Activity-based
costing (ABC, for short) is a
budget tool which tells elected officials, citizens, and workers each
department's finite services performed, as well as the unit cost
to produce the goods.
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Providing
needed government services utilizing competitive forces and
bidding for work. Both public and qualified private entities compete. Efficient government departments even compete for
other government districts' comparable work.
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CitiStat
regular department review, using computer mapping software and a
"control room" used as an accountability tool and to create
focus. This includes benchmarking current conditions and the state
of progress in the delivery of services. It has saved millions in
its founding City of Baltimore, Maryland.
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Citizens
of the government district become the new "armchair
CEO's." An ABC format of the district's budget will
display actual service costs and ongoing expenditures to
them online.
Add
to that capabilities of near real-time updating as costs are
incurred/ services delivered.
In addition, benchmarking of services (a detailed report card) provides
all parties with updated progress monitoring, relating how
good a job a district is doing and where it wants to be at a
future date is displayed internally to government and
externally to the public. No more guarded information, of
which only insiders have access (aside from legal limitations
such as personnel files, etc.).
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True
cost comparisons can be derived when similar neighboring government
entities compete.
As an example, such district competition might be between two contiguous counties or
nearby school
districts.
Government officials will learn new efficiency techniques from
friendly comparisons and this new dynamic: "external competition."
Each will inevitably strive to be the best.
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