PERFORMANCE AND FINANCIAL MANAGEMENT IN LOCAL GOVERNMENT: SYMPOSIUM INTRODUCTION
Rivenbark, William C.
Public Administration Quarterly; Randallstown Vol. 41, Iss. 1, (Spring 2017): 4-6.
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The fourth article included in this symposium, which was written by Zachary Mohr, responds to the lack of empirical research on how local governments use costing accounting at the department or service area, examining the influence of transaction costs on the measurement of indirect costs for service delivery. A major finding from this research is that service measurability uncertainty was found to be positively related to indirect cost measurement, which will require more attention over time given that more organizational leaders have an interest in results-based, decision-making and are pushing for a stronger understanding of direct and indirect costs.
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This symposium presents five articles on performance and financial management in local government, including citizen engagement through participatory budgeting, performance management, benchmarking property taxes, cost accounting, and comparative performance statistics as benchmarks. A major tread that runs through these specific topical areas is the desire to bring more accountability and transparency in local government, which continues to manifest both from internal organizational forces (Kelly and Rivenbark, 2011) and external community demands (Piotrowski and Van Ryzin, 2007). The goal of this symposium is to advance the research stream on performance and financial management in local government, responding to its prominent role in the study and practice of public administration.
I begin this symposium with an article written by Whitney B. Afonso that addresses how local governments are responding to growing pressures to increase transparency and citizen engagement through participatory budgeting, which has received a great deal of attention over the past several decades (Ebdon and Franklin, 2006). The majority of research on this topic, however, has approach citizen engagement from the perspective of the local government. This article presents a case study on participatory budgeting in Greensboro, North Carolina from the perspective of citizens, where they were given the authority to develop and vote on selected budget proposals. After identifying some of the specific challenges that citizens face when they take on the initiative to engage government, the author concludes that citizens must be persistent through participatory budgeting and that the government must foster these relationships for meaningful change.
The next article, which was written by Jeremy L. Hall, presents the components of capacity needed by local governments when embracing the benefits of performance management. They are financial capacity, administrative capacity, economy of scale and efficiency, inadequate strategic planning, task complexity and simplicity, and complex implementation environments. He then concludes by addressing several perceptual barriers to successful performance management, which includes the illusion of control. This article adds value to performance research given the paradigm shift that is occurring from performance measurement to performance management in local government. It also responds to the research on performance management that has found problems in the design and use of these systems for increasing governmental accountability (Heinrich, 2002).
I then included an article written by Spencer T. Brien, David Swindell, and Brent Stockwell on a property tax benchmarking initiative in the Phoenix, Arizona metropolitan area, responding to how public officials are extremely interested in how their own property tax burdens compare to neighboring jurisdictions. This study identifies two critical challenges when benchmarking property tax burdens, which include how the activity itself needs to be designed in a manner to add value to the participating jurisdictions and how the data are appropriately safeguarded. The authors conclude with several avenues for additional research opportunities, which parallel the performance management research of actually using data for decision-making. One of the more interesting possibilities is how benchmarking data actually influence decision-making during the annual budget process, which is where the actual property tax burden is changed and approved by elected officials.
The fourth article included in this symposium, which was written by Zachary Mohr, responds to the lack of empirical research on how local governments use costing accounting at the department or service area, examining the influence of transaction costs on the measurement of indirect costs for service delivery. A major finding from this research is that service measurability uncertainty was found to be positively related to indirect cost measurement, which will require more attention over time given that more organizational leaders have an interest in results-based, decision-making and are pushing for a stronger understanding of direct and indirect costs. The author concludes that a logical extension of this research would be to expand our understanding of transaction cost dimensions across all services, which is part of our profession’s desire to expand performance management and benchmarking in local government.
The final article of the symposium, coauthored by William C. Rivenbark, Dale J. Roenigk, and Roberta Fasiello, presents lessons learned from the North Carolina Benchmark Project to advance our understanding of why local governments participate in benchmarking consortiums and how they review and make decisions regarding the comparative data. A major finding from this study is that local governments use benchmarking data both for excellence and satisficing when responding to departmental rankings. This would suggest that not all comparative data are being used for the purpose of performance management, suggesting that there are accountability and transparency reasons for participating in a benchmarking consortium that has been in existence for approximately 20 years.
References
REFERENCES
Ebdon, C. & Franklin, A. L. (2006). Citizen Participation in Budgeting Theory. Public Administration Review, 66 (32): 437-447.
Heninrich, C. J. (2002). Outcomes-Based Performance Management in the Public Sector: Implications for Government Accountability and Effectiveness. Public Administration Review, 62 (6): 712-726.
Kelly, J.M. & Rivenbark, W.C. (2011). Performance Budgeting for State and Local Government, 2nd edition. Armonk, NY : M. E. Sharpe.
Piotrowski, S. J. & Van Ryzin, G.G. (2007). Citizen Attitudes Toward Transparency in Local Government. The American Review of Public Administration, 37 (3): 306-323.
Word count: 837
Copyright Southern Public Administration Education Foundation Spring 2017
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Search with indexing terms
⦁ Subject
Decision making
Public administration
Transaction costs
Public finance
Empirical methods
Local government
Accountability
Costs
Financial management
Property taxes
Transparency
Budgeting
Performance management
Citizen participation
⦁ Location
North Carolina
United States–US
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