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This paper adds to literature on financial audit in public sector organizations. The authors examined the effect of adapting a private sector audit body—the Board of Statutory Auditors (BoSA)—for u...

Purpose The purpose of this paper is to examine how the convergence of private and public sector accounting standards is affecting conceptual and practical issues relating to heritage. More specifically, the paper is intended to provide a better understanding of the state of the art in national and international accounting standards on heritage assets, and of the views influencing such standards. Design/methodology/approach A qualitative documentary analysis is carried out to explore the variety of existing positions and views on heritage, ranging from the scholarly literature, through potential stakeholders and users, to international and national standard setters. Findings The analysis shows that the path of convergence between public and private sector standards and practices is still problematic. After more than two decades of debate around the nature, definition, measurement, and reporting of heritage, these issues are far from settled. Research limitations/implications In the light of calls for increased measurement and reporting of public sector “assets”, and specifically for the definition of standards to recognise heritage, the paper suggests the need to strongly reconsider whether the convergence between public and private sector standards is desirable, feasible and effective. As such, the risks of embracing simplified or hybrid forms of accounting and reporting for heritage should be more seriously assessed. While reporting on heritage is important, it is fundamental to keep it distinct from reporting on government’s regular operations, in order to appreciate its specific value, nature and features. Originality/value Looking at European national standards for heritage, the IPSASB’s proposals, and the reactions to the latter by relevant stakeholders, the paper provides a pluralistic view on the positions and experiences about heritage, contributing to the debate on the convergence between private and public sector accounting standards.

Il PNRR è un documento di alta visione e di allocazione di importanti risorse di investimento per il SSN che devono garantire valore entro 5 anni, per ottenere l'effettivo riconoscimento finanziario da parte della EU e giustificare l'aumento del debito per le generazioni future. La partita attuativa è, quindi, solo iniziata e durerà 5 anni: un tempo breve in cui occorre definire la progettazione esecutiva per ogni misura, costruire pianificazioni regionali, attuare le politiche nelle singole aziende sanitarie locali. Il successo non può allora considerarsi scontato, richiedendo grande coesione di intenti, da perseguirsi con un forte impegno finalizzato a creare convergenze e collaborazione istituzionale. Nell'ottica descritta, un gruppo di studiosi di economia, management e politiche sanitarie, appartenenti a sei università, ha ritenuto di confrontarsi sul tema, ed esperire il tentativo di trovare una convergenza di visioni sul futuro del SSN (e del suo ruolo nelle politiche economiche e sociali del Paese), da consegnare alla valutazione delle istituzioni e al dibattito scientifico. Questa spontanea iniziativa ha permesso di elaborare delle proposte attuative sulla governance e sul riparto del PNRR, sull'autonomia e i vincoli per le regioni e le loro aziende, sullo sviluppo dei fattori abilitanti e sulla progettazione organizzativa e operativa delle diverse missioni del PNRR.

PurposeThe paper aims to offer a viewpoint on how governmental budgeting needs to be reconsidered after the COVID-19 outbreak.Design/methodology/approachBuilding on extant research, and drawing on the Italian context, the paper provides reflections on four interrelated aspects: (1) how budgeting and reporting processes and formats are being modified; (2) how budgeting may enhance governments' financial resilience; (3) how citizens are involved in the budgeting cycles and (4) how emergency responses may produce opportunities for corruption.FindingsTo tackle COVID-19 related challenges, budgeting, rebudgeting, reporting processes and formats need to be reconsidered and supported by the development of new competencies. Governments will need to put stronger emphasis on the anticipatory and coping roles of budgeting to reduce public organizations' exposure to shocks and support governmental resilience. The involvement of citizens has proven critical to face the pandemic and will become increasingly relevant due to the financial impacts of COVID-19 on future public service provision. Greater attention to the risks of increased corruption is also needed.Originality/valueDrawing lessons from one of the countries most hit by COVID-19, the paper offers a viewpoint on a timely topic of international relevance by looking in an integrated way at interrelated topics such as budgeting, rebudgeting, reporting, financial resilience, coproduction and corruption.

