The quest for users’ needs in public sector budgeting and reporting

PurposeNumerous of today's public sector organisations (PSOs) can be characterised as hybrids. Hybridity is caused by different (at times conflicting) demands that stem from the institutional environment, which is likely to affect performance measurement in these organisations. This paper focuses on the relationship between hybridity and organisational performance, which has so far not been studied in detail.Design/methodology/approachBased on a literature review (final sample of 56 articles), the authors systematise performance dimensions alongside the pillars “economy”, “efficiency”, “effectiveness” and “(social) equity”. The article summarises results in a framework for measuring performance in hybrid PSOs. The authors outline strategies as to how public managers can tailor frameworks to the requirements and idiosyncrasies of organisations.FindingsSince hybrid PSOs combine logics from different administrative models (Weberian bureaucracy, market-capitalism and democracy), so need their organisational performance measurement systems. Potential synergies from and frictions between the different performance dimensions related to the four pillars are discussed.Originality/valueThis is the first literature review on performance dimensions and their application in hybrid PSOs. The distilled “hybrid performance measurement framework” can be scrutinised and further refined in future research.

Section: Resultsmentioning

confidence: 99%

“A little bit of everything?” Conceptualising performance measurement in hybrid public sector organisations through a literature review

Waele

Polzer

Witteloostuijn

et al. 2021

“…This may however lead to effort being expended in audits instead of in core operations (Olson et al, 2001). Further, it seems that not only the managers but also the key stakeholders can see the functionality and meanings in accounting communication, even if other users such as the general public do not (Ahrens and Chapman, 2007;Haustein et al, 2019;Stenka and Jaworska, 2019;van Helden and Reichard, 2019). The perceptions of performance and reputation come from many sources, so consistent (voluntary) financial reporting practices, such as disclosure of additional information (in financial statement notes) about the potential and the risks related to the key intangible assets of the organization might be helpful.…”

Section: Discussionmentioning

confidence: 99%

“…Nevertheless, the accounting treatment of such intangible assets is not at all straight forward (Lev, 2019). The accounting treatment difficulties are highlighted in the public sector where profit is not available as a measure of performance, and where excellence in customer experience is not necessarily the only ideal, but there can be considerations of equality and public interest (see Canel and Luoma-aho, 2019; Haustein et al , 2019; Luoma-aho, 2007; van Helden and Reichard, 2019; Wæraas and Byrkjeflot, 2012). An increased disclosure of intangible assets as such does not change the organization or its processes, but from the financial accounting perspective, the financial statements do not necessarily communicate the true and fair view (see Hines, 1988; Lev, 2019).…”

Section: Introductionmentioning

confidence: 99%

“…Financial reporting in the public sector is detailed but questions have been asked about who the (end-)users of public sector financial reports are, whether such users even exist, and if current financial information – or its quality – reflects organizational performance and is seen as relevant to stakeholders (e.g. Haustein et al , 2019; van Helden and Reichard, 2019). Prior research suggests that there are several stakeholders that can be potential users of public sector financial statements, including politicians, citizens and media (van Helden and Reichard, 2019).…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Reputation and financial reporting in Finnish public organizations

Rautiainen

Luoma‐aho

2021

PurposeThis article analyzes the links between financial reports and reputation in the context of Finnish public sector organizations. In general, the paper discusses the accounting treatment of intangible and tangible assets and the quality and relevance of public sector financial reporting.Design/methodology/approachFor data, we combine three data sets: financial statement information of eight anonymous Finnish public organizations, the results of a reputation survey among their key stakeholders (N = 914) and a sample of the social media sentiment around the organizations.FindingsOur findings suggest that a decrease in spending and, surprisingly in the nonprofit sector, an increase in the surplus, indicate better perceived financial performance. An increase in surplus is positively linked with the reputational factors, for example, trust. However, disclosing excessive amounts of information, for example, in financial reporting seems to contribute to negative discussions on social media.Practical implicationsWe highlight the importance of managing intangibles, including those not recognized in the balance sheet, such as reputation. We present three propositions with potential managerial relevance.Originality/valueDespite the considerable amount of financial information disclosed by public sector organizations, few studies have analyzed its relevance or connection to reputation. This first-of-a-kind paper combines intangible and tangible assets by analyzing how financial data and intangible reputation are linked in the public sector accounting context. Six reputational factors were discovered, and financial performance was found to correlate with trust in the public sector.

“…Configurations and reconfigurations of PFM systems PFM systems encompass a comprehensive set of diverse tools and techniques regarding budget preparation and execution, control, accounting, reporting, monitoring and evaluation (Haustein et al, 2019). The concrete configuration of PFM systems is a combination of these elements.…”

Section: Austria and The Pandemicmentioning

confidence: 99%

Reflections on the Austrian COVID-19 budgetary emergency measures and their potential to reconfigure the public financial management system

Seiwald

Polzer

2020

PurposeCrises constitute stress tests for public sectors, with public financial management (PFM) systems having to respond to emergency needs. In this study, the authors analyze (1) what elements of the Austrian PFM system have been affected by the COVID-19 pandemic and (2) what mechanisms have been applied to close identified gaps in the PFM system and to ensure alignment with budget principles. The authors then reflect on these PFM measures.Design/methodology/approachThe research departs from the pre-crisis configuration of the Austrian PFM system. Making use of a data triangulation strategy, the paper analyses draft laws and regulations with corresponding explanatory notes and impact assessments, transcripts from debates in the federal Parliament and articles and commentaries issued by various stakeholders.FindingsThe analysis of five areas relevant to the reconfiguration of the Austrian PFM system shows that the pandemic has caused an external shock, but at the same time, the current system has not been challenged in substance and has been utilized to react to the pandemic—resulting in (ad hoc) modifications. The system has proved robust and crisis responsive; however, in a reactive pattern, emerging ad hoc elements have been integrated, with a number of defensive mechanisms ensuring compliance with budget principles. In addition, in some areas, more proactive actions have been taken for closing system gaps (e.g. risk disclosure).Originality/valueThe authors evaluate the likelihood of (proposed, decided and implemented) emerging elements or revisions to a PFM system being embedded into the existing PFM system, alongside reflecting on results and necessary further adjustments.