Using management control to understand public sector corporate governance changes

Laurence Ferry and Thomas Ahrens

Journal of Accounting & Organizational Change, 2017, vol. 13, issue 4, 548-567

Abstract: Purpose - Within the context of recent post-localism developments in the English local government, this paper aims to show, first, how management controls have become more enabling in response to changes in rules of public sector corporate governance and, secondly, how changes in management control systems gave rise to new corporate governance practices. Design/methodology/approach - Theoretically, the paper mobilises the concept of enabling control to reflect on contemporary changes in public sector corporate governance. It draws on the International Federation of Accountants’ (IFAC) and Chartered Institute of Public Finance and Accountancy’s (CIPFA) new public sector governance and management control system model and data gathered from a longitudinal qualitative field study of a local authority in North East England. The field study used interviews, observation and documentation review. Findings - This paper suggests specific ways in which the decentralisation of policymaking and performance measurement in a local authority (present case) gave rise to enabling corporate governance and how corporate governance and management control practices went some way to aid in the pursuit of the public interest. In particular, it shows that the management control system can be designed at the operational level to be enabling. The significance of global transparency for supporting corporate governance practices around public interest is observed. This paper reaffirms that accountability is but one element of public sector corporate governance. Rather, public sector corporate governance also pursues integrity, openness, defining outcomes, determining interventions, leadership and capacity and risk and performance management. Practical implications - Insights into uses of such enabling practices in public sector corporate governance are relevant for many countries in which public sector funding has been cut, especially since the 2007/2008 global financial crisis. Originality/value - This paper introduces the concept of enabling control into the public sector corporate governance and control debate by fleshing out the categories of public sector corporate governance and management control suggested recently by IFAC and CIPFA drawing on observed practices of a local government entity.

Keywords: Management control systems; Localism; Austerity; Local government; Enabling control; Public sector corporate governance (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaocpp:jaoc-12-2016-0092

DOI: 10.1108/JAOC-12-2016-0092

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