ACCOUNTABILITY AND MICROMANAGEMENT:
DECENTRALIZED BUDGETING IN MASSACHUSETTS
SCHOOL DISTRICTS
DOUGLAS SNOW
AIMEE WILLIAMSON
Suffolk University
ABSTRACT
The tension between micromanagement and decentralization of
decision making is a long-standing theme in the public and education
administration literatures. Decentralized budgeting has become a
system-changing political strategy to reform education by giving school
principals and stakeholders more responsibility and flexibility for
allocating resources to activities most likely to improve education
outcomes. This study uses survey and archival data to identify and
explain patterns of decentralized budgeting in Massachusetts school
districts. Factor analysis confirms a political pattern of decentralization
where school principals and school level stakeholders gain more
influence over budget decisions when they have the ability to originate
budget requests and control the disposition of budgeted funds. Political
decentralization is accompanied by greater involvement in school level
budget decisions by elected school officials. Political decentralization
is more likely to be found in smaller, rural, and fiscally stressed
districts where federal and state testing mandates have become salient
in budget decisions. Factor analysis also confirms a bureaucratic
pattern of decentralization where control over transfers among budget
accounts is delegated to school superintendents and business officials
and, to a much lesser extent, school principals. Wealthier, municipal
school districts are more likely to conform to the bureaucratic
decentralization pattern. With more financial resources, these districts
are more likely to have stronger internal controls and adequate central
office staff. Consistent with theory, school districts’ budget
environments, controlling for other organizational characteristics, shape
patterns of decentralized budgeting.
Key Words: Micromanagement, decentralization, school-based
budgeting, budget reform, administrative reform
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INTRODUCTION
The purpose of this paper is to identify, describe, and
explain patterns of decentralized budgetary control among
Massachusetts school districts and thereby contribute to
administrative, education, and budget reform theory. The
development of strategies to reduce micromanagement has long
been a major theme in public administration theory, with special
applicability to budgeting (Behn, 1995; Rubin, 2010). As a
critical, highly visible administrative function, budgeting is often
micromanaged by elected officials in order to reduce the risk of
embarrassment from shortfalls, misdirected resources, and waste,
as well as to bind managers to policy (Schick, 1966; Rubin,
2010). Decentralization themes generally include strategies to
increase efficiency and effectiveness through distribution and/or
redistribution of responsibility for management dec.
ACCOUNTABILITY AND MICROMANAGEMENT DECENTRALIZED BUDGETING .docx
1. ACCOUNTABILITY AND MICROMANAGEMENT:
DECENTRALIZED BUDGETING IN MASSACHUSETTS
SCHOOL DISTRICTS
DOUGLAS SNOW
AIMEE WILLIAMSON
Suffolk University
ABSTRACT
The tension between micromanagement and decentralization of
decision making is a long-standing theme in the public and
education
administration literatures. Decentralized budgeting has become
a
system-changing political strategy to reform education by
giving school
principals and stakeholders more responsibility and flexibility
for
allocating resources to activities most likely to improve
education
outcomes. This study uses survey and archival data to identify
and
explain patterns of decentralized budgeting in Massachusetts
school
districts. Factor analysis confirms a political pattern of
decentralization
where school principals and school level stakeholders gain more
influence over budget decisions when they have the ability to
originate
2. budget requests and control the disposition of budgeted funds.
Political
decentralization is accompanied by greater involvement in
school level
budget decisions by elected school officials. Political
decentralization
is more likely to be found in smaller, rural, and fiscally stressed
districts where federal and state testing mandates have become
salient
in budget decisions. Factor analysis also confirms a
bureaucratic
pattern of decentralization where control over transfers among
budget
accounts is delegated to school superintendents and business
officials
and, to a much lesser extent, school principals. Wealthier,
municipal
school districts are more likely to conform to the bureaucratic
decentralization pattern. With more financial resources, these
districts
are more likely to have stronger internal controls and adequate
central
office staff. Consistent with theory, school districts’ budget
environments, controlling for other organizational
characteristics, shape
patterns of decentralized budgeting.
Key Words: Micromanagement, decentralization, school-based
budgeting, budget reform, administrative reform
PAQ SUMMER 2015
3. 221
INTRODUCTION
The purpose of this paper is to identify, describe, and
explain patterns of decentralized budgetary control among
Massachusetts school districts and thereby contribute to
administrative, education, and budget reform theory. The
development of strategies to reduce micromanagement has long
been a major theme in public administration theory, with special
applicability to budgeting (Behn, 1995; Rubin, 2010). As a
critical, highly visible administrative function, budgeting is
often
micromanaged by elected officials in order to reduce the risk of
embarrassment from shortfalls, misdirected resources, and
waste,
as well as to bind managers to policy (Schick, 1966; Rubin,
2010). Decentralization themes generally include strategies to
increase efficiency and effectiveness through distribution and/or
redistribution of responsibility for management decisions within
an administrative hierarchy (Hayek, 1945; Anthony, 1965;
Simon, 1976) and strategies to increase managerial creativity,
entrepreneurship, and public value (Gulick, 1983; Osborne &
Gaebler, 1992; Moore, 1995). These themes are also present in
the education literature, although a major focus over the past
thirty years has been on strategies to use decentralization as a
means to achieve education reform (Brown, 1987).
Decentralization reforms, known generally as school-based
management and budgeting, stress the importance of citizen,
parent, and teacher involvement in school-level management
and
budget decisions. Decentralization strategies that include
external stakeholders in school level decisions are explicit
4. system-changing, political strategies to redistribute decision-
making to the school level and thereby solve the problem of
micromanagement (Wohlstetter and Buffett, 1991; Goertz &
Stiefel, 1998). Reform advocates maintain that school
principals, in collaboration with parents, teachers, and
community stakeholders, are in the best position to make
decisions that will positively affect student performance and
that
to be effective, the ability to make budget decisions should be
aligned with responsibility for educational outcomes.
Decentralization does not, however, relieve school boards of
their legal responsibilities and of their accountability to the
PAQ SUMMER 2015
222
electorate. While they may be supportive of reform goals in
general, elected school board members may view
decentralization as a risky proposition. As a result, they may
elect to approach decentralization selectively rather than
comprehensively (Brown, 1987). Selectivity, in turn, is likely
to
be shaped by the political, social, and economic environments
in
which officials make budget decisions (Schick, 1966; Rubin,
1996).
As normative theory, decentralization of budgetary
control in any governmental organization, including school
districts, raises important questions that can be addressed
through empirical research. How much budgetary
responsibility,
5. control, and flexibility do elected officials delegate to middle or
operating level managers? Does decentralization follow
prescribed or unique patterns? How do elected officials ensure
that managers with increased budget flexibility will pursue
objectives consistent with policy? Does the inclusion of
stakeholders and constituencies in decision-making reduce
micromanagement? This article addresses these questions using
Massachusetts school districts as cases in point. Research
methods include correlation analysis, confirmatory factor
analysis, and multiple regression. Data are derived from a
survey of members of the Massachusetts Association of School
Business Officials and from Massachusetts Department of
Elementary and Secondary Education data banks.
School districts are local governments with elected
boards and professional management. They employ some fifty-
six percent of local government employees in the United States
and consume twenty percent of total state and local
expenditures
(U.S. Census Bureau 2006 & 2007). As such, they represent an
important, fertile field for public administration research. An
examination of decentralization within the context of school
districts thus serves as an important link between the fields of
education and public administration. Our findings should be of
interest to practitioners, policy-makers, and scholars in both
public education and public administration. The high profile
nature of education policy in national, state, and local politics
hardly needs mention. Nevertheless, there is much to be
learned
PAQ SUMMER 2015
223
6. about management practices that cut across the public education
and public administration disciplines (Raffel, 2007).
LITERATURE
In his classic book, Planning and Control Systems,
Robert Anthony (1965) explores the distribution of decision-
making authority through a framework consisting of three basic
management functions: strategic planning, management control,
and operational control. Following Anthony’s framework,
responsibility for strategic planning should be located at the
executive and policy levels of organizations. The strategic
goals
that emerge from the planning process shape the development of
programs and short-term objectives. Line managers working at
the lowest levels of the hierarchy are responsible for directing
the routine activities of programs. Anthony refers to this
function as operational control. As applied to governments,
management control is a process that involves continuous
interplay among elected officials, top administrators, and mid-
level managers in assuring that program resources and
objectives
are aligned with overall strategic goals (Anthony & Young,
2007). Anthony, having served as Defense Department
controller in the mid-1960s, was influential in the
implementation of Planning, Programming and Budgeting
systems which has, in turn, influenced more recent
developments
and prescriptions generally associated with new public
management theory. For example, responsibility budgeting, a
practice which falls within the PPB tradition, aligns
responsibility for budgetary decisions with responsibility for
7. program management and goals (Jones & Thompson, 1986;
Barzelay & Thompson, 2003). Giving managers control over
resources so that they can achieve goals as they see fit is also
an
important value in the reinventing government movement and in
new public management theory (Osborne & Gaebler, 1992;
Barzelay, 2001).
