The application of management accounting for achieving public sector outcomes-based performance management in Queensland - a case study

This research investigates the application of management accounting practices (MAP) for achieving public sector outcomes-based performance management (OBPM) in Queensland under its Managing for Outcomes (MFO) policy. It identifies specific principles that support a performance-based environment in which outcomes-based performance is measured and for which costs are determined. This research also investigates whether there is support for the proposed MAP and examines the extent to which MAP is adopted. The research approach provides a complementary view of what should be happening with that which is actually happening in relation to MAP in the agency selected for this research. An insider research approach was undertaken for this research, drawing on a process of reflexive awareness and careful judgement to reframe, as theoretical knowledge, the tacit knowledge that has become deeply segmented in the Queensland public sector. A mixedmethod approach was used to limit the risk of the insider researcher losing objectivity and to ensure the standards of academic rigour. The approach utilised a group of critical practitioners, in a co-operative style of reflective inquiry, to co-create knowledge in the development of the theoretical principles. Document analyses and a case study including interviews with participants from two work units operating within one Queensland Government agency were conducted for the purposes of gaining knowledge of the Queensland Government’s MFO policy, the intended-MAP and the MAP-in-use, in particular performance measurement and cost management. An independent interviewer was employed wherever possible with the aim to limit possible insider researcher bias during the interview process. Findings suggest a significant gap exists between what the objectives of the MFO policy is seeking to achieve and the operational level at which this policy operates. Consultations with the critical group of practitioners and evidence from an analysis of documentation provide support for the theoretical principles. However, evidence from the case study interviews indicates a limited application of these principles. The “performance story” of the agency lacks logical links between the services it delivers and the government outcomes to which it contributes. The use of measures is not uniform throughout the agency. The agency’s ability to assess the efficiency and effectiveness to which it delivers services is limited by the fact that it reports mainly output oriented cost information. Thus, any extolments that the agency has improved their cost of delivery are largely rhetoric rather than anything real based on sound costing information. With an apparent compliance focus by the agency, the implication of these findings is that the costing approach adopted is one that is more likely to be based on its needs to secure sufficient resource allocations through budgeting processes of the Government. Opportunities exist to examine the broader social, cultural and political contexts within which Queensland government agencies operate. The findings of this study suggest that the technical merits of the proposed MAP that should be adopted by the Queensland government agencies are not sufficient to motivate agencies to adopt them. Future research that gains a fuller understanding of this aspect seems to be a logical progression.