Drawing on upper echelons theory, the article investigates the potential impact of top managers’ background and demographic characteristics and personality traits on organizational decisions in the public sector. The top-management figure being investigated is the municipal chief financial officer (CFO) and the specific organizational decision under analysis is the extent of revenue misrepresentation during both budget formulation and execution. The empirical setting is provided by the CFOs of Italian municipalities with populations above 15,000 over a 3-year period (2012–14). Financial data are drawn from existing databases. Non-financial data are collected through an online survey. The results show that top managers’ individual characteristics and traits do influence the extent of accounting manipulation. In particular, revenue misrepresentation was found to be smaller in the presence of female managers, managers with degrees in business administration, and managers describing themselves as “conscientious”. These effects on accounting manipulation were moderated by auditors’ and opposition councilors’ oversight, managers’ experience, and the presence of local elections. The article extends upper echelons theory and its applications in several directions: from the private to the public context, from CEOs to CFOs, from managerial decisions in general to accounting choices, and from background and demographic variables to personality traits.

The impact of diagnosis-related group (DRG)-based funding has been analyzed along a wide range of dimensions. Its effects on hospital specialization, however, have been investigated only sparsely. This paper examines such effects in the context of the Italian National Health Service, where decentralization has produced a significant degree of variation in funding arrangements. To this end, a 9-year panel data set covering 762 Italian public and private hospitals was analyzed using a finite mixture model approach. Hospital specialization was measured by the internal Herfindahl-Hirschman Index. Three variables were introduced as proxies for the choices made by Italian Regions with respect to the development and use of their DRG systems. The best finite mixture model identified three groups of hospitals, two of which sizeable. Of these, one included nearly all public hospitals, while the other was composed almost exclusively of small and medium-sized investor-owned hospitals. Averagely, private and smaller hospitals showed a stronger tendency to specialize over time. The positive impact of DRG funding on the hospitals' propensity to specialize found only limited empirical support. Moreover, it emerged as comparatively much smaller for public hospitals vis à vis private ones.

The policies pursued both at the international and national levels have brought to the fore the concept of governance decentralization of health-care systems. In Italy, in particular, with the approval of legislative decree n. 56/2000 on fiscal federalism and the amendments to Title V of the Constitution (Const. Law n. 3/2001), the Regions have obtained wider political, administrative, organizational and management competencies also in health care. At the international level, several studies have examined the issue of equity in a decentralized health-care system. In the Italian context, this also involves the provision of essential levels of health care (LEAs) across Regions. Equity is a constitutional principle, pursued by the central level and monitored through the set of indicators of the "LEA Grid" (Griglia LEA). Starting from the "LEA Grid" indicators, through a multidimensional analysis by principal components, the study analyzes the evolution of inter-regional equity in the provision of health care (prevention, hospital care, outpatient care) between 2001 and 2012, when the process of health-care decentralization became more established. In line with the international literature, this analysis shows a significant inter-regional heterogeneity. In particular, it highlights: 1) an interregional differentiation with respect to the principal components defined "vaccination coverage", "hospital care performance" and "outpatient care for the disabled"; 2) a persistent differentiation in "hospital care" between central-northern and southern regions; 3) a negative trend for the autonomous regions and provinces both in the provision of "hospital care" and "vaccination coverage". The results of the study, innovative for equity dimensions explored and data available, justify the central government’s intervention as guarantor of territorial equity with respect to the provision of health care.

Italian and American hospitals, in two different periods, have been urged by external circumstances to extensively redesign their quality improvement strategies. This paper, through the use of a survey administered to chief quality officers in both countries, aims to identify commonalities and differences between the two systems and to understand which approaches are effective in improving quality of care. In both countries chief quality officers report quality improvement has become a strategic priority, clinical governance approaches, and tools—such as disease-specific quality improvement projects and clinical pathways—are commonly used, and there is widespread awareness that clinical decision making must be supported by protocols and guidelines. Furthermore, the study clearly outlines the critical importance of adopting a system-wide approach to quality improvement. To this extent Italy seems lagging behind compared to US in fact: (i) responsibilities for different dimensions of quality are spread across different organizational units; (ii) quality improvement strategies do not typically involve administrative staff; and (iii) quality performance measures are not disseminated widely within the organization but are reported primarily to top management. On the other hand, in Italy chief quality officers perceive that the typical hospital organizational structure, which is based on clinical directories, allows better coordination between clinical specialties than in the United States. In both countries, the results of the study show that it is not the single methodology/model that makes the difference but how the different quality improvement strategies and tools interact to each other and how they are coherently embedded with the overall organizational strategy.

