The Use of Management Accounting Information to Support Contracting out Decision-Making in the Public Sector


The mainstream service provision in the government sector has always been known to embrace the concept of efficiency with the focus on constantly improving the quality and effectiveness of the services. The significant emphasis is to cut down on the cost of the services but at the same time maintain the quality. The expectations amount to a setting in which there is the consideration of whether the due services could be provided through outsourcing as the basis for supplementing the standard government operation charters. The objective of the article is to determine the capacity of use of accounting information by the public sector managers in the quest to make the decision whether the services due to be rendered should be outsourced or not (Sciulli, 2004). In the cultural institution setup, all the factors of ethnic balance must be considered to ascertain that the due regional balance expectations are realized.

The case study under consideration for determination of the trends is contracting of the Museum of Victoria and State Library. The avoidable cost focus was the standard of reference in the determining the level of estimated savings when the basic services expected to be dispensed with are contracted out. The verification of the trends was done by accountants from outside to identify the sought consistency. The findings featured the identification of such factors as the dollar-driven cost savings as the key cause of the decision to outsource the services. There was also the determination that the quality and image factors had a significant role to play in influencing the outsourcing decisions. The findings allude to the ongoing practice of outsourcing of the government services. The primary intention identified is the desire to have the quality of the output improved to heighten the likelihood that the designated goals would be realized.

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The Problem

The problem is clearly stated as the possibility of using accounting information by managers in the public sectors to make the decision on whether the contracting of the standard services would be needed. The problem is practically important in light of the possibility that it points out the foundation of the basic operations in the public sector. It also ensures that service charters reflect the expectations of efficiency. The purpose of the study is to stage an investigation to establish if and how the managers in the public sector use accounting information to determine whether or not particular services need to be contracted (Van Dooren, Bouckaert, & Halligan, 2016). The hypothesis of the study is the concern shown by the recipients of the services on whether the provisions are from the state directly or through an outside contractor. There is no definition of key terms, but all the essential components and study intentions are adequately described.

Review of Literature

All the sources cited are pertinent to the study and reflect the relationship between the quality of performance in the services in the public sector and whether they are outsourced or structured internally. From the account given by the sources, there is the identification of the importance of quality of services as the standard reason for which a consideration is embraced to improve the provision of the basic service functionalities. The review is broad as a result of the inclusion of sufficient sources that reflect the likelihood that the context of the problem has been sufficiently assessed so that the theoretical underpinnings are determinable (Sciulli, 2004). The study having been conducted in 2004, the references used are recent, an implication that the context of their use is befitting the identified problem in the population setting. There is no evidence of bias as the participants in the study were randomly selected from institutions in which the investigation was purposed to be conducted.

Design and Procedures

The research methodology chosen for the study was case-based to potentially determine the exhibited trends in the decision made about contacting in the business setting in the public sector. The study is not a replica, but an original layout looking to collect data and make recommendations on the basis of the trends that have been identified. The primary measurement tool used was interviews owing to its suitability for generating direct data that could be used in determining the perceived value of performance in the pre-determined sector by engaging the respondents directly. The procedures were structured in a way to obtain consistent and viable results from which the recommendations made would be considered dependable (Sciulli, 2004). Both fieldwork and study reviews were used in the collection of the intended data. There is no evidence of a pilot study being conducted, instead, a justification of the need for the research was done and the preliminary plan made to roll out the significant elements. The independent variables in the study are tasks and services that are to be considered for either being handled directly by the government charters or being outsourced. The dependent variable is the nature in which the layout of the work is to be overseen; whether subcontracted based on the internal decisions made by the management. The sampling was random.

Data Analysis and Presentation

The methods used in analyzing data featured pattern matching discourse analysis, concept formation, and narratives. The data type is qualitative, the reason for the need to use methods of analysis that are descriptive in nature with the result that the essential components and trends in the research would be determinable. The methods of analysis have been used interchangeably in an effort to ascertain that all the essential components of the research have been included when the final recommendation is done (Sciulli, 2004). The findings are in support of the hypothesis and purpose. Accounting services were identified to be relied on in the making the decision to outsource some of the standard government services. There is no highlight of any weaknesses that could have potentially undermined the authenticity of the study.

Conclusions and Implications

The conclusions of the study directly relate to the original purpose. The initial focus on how accounting methods are used in making the decision about outsourcing relates to the findings in which all the factors that are taken into account to make the decision have been reviewed. The implications have been discussed to reflect on the quality and efficiency of the government services relative to the decision that has been made whether to stage them internally within the government systems or to outsource the services. The results and conclusion will dominantly affect the managers and human resources in the institutions targeted as a result of the need to modify the standard approach to embrace the use of accounting to attain consistency (Rossi, Cohen, Caperchione, & Brusca, 2016). The recommendation at the conclusion was the need to embrace the use of accounting in making outsourcing decisions to ascertain that the quality and efficiency with which work is done would be improved.

Overall Assessment

The overall assessment of the study is an evaluation that has been successful in detailing all the essential components of research to identify an underlying problem. The study has been successful in elucidating the importance of consistency in decision-making in regards to service delivery. It has been apparent that several other considerations are explored when project managers and human resources in organizations in the public sector are making the decision to outsource services. Accounting is essential in determining the associated cost of transactions and transitions when services are contracted out. The impact of avoidable costs must also be considered when making the decision. The article is sufficient for highlighting the role of self-perception and how it results in a bias when the decision is made to contract services based on the same. Therefore, accounting accords the numerical evidence of the value that would be realized from either contracting the services or overseeing them internally.