Measuring Financial Condition: A Study of U.S. States

This study tests a measure of financial condition using government‐wide information as required under the new financial reporting model set forth in GASB Statement No. 34. The measure consists of four financial condition dimensions in cash, budget, long‐run and service‐level solvencies, and 11 financial condition indicators. Results show that the measure is relatively reliable and valid and that government‐wide information reported under the requirements of GASB Statement No. 34 provides a useful reporting framework to evaluate financial condition of a government. Additionally, financial condition among states varies greatly and there is much room for improvement.     

Financial Regulation in the United States: Lessons from History

History is institutional memory writ large. One looks at economic history to see what problems recur, what causes them to recur, what solutions have worked best in the past, and which interventions have made the problems worse. The authors argue that a moderately complex interaction between the workings of the financial sector, the way in which the political system is organized, and the administration of regulation makes perfect regulation of the financial sector extremely unlikely. Many of these problems arise as a result of conflicting incentives for those participating in and regulating the financial field. The authors find that some proposed solutions have improved matters but have costs, and that some proposed solutions have actually worsened problems in the financial sector.

Peoples and governments never have learned anything from history, or acted on principles deduced from it.
— Georg Wilhelm Friedrich Hegel, 1837

     

Trends and Developments in Budgeting and Financial Management in Large Cities of the United States

Revenue constraints, demands for increased services, and rapidly increasing utilization of data processing have led large municipalities to effect significant changes in their budgeting/financial management processes and procedures. Based upon results from a survey of all cities in the United States with a population of 100,000 or greater, the author discusses the impact of such changes.     

Information Resources Management Expenditures in the States: A Case for Integrating Accounting and Budgeting Systems

A recent national study has found that states may be spending $20 billion on information resources management (IRM) in FY1989. The significant findings of the study regarding financial management are highlighted to show the dimensions of the IRM expenditures in the states. The second part of the paper examines how well the states' accounting systems are able to provide data on IRM expenditures for budgetary decisions. The article expands upon an important issue raised in the study's findings: the need for better integration of accounting and budgeting systems to improve management of information resources. An Information Object Classification Scheme, first suggested by the Commission on Federal Paperwork, is proposed as an important step in helping states improve their information resources management.     

The Politics of Growth Management Reform in the States: A Comparative Analysis

This article seeks to advance our understanding of the politics of growth management reform in the American states. First, it builds on prior research on agenda processes in other policy arenas to identify four "ideal" types of growth management reforms with empirical referents in the states: quantum, emergent, convergent and gradualist. Next, the political dynamics associated with each type are culled from the experiences of eight states pursuing such reforms over the past three decades. The article concludes by reviewing the implications of these findings for future research and for those pursuing growth management reforms in the future.     

Financial incentives and welfare reform in the United States

This paper uses a microsimulation model to ask whether welfare recipients in the United States would work full‐time if offered an earnings supplement that was conditioned on full‐time employment. The simulations suggest that the earnings supplement would increase full‐time employment, with little additional cash transfer cost to the government. In contrast, financial incentives currently being used by many of the states are increasing employment and income, but are encouraging primarily part‐time employment. Encouraging full‐time employment is particularly important in light of new time limits on welfare receipt. Faced with a loss of welfare benefits, many recipients may find that part‐time earnings do not allow them to be economically self‐sufficient. © 2001 by the Association of Public Policy Analysis and Management.     

Curriculum Development for Public Sector Financial Management

Inadequate curriculum materials frequently impede the teaching of public sector financial management to graduate and mid-career students. The Curriculum Development Project at the School of Public Affairs of the University of Maryland has produced a draft curriculum that emphasizes the use of microcomputers and associated analytical skills in integrating topics in finance, accounting and budgeting.     

Graduate Curricula in Budgeting and Financial Management: Recommendations for Reform

This is an abridged version of the final report of the American Society for Public Administration's (ASPA) Section on Budgeting and Financial Management's Task Force on Curriculum Reform. The report was produced by the Section on Budgeting and Financial Management's Executive Committee. The complete final report is available from Robert Berne, Graduate School of Public Administration, New York University, 4 Washington Square North, New York, NY 1003, or James Alexander, Department of Political Science, University of Pittsburgh at Johnstown, Johnstown, PA 15904.     

