Performance and Accountability: Budget Reform in New Zealand

Since 1984, New Zealand has made major changes in public sector management. This article describes the perceived problems with the previous New Zealand system and discusses the reforms designed to address these problems. The changes attempt to increase efficiency by: (1) separating commercial functions from other government operations; (2) strengthening lines of ministerial and executive accountability; and (3) designing budget and financial management systems to improve measurement of public sector performance. This last reform includes shifting from an input to an output-based system, changing from cash to accrual accounting, and creating different forms of appropriations for different types of government activities. While it is too early to assess whether the reforms are successful, we note potential problems.     

Incentives and their dynamics in public sector performance management systems

We use the principal‐agent model as a focal theoretical frame for synthesizing what we know, both theoretically and empirically, about the design and dynamics of the implementation of performance management systems in the public sector. In this context, we review the growing body of evidence about how performance measurement and incentive systems function in practice and how individuals and organizations respond and adapt to them over time, drawing primarily on examples from performance measurement systems in public education and social welfare programs. We also describe a dynamic framework for performance measurement systems that takes into account strategic behavior of individuals over time, learning about production functions and individual responses, accountability pressures, and the use of information about the relationship of measured performance to value added. Implications are discussed and recommendations derived for improving public sector performance measurement systems. © 2010 by the Association for Public Policy Analysis and Management.     

Program Budgeting and Accountability in Local Government

Much has been written about program budgeting and its relevance to improved efficiency and effectiveness. However, there is little discussion about the relationship between the use of program budgeting and accountability. While, organisations using program budgeting focus on the issues of performance, the accountability of management to an elected body, such as a local council has been given little attention. In this article three questions are posed: (1) Is the performance information available to enable councillors to form a judgment about management's performance?; (2) Is management involved in determining issues of policy, such as objectives, programs and performance measurement?; and (3) Are councillors confronted by a greater volume of budgetary documentation but with no increase in time to consider it? The results show that program budgeting does not always enhance accountability in local government.     

Understanding the changing role of public sector performance measurement in less developed countries

This article develops a framework for understanding changes in the demand for and supply of performance information in public sector organizations in less developed countries (LDCs). New Institutional Sociology (NIS) is used to argue that pressures from specific stakeholders stimulate organizations to produce particular performance information. The article distinguishes three groups of stakeholders (i.e. funding bodies, statutory boards and purchasers), and elaborates on the performance dimensions these stakeholders are interested in. The group of funding bodies, with their interest in financial performance information, used to be the most important group of stakeholders. However, statutory boards and purchasers are gaining importance as a result of recent public sector reforms, which include decentralization, marketization and the implementation of anti‐corruption programs. As a consequence of pressures coming from these stakeholders, new performance dimensions, such as the quality and quantity of services and the political governance structure, will be added to organizations' performance measurement (PM) systems. Whether these and other—often more traditional financial—performance dimensions will be balanced and integrated throughout organizations depends on the power positions of the various stakeholders. The arguments presented in this article intend to stimulate public sector organizations in LDCs to design and redesign PM systems as a response to changing stakeholder interests. Copyright © 2010 John Wiley & Sons, Ltd.     

Administrative Accountability in the ‘Westminster’ Democracies: Towards a New Conceptual Framework

Understandings of administrative accountability in the “Westminster” democracies remain too closely linked to the institutional arrangements through which accountability has traditionally been exacted in these countries. This has prevented a full appreciation of the nature and extent of changes which have been under way for some time. The article argues that a refined concept of accountability and five subordinate “conceptions” of accountability, corresponding to distinctive sets of institutional arrangements, are needed to comprehend the relevant changes. The identification of multiple options for administrative accountability, in turn, raises questions about how the different accountability systems are to be chosen and combined to maximize accountability without impairing administrative effectiveness.     

The Ups and Downs of State Budget Process Reform: Experience of Three Decades

From zero-base budgeting to the Government Performance and Results Act, state budgeting systems have been synonymous with budgeting reform for over 30 years. This article examines the trends, both long-term and short-term, which have been identified through analysis of state budgeting office practices. Particular emphasis has been placed on understanding the changes in performance measurement over the period of 1970 to 2000. The findings reveal trends such as changes in the makeup of budget office personnel, a lack of budget offices in moving toward cost accounting, and trends in budget preparation and budget documents. Some budget reforms seem to have plateaued, beginning in the mid-1990s, while other reforms have exhibited "backsliding." It is clear that the states are not all marching in unison in reforming their budget systems. As with earlier phases of this study, the 2000 data raise many questions that will be explored in future research.     

The Ethical Implications of Altering Public Sector Accountability Models: The Case of the Atlanta Cheating Scandal

ABSTRACT

Outcome based policies promote the use performance accountability models. However, the impact these policies have on the ethical culture of public sector organizations has not been adequately assessed. This research examines performance accountability reforms by examining the City of Atlanta’s implementation of federal and state performance policies. The analysis reveals the use of performance models in vulnerable organizations negatively impact employees’ ethical behavior. Teachers and administrators altered test results, delivered threats, misled parents and students about performance outcomes, and were dishonest with state investigators to give the illusion that performance goals had been met or exceeded.     