School reform prescriptions, most notably school-based
budgeting, emphasize that principals, either implicitly or
explicitly, are accountable for educational results. It follows
that
the ability to direct resources where they are most needed
should
PAQ SUMMER 2015
224
fall to the person most familiar with a school’s needs, the
principal. The individual school is conceptualized as a
responsibility center, an appropriate unit of analysis in
responsibility budgeting. To the extent that control over
budget
decisions remains within the school district’s hierarchy, school-
based budgeting, as it is called in the education literature, is
consistent with management control and responsibility
budgeting
theory (Barzelay & Thompson, 2003; Anthony & Young, 2007).
When responsibility budgeting includes parents, citizens, and
teachers in budget decisions, however, school-based budgeting
takes on a political dimension (Goertz & Stiefel, 1998).
8. School-based Management and Budgeting
School based-budgeting, the prescriptive education
reform most relevant to this research, generally accompanies
school-based management in the education literature.
Definitions of each are generally quite broad but include
strategy
and policy, operational control, and budgeting (Caldwell, 1993;
Hansen & Roza, 2005; Wohlstetter & Van Kirk, 1995). School-
based budgeting is generally considered integral to school-based
management (Candal, 2009; Cuban, 2007; Hadderman, 2002;
Hansen & Roza, 2005; Kedro, 2003). Brown (1987) considers
school-based budgeting to be the primary component of school-
based management. More broadly, Roza (2008) asserts the
importance of a good fit between budgeting methods and reform
strategy. A comprehensive approach to school-based budgeting
could include:
• Control over all school level expenditures for staffing,
including the ability to determine the number and
distribution of teachers, aids, clerical, custodial and
maintenance employees;
• Control over purchasing instructional and building
maintenance supplies and services,
• Procurement of professional development services (see
Wohlstetter & Buffett, 1991; Goertz and Hess, 1998).
Implementing all of these features would be a dramatic change
for most school districts. In traditional school districts, staff
positions and assignments are controlled centrally and
principals
control only a few small budget items for instructional, office,
9. PAQ SUMMER 2015
225
and building supplies. School level control may also include
accounts holding funds raised by parent-teacher organizations
(Wohlstetter & Buffett, 1991).
As reforms, school-based management and budgeting
are often prescribed as “system changing strategies” to shift the
balance of power inside school districts (Wohlstetter & Buffett,
1991). Although the findings are mixed, supporting research
suggests that decentralization improves student performance
through stronger employee commitment and motivation,
increased parent participation, and a reduction of bureaucratic
barriers (Bandur, 2012). Referring to these reforms in the
Chicago public schools, Goertz and Stiefel write: “The theory
underlying this ‘democratic localism’ is that expanded local
participation will create a political force for improvement,
leveraging and sustaining the organizational and instructional
changes needed to raise student achievement” (1998, p. 2).
Local participation generally takes the form of a school council
made up of parents, teachers, and other citizens, thus
integrating
stakeholder influence with responsibility budgeting.
Empowering school-level stakeholders would presumably
change the nature of control exercised by the central office and
alter the ways that elected officials—school boards—exercise
control. If this is not the case, one has to ask, “Why bother?”
(Wildavsky, 1992, p. 594).
While any change in decision-making authority within
an organization can change power relationships, the extension
of
10. influence to stakeholders at the school level allocates a measure
of political accountability to individual schools, without,
presumably, reducing the accountability of elected school board
members. This distinguishes decentralization that takes place
within the school district’s administrative structure from
decentralization that empowers school constituencies in making
budget decisions. Both types address the problem of
micromanagement, but in very different ways. In a lengthy
monograph on decentralization, Brown (1987, p. 5) identifies
distinct bureaucratic and political types. Bureaucratic
decentralization may occur within the organization and can be
“revised” or “recalled” without requiring legislative action
(Brown 1987, p. 5). In the political type, however, “groups of
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226
the public are given power to make decisions” (1987, 5).
School-based budgeting prescriptions often include school
councils, composed of teachers, parents, or community
representatives, in school-level budget decisions (Goertz &
Stiefel, 1998). The inclusion of school-level stakeholders in
decision-making goes beyond bureaucratic forms where
responsibility is distributed among employees. To state the
obvious, the parents and community representatives on these
councils are voters, not employees. Their role, as commonly
prescribed, goes well beyond traditional parent-teacher
organizations. The creation of school councils, by design, is
intended to extend responsibility and accountability for school
performance to stakeholders.
11. Barriers to Budget Decentralization
The school-based management and budgeting literature
identifies a gap between theory and practice (Wohlstetter & Van
Kirk, 1995). Reasons for the theory-practice gap include
legitimate concerns of school board members, opposition of
administrators, lack of training for principals, weak internal
controls, public pressure for results measured under the No
Child
Left Behind Act of 2001 (NCLB), the potential for political
conflict when parents and citizens are given budget influence at
the school level, the need to centrally manage collective
bargaining agreements, and fiscal stress. Perhaps the most
significant of these reasons are the legal and political
responsibilities of school boards which may lead them to
delegate budgetary control to principals selectively rather than
comprehensively (Brown 1987, p. 9). Alternatively, selectivity
in decentralization may be due to a lack of political will, as
observed by Moynihan (2009) in a study of administrative
reform in state government. The result is a “constrained model”
of decentralization, half measures that have the form of
decentralization without the substance (Moynihan 2009, p. 165).
In writing about federal budget reforms in the 1960s,
Allen Schick (1966) identifies weak internal controls as a
reason
for micromanagement. As applied to school districts, these
controls are critical to assuring the effective use of school
assets.
Poor or ineffective controls may increase the risk of misuse of
PAQ SUMMER 2015
12. 227
funds and assets for which school board members, and their
appointees, are responsible. To reduce this risk, school boards
may limit the discretion of principals in the use of funds and
physical assets. Related to internal controls, Schick also notes
that top level officials may lack confidence in the abilities of
middle and operating level managers to execute stated policy,
which, in turn, may be related to training and/or resources for
organizational development (Clover, Jones, Bailey & Griffin,
2004).
In order to “bind” lower level managers to stated policy,
central control may extend to all or some aspects of budget
decisions, including planning and programming, budget
preparation, implementation, the annual audit, control over the
number of authorized positions, transfers among accounts, and
control over travel and purchasing (Schick, 1966, p. 244). In a
similar vein, Irene Rubin (1996) suggests that municipal
governments may increase central control over functions where
public concern for poor performance is highest and, given scare
administrative time and resources, reduce the attention paid to
other functions. For example, the No Child Left Behind Act
focuses accountability for student learning outcomes at the
school level. Test scores are publicly reported and generate
considerable public discussion. Decentralization of budgetary
decision making could be a high stakes proposition for elected
school boards and superintendents who lack confidence in the
ability of principals and school councils to direct resources to
those activities that will assure higher test scores. The extra
attention paid to test scores could come at the expense of other
education priorities.
Existing research does explore the impact of
standardized test scores on school budgeting, but it is
recognizably limited (Chiang, 2009; Craig, Imberman, &
Perdue,
2013) and focuses more on changes in allocation amounts than
13. on budgetary reform strategies. Both Chiang (2009) and Craig,
Imberman, and Perdue (2013), for example, find increases in
school budgets resulting from the threat of sanctions and a
reduction in accountability ratings, respectively. Such findings
are not always consistent, however, even within studies, nor are
budget increases permanent (Craig, Imberman, & Perdue, 2013).
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Selective micromanagement, the flip side of selective
decentralization, is one way for school boards to exercise
control
over some types of budget decisions that are, at any given time,
most salient. Both Schick (1966) and Rubin (1996) refer to
this
phenomenon as a “budget orientation.” The concept stems from
the idea that governmental organizations typically lack the
resources to perform all centralized functions equally well,
which then leads them to orient themselves to those types of
control most responsive to the environment in which budget
decisions must be made. The orientations most relevant to this
research are control (Schick, 1966) and accountability (Rubin,
1996).5
The involvement of school-level stakeholders in making
budget decisions is a common reform prescription that generally
accompanies school-based budgeting. School councils create a
new level of responsibility and political accountability at the
school level. These councils may present political risks to
school boards by creating or exacerbating political conflicts
within a district. Marlowe and Portillo (2006) suggest that an
14. expansion of citizen participation in a local government could
“exacerbate its pluralistic tendencies and inhibit compromise”
(p.
