Book Reviews

References to ‘customers’ have become commonplace in the policy discourses within UK government and other public sector bodies. It is a working assumption of UK public sector management that the concept of the ‘customer’ can be applied to any public sector service agency or department; and this paper analyses how the UK government's revenue department, formerly titled the Inland Revenue (IR), re-characterised firstly taxpayers and latterly tax claimants as ‘customers’, rather than ‘users’, of IR services. This paper identifies some problems, dilemmas and ambiguities associated with this reconceptualisation in the context of an organisation that is predominantly a regulating department. Far from being merely a reclassification of the taxpayer as customer, the emerging discourse and associated practices of the IR were in part embedded in organisational change, including the merger with HM Customs and Excise to form the present-day HMRC. Thus this case analysis illustrates the limits of consumerism as a strategic tool of a government revenue department and raises wider questions for public management.     

A comparative study of cross-selling practices in public and private sector banks in India

This paper is a study of cross-selling practices in Indian public and private sector banks through the case study method. The study revealed that cross-selling practices in public sector and private sector banks are quite different. These differences emerge mainly from their different philosophy, background and distinct target customer segments. However, both sectors can learn from each other; public sector banks can introduce specialised training and incentives, whereas private sector banks need to introduce appropriate control mechanisms and avoid indiscriminate cross-selling. The paper also brings out the elements of successful cross-selling in India.     

Speaking my language?

The competitive nature of the financial services sector means that financial organisations have to work harder than many other sectors to communicate with customers, to retain their business and to cross-sell additional products or services. This paper addresses the current state of Customer Relationship Management in the sector and the public perception of how well it targets its customer communications. It suggests that an improvement in targeted marketing standards could lift the sector out of its worsening record on customer retention.     

The Best Value Agenda for Auditing

The developments in the public sector auditing can be seen against a backcloth of adverse publicity for private sector audits. This focus on the private sector has meant public sector developments have gone largely unnoticed. The advocacy of Best Value is a logical and useful development in addressing the needs of the citizen with an active interest in the public sector.     

Fostering Innovation in Public Services

Innovation is essential to the improvement of public services; it is not an optional luxury but needs to be institutionalized as a deep value. This article presents a framework for thinking and action to foster higher levels of successful innovation in the public sector. The major barriers to innovation in the public sector are identified. Finally, some immediate and practical steps which government departments and public service organizations could take to foster innovation are described.     

Financial reporting standards for the public sector: New Zealand's 21st-century experience

New Zealand was seen as world-leading when public sector financial reports were prepared using sector-neutral accounting standards from 1995 onwards. The decision in 2002 to adopt IFRS was disruptive, effecting new understandings of ‘sector-neutral’, and the standard-setter's approach was unsuccessful in meeting public sector users’ needs. The development of a new strategy finalized in 2012 has created a multi-standards framework, including adapted IPSASB standards applicable from 1 July 2014. While neutrality is still prized, it is within a framework of meeting users’ needs. This paper traces the influences expediting these changes.     

A consumer‐oriented culture?

Public sector managers are asked to ‘stay close to the customer’ and to develop a consumer‐oriented culture. While important lessons from the private sector ‐ if properly translated—can be applied to the public sector, this does not mean that existing skills need to be abandoned, rather supplemented.     

Professional Accounting Standards and the Public Sector—a Mismatch

Professional accounting standards have been applied to the public sector in Australia as part of the process of adopting accrual accounting. However, the reason given for their application to the public sector is questionable. The modes of operation of governments and of the business sector are very different, and accounting standards must be tailored to suit the specific information needs of each sector for the accounting systems to provide relevant information. The four Accounting Concepts Statements and the broad requirements of AAS 29 and AAS 31 are examined to show where changes are needed in the standards to make their information more relevant to the needs of the public sector. These changes would better enable accrual accounting information systems to assist in enhancing the efficiency and effectiveness of public sector operations and the accountability of governments to parliament and citizens.     

Securitization in Public Sector Finance

Already commonplace in the private sector, the securitization of future income streams is now being promoted in the public sector as a means of accessing investment capital. This article reports on a British university's securitization of 30 years' future rents on its student accommodation. Although the securitization made it possible to refurbish the residences, it has turned out to be costly in other respects. The authors conclude that investment returns in the public sector will rarely be sufficient to cover the finance costs of securitization; that the loss of the securitized income in labour-intensive public services is virtually certain to cost jobs; and that the accounting treatment of securitization needs to incorporate a realistic calculation of the movements in effective debt. Finally the article recommends that the value for money of any proposed public sector securitization should be independently checked by comparing its total cost of capital with the returns on its proposed uses.     