The usefulness of key performance indicators to public accountability authorities in East Asia

Has the mandated reporting of key performance indicators (KPIs) by public agencies to public accountability or reporting authorities in Taiwan, Hong Kong and Singapore helped these authorities in their task to hold the agencies to account? This article argues that the sheer existence of KPIs in public agencies' annual reports and budget papers does not automatically lead to their effective use by the authorities for making decisions about the agencies' performance achievements. The utilization of KPIs for making decisions by the participating authorities in these countries could be best described as careful and cautious because of their perceptions that the KPIs have failed to meet their performance information needs. Since the implementation of a performance measurement and reporting system has been linked to both instrumental and symbolic benefits, perhaps the main value of the current systems lies less with their ability to bring about instrumental benefits to reporting authorities and other stakeholders. Instead, their primary strength may be skewed towards their capacity to accrue symbolic benefits for the government. Copyright © 2007 John Wiley & Sons, Ltd.     

Are Public Service Nonprofit Boards Meeting Their Responsibilities?

Public service nonprofit organizations have long been "partners" in the delivery of public services. Such nonprofit organizations are governed by boards, typically composed of citizen volunteers, that are expected to meet substantial standards of accountability and performance. Previous research has raised questions about how well such boards are meeting their responsibilities. A 2007 Urban Institute study, based on the first large representative sample of U.S. public benefit nonprofits, provides important evidence about the extent to which nonprofit boards are meeting certain accountability and performance standards.     

Do School Report Cards Produce Accountability Through the Ballot Box?

Public education has been transformed by the widespread adoption of accountability systems that involve the dissemination of school district performance information. Using data from Ohio, we examine if elections serve as one channel through which these accountability systems might lead to improvements in educational quality. We find little evidence that poor performance on widely disseminated state and federal indicators has an impact on school board turnover, the vote share of sitting school board members, or superintendent tenure, suggesting that the dissemination of district performance information puts little (if any) electoral pressure on elected officials to improve student achievement.     

Reengineering Nonprofit Financial Accountability: Toward a More Reliable Foundation for Regulation

The annual Internal Revenue Service Form 990 tax filing is the principal disclosure mechanism for nonprofit organizations. Although considerable efforts have been made to improve the accuracy and accessibility of Form 990, questions remain as to whether this data source is the most desirable foundation for a system of nonprofit accountability. Taking a broad perspective on financial accountability, this article assesses not only the quality and availability of the financial data, but also the entire financial–reporting model. The article develops a framework for thinking critically about nonprofit financial accountability. After examining the current structure of nonprofit financial reporting and contrasting it with alternative systems developed for other industries, the article concludes with recommendations for reengineering nonprofit financial accountability.     

THE FINANCIAL ACCOUNTABILITY AND CONTROL STRUCTURE OF PUBLIC SECTOR UTILITIES*

Abstract: Profit-based financial measures have been given prominence in the present financial accountability and control systems of public sector utilities in Australia. As a result, periodic evaluation of financial accountability and managerial performance suffers from a lack of objective-orientation. Assessing the financial accountability and controlling the activities of public utilities properly requires information consistent with their operational environment. Neither clear financial policies and targets, nor a set of environment-specific performance measures have been outlined by the government. The paper proposes that, in addition to profit measures, consideration should also be given to non-profit measures if an improvement is really desired in the monitoring of managerial performance and in accountability of those utilities which operate in virtual monopoly or near-monopoly situations.     

Victims’ Rights and Distributive Justice: In Search of Actors

The aim of this article is to discuss the role that victim groups and organizations may have in framing and supporting an accountability agenda, as well as their potential for endorsing a distributive justice agenda. The article explores two empirical cases where victims' rights have been introduced and applied by victim organizations to promote accountability—Colombia and Peru. It will be argued that if transitional justice in general and victim reparations in particular are to embark in a quest for distributive justice, it cannot do so without considering victims as political actors, and putting forward demands in terms of victims’ rights.     

Determinants of Financial Transparency in Government

ABSTRACT

The search for enhanced transparency and accountability in government organizations has inspired studies to identify the key factors that facilitate greater disclosure of public financial information. With the advantages provided by the meta-analysis technique, applied to a sample of studies, we identify the most significant factors and incentives underlying the decisions adopted by public managers on policy strategies regarding information transparency and public responsibility. Our study shows the variables analyzed to be positively associated with the disclosure of public financial information, but also that this depends on the context in which the research is carried out. The most influential variables were the moderator variables of the administrative culture and of the measurement unit for the variables.     

Support for Performance‐Based Funding: The Role of Political Ideology,Performance, and Dysfunctional Information Environments

As performance‐based mechanisms for accountability have become increasingly commonplace in the public sector, it is apparent that administrative reactions to these reforms are central in determining their effectiveness. Unfortunately, we know relatively little about the factors that drive acceptance of performance‐based accountability by administrative actors. This article employs data collected from an original survey instrument to examine the perceptions of presidents at American public colleges and universities regarding performance funding. The author finds that acceptance of performance as a basis for funding is driven by a variety of factors, including the partisanship of the state legislature, organizational performance (measured by institutional graduation rates), dysfunction in the external information environment, and the political ideology of university presidents.     