180). While acknowledging the benefits of school-based
budgeting, Fermanich, Odden, and Archibald (2000) observed
increased conflict in a large district with school-based
budgeting
when economic conditions required budget reductions. Newly
influential school councils and the teacher union represented
new
constituencies that had to be consulted in the budget cutting
process. School boards may be justifiably reluctant to open up
such conditions through decentralization.
Another important force that may drive
micromanagement is responsibility for managing collective
bargaining agreements. Since bargaining agreements cover a
wide range over an entire district, decentralization of many
types
of management and budgetary control may not be feasible.
State
education department rules and regulations applying to the use
of
5 Schick (1996), who coined the term budget orientation, also
identifies planning and
management orientations. Rubin (1996) also identifies a
“prioritization orientation”
linked to the salience of cutback management. Thurmaier and
Gosling (1997) identify a
“policy orientation” in state government budget offices.
PAQ SUMMER 2015
15. 229
funds and purchasing could also be centralizing forces (Goertz
&
Hess, 1998).
Fiscal stress may act alone or with other barriers to
decentralization (Forrester & Spindler, 2001; Lu & Facer,
2004).
Fiscal stress may force local government officials to reallocate
their time and energy to reprioritization of their programs at the
expense of other management activities. A major
reprioritization
is likely to be a centralizing force, especially if cuts involve
whole programs or other organizational units, such as the need
to
close a school.
The Massachusetts Legal Framework
Massachusetts provides a particularly useful case to link
public administration and education literatures. Massachusetts
law delegates school district governance to elected school
committees (with the exception of the City of Boston School
Committee, which is appointed by the Mayor, Chapter 108, Acts
of 1991).6 Statute defines a school district as either the school
department of a municipality or a regional entity (Massachusetts
General Laws 70: §2). All non-charter school districts are
fiscally dependent on municipalities in Massachusetts. State
school aid flows to municipalities first, then to school districts.
Of 328 non-charter school districts in Massachusetts, 243 are
municipal districts, which account for 85 percent of enrollment.
School districts compete directly with other municipal
departments for any dollars beyond the state mandated level of
spending and for a place on the ballot for proposed property tax
increases. Unused funds generally lapse to the municipality at
16. the close of the fiscal year. The school finance system is
based on the creation of foundation budgets for each school
district, which are driven by enrollment and standardized costs
that are adjusted for different labor markets within the state.
State education aid makes up the difference between the
foundation budget and local tax effort, which is computed by
imputing a tax on both property wealth and, in recent years,
adjusted gross income. Local tax effort is enforced by way of a
minimum spending requirement. School districts may exceed
the minimum spending requirement, but may not spend less
6 School district governing boards are called “school
committees” in Massachusetts.
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230
except under special circumstances (Massachusetts General
Laws 70: §11). Once the annual school finance plan becomes
law, school districts may allocate funds within the district as
they
see fit (Massachusetts General Laws 70: §8), but in compliance
with federal and state restrictions and union contracts.
School committees do not have the final say on the
revenue side of budgets, but must submit funding requests to the
appropriate municipal body—either town meeting or city
council—for approval (Massachusetts General Laws 71: §34).
Regional districts must request approval of each member
municipality’s share of the district’s budget. During budget
development, school committees must allow input from local
school councils (Massachusetts General Laws 71: §59C) and
hold public hearings on the proposed budget (Massachusetts
17. General Laws 71: §38N). School committees determine the
amount of budget flexibility allowed to superintendents,
business
officials, and principals.
While state law places a great deal of responsibility on
school committees and establishes fiscal dependence on, and
thus, political accountability to, municipal governments, school
reform in Massachusetts has also sought to encourage school
committees to decentralize administration to the school level.
State law makes principals “the educational administrators and
managers of their schools” with responsibility for “the
operation
and management of their schools and school property”, but
subject, of course, “to the supervision and direction of the
superintendent” (Massachusetts General Laws 71: §59B). The
Massachusetts Education Reform Act of 1993 (MERA)
stipulated the creation of school councils, whose members are
parents, teachers, community members, and (in the case of high
schools) students. MERA also decentralized decision-making
authority in the areas of hiring and dismissing teachers from
school committees to superintendents and principals (Anthony
&
Rossman, 1994; McDermott et al., 2001). There is, however,
no
requirement to delegate budget control to principals.
Perhaps the most visible and salient feature of
Massachusetts education reform is the Massachusetts
Comprehensive Assessment System (MCAS), a set of exams that
measure student, school and district level performance at
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18. specified intervals. Students must pass the 10th grade MCAS
exams to graduate from high school. MCAS scores are
reported
to parents and in the media and have become both visible and
controversial. The MCAS system is used by Massachusetts to
comply with the assessment requirements of NCLB, although
the
MCAS system predates NCLB.
RESEARCH METHODS
The extensive school reform and public management
reform literatures and the Massachusetts legal environment, all
of which have been part of the Massachusetts education
environment for twenty years, suggest that school districts
should be very much aware of decentralized decision making,
broadly, and school-based budgeting prescriptions, specifically.
The literature suggests that decentralization may follow
bureaucratic and/or political patterns. Where decentralization
exists, one would expect to observe these patterns in practice.
Hypothesis 1: Decentralized budget practices
will follow distinct bureaucratic and political
patterns.
Stakeholders—citizens, parents, and teachers— that are
involved in budget decisions are more likely to be influential in
districts where decentralization follows a political pattern.
Statute gives a role in budget decisions to school level councils
in Massachusetts and school-based budgeting generally
prescribes such a role. These councils should be more
influential in budgetary decision making in districts where
principals have the ability to originate a budget request and
exercise some control over the use of budgeted funds. And, by
19. definition, one would expect principals to have more influence
over budget decisions under the aforementioned circumstances.
Hypothesis 2: Principals and stakeholders will
be more influential in the budget process in
districts with higher levels of political
decentralization.
Little is known about how school district characteristics
and budget environments interact in shaping decentralization.
Following Rubin’s (1996) observations about the centralizing
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232
effects of fiscal stress and public dissatisfaction with municipal
performance, one would expect school districts to respond to
both by centralizing control. On the other hand, reformers view
decentralization as a way to unleash the knowledge and skills of
principals and thereby improve both efficiency and educational
outcomes. Schick (1966) suggests a linkage between weak
internal controls and centralization of budget decisions. This
could be especially true in two cases: 1) pre-auditing account
balances prior to authorizing a transfer between accounts and 2)
assuring that there is a budgeted position available before hiring
a new employee. Internal controls could be weaker in school
districts with lower fiscal capacity. This could be less
important,
however, in smaller districts where it is easier for central office
officials to oversee fewer schools. The variables selected to
measure individual school district characteristics and budget
environments may have positive or negative effects on
20. decentralization, as indicated in the above examples. These
variables could also have differential effects on bureaucratic
and
political decentralization. Therefore, Hypothesis 3 must be
expressed in broad terms.
Hypothesis 3: Decentralization is shaped by
school district characteristics and the budget
environment.
Data
A survey administered to school business officials in
April and May of 2009, with the sponsorship and support of the
Massachusetts Association of School Business Officials
(MASBO), provided most of the data for this study.
Development of the survey instrument was informed by the
literature and by pilot interviews with business officials in two
urban, two suburban, and two rural districts. These data were
supplemented by archival data available from the Massachusetts
Department of Elementary and Secondary Education. Business
official is the generic job title used by the association, but
actual
job titles vary and include, naming a few: Chief Financial
Officer, Associate Superintendent for Human Resources and
Finance, Director of Finance, and Director of Administration
and
Finance. Excluding respondent information, the survey
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233
21. included 162 items. Other data sets extracted from the survey
have been employed in other research by the authors
(Williamson & Snow, 2013, 2014). Charter schools were not
included in the study since most of them are small, operate
independently of the traditional school districts, and are already
decentralized, by definition. Survey respondents represent 179
public school districts, 73 percent of the public, non-charter
school districts with a MASBO member and 55 percent of the
328 Massachusetts non-charter public school districts. 7
Responding school districts are representative of all
Massachusetts school districts in terms of enrollment, spending
per student, and reliance on state aid. Municipal and regional
districts are represented in the same proportions among
responding districts and all others. The eastern part of the state
is somewhat overrepresented among survey respondents: 64
percent of responding districts are located in Eastern
Massachusetts compared to 56 percent of all other districts.