Accounting innovations, and especially the introduction of accruals accounting, are often portrayed as fundamental aspects of publicsector reforms. An increasing body of literature has been studying the experiences of different countries and levels of government, often referring to Lueder's (1992) "contingency model" and its subsequent developments. This model highlights a number of social, political, and administrative variables that are likely to affect government accounting innovations. It applies at a country-wide level and is mainly intended to describe and compare the environments within which accounting reforms take place, as well as the technical features of such reforms. Our paper, on the contrary, tries to expand the contingency model by applying it to individual organisations and by testing its explanatory power.

The introduction of accrual accounting in Italian Local Governments has been mandated in a way that permits, and in fact encourages, a merely formal compliance. Local Governments must produce accrual-based financial statements, but double-entry bookkeeping is not mandatory, nor may traditional budgetary accounting be abandoned. Why, then, should they bother to introduce an integrated system of budgetary and accrual accounting? In this paper, we empirically investigate the determinants of Local Government's choices of accounting innovation. According to our results, ‘rational’ elements such as complexity, types of activities performed, presence of surpluses, and access to capital markets are seemingly unhelpful in explaining why a Local Government decides to introduce accrual accounting. What counts are ‘institutional’ and cultural explanations, such as the perceptions of CFOs and the North-South divide.

Over the last decade, many countries have introduced accruals accounting at one or more levels of government, as a component of wider public-sector reforms (Hood, 1991 and 1995; Olson et al., 1998; and Lueder and Jones, 2003). In the literature, the introduction of accruals accounting has been the subject of significant debate. Supporters have emphasised its ability to better meet user needs and its consistency with the overall shift from ex-ante constraints to ex-post accountability. Critics have raised both theoretical and practical objections. At first sight, an appealing compromise would be for accruals accounting to coexist with traditional, cashor commitment-based budgetary accounting, letting governments reap the benefits of ‘both worlds’. This compromise is being increasingly discussed among academics, professionals and policy-makers, but empirical evidence is still scarce. This paper draws from the experience of Italian Local Governments (LGs) to empirically analyse the effects of such coexistence. The paper is organised into five further sections. The next section reviews the existing literature and specifies the research questions. The third section provides a short background on Italian LGs’ accounting system. The fourth section describes materials and methods. Results are presented in the fifth section. The final section draws some conclusions and discusses implications for policy makers and researchers.

The purpose of this paper is to analyse, in terms of presence, determinants and purposes, the misrepresentation of expected revenues during budget formulation and the misrepresentation of actual revenues during budget execution. To this end, we use six-year panel data from Italian municipalities with populations above 15,000. Our results suggest that overestimations of current revenues are more frequent than underestimations, during both budget formulation and budget execution. In terms of determinants, our results highlight the impact on revenue misrepresentation of both political orientation and fiscal stress. Finally, in terms of purposes, we show that revenue underestimation during budget formulation and revenue overestimation during budget execution may contribute to the formation of surpluses. The former, in particular, may allow mayors to create a ‘war chest’ in non-election years, which can then be used to increase net borrowing on the eve of elections.

In Italy, New Public Management (NPM)-inspired reforms have been mostly legislation-driven. For Italian Local Governments (LGs), one of the most significant reforms was the introduction, in 1995, of an “Executive Management Plan” (EMP). The EMP has been interpreted and applied by Italian LGs differently across space and over time. Some LGs have introduced it only formally. Others have interpreted it as a tool to define individual managers's spending authorizations. Only some have viewed it as a building block of a wider management control system. Over time, LGs have since been making continuous changes to their budgeting systems, without yet reaching a new steady state.

