How Should Public Administrators of the Future be Introduced to “Accounting”?

By: Wendy M. Payne, CGFM, CPA

Wendy M. Payne, CGFM, CPA, a member of AGA’s Washington, D.C. Chapter, is the executive director of the Federal Accounting Standards Advisory Board (FASAB).

Opinions expressed here are those of Ms. Payne and do not represent the views of the Board.

Much has been made about the future of accounting education and particularly the availability of courses on government accounting; but what of our customers’ education needs? As John Radford, Oregon’s state controller, noted in his April 4 blog on commitment to performance-based management:

It almost appears as though the cost of providing real activity-based cost accounting or performance-based management systems based on cost accounting standards, and the perceived interference with political decision-making that such standards could ignite, are still with us. In a world where resources are allocated based on perception, group think, the latest crisis and political relationships, I have to wonder about the efficacy of pursuing the development and implementation of cost accounting systems to support performance based management. One has to question if that will ever happen beyond experimentation and a few isolated examples of success. I have a colleague on my team who is fond of saying, “you can bring a person to knowledge, but you can't make them think.”

As accountants, we are providers of information who need to know how people think about issues in order to meet their needs. Our customers should include program managers, agency executives, political decision-makers, and ultimately, citizens. One must wonder if our customers have the right tools to ask the right questions. If not, do they understand the questions that accounting—and their accountants—can answer? Until we can align our answers with at least some of the questions that customers ask, this great experiment will at best remain on the fringes.

There are many ways to approach the challenge of communicating with our customers. Educating the customers we have and preparing the customers we are likely to have in the future. The Citizen-Centric Reporting effort is one example of how AGA is striving to reach the citizen customer base. (And through the citizen, one may expect to reach the political customer base; but I’ll leave that arena for a future blogger!)

Recently, I decided to focus on the program managers of the future. There are increasing numbers of programs in public administration. In the metropolitan Washington, D.C. area alone, there are more than half a dozen MPA or MPP programs (more if one includes executive MPA and certificate programs). Currently, I am an adjunct faculty member with such a program.

The course I teach was designed by a former member of the Federal Accounting Standards Advisory Board, Phil Calder. When he retired from teaching, I benefited greatly from his vision for the course. The course he designed is intended to introduce future administrators to accounting, including cost accounting, internal controls—including the incentives and behavior implications inherent in them—analytical techniques such as present value, pricing models, performance measurement and strategic planning. As you can imagine, the course material is not centered on double-entry book keeping. Instead, a text built around case studies is used and the classroom discussion addresses the behavioral influences—human and political—at play.

I hope the course is consistent with the goal of producing evidence based policy makes, analysts and managers espoused by the University of Oregon:

A central focus of the Master of Public Administration (MPA) program is to prepare students to become evidence based policy makers, analysts, and managers. Evidence-based policy-making is based on the idea that the formulation of policy and its implementation should be based on evidence of effectiveness.

I hope that MPA programs throughout the country can integrate financial and cost accounting, internal control, strategic planning and performance reporting for their students. Of course, a single course can not accomplish what needs to be done. I wonder what you think belongs in the critical knowledge base for future public administrators. What would you include in a course for future leaders in your government? Can greater knowledge in those areas overcome the barriers to evidence based policy-making? On a smaller scale, can greater knowledge lead to better day to day operations as program managers implement policies?

TOMORROW: Craig Hall, chief financial officer for the Massachusetts Developmental Disabilities Council, talks about his agency's Citizen-Centric Reporting effort.

Questions on posting comments? Find instructions here. Want to be our guest on the Blog? Contact Marie Force, AGA communications director, at mforce@cox.net.