The
largest district in the state, Boston, which is an outlier in terms
of
both its size and governance, did not respond to the survey.
However, urban schools are represented. Responding districts
include the Worcester and Springfield municipal districts.
Respectively, they are the second and third largest cities in the
state with estimated 2009 populations of 182,000 and 156,000
and school enrollments of 27,000 and 24,000. More detail
comparing responding districts with all districts can be found in
the appendices.
These data collection methods bring both strengths and
limitations. Although business officials offer the perspective of
individuals uniquely positioned to participate and observe both
financial decision-making processes and operations, their
perspectives may be limited by their training and values.
22. 7 The unit of analysis in this study is the individual school
district, as viewed from the
business official’s perspective. The response rate for individual
MASBO members
differs from representation of individual school districts in the
data set. The survey
generated 192 responses from 294 individual MASBO members
who were invited to
participate in the survey, a response rate of 65 percent. In the
twelve cases where there
were two responses from a school district, the response of the
highest-ranking
respondent, based on job title, was retained. One charter school
business official who
had been inadvertently invited to participate in the survey was
also dropped from the data
set. This left 179 usable surveys.
PAQ SUMMER 2015
234
Despite this potential bias, business officials are in an ideal
position to report on financial and budget practices, and to
provide responses to the wide range of questions in the survey.
They play a leading role in financial and operations
management
and typically report directly to the superintendent. They interact
with a wide range of other actors in the district, the State
Department of Elementary and Secondary Education, and
municipal government. School business officials have the “duty
as stewards of the public’s money to make school finance more
23. accessible, transparent, and easily understandable” (Willis,
2010,
p. 17). Superintendents and school business officials have
been
described as “mutually interdependent” actors with varying
responsibilities—superintendents bring leadership to the
process,
while school business officials bring financial expertise (Bird &
Wang, 2010, 11). Furthermore, the focus on school business
officials has helped generate the high response rate. The single-
state focus also provides a natural control for the legal and
policy
environment. Like all states, however, Massachusetts must
comply with federal education laws and regulations.
Selection of Variables and Measurement
To identify patterns and types of decentralization among
responding school districts, selected survey items focus on
budget practices that 1) place greater control over budget
decisions in the hands of principals, superintendents, or
business
officials, 2) increase controls exercised by elected school
committees, and 3) increase the influence of stakeholders.
Three
survey items measure decentralization of budgetary decision
making to school principals by asking business officials
whether
principals may: 1) formulate a complete budget request,
including all grades, programs, salary, and non-salary expenses;
2) exercise direct control over all budgetary accounts related to
their building or site, both non-salary and salary accounts; and
3)
move (transfer) funds among budgetary accounts, without
approval of the district business office. When combined, these
practices constitute a substantial amount of budgetary
24. responsibility in the formulation, adoption, and monitoring
phases of the budget process. However, this study makes no
attempt to specifically identify the existence of school-based
PAQ SUMMER 2015
235
management or budgeting as comprehensive management
strategies or policies since definitions in the literature lack
consistency and precision.
To account for micromanagement by school committees,
the study also includes three survey items that identify budget
decisions that pilot interviews suggested could be exercised by
school committees: 1) Control over transfers among budgetary
accounts, 2) involvement in the details of developing school-
level budgets and 3) control over the number of administrative,
faculty, and staff positions. None of these items has a direct
opposite among the three types of decision making exercised by
principals. A school committee’s decision not to exercise a
type
of centralized control does not mean that control has been
delegated to principals.
Decentralization of budget decisions, as a system-
changing, political strategy, should alter administrative
relationships and the relative influence of actors in making
budget decisions (Wohlstetter & Buffet, 1991). Survey items
identify business officials’ perceptions of the influence of
school
councils, principals, teachers, and parents and citizens in
general
over budget decisions. Their influence is expected to be higher
in districts where budgetary decisions are delegated to
25. principals.
The inclusion of teachers, citizens, and parents on school
councils tends to make them representative in nature.
Therefore,
we include variables for stakeholders jointly, in the form of
school councils, and individually. Every school should have a
school council, as required by statute. Without the ability to
originate a budget at the school level and some level of control
over accounts once the budget is approved, however, one would
not expect the council to be very influential in making budget
decisions. The literature also suggests the possibility of greater
union influence under decentralization (Straut, 1996). We
included business officials’ perception of the influence of
unions
in budget decisions in our analysis.
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236
Table 1
Descriptive Statistics: Exercise of Budgetary Control
Survey' Item' (1' =' Strongly'Disagree,' 2' ='
Disagree,' 3' =' Neutral,' 4' =' Agree,' 5' ='
Strongly'Agree)' N' Mean'
Std.'
Dev.'
%'Agree'or'
Strongly'
27. %'
Moderate'
Influence'
%'Great'
Deal'of'
Influence'
Principals'' influence' in' the'
budget'process' 158' 3.22' 0.66' 55.1' 34.2'
School' councils’' influence' in'
the'budget'process' 158' 2.27' 0.65' 36.7' 0.6'
Union's'influence'in'the'budget'
process' 158' 2.19' 0.74' 29.1' 3.2'
Teachers'' influence' in' the'
budget'process' 159' 2.45' 0.62' 48.4' 1.3'
Parents''influence'in'the'budget'
process' 158' 2.37' 0.67' 38.0' 3.2'
Citizens'' influence' in' the'
budget'process'' 159' 2.13' 0.65' 24.5' 1.3'
Note: This survey item was adapted from similar items on the
US Department of
Education’s Schools and Staffing Survey, Public School
Principal Survey.
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237
To identify potential environmental determinants of
decentralization patterns, this study includes three scales
constructed from survey items and archival data:
28. 1. MCAS/NCLB Budget Influence: A scale of five survey
items that measure business officials’ perceptions of the
extent to which standardized exams required under both the
Massachusetts Comprehensive Assessment System (MCAS)
and No Child Left Behind Act (NCLB) influence budget
decisions (Cronbach’s Alpha = .710)
2. Wealth Index: Composed of the mean of FY 2009: 1) school
district spending as a percentage of the state minimum
requirement, 2) the percentage of mandated spending from
own source revenue, and 3) the percentage of students who
are not eligible for free and reduced lunches (Cronbach’s
Alpha = .738)
3. Fiscal Stress Index: The sum of “yes” responses (yes is
coded “1”) to twenty-four survey items asking whether the
district has experienced fiscal challenges in recent years,
during the survey year, or expects to experience fiscal
challenges over the next few years.
The influence of MCAS/NCLB mandated exams on
budget decisions is a potential centralizing force. Rubin (1996)
suggests that a salient issue may cause the public to demand
greater accountability for its performance in that domain.
Higher
scores on this index, which indicate greater importance of
NCLB/MCAS in budget decisions, could be the result of public
demand for improved MCAS performance. Our exploratory
analysis indicates that this index is weakly and negatively
correlated with actual performance on MCAS exams (-.220).
Higher scores on the index are driven by more than low test
performance. Instead, higher MCAS/NCLB index scores may
represent local aspirations or even concerns about property
values, since shopping for a home based on the test scores of a
community’s schools has been documented in Massachusetts
29. (Bradbury, 1998). The wealth index is a proxy for fiscal
capacity and based on the premise that wealthier districts have
the resources to train principals (Clover, Jones, Bailey &
Griffin,
2004) and invest in stronger internal controls (Schick, 1966).
Fiscal stress is a potential centralizing force in that districts
PAQ SUMMER 2015
238
facing fiscal stress must orient budgetary decision making in the
direction of reprioritization in order to balance their budgets
(Rubin, 1996). As previously noted, however, these variables
could easily have the opposite effects if one adopts a school
reform perspective. They could also have differential effects on
bureaucratic and political decentralization patterns. Details of
scale construction are included in the appendices. Two
additional variables measure progressively more severe
sanctions
imposed upon districts that fail to meet state determined
performance targets required under NCLB. Meeting these
performance targets is called adequate yearly progress (AYP).
The failure of one or more schools to make adequate yearly
progress after one year requires districts to allow parents in the
attendance zone of a school that failed AYP to attend another
school in the district (School Choice) and, if AYP is still unmet
the following year, offer supplemental educational services
(SES). To account for potentially different effects of these
sanctions, we constructed separate regression models for School
Choice and Supplemental Educational Services (Williamson &
Snow, in 2014). Actual performance on MCAS exams has been
excluded from the regression models due to colinearity with the
30. wealth index (Pearson’s R = .720).