Reforms of the public health-care sector have emphasised the role of management accounting (MA). However, there is little systematic evidence on its use and benefits. To fill this gap, we propose a contingency-based model which addresses three related issues, that is, whether: (i) MA use is influenced by contextual variables and MA design; (ii) top-management satisfaction with MA mediates the relationship between MA design and MA use; and (iii) financial performance is influenced by MA use. A questionnaire was mailed out to all Italian public health-care organisations. Structural equation modelling was performed to validate the research hypotheses. The response rate was 49%. Our findings suggest that: (i) cost-containment strategies encourage more sophisticated MA designs; (ii) MA use is directly and indirectly influenced by contingency, organisational, and behavioural variables; (iii) a weakly significant positive relationship exists between MA use and financial performance. These findings are relevant from the viewpoint of both top managers and policymakers. The former must make sure that MA is not only technically advanced, but also properly understood and appreciated by users. The latter need to be aware that MA may improve performance in ways and along dimensions that may not fully translate into better financial results.

In the 1990s, the Italian National Health Service (INHS) experienced a major reform introducing regionalization, quasi-markets and managerialism. The combination of quasi-markets and regionalization has produced an interesting scenario: 21 Regional Governments designing their own organizational and funding models to achieve the desired combination of equity, efficiency, freedom of choice and cost containment. This paper reports the results of a research project carried out in 1998-99 to identify such models, verify their actual states of implementation and analyse the resulting incentives for individual health-care organizations. Overall, most Regions have designed their models according to the 'LHU-centred' template, under which most public hospitals remain under Local Health Unit (LHU) control, LHUs are funded by their Regions on a capitation basis and each LHU is expected to reimburse other LHUs, Independent INHS Hospitals (IHs) and accredited private providers for services supplied to its residents. Reimbursements are activity-based according to Regional fee schedules. The major exception is Lombardy, Italy's largest and wealthiest Region, which has formally opted for the 'purchaser-provider split' template, with LHUs acting mostly as purchasers while IHs and accredited private professionals and organizations act as providers. In practice, however, many Regions still show significant features of the traditional cost-reimbursement system.

The literature on budgeting in the public sector has traditionally focused on the annual budgetary process. Much less attention has been paid to rebudgeting—that is, what governments do to revise and update their budgets during the fiscal year. Because of its potentially large impact on appropriations, rebudgeting seemingly deserves more attention than it has been granted so far. This article uses data from a sample of Italian municipalities to test hypotheses on the main drivers of budget revisions. According to the results, rebudgeting is strongly affected by the degree of incrementalism in the initial budgeting process, as well as by several internal and external determinants, such as political variables, organizational features, financial conditions, and the local socioeconomic environment.

In the last decade the pace of innovation in medical technology has accelerated: hence the need to better identify and understand the real forces behind the adoption and diffusion of medical technology innovations in clinical practice. Among these forces, financial incentives may be expected to play a major role. The purpose of this paper was to assess the influence of financing mechanisms for new medical devices and correlated procedures on their diffusion. The analysis was carried out in the Italian inpatient cardiovascular area and applied to drug eluting stents over the period 2003-07. The paper's main hypothesis, that higher levels of reimbursement encourage technology diffusion, was rejected. So was the hypothesis that private hospitals may be more sensitive to tariff levels than public hospitals. A statistically significant difference was found only between hospitals that are funded on a Diagnosis-Related Groups (DRGs) basis and those that are not, with the former showing higher levels of technology diffusion. These results warn policy makers against excessive reliance on specific reimbursement fee changes as a way of steering provider behaviour.

In the last decade, the Italian National Health Service has been characterized by the introduction of managerial concepts and techniques, according to the New Public Management paradigm. Recently, these reforms have been increasingly criticized. This article examines the implementation of managerialism in an attempt to evaluate its overall achievements and shortcomings. Overall, managerialism seems to have made good progress: managerial skills are improving; several management tools have been adapted to health-care and public-sector peculiarities; health-care organizations have adopted a wide range of technical solutions to fit their specific needs. At the same time, managerial innovations have often focused on structures as opposed to processes, on the way the organization looks as opposed to the way it works, on the tools it has as opposed to those it actually needs and uses. We thus suggest that research, training and policy-making should stop focusing on the technical features and theoretical virtues of specific tools and should redirect their emphasis on change management. Copyright © 2006 John Wiley & Sons, Ltd.