Substance, Form and PFI Contracts

The Private Finance Initiative (PFI) was launched by the United Kingdom Government in 1992 in order to encourage the private sector in the UK to become more involved in public sector development projects. A key theme of the initiative was that the public should receive 'value for money'. This article investigates the accounting issue as to whether or not the private or the public sector should record any property related to PFI projects on balance sheet. It argues that although both HM Treasury and the Accounting Standards Board (ASB) might agree on the accounting principles, the practical impact is that in order for related properties to stay off the public sector's balance sheet, substantial risk needs to be transferred to the private sector. As a consequence of this, the objective of providing value for money to the public may not be achieved.     

A Private-Sector Perspective

The Public-Private Partnership model is best placed as a means for delivering public infrastructure for government. However, the private sector needs to consider some issues if it is to encourage governments to use this model effectively. Specifically, for the public-private partnership model to be sustained and accepted by governments, the private sector needs to explain its benefits in a way that wins the trust of the community.     

CAPITAL ACCOUNTING, USER NEEDS AND THE FOUNDATIONS OF A CONCEPTUAL FRAMEWORK FOR PUBLIC SECTOR FINANCIAL REPORTING

This paper analyses the need for an adequate conceptual framework for financial reporting, particularly in the public sector, and examines several factors which may have worked against progress in the UK in developing such a conceptual framework in the past. The paper then analyses in detail the needs of potential users for capital accounting information in public sector financial reports, and the relevance of accruals accounting and different measurement bases in this context. Given the large amount of existing work outside the UK on the development of conceptual frameworks for financial reporting, the paper argues the need not for a new framework, but rather for a more focused analysis of several key conceptual issues that are relevant to meeting user needs.     

Institutionalising multiple accountability logics in public services: Insights from Australia

This paper reports on a field study of how a range of inter-institutional and inter-organisational forces shape the evolving rhetoric and practice of multiple accountabilities in public services. Drawing on the institutional logics perspective, we carried out a qualitative field study in the Australian Commonwealth Public Service involving semi-structured interviews, two focus group discussions, and the examination of internal accounting, management reports, and government archival records. The findings suggest that emphasis on conventional instrumental mechanisms and reporting tools, such as budgeting and accrual-based reporting, support managerial (instrumental) accountability through compliance logics. We conclude that an emphasis on public (relational) accountability through public dialogue is central to the public sector accountability debate, and that more attention needs to be paid to the question of how to balance the dual logics (instrumental and relational) in public services. The findings provide practical insights for public sector managers, policymakers and governments responsible for designing and implementing reforms, accounting tools, and accountability practices.     

英国职业养老金发展动态及启示

本文介绍了英国职业养老金的基本情况。在老龄化等影响下,英国公共部门和私有部门职业养老金分别出现了严重危机。近年英国政府全面加强了职业养老金改革,包括实施养老金个人账户制,调整公共部门养老金政策,提出加强工作养老金的设想等。这些政策的核心是如何设计一种更有效率,但同时保障了人们养老需求的市场化私有养老金模式。英国职业养老金的发展的经验教训,对我国完善养老金制度有积极启示意义。     

Defining the Reporting Entity in the Not‐for‐profit Public Sector: Implementation Issues Associated with the Control Test

This paper reports the main findings of a research project carried out on behalf of the Australian Accounting Standards Board (AASB) and the New Zealand Financial Reporting Standards Board. The purpose of the research is to inform standard setters about implementation issues that had been encountered in the not‐for‐profit (NFP) public sector when applying the control concept in AASB 127, Consolidated and Separate Financial Statements. The intention is to use the findings to inform proposed implementation guidance for AASB 10, Consolidated Financial Statements. Data were collected via a literature review and meetings with various NFP public sector constituents. Identified issues were either conceptual in nature (for example, who are the relevant users of NFP public sector general purpose financial statements and what are their needs?) or related to implementation concerns (for example, is the power exerted by one NFP public sector entity over another of an ‘ownership’ or a ‘regulatory’ form?). The findings give rise to several suggested actions that standard setters could take in providing useful guidance to NFP public sector constituents.     