We also included three characteristics of Massachusetts
school districts as potential determinants of decentralization
patterns: the number of schools, type of district (municipal or
regional), and rural location. School committees with fewer
schools to administer may be more likely to micromanage
budgeting simply because of the narrower span of control. A
dummy variable for municipal districts (regional district is the
dropped category) accounts for potential differences in political
accountability. Municipal districts are contained within a
single
political entity and are directly accountable to a single
municipal,
government. Regional districts are accountable to more than
one
municipality. A dummy variable was also created for rural
districts where different political cultures and economic bases
may be important to decentralization decisions. We excluded
total district enrollment since it is collinear with the number of
schools (Pearson’s R = .954). We also excluded dummy
variables for urban and suburban schools because they are both
PAQ SUMMER 2015
239
collinear with the wealth index (Pearson’s R = - .587 and .502,
respectively).
Data Analysis
Data analysis was conducted in two stages. The first
stage consisted of an analysis of zero order correlations. The
31. decentralization, micromanagement, and budget influence
variables listed in Tables 1 and 2 were included. To confirm
the
political and bureaucratic decentralization patterns observed in
the correlation analysis and to obtain dependent variables for
regression, confirmatory factor analysis was employed to
extract
two factors with the expectation that the results would follow
the
hypothesized political and bureaucratic decentralization patterns
suggested by the literature. After conversion to standard scores,
items with statistically significant correlations with one or more
of the three types of budgetary control that could be delegated
to
school principals were included in the confirmatory factor
analysis. This methodology is appropriate because the literature
suggests that there are two distinct forms of decentralization,
political and bureaucratic, as well as a critical distinction
between the two, the influence of stakeholders in school-level
decisions. The analysis is driven by theory as to the types and
structure of the hypothesized latent variables, political and
bureaucratic decentralization (Thompson, 2004). The extracted
variables were retained in the data file as dependent variables
for
regression analysis. In the second stage of the analysis, the
saved factor scores were regressed on measures of the budget
environment and other school district characteristics.
FINDINGS
Frequencies
Survey responses indicate substantial variation in the
frequency with which various practices are decentralized.
Among the budget decisions delegated to school principals,
budget preparation is the practice with the highest frequency of
32. responses in the agreement range (38 percent), followed by
control over all budgeted accounts (23 percent), and ability to
make transfers among budgeted accounts (13 percent). None of
the business officials strongly agreed that all three practices
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applied in their districts. In sharp contrast, school committees
exercise a substantial amount of control. Based on answers in
the agreement range, a majority of business officials indicate
that
school committees retain the authority to approve transfers
among budget accounts (55 percent) and exercise control over
the number of administrative, faculty, and staff positions (52
percent). A large minority of respondents (44 percent) agree
that
the school committee is involved in the details of developing
school-level budgets.
In terms of influence in the budget process, 34 percent of
respondents indicated that principals have a great deal of
influence in the budget process. School councils, unions,
teachers, parents, and citizens are much less influential in the
budget process, as seen in Table 2, above. While survey items
asking about the relative influence of school committees,
superintendents, and business officials on budget decisions are
not included as variables in our factor analysis (which was
limited to the influence of stakeholders at the school level) we
note that these actors are, as expected, very influential.
Variability only occurs in the top two categories on the four
point scale of no influence, very little influence, moderate
influence, and a great deal of influence. For superintendents,
33. 94
percent of responses fall in the “great deal of influence”
category. Regardless of the amount of decentralization or
school committee micromanagement, these actors exercise a
great deal of influence in budget decisions.
Bivariate Correlations
Correlation analysis was conducted to 1) identify
significant zero order correlations between each of the variables
measuring delegation of control to principals, micromanagement
by school committees, superintendents and business officials’
control over transfers, and stakeholder influence in the budget
process and 2) to identify individual variables likely to be
components of latent political and bureaucratic forms of
decentralization (Table 3). The correlations suggest that
decentralization follows both political and bureaucratic
patterns,
although the political pattern does not follow the ideal type
identified in the literature. In the political pattern, the
influence
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of stakeholders correlates positively with greater control
exercised by principals in the areas of budget preparation and
control over the use of funds. However, correlations also
suggest increased micromanagement by school committees when
these two types of control are delegated to principals. School
committees appear to increase their involvement in school level
decisions under decentralization, a potential effort to establish
school level accountability to the school committee that will be
34. explored further in the “Discussion” section, below.
Components of the political decentralization variable are
suggested by the significant positive correlations between two
decentralization variables,
• principals develop and submit a complete budget
request and
• principals have direct control over all budgetary
accounts,
and each of the following variables:
• principals' influence in the budget process,
• school councils’ influence in the budget process,
• teachers' influence in the budget process (significant for
the budget request variable only),
• school committee retains detailed control over transfers,
• school committee is involved in the details of developing
school-level budgets.
Correlations also suggest a bureaucratic decentralization
pattern that involves school committees’ delegation of authority
to make transfers to superintendents. Business officials and
principals also gain more control over transfers when school
committees delegate control over transfers. Transfer control is
also positively correlated with school councils’ influence.
Components of this bureaucratic decentralization factor are
suggested by the significant correlations between principals
may
move funds among budgetary accounts and:
• school committee retains detailed control over transfers
(negative),
• superintendent has the flexibility to make transfers
35. among budgetary accounts (positive),
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• superintendent reserves the right to approve major
transfers but delegates minor transfers to business office
(positive).
Table 3
Inter-Item Correlation Matrix
Delegated to School
Principals
Micromanaged by School
Committee
Survey Item 1 2 3 4 5 6
1
Principals develop,
submit complete budget
request
1 .599** .016 .245** .304** -.027
2 Principals control all budgetary accounts .599
36. ** 1 -.008 .200* .333** -.021
3 Principals may move funds among accounts .016 -.008 1 -.223
** -.072 -.087
4 School committee controls transfers .245
** .200* -.223** 1 .314** .345**
5
School committee
involved in details of
developing school
budgets
.304** .333** -.072 .314** 1 .291**
6
School committee
retains control over
number of admin.,
faculty, staff positions
-.027 -.021 -.087 .345** .291** 1
7
Superintendent has the
flexibility to make
transfers among
accounts
-.036 -.025 .188* -.446** -.026 -.143
8
37. Superintendent
delegates minor
transfers to business
office
.025 .036 .269** -.336** .053 -.010
9 Principals' influence in budget process .211
** .201* .032 .116 .092 .126
10
School councils’
influence in budget
process
.207* .170* -.130 .205* .235** .252**
11 Unions’ influence in budget process -.024 -.030 .008 -.057
.037 .196
*
12 Teachers' influence in budget process .160
* .101 -.068 .142 .234** .163*
13 Parents' influence in budget process .123 -.011 .088 .021
.095 .137
14 Citizens' influence in budget process .083 .033 .033 -.010
.120 .082
**Correlation is significant at the 0.01 level (2-tailed).
*Correlation is significant at the
0.05 level (2-tailed). Listwise N=154: Columns are limited to
the first six variables. The
full fourteen-column correlation matrix is available from the
38. authors.
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Position Control
School committee control over administrative, faculty,
and staff positions (position control) is the odd man out in this
analysis. It is practiced by a majority of school districts and
not
correlated with other forms of decentralized budgetary control.
Position control exercised by the school committee is, however,
positively and significantly correlated with other forms of
control exercised by school committees (transfers, .345;
involvement in school-level budgets, .291). Position control
has
weak but statistically significant correlations with teacher union
influence (.196), teacher’s influence (.163), and school council
influence (.252). While position control is correlated with
stakeholder influence, there is no correlation with the most
commonly decentralized budget practices. It may be that
stakeholder influence is high in some districts where budgeting
is not decentralized.
Confirmatory Factor Analysis
Factor analysis of the statistically significant variables,
summarized in Table 4, confirms the decentralization patterns
suggested by the literature and observed in the analysis of zero
order correlations. Pattern and structure coefficients
(“loadings”) greater than .4 are reported. As hypothesized,
decentralized budget practices follow distinct political and
bureaucratic patterns (Hypothesis 1) and stakeholder influence
39. increases with political decentralization (Hypothesis 2).