State Financial Management Systems: The Connecticut Experience

Budgeting has gone from being a cyclical event to an ongoing process with continuous data needs. This transformation has increased the need for states to have an information system to keep track of the data bases that support the budgetary process. This article discusses the creation of such a system in Connecticut.     

Australian Federalism: A Prospective Assessment

On 1 January 2001, Australia celebrated the centenary of itsfederal Constitution. Throughout its history, the Australianfederal system has proved both resilient and flexible, servingthe Commonwealth through the trials of depression, total war,imperial decline, and economic reconstruction. The constitutionalsystem has been developed through interpretation by the HighCourt and popular input via referendums, as well as by the ongoingprocess of intergovernmental relations. There has been an overallexpansion of Commonwealth powers with the politics of nation-building,but the states remain significantly powerful although financiallydependent on the Commonwealth. Given the institutional and popularsuccess of Australian federalism, the challenges facing theCommonwealth in the new century are not expected to be domesticor constitutional, but strategic and economic: principally,how a smallish middle power should meet the difficulties ofglobalization and security from a position of relative isolationadjacent to Asia in the southern Pacific.     

Public Financial Management Systems and Countries' Governance: A Cross‐Country Study

The objective of this study is to explore whether a relationship exists between public financial management (PFM) systems and expert perceptions of countries' governance in an international cross‐country study. We examine the extent to which variations in accounting, budgeting and auditing practices are associated with governance in a sample of 97 countries that represent different levels of development, analysing the differences between countries classified into factor, efficiency and innovation‐driven economies. Our concept of governance perception includes three dimensions: accountability, government effectiveness and corruption. We find that countries with a higher level of economic development show, on average, more sophisticated PFM systems characterized by the presentation of accrual‐based financial statements, the application of value for money audits and higher budget transparency. When analysing the sub‐samples of countries according to the level of economic development, we find that countries with similar governance perception scores show different patterns of PFM practices, suggesting that there is no one‐size‐fits‐all approach. Copyright © 2015 John Wiley & Sons, Ltd.     

Performance Budgeting and Performance Funding in the States: A States Assessment

For a variety of reasons, performance budgeting has gained new life in the 1990s. Initially introduced in the 1950s by the Hoover Commission and others, performance budgeting efforts, in the 1990s, go beyond the workload productivity and efficiency focus of earlier phases and place greater emphasis on outcomes and accountability. This study reports on a survey of state executive-branch budget officers designed to determine the current status of state performance budgeting efforts including performance budgeting processes used by the states, their perceived impacts on budget decision making, and their probable future use. In addition, the study assessed the emerging role of performance funding as a further extension of performance budgeting processes. The linking of performance to the allocation or distribution of appropriated funds may be emerging as the next iteration of performance budgeting in the states. In addition to reporting on the survey, relationships between performance budgeting and various aspects of state budgeting practices are analyzed through crosstabulations, and regression analysis is employed to examine the states' organization, fiscal, and political capacity to implement performance budgeting and funding.     

Federal Financial Management Control Systems: An Integrative Framework

The increasingly large and complex web of federal government finances seems to require ever more comprehensive and consistent financial management control systems to achieve managerial responsibility. This article identifies a framework for promoting integrated accounting, budgeting, and financial reporting in order to achieve the goal of providing relevant information to management and policy leaders. The article identifies four central areas in which endeavors to develop effective financial management control systems should concentrate: accounting for funds; assessing the cost of operations; managing cash; and collecting money due the government.     

Revenue Diversification: Fiscal Illusion or Flexible Financial Management

This study examines the trends in revenue diversification in approximately 240 suburban municipalities in the Chicago metropolitan region between 1988 and 1997. It then tests a model of revenue diversification's impact on tax effort using data from 1993 to 1997, and separated by home rule and non–home rule municipalities. Trends show that suburbs with higher increases in diversification tend to be home rule, younger, less residential, experiencing more growth, less reliant on property taxes, and more reliant on sales taxes. Model estimates show that communities with more revenue diversification have lower tax effort when controlling for other determinants of tax effort, and this effect is stronger in non–home rule municipalities.