Reference no: EM132669699
The desire to make the public sector more efficient (Osborne and Gaebler, 1993) led to a shift from the traditional accountability paradigm of progressive public administration (PPA) towards the New Public Management (NPM), the basis of which lay in reversing two cardinal doctrines of PPA (Hood, 1995). First, it was aimed at lessening or removing differences between the public and private sectors and second, shifting the emphasis from process accountability towards a performance (results) accountability (ibid., p. 94), requiring a change in the orientation of public sector administration "from a focus on the control of inputs to the pursuits of outputs" (Guthrie and Parker, 1998, p. 55), and "accounting systems oriented towards output performance measurement" (ibid., p. 56), with the focus on the bottom-line (Chua and Sinclair, 1994; Hood, 1995). The notion of public accountability has thus not only been fundamentally altered, but the exclusion of AAS16 Financial Reporting by Segments and AAS22 Related Party Disclosures from application in the public sector, has significantly eroded public accountability.
- As privatization gathered momentum nation wide, with Victoria leading the way (requiring local governments to have 50% of operating expenditure subject to tendering process by June 1997), the treasuries or premiers' departments of several States have been unable to say exactly how much outsourcing was going on, because they did not have a centralized database (Jay, 1997). Several of the major accounting firms have been active in outsourcing advice, providing several types of consulting services. For example, Deloitte was the author of the comprehensive (and bulky) Victorian guidelines for outsourcing and contracting out, issued in 1995 (ibid.). Coopers & Lybrand was apparently another consultant (ibid.). The nature of consulting service provided to local government councils, inter alia, by Coopers & Lybrand Consultants as described by a director, included "sitting down and thinking" on what the councils wanted and the quality of service, which led to "a big improvement" in the delivery of services (ibid.).
Answer the following questions based on the above article:
Problem 1: Write report to AG explaining how, PPP help the government to contribute the growth for the economy.
Problem 2: Explain how public sector shift from the traditional accountability paradigm towards the new public management paradigm, resulting largely from the government's privatization program, necessitated the commercialization of public sector accounting.