The Transformation of an Accounting System During Organisational Change: A Longitudinal Study

Accounting can both shape and be shaped by organisational reality (Nahapiet, 1988). This paper focuses on the shaping of an ABC (activity based costing) system in a public sector authority during a period of rapid change from 1993 to 1998. The reasons why management invested substantially in such a system are outlined, and are compared and contrasted with the views of the employees. Over time the ABC system became locked in as the transfer pricing system to meet the needs of a new style of business unit accountability where quasi–profit centres were set up within a public sector authority. A new CEO eliminated the profit–centre concept and returned to budgetary control as the primary form of financial accountability. At this stage ABC became side–lined but was still useful for strategic decisions relating to out–sourcing and improving lines of business, more in line with its initial objectives. Finally, the paper explores why ABC ceased to exist. It is a rare case of a longitudinal study of an accounting technology in a public sector organisation and provides insights into the moulding of accounting by organisational change.     

THE RELATIVE EFFICIENCY OF PRIVATE AND PUBLIC SCHOOLS IN DEVELOPING COUNTRIES

Aside from revenue mobilization, one of the arguments for allowingthe private sector to assume a larger role in the provisionof education is that it would increase efficiency, as administratorsbecome more responsive to the needs of students and their parents.But what is the evidence? Based on case studies that compareprivate and public secondary education in Colombia, the DominicanRepublic, the Philippines, Tanzania, and Thailand, private schoolstudents generally outperform public school students on standardizedmath and language tests. This finding holds even after holdingconstant for the fact that, on average, private school studentsin these countries come from more advantaged backgrounds thantheir public. school counterparts. In addition, preliminaryevidence shows that the unit costs of private schools are lowerthan those of public schools. Although these results cannot,in themselves, be used as arguments for massive privatization,they indicate that governments should reconsider policies thatrestrain private sector participation in education. Furtherresearch is needed to determine whether some teaching and administrativepractices in private schools are applicable to public schools.      

An investigation of the relationships among consumer satisfaction,loyalty, and market share in Kuwaiti loan services

This study investigates the relationships among customer satisfaction, customer loyalty, and market share in nearly 700 users of Kuwaiti bank loan services. The authors show that the expected positive relationships of satisfaction with market share and of satisfaction with loyalty are not supported in this sector of the banking industry. As expected, however, customer loyalty is shown to be related to market share. It appears that, within this product market, loyalty is not derived from customer satisfaction, but rather is based on other factors such as, for example, price, special deals, or bank–customer relationships. Therefore, market share in Kuwaiti loan services is dependent on banks creating and maintaining a large and loyal customer base.     

Technologies of government in public sector's networks: In search of cooperation through management control innovations

In recent years, the public sector has been the subject of a thorough reassessment in a significant number of countries. During this process of modernization, issues such as inter-organizational collaboration and managerial innovation have been progressively placed at the forefront of practice and research. In particular, a number of countries have recently re-organized their public sectors around more or less formalized networks or hybrid inter-organizational forms, which are often led by a regulatory body and governed by a cooperation agreement. The literature on inter-organizational relationships in the public sector has evolved alongside the development of such cooperation agreements and innovative forms of organizing. Nevertheless, despite the fact that networks formed by public organizations, not-for-profit organizations, and private firms provide important services to their relevant communities, limited attention has been dedicated to studying the role of management control practices within inter-organizational relationships in public organizations. This is an important gap in the existing literature that this Special Issue intends to address. For this reason, and most importantly because public sector forms of inter-organizational collaborations are likely to differ significantly from those observed in the private sector, in the first part of this Editorial we draw attention to some of the themes that characterize the management and control of inter-organizational relations in the domain of public administration. Next, we introduce the six papers which comprise this Special Issue, and we briefly illustrate how each of them enhances our understanding of the role of control systems within public sector networks. Building on the empirical evidence and theoretical arguments offered by these studies, and after a brief review on the possible alternative ways of conceptualizing the process of adopting new management practices, we point to the further research that needs to be done if we are to understand the role that management control practices play in public sector networks. In particular, we suggest that there is a need to look inside management control practices, to explore what these practices are and, how and why they enable the cooperative “ideal” to become real, as well as to stimulate or hinder opportunities for public sector managerial innovation. It is concluded that there are a number of issues yet to be explored if we are to deepen our understanding of the formal and informal mechanisms of control which are the active elements of the so-called “regulatory hybrids” in the public sector.     

THE DEVELOPMENT OF CONCEPTUAL FRAMEWORKS OF ACCOUNTING FOR THE PUBLIC SECTOR

This paper offers a review of the conceptual framework projects that have been done by, or on behalf of, accounting standard-setting bodies, and that have concerned themselves with public sector accounting. Developments since 1966 in North America are the primary focus, although the UK and New Zealand are also explicitly addressed. The major theme identified is the ubiquity of the user/user needs approach, despite the continuing lack of evidence about user needs. The paper tries to explain this and concludes that standard-setting bodies have used these conceptual frameworks to establish their own legitimacy, by appealing to the public interest.