The Italian National Health Service introduced quad-markets, regionalization, and managerialism in the 1990s. Under quasi-markets, large providers have been separated from purchasers and funded by ‘activity’—the quantity, mix, and possibly appropriateness of services provided. Under regionalization, each of Italy's 21 regional governments is able to design its own funding arrangements. The regions have generally been trying to mitigate the effects of quasi-markets and are now increasingly ‘governing’ them. The system is producing some desirable results, including a shift from ordinary to same-day hospitalizations and a reduction in length of stay. Hospital admissions increased initially, but only where the regions encouraged this. Financial effects are more controversial.

Since 1995 Italian Local Governments have been required to publish an accrual-based report. However, traditional cameralistic budgeting and reporting remain mandatory. The purpose of this paper was to study the actual implementation of accrual reporting. To this end, an analysis was carried out on a sample of LGs' financial reports. Results were not encouraging. Although the cameralistic [bottom line] (current surplus) and its accruals counterpart (net income) were not particularly correlated, the reliability of many statements was seriously jeopardised by large errors and the difference between current surplus and net income was often largely explained by unexpected items. Moreover, 'typical' accrual-accounting items were often set to nil and disclosure, if any, was usually minimal. Practical and technical problems are likely to explain some of such results. However, for the future, user needs are the crucial issue. As long as cameralistic accounting remains the LG's main accounting system, dominates budgeting, provides the information required by the most important external users while all other potential users remain rather indifferent, accruals accounting is likely to remain marginalised and the solution of technical and practical problems to produce very little benefits.

Background: Central-venous-line infections can be successfully treated with appropriate antibiotics, thus avoiding the need for catheter removal. Based on our experience, vancomycin, gentamicin, piperacillin, ceftazidime, and amphotericin, alone or in combination, are usually administered, pending sensitivity results. This empirical list, however, has never been verified against actual sensitivity results nor has it been tested for cost or efficacy. Methods: Medical records of inpatients on hyperalimentation over 1 year were reviewed. Success rate, therapy duration, and drug acquisition cost and charge were assessed for central-venous-line infections. Antibiotics then were paired and evaluated in terms of charge and efficacy against all microorganisms as determined by sensitivity results. Results: In 500 inpatients receiving hyperalimentation for 9698 patient-days, 8.4 central-venous-line infections/1000 patient-days occurred. Staphylococcus non-aureus, Candida species, Enterococcus faecium, and Staphylococcus aureus predominantly were isolated. Of the infections, 51 (67%) were sensitive to one or more of the initial antibiotics. A 2-week course of antibiotics successfully treated 50 (66%) catheter infections without line removal. Appropriate initial therapy on average reduced treatment duration by 8 to 10 days and drug charges by $400 to $700. Conclusions: Amikacin-vancomycin appears to be the most cost-effective selection for presumed central-venous-line infections, pending sensitivity results, followed by valid alternatives. Lower failure rates are well worth the extra cost in pharmaceutical charges.

Jones and Pendlebury (1992) have emphasised that “accounting is a purposive activity”, i.e. it is “directed towards a specified end” and “must above all be useful”. Luder (1992) has shown that the existing cross-country variations in government accounting models stem from environmental pressures and from the needs of external and internal users. This paper focuses on the relationship between the goals assigned to local government (LG) accounting systems over time and their technical features, and aims at identifying the main methodological issues concerning such relationship.

Moving to outcome-based measurement systems in the public sector has been difficult. In this article, we examine the contingent decision-making arguments stimulating output instead of outcome measurement in public management. Based on an argumentative literature review, we conclude that there exist several contingent arguments encouraging politicians and public managers to stick with outputs while ignoring outcomes in performance measurement. Mapping out these arguments contributes to understanding the difficulties in implementation of outcome-based measurement and management systems. This understanding is highly useful in performance management research and policy practice. We also suggest that these contingent arguments may be considered proposals for the future research in the area of public financial management and public sector performance measurement.

This chapter will bring together two bodies of the literature addressing some of the most important issues in contemporary public administration and governance: policy coordination and performance management.