ABSTRACT
This chapter presents the intrinsic value of cost accounting in calculating comparable efficiency measures for the management tool of benchmarking and for the paradigm shift from performance measurement to management in public organizations. It presents information on why local governments participate in the benchmarking consortium and includes two case studies on how efficiency measures have been used to advance performance management within the service areas of residential refuse collection and fleet services. There are three types of benchmarking approaches in the public sector, including corporate-style benchmarking, targets as benchmarks, and comparison of performance statistics as benchmarks. While there are numerous benefits to cost accounting as described in this text, there also are several challenges to implementing and managing cost accounting systems over time. The chapter concludes with several observations on the challenges of implementing and managing cost accounting systems for the calculation of efficiency measures and on the future of benchmarking both from a theoretical and practical perspective.
