show the extent to which Dutch municipalities have adopted businesslike instruments and styles. Following Pollitt's framework on studying public management changes, a distinction will be made between changes in ideology, instruments, practices and impacts. The article concludes that, unlike ideological and instrumental innovations, the evidence for NPM-like practices and impacts is limited. To put it crudely, a lot of apparent changes in Dutch local government seem to be only skin-deep.     

The knowledge-interest context of local public finance: Judgments of city finance officers

A potential constraint on local public finance decision making is the distribution of knowledge of, and interest in, public finance issues within a community. Since city finance officers occupy strategic positions in local government and politics an understanding of their assessments of the local knowledge-interest context is preliminary to financial management capacity building initiatives. This article considers the judgments of seventy Ohio city finance officers on the level of local government finance knowledge and interest in their communities. Alternative explanations for variation in judgments on the knowledge-interest context are tested. While little variation is explained by aggregate city characteristics, local financial management professionalism, or city government structural arrangements, variables related to city specific political factors do tend to have considerable explanatory power.     

From Tuscany to Victoria: Some Determinants of Sustainability Reporting by Local Councils

This paper seeks to respond to recent calls by the academic community for studies investigating sustainability reporting by the public sector, as well as for more engagement-based studies of this issue by examining the views of managers within local councils (LC). The objective of this project is to provide insights as to the possible reasons and explanations for the types of sustainability disclosures among a group of local councils operating in Italy and Australia. In particular, an international comparison is undertaken to ascertain the effect of culture on the adoption of sustainability reporting (SR). Evidence is collected from semi-structured interviews with managers and accountants from ten local councils consisting of five from Italy (Tuscany) and five from Australia (Victoria). The findings suggest that although there are available some general policy documents relating to sustainability reporting, councils are left to their own discretion as to what they consider fit under the definition of sustainability and therefore, determine to a large extent, what to report to stakeholders. Moreover, there was a range of legitimacy type behaviours displayed by a number of councils while others were influenced by notions of public sector accountability and transparency. Adopting Hofstede's cultural framework, the research also highlights the relevance of the Italian and Australian cultural settings in shaping the SR practices used by LCs. The findings suggest that differences regarding cultural dimensions, such as ‘power distance’ and ‘uncertainty avoidance’, influence key aspects of SR.     

Compulsory Competitive Tendering And Local Government Financial Services: An Analysis Of The Views Of Local Government Accountants In The North West Of England

Between 1979 and 1997, successive Conservative governments sought to reduce the scale of public sector activity and to introduce competition in the provision of public sector services. A central feature of this policy was the introduction of compulsory competitive tendering (CCT). CCT was initially confined to blue collar services but, by means of the Local Government Act 1992, it was extended to white collar, professional services, including financial services. However, though potentially extremely significant, the support for and implications of such a policy are issues which have been inadequately researched. Because of this, research has been under-taken into financial services CCT and has included a questionnaire survey of 300 professionally qualified accountants employed in 17 local authorities in the North West of England, drawn from county councils, district councils and metropolitan authorities. The article presents the findings of the survey, with a particular focus on the views of accountants on CCT in general and financial services CCT in particular. In addition, it provides evidence that the CCT process, irrespective of views on CCT and its appropriateness for specific activities, has changed culture and attitudes in the case of local government finance professionals.     

LOCAL GOVERNMENT IN POLAND: EMPIRICAL INSIGHTS INTO THE PROCESS OF ENVIRONMENTAL POLICY

The subject of this investigation is the performance of Polish local government and its ability to make and implement environmental policy. The article proposes an assessment of national policy implementation based on policy outputs in the form of local policy programmes. National policy is implemented inter alia through elaboration, adoption and execution of environmental protection programmes at three subnational levels of self‐government. Self‐government is solely responsible for preparation and execution of the programmes. For every municipality, the rules for adoption including timetable, the structure of the draft, consultation of the draft and formal vote by local council to adopt the draft are the same. Therefore, the process of elaboration and adoption provides opportunity to compare municipalities across the country. Survey and interview based data from the study gives evidence about municipal performance in the programming and allows verifying possible influence of three macro factors on this performance.     

