Author:

Keywords:

Local governments, Results oriented financial management

Abstract:

On the 25th of June 2010, the Flemish government approved the order regarding the implementa-tion of the Policy and Management Cycle (PMC) in Flemish municipalities, Public Centres for Social Welfare (PCSW) and provinces. The order contains the stipulations with respect to the set-up of the multi-year planning, the budget and the accounting systems of these organizations. Different phases of both the policy and management cycle and the underlying financial cycle are seriously altered. By means of the enactment of the PMC order, the Flemish government aims at moving results-oriented planning and management sharply up local governments’ agendas. As such, an attempt is made to join in with an international trend that can be labelled as New Public Financial Management (Guthrie et al. 1999). The key to a successful information-supplying and decision supporting policy and management cycle, is an adequate integration of financial and non-financial information. In an attempt to find out if the implementation of the policy and management cycle actually leads to this blending of both types of information, this research will especially focus on the two first phases of the financial cycle, namely the ex ante (the budget) and the ex nunc (accounting) phases. Ideally, these correspond and are integrated with the first two phases of the policy and management cycle, which are the policy planning and policy monitoring phases. This research will gather data through a document analysis, case studies and a survey to enable a clarifying picture regarding the (un)successful introduction of results-oriented financial management in local governments. Whether Flemish local governments have actually integrated financial and non-financial information is an important question. Ultimately, the methods used should enable testing the influence of micro- and meso-variables on the implementation of results oriented financial management. More specifically, hypotheses will be derived from the conceptual model developed by ter Bogt and van Helden (2000) that combines three theoretical approaches, namely (1) the old institutionalist approach as described in Burns & Scapens (2000), (2) the ‘Seven C’s’ model of Shields & Young (1989) and (3) the ‘behavioural theory of the firm’ developed by Cyert & March (1963). The operationalization and refinements made in earlier research concerning Flemish local governments (Weets, 2012) will inform testing these hypotheses.