The first factor extracted, which explains 27.75 percent
of the variance among the included variables, confirms a latent
political decentralization variable with which school committee
involvement in school-level budgets, decentralization of budget
development and control to principals, and influence of
principals, teachers, and school councils in the budget process
have positive loadings. The extracted factor scores were saved
for regression analysis. The new variable is named “Political
Decentralization.” Higher political decentralization scores
indicate greater budgetary control at the school level, greater
stakeholder influence, and increased school committee
micromanagement.
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The second factor extracted explains 19.6 percent of the
variance among the included variables and confirms a latent
bureaucratic decentralization variable with which
decentralization of control over transfers to superintendents and
business officials as well as control over transfers exercised by
school principals have positive loadings and control over
transfers by school committees has a negative loading. These
factor scores were also saved for further exploration. The new
variable is named “Bureaucratic Decentralization.” Higher
bureaucratic decentralization scores are indicative of less
control
over transfers by school committees and greater control over
transfers by superintendents, business officials, and, to a lesser
extent, by principals. Delegation of control over transfers to
principals is neither widely practiced nor significantly
40. correlated
with the other two types of budgetary control exercised by
principals that were measured in the survey, while transfer
control by school committees is positively correlated with other
types of school committee control.
Determinants of Political and Bureaucratic Decentralization
Regression analysis was performed to explore potential
explanations of the variance in political and bureaucratic
decentralization factor scores. Descriptive statistics for the
regression variables are summarized in Table 5. Regression
coefficients, reported in Tables 6 and 7, reveal distinct
differences in the significant determinants of political and
bureaucratic decentralization. Political decentralization scores
are higher in school districts where the performance
requirements of the No Child Left Behind Act and the
Massachusetts Comprehensive Assessment System are more
important to budget decisions, among districts that are not
under
a school choice sanction, where fiscal stress is greater, in rural
districts, and in districts with fewer individual schools, i.e., a
smaller span of control. Bureaucratic decentralization scores
are
higher in wealthy, municipal school districts.
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Table 4
Pattern and Structure Coefficients (Oblique Rotation)
41. Survey Item
Political
Decentralization
Bureaucratic
Decentralization
Pattern Structure Pattern Structure
School councils’ influence in
the budget process .650 .671
Principals develop and submit a
complete budget request .681 .667
Teachers' influence in the
budget process .636 .649
Principals have direct control
over all budgetary accounts .654 .637
Principals' influence in the
budget process .617 .619
The school committee is
involved in the details of
developing school-level
budgets .574 .572
The superintendent delegates
control over minor transfers to
the business office .891 .876
The superintendent has the
flexibility to make transfers
among budgetary accounts .883 .874
The school committee retains
detailed control over transfers -.575 -.619
Principals may move funds
among budgetary accounts .473 .471
Variation Explained 27.747 19.601
Total Variation Explained 27.747 47.348
Mean 0 0
42. Standard Deviation 0 0
Skewness 0 -.311
Kurtosis .202 -.631
Notes: Listwise n = 155. Oblique rotation selected due to
significant correlations across
variables in each of the two hypothesized types (Thompson
2004, 48). Correlation
between political and bureaucratic decentralization = -.142.
Loadings less than .4
omitted (absolute value). Kaiser-Meyer-Olkin Measure of
Sampling Adequacy = .667;
Bartlett's Test: Approx. Chi-Square = 424.488, df = 45, p <
.001.
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Table 5
Descriptive Statistics: Regression Variables
Variable Mean Std. Dev.
Dependent Variables:
Political Decentralization .03 1.02
Bureaucratic Decentralization -.036 1.01
Budget Environment:
MCAS/NCLB Budget Influence 3.65 .66
Wealth Index 9.51 4.77
43. Fiscal Stress Index 85.48 13.11
School Choice .62 .49
Supplemental Educational Services .42 .495
School District Characteristics:
Number of Schools 6.25 6.34
Municipal School District .28 .45
Rural School District .71 .45
N = 122 (Listwise): Political and Bureaucratic dimension
descriptive
statistics vary from Table 4 because of missing values, which
reduces
the cases available for regression analysis.
Table 6
Standardized Regression Coefficients: Political
Decentralization
Model 1 Model 2
Beta t Beta t
Budget Environment:
MCAS/NCLB Budget Influence .220** 2.544 .222** 2.535
Wealth Index .-080 -.840 -.062 -.643
Fiscal Stress Index .150* 1.754 .149* 1.706
School Choice -.156* -1.832
Supplemental Educational
Services .013 .150
School District Characteristics:
Number of Schools -.232** -2.332 -.210** -2.066
Municipal School District .051 .555 .043 .459
Rural School District .177* 1.974 .189** 2.077
44. R .430 .402
R Square .185 .161
Adjusted R Square .135 .110
Std. Error of the Estimate .9515 .9653
F 3.702 3.134
Sig. .001 .005
N 122 122
***Significant at .01 level **Significant at .05 level;
*Significant at .1
level (2-tailed)
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Table 7
Standardized Regression Coefficients: Bureaucratic
Decentralization
Model 1 Model 2
Beta t Beta t
Budget Environment:
MCAS/NCLB Budget Influence .091 1.021 .099 1.111
Wealth Index .276*** 2.785 .280*** 2.835
Fiscal Stress Index -.095 -1.077 -.106 -1.191
School Choice -.136 -1.546
Supplemental Educational
Services -.129 -1.444
45. School District Characteristics:
Number of Schools .086 .836 .078 .750
Municipal School District .169* 1.774 .157* 1.652
Rural School District .022 .240 .023 .247
R .360 .357
R Square .130 .127
Adjusted R Square .076 .074
Std. Error of the Estimate .9676 .9688
F 2.428 2.379
Sig. .024 .026
N 122 122
***Significant at .01 level; **Significant at .05 level;
*Significant at .1
level (2-tailed)
These regressions supply weak support to Hypothesis 3.
The budget environment and school district characteristics do
affect decentralization, but, clearly, there are other variables
that
are more important. This issue is addressed in the Discussion
section, below.
DISCUSSION
The majority of the school districts in the cross section
micromanage the position and transfer control functions.
Following Schick (1966), we speculate that they do so because
they lack confidence that internal controls are sufficient to
avoid
deficit spending. Weak accounting and control mechanisms
increase the probability of filling unfunded positions and
transferring funds from over obligated accounts. Many districts
do allow principals to originate a budget and control the
disposition of funds in budgeted accounts, but the
46. comprehensive decentralization advocated in the school-based
budgeting literature is nowhere to be found. Decentralization
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248
does not follow ideal types, as we observed in the wide
variation
in the frequency with which each of the three budget practices
has been decentralized. Instead, the Massachusetts school
districts represented in this study are selective in the budget
decisions that they delegate to principals (Brown, 1987).
Interestingly, political decentralization includes both
bottom-up and top-down accountability. Where budget
development and control over accounts are delegated to school
principals, school committees are more involved in school level
budget details and, to a lesser extent, more likely to
micromanage transfers. School councils and teachers are more
influential in budget decisions. Explaining this complex set of
relationships is not simple. Regression results indicate that
higher political decentralization factor scores are driven, in
part,
by the influence of the No Child Left Behind Act and the
Massachusetts Comprehensive Assessment System on budget
decisions, by a smaller number of schools, and, to a lesser
extent,
by fiscal stress. School choice, as required by NCLB for
schools
that fail to make adequate yearly progress, is a centralizing
force.
NCLB appears to have differential effects. When the MCAS
testing regime is salient in budget decisions, political
47. decentralization scores are higher, but when individual schools
are in trouble and the district must offer school choice, school
committees are less likely to relinquish control. While the
reform literature assumes that the benefits of influential school
councils are positive, the risks of increased involvement by
school level stakeholders could be high for school committees.
Roza (2008), for example, asserts that the allocation of
resources
based on political demand can “undermine district strategy” and
prevent the resources from being distributed to those it was
intended. She also notes that accountability should accompany
discretion to reduce this problem.
Rubin’s (1996) suggestion that an increased emphasis on
accountability for results shapes budgetary decision making also
finds support in these findings. Where political
decentralization
is strongest, higher levels of political influence and control can
be found at both the school and the district level. To the
question: “How can elected officials and chief executives
ensure
that managers with increased budget flexibility will pursue
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objectives consistent with policy and/or strategic goals?” this
research suggests that they do the obvious. They involve
themselves.