Public Financial Management Reform in South African Provincial Basic Education Departments

Since the transition to democracy in 1994, the South African government has engaged in a sustained programme of public financial management (PFM) reform across the national, provincial and local spheres of government. This study evaluates the progress of the nine provincial education departments (PEDs) in implementing the Public Finance Management Act of 1999 and explores the factors that facilitated or impeded reform. A PFM progress (PFMP) index is constructed to track each PED's performance from 1997/1998 to 2013/2014 and then used to benchmark its progress over time and relative to the education sector as a whole. The indicators comprising the PFMP index assess key PFM functions (budgeting, accounting, financial auditing and audits of performance information), financial leadership and the effectiveness of governance institutions such as audit committees. While there has been considerable progress in PFM, distinct differences in the quality and effectiveness of PFM practices across the nine PEDs remain. Stable top administrative leadership, availability of PFM skills, varying degrees of accountability and departmental capacity to establish PFM systems that conform to new accounting standards drive variances in reform outcomes. Copyright © 2016 John Wiley & Sons, Ltd.     

Accountability via Performance Measurement: The Case of Child Protection Services

Since the 1980s child protection agencies have been subject to enormous scrutiny about perceived poor performance. Concerns are expressed about the capacity of services to cope with demand, the quality of practice, out‐of‐home care standards, and poor outcomes for children. Enter performance measurement. Using quantitative data to monitor effectiveness and efficiency, performance measurement promises improved resource management and accountability. This article discusses national, Victorian and Queensland child protection performance measurement regimes. It examines the extent to which performance measurement is used to promote accountability, as well as the indirect role of performance measurement in communicating policy intent. It suggests performance measurement is under‐utilised in child protection, but could be enhanced to contribute to better outcomes for children and families.     

Local government decision‐making—citizen participation and local accountability: some evidence from Kenya and Uganda

The current fashion for decentralisation is built on the assumption that it will result in decisions that reflect local needs and priorities. Yet representative democracy, through periodic elections, is a crude mechanism for establishing these needs and priorities. Most local government systems offer few other opportunities for citizens to participate, particularly for the poor, and few mechanisms of accountability. This article reviews the literature relating local level decision‐making, citizen participation and accountability. It then presents the findings of a study of decision‐making about the use of resources in a sample of municipal governments in Kenya and Uganda. Local governments in Kenya have traditionally offered minimal scope for citizen participation or accountability, but this is beginning to change, mainly as a result of performance conditions applied through the recently introduced Local Authorities Transfer Fund (LATF), together with an increasingly active civil society. In Uganda, which has undergone a radical decentralisation, there is much greater scope for citizen participation at the local level but there are still many of the same problems of local accountability as in Kenya. The article reviews some of the examples of, and reasons for, good (and bad) practice. It concludes that factors like committed local leadership, central monitoring of performance, articulate civil society organisations and the availability of information are critical. But even with these, there is no guarantee that decentralised decision‐making will be inclusive of the poor. Copyright © 2003 John Wiley & Sons, Ltd.     

Critical success factors for modernising public financial management information systems in Bosnia and Herzegovina

This article identifies a number of critical factors that have contributed to the successful implementation of a public financial management information system in the Republic of Bosnia and Herzegovina (BiH). The information system, funded by USAID and implemented by Emerging Markets Group from 1999 to 2004, has revolutionised accounting practices and has contributed to a more transparent and effective public sector. This article describes the project's context and purpose, its main features, challenges and obstacles. It continues by outlining the critical success factors that have contributed to the success of the project in a challenging environment. The project was implemented in a rather unique environment since it was initiated not long after the end of the civil war and the creation of the Republic of BiH. The Republic of BiH inherited the former socialist Yugoslavian payment systems. There were no adequate public financial management systems in place, and the project team could essentially start from scratch. The project team designed and implemented an accrual accounting system, and unlike the situation in many countries, relieved the government from having to transform their financial management system from cash‐based accounting to accrual accounting. Copyright © 2005 John Wiley & Sons, Ltd.     

Do Managers Face a Performance Trade-Off? Correlations Between Production and Process Performance

The existence of multiple goals in public organizations inevitably raises the concern that managers face performance trade-offs. In particular, scholars have expressed the fear that public managers, in order to secure high production performance, are forced to sacrifice performance on goals like equity, accountability, and procedural justice. However, our knowledge of whether such trade-offs exist is scarce. Using an administrative 10-year panel data set of Danish public schools and principals, this article analyzes trade-offs between production performance (measured by student performance and student pass rate) and process performance (measured by equity, accountability, and procedural justice). Results show no evidence of trade-offs. In contrast, principals who succeed in raising student performance generally also succeed in securing high pass rates, high equity, high accountability, and high procedural justice. These results suggest that managers who are able to secure high performance on one dimension of performance will likely also be high-performing on other performance dimensions.