G. Jan van Helden

EXAMINING THE PRACTICAL RELEVANCE OF PUBLIC SECTOR MANAGEMENT ACCOUNTING RESEARCH

Concerns exist that practical relevance is becoming devalued as accounting scholars respond to signals about what sort of research ‘counts’. We categorize public sector management accounting papers in six leading journals according to two criteria: the practical orientation of the research objective(s), and whether the conclusions communicate issues of practical relevance. The findings reveal that most of the papers are directed towards understanding or critiquing the use of management accounting techniques, while other practically oriented research objectives are largely absent. Although half of the papers identify practical research implications, few suggest guidelines for practice. Reflections are offered on the role of leading journals in shaping how practical relevance is valued in accounting research.

Distinctive research patterns on public sector performance measurement of public administration and accounting disciplines

Abstract This article explores distinctive research patterns of public administration and accounting disciplines concerning public sector performance measurement (PSPM). Our review shows that accounting researchers from Europe investigate reasons for limited PM use and factors explaining a rational or symbolic PM use, inspired by organization theory and institutional theory and conducting case/field studies. Public administration researchers from Europe and the USA prefer to study PM design and PM impact respectively, mainly using surveys in combination with various theories, like political theory. Public administration research from the USA examines the types of performance indicators in PM systems and contingent factors for PM design. Public administration research from Europe shows an interest in evaluating public sector reforms like Best Value and explaining learning processes for improvement. We argue that PSPM research could benefit from interdisciplinary efforts and intensified mutual communication between public administration and accounting.

The life cycle approach to performance management: Implications for public management and evaluation

This article discusses how performance-management systems may be conceptualized as tools with a life cycle consisting of several stages. Studies on public-sector performance management generally concern the question of how management can design these systems or address dysfunctional effects when they are used. This article, however, argues that the research in this field should cover the entire life cycle of performance-management systems: it should focus on both their benefits and costs and needs to recognize a broader spectrum of actors involved in the life cycle than that normally associated with the hierarchical conception of principals and agents. The life-cycle approach facilitates a comprehensive mapping of the various performance-management stages and their contingencies from invention to assessment and re-design, including their interdependence. The framework enables policymakers, managers, evaluators, and researchers to better understand performance-management systems, to identify relevant research areas and to communicate the practical problems and solutions related to the systems’ specific stages.

Challenging the NPM Ideas about performance management : Selectivity and differentiation in outcome-oriented performance budgeting

This paper shows how the performance budget of a local government organization, in this case a province in the Netherlands, can be attuned to the specific task characteristics of the programmes in these budgets. Three ways of alignment are suggested: differentiating between standardized and complex programmes; focussing on the politically most relevant programmes in order to avoid information overload; and distinguishing between the types of performance information in terms of the role of the province in the programme (facilitator versus executor) and the stage in the policy making cycle (policy development, policy elaboration or policy execution). These suggestions challenge the generally straightforward NPM rationale of performance budgeting, in which standardized outputs are directly related to resources. Our empirical research shows on the one hand that the redesigned programme budget based on the above principles received substantial approval of its users, i.e., the provincial councillors. On the other hand, as regards the use of this programme budget the picture is rather diffuse, i.e., the majority of the councillors indicate that they use the information rather intensively, but its formal use in official Council and Council committee meetings remains limited.

Benchmarking in the Dutch Waste-Water Treatment Sector

The Dutch water boards have recently completed a performance measurement and evaluation project for waste-water treatment. This project was intended to strengthen the boards’ accountability to their stakeholders and to identify starting points for performance improvement. The Balanced Scorecard was used as a framework to develop a broad set of performance indicators. This article describes the benchmarking project and how the Dutch water boards intend to use the results to improve performance. Finally, the Dutch project is compared with the UK’s Best Value project.

Policy Making on Reserves of Dutch University Hospitals: A Case Study

Organizations in the health care sector are increasingly managed and judged on the basis of economic criteria. Because they are faced with growing risks, reserves need to be sufficiently high. This paper entails a case study on policy making regarding reserves in a particular segment of the Dutch health care sector, i.e. university hospitals. After describing the various major risks of health care organizations, the three stages of the case study will be presented. First, we developed, in collaboration with experts from the university hospitals, a model for establishing sufficient reserves. Second, an advisory committee of the Dutch government formulated guidelines for policy making on this issue. Finally, after the recommendations of this committee became the basis for policy making on reserves, we examined the changes in the actual reserve policy of the university hospitals. The way in which health care organizations can cope with their perceived risks by establishing sufficient reserves or by taking other actions is hardly covered in the literature on public sector or not-for-profit organizations. This paper endeavours to raise relevant questions and to suggest preliminary answers by describing and critically appraising a case study on this subject.

Diseconomies of scale for plant utilisation in electricity generation

Abstract Using data on electricity generation in the Netherlands it is shown that diseconomies of scale for plant utilisation occur. It is plausible that these diseconomies even offset economies of scale for capacity costs.

Exploring the Balancing Concept in the Design of a Performance Measurement System for Waste Water Treatment in the Netherlands

Water boards in the Netherlands recently completed a sector-wide performance measurement and evaluation project for waste water treatment. The project is supposed to achieve two goals. First, it should strengthen the accountability of water boards to their main stakeholders, such as taxpayers and governmental policy makers. Water boards are (partly) regional monopolies, and they are legally able to raise taxes for funding their activities. Therefore, they wish to show that they deliver value for money. Second, the project is supposed to identify relationships between various performance indicators, in order to provide information to enable individual water boards to improve their performance.

New development: Public sector controllership—reinventing the financial specialist as a countervailing power

Different types of ‘controllers’ can be distinguished in the public sector. The authors’ research indicates that public sector controllers acknowledge the distinctive characteristics of ‘hybrid’ controllers, but question some of the possible advantages of ‘pure’ controllers. This result could signal a decreasing share of pure controllers and thus a loss of financial expertise in the public sector. This article calls for the controller to be ‘re-invented’ as a professional who combines solid financial expertise with an independent and critical attitude towards overly ambitious politicians and managers. The general public’s support for public sector organizations could be enhanced if strong controllers counterbalance the sometimes too optimistic views of managers and politicians.

A pragmatic view on engaged scholarship in accounting research

Purpose - – This paper aims to discuss the question of how the possible gaps between academic and practical accounting research can be reduced and how academics could make a contribution to solving the practical problems of organizations. Design/methodology/approach - – A reflection on Van de Ven and Johnsons ideas about “engaged scholarship” as a way for overcoming the gap between academic and practical knowledge creation, illustrated with examples coming from public sector accounting research. Findings - – Although academic consultant/researchers, who conduct research of direct relevance to practice, ideally must have research objectives in mind that go beyond the practical problems of the organization in order to address academically relevant goals, this is often not feasible. This is due to the fact that academically relevant research questions can often only be identified when a practice-oriented research project has already taken shape. The authors argue and illustrate that a pragmatic form of engaged scholarship in public sector accounting research implies that such research results in a variety of outputs. Some of the outputs will have direct relevance to the practitioners and others to the academics involved, whilst the outputs that are relevant to each of these two groups will only partly show connections and overlaps. Practical implications - – The preoccupation of academic researchers with publications in high-ranking journals, due to pressures from their universities and peer groups, threatens research projects with a potential relevance for practice, because their publication opportunities are uncertain in advance. The authors welcome researchers who want to take this type of risk, and the authors challenge university officials and journal editors to broaden their view on excellence in research beyond the scope of their traditional academic domains. Originality/value - – The paper offers a realistic way out of serving two seemingly different research goals, practice-relevance and academic rigour.