Does the increased involvement of school committees
observed in districts with higher political decentralization
scores
48. constitute micromanagement? There is no empirical answer to
this normative question, especially if a discussion of the
legitimate role of the school committee is left out of school-
based budgeting prescriptions. Should budgeting be
decentralized? Some school committees represented among the
respondents seem to think so. They do look to principals and
stakeholders to manage NCLB/MCAS mandates and, to a lesser
extent, fiscal stress. But, given a manageable span of control,
school committees stay involved. What reformers may perceive
to be micromanagement, school committee members may
perceive to be an ethical obligation. Prior practices and the
incremental nature of change in the public sector could also
result in a more “unintentional” or “de facto” strategy (Roza,
2008, p. 1).
An alternative to viewing legitimate concerns for
accountability as a force that shapes political decentralization is
the more cynical view that some districts want to adopt school-
based budgeting without confronting internal resistance to
change, the constrained model suggested by Moynihan (2009).
Superintendents and business officials would likely be the
primary constituencies that would be opposed to increasing the
budgetary powers of principals and increasing the influence of
school councils. Case study research is needed to determine the
extent to which opposition by these key actors is driven by their
own propensity to micromanage or to legitimate concerns about
the abilities of principals to manage in a decentralized
budgeting
environment.
Bureaucratic decentralization, limited in the findings of
this study to transfers among accounts, is more likely to occur
in
wealthier, municipal school districts. Following Schick’s
(1966)
logic, these districts may have better internal controls and
larger
and/or better qualified staffs in the central office, allowing
49. elected officials to relax control. This type of decentralization
primarily applies to superintendents and business officials, as
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indicated by the lower factor loading for principals. It is
striking, however, that 55 percent of the responding business
officials indicate that the school committee maintain control
over
transfers. Massachusetts school committees, it would appear,
are
careful about delegating control over transfers. Running a
budget deficit could be a high stakes proposition for a school
committee member who wants to be reelected. One must ask,
as well, “Just how important is control over transfers to the
school-based budgeting prescription? Would a transfer be more
easily or quickly accomplished if the principal could initiate
and
approve the transfer?” A pre-audit of the transaction would still
be required to determine sufficiency of funds in the source
account, but, presumably, the transaction could bypass the
signature of top officials, but it would be a poor internal control
system indeed if the business official or a designee did not also
have to sign off on the transfer.
This study’s findings are generally consistent with the
school-based budgeting literature in that stakeholders do
become
more influential under the political form of decentralization
and,
in this respect, decentralization may be a system changing
strategy (Wohlstetter & Buffett, 1991). However, this study
50. finds no reduction in central office budget influence under any
form of decentralization. Admittedly, this may be due, in part,
to
the business official’s perspective. More research is needed to
determine if there is a change in how superintendents and
business officials exercise budget influence under
decentralization. For example, respondents may fail to
recognize
the impact of “micro-decisions” made by principals, such as
how a shared staff member distributes time, on resource
allocation (Roza , 2008), which could result in an under-
estimation of decentralized decisions. It is tempting to simply
state that the human propensity for micromanagement is too
powerful a force to be overcome by the prescriptions of
reformers. Admittedly, superintendents and business officials
may attempt to influence school boards to maintain centralized
control over budgeting in order to protect their own turfs
(Moynihan 2009), but these officials, along with school boards,
have a stewardship role to play that they cannot abandon. Their
concerns may be real. This should lead us away from
PAQ SUMMER 2015
251
prescriptions and to a practical focus on how elected officials
and administrators perceive and exercise their stewardship.
The best explanations for the variance in political and
bureaucratic decentralization may be found in the relationships
forged by professional administrators with school committees
and the community, independent of the budget environment or
school district characteristics. The very limited nature of
decentralization among the school districts studied, which
51. appears to occur in a kind of “safe mode,” may also help
explain
why the budget environment is not more important. School
districts have already hedged against potential problems
stemming from decentralization. One might also examine the
adequacy of financial management systems and the experience
of elected officials and administrator with the adequacy of these
systems as factors in the propensity of elected officials to
micromanage. Reforms have an uphill battle if they are
inconsistent with the norms, values, and experiences that
professionals and citizens bring to the organization.
PAQ SUMMER 2015
252
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Appendix 1. Comparison of Responding Districts to All Non-
charter School Districts by Type
Type of School District Respondents All Districts
Municipal 71.3% 74.2%
Regional 28.7% 25.8%
Total 100.0% 100.0%
59. Appendix 2. Comparison of Responding Districts to All Non-
charter School Districts by Region
Geographic Region Respondents All Districts
Eastern Massachusetts 64.0% 55.9%
Western Massachusetts 32.6% 36.8%
Cape Cod and the Islands 3.4% 7.3%
Total 100.0% 100.0%
Appendix 3. Comparison of Responding Districts to All Non-
charter School Districts by Enrollment, Spending, and State Aid
Respondents All Districts
ENRL
Expend.
Per
Student
State
Aid (%) ENRL
Expend.
Per
Student
State
60. Aid (%)
Mean 3,120 9,726 39.1 2,868 9,616 39.1
Std. Dev. 3,262 2,061 20.2 4,469 1,949 20.3
Minimum 134 7,985 13.4 7 7,854 13.4
Maximum 28,235 18,929 96.3 60,951 21,687 96.3
N = 179 N = 328
Independent samples t tests reveal no statistically significant
differences. Variance in
spending per student of respondents, however, is significantly
different (p = .044) from
non-respondents. Enrollment differences, while not statistically
significant, are due to the
very large City of Boston School Department, which is not
among the responding
districts.
PAQ SUMMER 2015
258
Appendix 4. Components of the MCAS and NCLB Index
Cronbach’s Alpha: .710.
Appendix 5. Components of the Wealth Index
Wealth Index Mean S. D.
61. Net school spending as percentage of requirement 115.63 10.95
Percentage of minimum spending from own source revenue (1 -
state
aid) 60.84 20.28
Percentage of students ineligible for free and reduced lunches
80.14 17.01
N = 175, Cronbach’s Alpha: .738.
Appendix 6. Components of the Fiscal Stress Index
Fiscal Stress Index Mean S.D.
Summation of survey responses for following items
(potential range of 0-24): Thinking about fiscal stress, which
of the following has your district experienced recently, is
experiencing this year, or expects to experience over the next
few years? (Please check ALL that apply. You may check
more than one column for each item.). Difficulty Balancing
the Budget, Layoffs, Decline in Local Contribution, Decline
in State Aid, Mid Fiscal year Budget Cuts, Elimination of
Academic Programs due to Fiscal Stress, Elimination of
Extracurricular Activities due to Fiscal Issues, Inability to
Provide Services at the Level or Quality Expected by the
Citizens in our Community
9.32 4.87
N = 142, Cronbach’s Alpha: N/A
Importance of MCAS and NCLB in Budget
Decisions N Mean S.D.
%
Agree
62. No Child Left Behind requirements are a
significant force behind budget decisions 158 3.54 .803 59.5
MCAS scores are a significant force behind
budget decisions 160 3.40 1.041 53.1
Reallocation of FTE positions because of low
MCAS scores 158 3.36 0.946 50.6
Importance of MCAS scores to the school
committee in making budgetary decisions 165 3.97 0.946 74.5
Importance of MCAS scores to the
superintendent/central office in making
budgetary decisions 162 4.04 0.993 79.6
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Introduction
Topics to be covered include:
· Being Accountable to Citizens
· Carl Friedrich’s Views on Accountability
· Herman Finer’s Views on Accountability
· Reaching a Middle Ground
· A Framework for Accountability
· A Question of Ethics
· Privatizing Public Services
· Privatization Debate
· What is Participatory Budgeting?
· Public Works Programs
63. · Thematic Programs
· Four Perspectives of Participatory Budgeting
· Behavioral Public Finance
· Behavioral Finance Frameworks
· Collaborative Budgeting
· Involving Citizens in the Process
In this final week of the class, we will focus on public
administrator accountability to the citizenry and the increased
involvement of those citizens in the budget process. Today,
public administrators are more than ever beholden to what
public goods and services citizens want for their tax money. In
the late nineteenth century, Woodrow Wilson identified a
dichotomy between elected politicians and public
administrators. He believed they both should focus on doing
their respective jobs and not interfering with one another. As we
will see in this lesson, this dichotomy evolved in the century
that followed.
Being Accountable to Citizens
‹1/4 ›
Accountability
What exactly does it mean to be accountable on a public service
level? It means to adhere to a standard of professionalism that
incorporates the understanding that the nation’s citizens are
supporting the professional activities of administrators through
their tax dollars. As such, public employees uphold the missions
of their organizations and are held responsible by citizens to do
so. Whether an organization is public or private, accountability
is an important aspect of its functionality and it reminds public
servants that they will be held liable for their actions while they
are employed by this
Standards of Accountability
It would seem that accountability in the realm of public service
is a simple matter, but in reality, it is definitely not. The public
interest, statutory and constitutional law, other agencies and
levels of government, and community values are among the
standards of accountability to which public servants are held
64. accountable—in addition to the citizens whom they serve, of
course. Public servants must respond to an array of norms,
values, and preferences related to accountability that may
overlap, sometimes contradict each other, and are constantly
evolving. The environment that is produced by these demands is
an exceedingly complex one organization.
