Management Accounting for Public Administration
| Published date | 01 June 1954 |
| Date | 01 June 1954 |
| DOI | http://doi.org/10.1111/j.1467-9299.1954.tb01306.x |
| Author | Lawrence W. Robson |
Management Accounting
for
Public
Adrnin
istra
t
ion
By
LAWKENCE
W.
ROBSON,
F.C.A.,
F.C.W.A.
A
lecrure delivered to the
Institute
of
Public
Adniinistration
on
7th
December,
1953,
in
the
series
‘‘
Current Questions in
Public
Finance.”
Introduction
IT
gives me great pleasurc to discuss the place of management accounting
in the field of public administration, because
I
hold the firm belief that
management accounting has an important contribution to make to the economic
well-being of this country, including that large slice comprised in those
activities defincd as public services.
The accountability of public bodies is assuming an ever-increasing
importance with the growth in size and scope of these bodies, and
it
is being
increasingly accepted that accountability means something more than the
containment of expenditure within the bounds of voted funds.
It
calls
for proof of the production of satisfactory scrviccs at the lowest cost.
It
secms to me that there is bound to be
a
growing impetus to the swing
away from the earlier conception of sanctioned funds and yearly estimates
based on previous years plus a little something
for
increased wages and
material costs. The need is for a sharper tool of control in the form
of
operating
budgets, and standards developed on similar lines to those used in industrial
and commercial concerns to cnsure effective management of public bodies.
My intention is firstly to outline briefly the general conception
of
manage-
ment accounting and then to consider its applications in the public services.
Management Accounting
in
General
Terms
Much has been said and written about management accounting in recent
years
so
that
it
is probable that most people have at least a fair idexof what
it
is all about. But it is probably worth while at this time to restate thc guiding
principles for consideration in the context of our subject.
Management accounting may be described as a comprehensive scheme
for
reporting on all the activities of a concern in line with certain established
budgets and standards to provide effective information at frequent and regular
intervals for all levels of managcrial and policy-making responsibility.
the core of management accounting clearly lies in a sound scheme
of
budgetary
control developing into a complete
or
partial sct of standard costs.
The main steps involvcd in setting
up
such a scheme may be stated
briefly as follows
:
Although other techniques are comprised within the general definition,
.
(a)
Setting
budgets and standards
(i) Decide on the sections
of
an undcrtaking to be treated as centres
172
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