Public Enterprise Reforms and Financial Performance of Government Commercial Companies of Fiji

Public enterprise reform is no new phenomenon. Since the late 1970s, state intervention in the market has been increasingly challenged, acquiring a more ideological form with the rise of ultra-conservative governments in the UK and USA. Like other countries across the world, Fiji has also attempted to reform its public enterprises. This article compares the performance of corporatized public enterprises that sit at different levels of financial performance. Such enterprises have experienced reforms but with mixed financial outcomes. Overall, the major finding of this research is that there is no single factor that can lead to better or poor financial performance.     

Do Accrual Numbers Really Affect the Financial Market? An Empirical Analysis of ESA Accounts Across the EU

The adoption of a full accrual framework in the public sector is differentiated country by country both for budgeting and for reporting phases. The purpose of this article is to address the following broader research question: How do accrual numbers affect the financial markets? The 10-year average interest rate on sovereign bonds across the European Union is used as a dependent variable. The results of the research show an unclear relation among the variables investigated. Given this evidence, an alignment between micro- and macroaccounting rules could be pursued. We argue the suitability of the Australian experience in this sense.     

More dissimilar than alike? Public values preferences across US minority and white managers

Interest in public values has grown considerably over the past two decades. Much of this attention reflects a growing awareness that public values hold considerable significance for citizens and public employees. Yet, despite the rapid expansion of research on public values, we still know little about the role of race in shaping and determining public employees’ values preferences. To begin remedying this gap, this article examines whether minority and white public managers in large US local governments exhibit the same value preferences when making departmental decisions. Results from a multiple group confirmatory factor analysis indicate that minority and white managers express similar preferences for traditional public administration values; however, minority managers report a stronger preference for both traditional public administration (e.g., efficiency and effectiveness) and social equity‐oriented (e.g., equity, representation) values.     

THIS ARTICLE HAS BEEN RETRACTED: STRENGTHENING THE LINK BETWEEN PERFORMANCE MEASUREMENT AND DECISION MAKING

Retraction: The following article from Public Administration, ‘Strengthening the link between performance measurement and decision making’, by Jeannette Taylor, published online on 18 December 2009 in Wiley Online Library ( www.wileyonlinelibrary.com ) and in Volume 89:3, September 2011, pp. 860–878 (DOI: 10.1111/j.1467‐9299.2009.01802.x), has been retracted by agreement between the author, the journal Editor in Chief, Arjen Boin, and Blackwell Publishing Ltd. The retraction has been agreed due to a production error, as a duplicate version of the article, entitled ‘Strengthening the link between performance measurement and decision making’ by the same author (DOI: 10.1111/j.1467-9299.2009.01788.x ) was previously published in volume 87:4 of the same journal. The publishers apologise to the author and to our readers for this error. REFERENCE Taylor, J. (2011), Strengthening the Link Between Performance Measurement and Decision Making. Public Administration, 89: 860–878. doi: 10.1111/j.1467‐9299.2009.01802 Many public agencies now face dual pressures to meet external accountability demands on one hand, and improve their internal performance on the other. This begs the question whether the demands that are made on public agencies to externally report on their performance have a limited or wide ranging impact on the utilization of performance indicators (PIs) for internal improvements. This article addresses this question via a small group of public agencies and public accountability authorities in Australia. It also examines the main factors that affect the use of PIs for decision making. The evidence suggests that the agencies use PIs more for meeting external reporting requirements than for achieving internal improvements. Various constraints on the use of PIs were identified, mainly technical problems, and to a lesser extent, political and organizational issues.     

IMPROVED PERFORMANCE IN LOCAL ECONOMIC DEVELOPMENT: A WARM EMBRACE OR AN ARTFUL SIDESTEP?

This article examines the extent to which changing approaches to performance management have had an impact on a range of agencies responsible for local economic development programmes in Britain. It explores the possibility that the effectiveness of public programmes could be more sharply highlighted and incorporated in the performance review of organizations. It demonstrates that major improvements have occurred but that overall the planning and management of local economic development remains largely incremental. While the FMI (Financial Management Initiative) has led to greater understanding of the extent to which corporate and programme accountability can be achieved in public agencies, it is not clear that sufficient momentum has been achieved for future changes to be self-generating. Further progress in performance management continues to be dependent on strong external pressures to publicize, probe and reward demonstrable improvements in public sector performance.