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AGA Research Study Sees Benefits for Federal Governments Using Managerial Cost Accounting.

Research Examined Managerial Cost Accounting Practices within Federal Government Agencies

ALEXANDRIA, Va. -- A recently released research study conducted by the Association of Government Accountants (AGA), examined the status of managerial cost accounting (MCA) implementations within federal government agencies. The case studies depict entities at various stages of implementation, from one that has been in existence for more than thirty years, and other mature systems (more than ten years in existence) to some that have only just started (two years or less). The research publication, Managerial Cost Accounting in the Federal Government: Providing Useful Information for Decision Making, was released in October 2009.

This study, sponsored by AGA's Professional Corporate Partner, The MIL Corporation, looked at 10 federal entities that have had success with the implementation of Managerial Cost Accounting (MCA) systems and are now reaping the benefits. The objective of the research was to share advice and best practices with entities that may be considering setting up a MCA system.

Benefits documented include: enhanced awareness on the part of program managers on how cost accounting data can help them make smarter decisions; more informed knowledge of the value of activities conducted in pursuit of effective mission delivery; better cost-effectiveness and efficiency; and easier compliance with requirements such as audits, budget justifications and testifying to Congress.

The research found that, for a successful MCA implementation, it is necessary:

* To gain the support of top leaders. A champion who supports the concept can keep employee enthusiasm high, for the day-to day work both in development and sustaining the application once it is up and running.

* To enhance the usefulness of the cost data by tying it to performance or budgetary data.

* To listen to program managers and other users and try to address their needs.

* To reach out to the field offices. Provide training. Give explanations about cost accounting and what it can do for them. Have a written, clear organization-wide statement defining the objectives and uses of MCA, and have it known and available to everyone.

* To continually monitor for accuracy and reliability of the data input into the system.

* To try to ensure that leaders want the data input to be accurate. Then the managers will do what the leaders want.

* To work with high-quality cost accountants with excellent analytical skills, outstanding communication skills, and a good understanding of the organization's activities and the processes used to accomplish those activities. For the best skill mix, you probably should employ system accountants and budget analysts as well as cost accountants.

* To provide the information or make the information accessible as frequently as possible. Monthly is better than quarterly.

* To make the system easy to use.

As one government official interviewed said, "Everything is measurable, everyone can do it, there are methodologies to use. Make sure that you can answer the following questions before you start: What do you want to measure? What is your business? What service are you delivering? What measure can you use to show that you are delivering the service? Then just do it and start to reap the benefits."

Read the report at:

Questions: Contact Anna Miller at 800.AGA.7211, ext. 313.

AGA is the premier Association in advancing government accountability. We support the careers and professional development of government financial professionals working in federal, state and local governments as well as the private sector and academia. Founded in 1950, AGA has a long history as a thought leader for the government accountability profession. Through education, research, publications, certification and conferences, AGA promotes transparency and accountability in government.
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Publication:Business Wire
Date:Nov 5, 2009
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