This thesis provides an empirical understanding of how management accounting and control systems (MACSs) are designed and implemented in the context of public sector reforms in a developing country by using a case study of the Department of Finance (DoF) in Papua New Guinea (PNG). The DoF is one of the largest and most powerful central agencies in the PNG public sector. Over the years, it has undergone a number of structural reforms under the influence of external parties—mainly international aid agencies. During these periods, the DoF has adopted a significant number of private sector style MACS tools under the influence of the international financial institutions of the World Bank and the International Monetary Fund (IMF),and supported by the Asian Development Bank (ADB) and the Australian Agency for International Development (AusAID). The DoF case study attempts to obtain an in-depth understanding of the private sector style MACS that have been designed and implemented in the DoF since the new public management (NPM) public sector reforms began in 1995. The period 1995–2006 is the focus of the study; two significant pieces of legislation stood as foundation pillars and triggered the public sector reforms in PNG. The first trigger was the enactment of the new Organic Law on Provincial and Local level Governments (OLPLLG). The introduction of this legislation introduced the first private sector style management control systems tools such as good governance, accountability, transparency, an enhanced service delivery mechanism and the private sector culture of good organisational performances in the DoF. Accountability is a cornerstone of good public governance and management because it requires those who hold and exercise public authority to be held accountable under the OLPLLGs and the Public Finances (Management) Act (PFMA). Although accountability regimes vary in important respects under these legislations, they collectively encompass the process in which customers or citizens hold their managers and public servants in the DoF accountable for their behaviours and performances in the design and implementation of private sector style MACS in the DoF. It should be noted that an old Organic Law existed that embodied traditional public sector management that was not focused on transparency and accountability. Empirical evidence suggests that the old OLPLLG was considered a foreign piece of legislation that was a replication of the Commonwealth of Australia and its federated states and local government councils. The old Organic Law embedded characteristics of a weak financial management and governance regime due to an incapacitated public sector. The new Organic Law was considered a significant piece of legislation that was meant to overcome the inherent difficulties of the former law and its associated management control systems (MCSs) with the introduction of a private sector culture of good financial management practices and work ethics. The second trigger that led to public sector reforms in PNG was the amendment to the PFMA of 1996. The financial management reforms that culminated from the amendments to the PFMA are considered significant pillars of the public sector reforms in PNG. As the administering agency of the PFMA, the role and overarching influence of the DoF has triggered consequences for the entire government under these financial management reforms. The amendment to the PFMA also warranted NPM style public sector management and led to the adoption of a significant number of private sector style MACS in its design and implementation of these techniques in the DoF. Many of these MACS were directly influenced by external aid agencies in their actual design and implementation. However, this study has an exploratory nature, with a specific focus on successes and failures in the design and implementation of MACS tools. Where failures have been encountered, the study attempts to uncover the difficulties encountered in implementing these MACS tools in their daily practices and it provides a road map regarding how the MACS tools were modified to suit their local environment as a means of overcoming these inherent difficulties. The qualitative methodological paradigm has been adopted through a subjective and interpretative case study of the DoF. In qualitative case study research, multiple sources of data have been used to explore the context of the case study, such as archival records, interviews, and direct observations. The study took a total of five months from 1st June 2011 to 31st July 2011 and from 1 November 2011 to 28 February 2012. Historical government documents relating to the public sector reforms from 1995-2006 were collected and analyzed. Semi structured interviews entailed 40 in-depth interviews at various levels of management in the DoF were conducted as an appropriate method to inherently capture human interactions. Direct observations were also used to explore the behaviours of managers in the DoF and the interpretive schemes used to communicate and understand each other in their daily routine practices in the DoF. The data collected suggest that external influences have brought to bear the difficulties encountered in the design and implementation of MACS in the DoF. This study therefore reinforces the findings of researchers in other developing countries, who have claimed that where external influences are exerted on organisations, MACS have limited success or have failed in these organisations.
|Date of Award||2014|
|Supervisor||Monir Mir (Supervisor) & Chris Sadleir (Supervisor)|