| Abstract: | This article examines how monitoring mechanisms embedded in interlocal agreements (ILAs) are associated with vertical and horizontal intergovernmental relations. The authors hypothesize that ILAs established by local governments with higher‐level governments are likely to rely on a clearly specified set of rules to establish an administrative structure, whereas ILAs established by local governments with other local governments rely on associational benefits to ensure that policy preferences are aligned across multiple political boundaries. The article examines ILAs established by small town, county, and municipal governments in Denton County, Texas, for the provision of emergency medical, police, and fire services. Findings show that more than half of the ILAs specified a financial reporting system, but an almost equal percentage did not contain features requiring financial records to be available for audit by a third party. Quadratic assignment procedure correlation analysis confirmed the presence of cross‐monitoring mechanisms and showed that the patterns of ILAs tend to cluster around a geographic space. Practitioner Points - Monitoring mechanisms embedded in interlocal agreements (ILAs) matter, highlighting the important managerial functions played by frontline officers drafting ILAs.
- The rules embedded in ILAs are important not only for encouraging intergovernmental cooperation but also for reducing the risks associated with contract failures.
- With the increasing number of ILAs, local government officials need to consider various types of ILAs that are suitable to meet jurisdictional interests and policy preferences.
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