Serving the Public Interest
Accountability is a central matter in democratic governance.
Simple measures of efficiency or market-based standards cannot
measure or encourage responsible behavior adequately. In the
public sector, accountability should be based on the idea that
public administrators should serve the public interest in all
decisions, regardless of how complicated the situation may be.
Dialogue within organizations, citizen empowerment, and
broad-based civic engagement should all be utilized when
making these judgments in order to produce the most equitable
results. Public servants assure that solutions to public problems
are consistent with laws, democratic norms, and other
constraints, while it is the public administrators who make these
constraints and their realities known to citizens. Doing this does
more than just create realistic solutions. It also builds
administrative accountability and further engages the citizens in
the process.
Political Influences
It was once believed that defining the work of public
administrators as objective and businesslike, completely
separating the realm of public service from politics, would
ensure administrative accountability. This belief did not take
into account the complexity of governmental functions and their
dual administrative/political face. Administrative functions
cannot entirely be separated from politics, and administrators
typically are not elected to their positions. Thus, holding them
responsible for their actions and ensuring that they exercise
discretion in a manner consistent with democratic ideals
becomes a more difficult task.
Today, some of the most important issues in democratic
65. governance involve how accountable and responsible
administration can be secured. The notion of controlled,
accountable government forms one of the pillars of our political
system, one that lies at the roots of American democracy.
Carl Friedrich’s Views on Accountability
German-American political theorist Carl Friedrich (1901-1984)
Accountability in the public sector first became an issue during
World War II, when the German-American political theorist
Carl Friedrich argued that public administrators need to rely on
technical and professional knowledge in order to be
responsible. According to Friedrich (1940), professionalism was
pivotal to bureaucratic responsibility. At this point,
policymaking and policy execution were becoming largely
inseparable, and administrators generally possessed the
knowledge and technical expertise that the average person did
not possess, which was believed to make them more qualified
for these tasks that the citizenry at large. Their responsibilities
were based on professional knowledge, thus according to
Friedrich, they should only be accountable to their fellow
professionals where meeting commonly agreed-to standards
were concerned.
PERSONAL AND FUNCTIONAL RESPONSIBILITY
Friedrich did not believe that it was unimportant to be
responsible to the public. But he did carry a focus on the
changing nature of administrative responsibility required that
professionalism, or “craftsmanship” should be central to the
definition of accountability. According to Friedrich, two types
of responsibility should be considered when evaluating
accountability. Personal responsibility refers to the
administrator’s being able to justify his or her actions according
to orders, recommendations, and so forth. Functional
responsibility involves the administrator’s looking to his or her
function and professional standards for guidance (Denhardt &
Denhardt, 2007, pp. 121-122). If personal and functional
66. responsibility were to conflict, as Friedrich believed the
potential to occur existed, both technical knowledge and
hierarchy would have to be considered.
MEASURING AND ENFORCING ACCOUNTABILITY
THROUGH INTERNAL CHECKS
Friedrich suggested several methods that could be used to
measure and enforce accountability. Essentially, he believed
that administrative problems could be solved effectively
through internal checks that were created by professional
standards and technical knowledge to ensure accountability.
This way, the professional administrators’ responsibility cannot
be held to politicians and elected legislators, but instead to
peers who are appointed rather than elected and who have the
same technical knowledge and standards—and therefore know
how the standards should operate. In other words, public
administration’s complexity requires professionals to deal with
ethical decisions because they are the only ones who have the
knowledge required to properly understand the ethical issues at
hand and how to handle them. The technical knowledge of
professionalism ensures proper standards of ethics, making it
the only proper framework for ensuring accountability
according to Friedrich.
Herman Finer’s Views on Accountability
The Romanian-British political scientist Herman Finer (1898-
1969), at the time a professor at the University of London,
strongly disagreed with Friedrich’s views and ignited a debate
on the topic of accountability after writing to Friedrich in
response. According to Finer, the best means of ensuring
accountability were external controls; in fact, in a democracy
allowing public administrators to hold themselves accountable
was futile and counterproductive. Instead, administrators should
be subordinate to elected officials, who represent the people and
are directly responsible for them.
Finer defined responsibility in two ways in his argument: as a
personal sense of moral obligation, and as “X is accountable for
Y to Z.” The first definition emphasizes the conscience of the
67. agent. Whether the agent does wrong or not is determined by his
or her own conscience. Thus, Finer saw the second definition as
the most relevant for ensuring accountability in public
administration.
According to Finer, technical feasibility and knowledge should
be secondary to democratic controls based on three doctrines or
ideas.
FIRSTThe first is what Finer referred to as the “mastership of
the public.” Public servants do not work for the good of the
public based on their sense of what the public needs, but rather
what the public says it wants (Finer, 1941, p. 337).
SECONDSecondly, an elected body and other institutions must
be put in place for the purpose of expressing and exerting public
authority.
THIRDThirdly, and most importantly, these elected institutions
should not only express public wants but also be able to decide
how these wants are to be satisfied and to enact these decisions.
If there are no external controls used in the process, it is
inevitable that power will be abused and corruption will occur.
Finer did not agree that administrative responsibility was more
of a moral than a political issue, as Friedrich had posited. He
finally reached the conclusion that moral responsibility operates
in direct proportion to the strictness and efficiency of political
responsibility. When political responsibility is weakly enforced,
a complete lack of accountability and gross corruption result.
Finer did not find professional standards, public duty, and
technological efficiency to be unimportant to achieving
accountability; but he viewed them as factors in sound
administrative operations rather than prime movers of sound
policy.
Reaching a Middle Ground
‹ 1/6 ›
· Friedrich’s Response to Finer’s Approach
68. Friedrich later argued that Finer’s views would not be feasible
without clear agreement and little or no need for administrative
discretion. He pointed out that the main concern should be
ensuring effective administrative action, which would involve
consideration of the relationship between the realms of
policymaking and policy execution. He also was critical of
Finer’s suggestion that accountability depended upon external
controls, insisting that unless administrators hold each other
accountable to a set of standards based on professional and
technical knowledge, no accountability can be achieved. For a
public administrator, accountability means not only following
the law and the rules of elected officials but also using your
profession’s expertise.
Blending of Internal and External Controls
Today, the ideas of Friedrich and Finer are both highly regarded
in the realm of public administration, but most theorists have
sought a middle ground on the subject. Most agree that
accountability in public administration is best achieved through
both internal and external means. Internal controls are those
that are established and enforced within an agency, while
external controls may involve legislative supervision, budget
and audit activities, the use of an ombudsman, criticism from
the press, and oversight by consumer groups, interest groups,
and other concerned individuals (Denhardt & Denhardt, 2007, p.
125).
Three Important Questions
Questions about accountability have continued to revolve
around three deceptively simple questions that have been
debated hotly by those in the field. Different perspectives on
administrative accountability have been suggested based on the
answers to these questions and the importance assigned to them.
· What are we responsible for?
· To whom are we responsible?
· How is that responsibility best ensured?
Achieving Accountability
69. If these are the basic circumstances, how should accountability
be achieved? The basic principles of administrative
responsibility are sometimes incompatible, so no generic
response is acceptable. This could involve the use “criteria” of
responsibility, some of which may conflict with others, but all
of which can be weighted and applied appropriately (Maass &
Radaway, 1959, p. 163-164). These questions illustrate exactly
how complex accountability truly can be. One answer might be
to make sure that accountability is always in balance in a given
circumstance, and that all administrators are only held
responsible for incidents that occurred under his or her official
authority. But even the word “responsibility” has multiple
definitions and uses and is used more often than it is defined.
Accountability, Cause, and Obligation
When addressing responsibility, three connotations are used:
accountability, cause, and obligation. Explicit accountability
involves answering and accounting for an administrator’s
performance of official tasks. But implicit accountability can
involve outcomes that the administrator did not cause directly
and occurs when one or more of four core elements is lacking:
resources, knowledge, choice, and purpose (Spiro, 1969, pp.15-
16). Democratically, it would be very negative if a person were
held accountable for an event that he or she did not contribute
to. Thus, figuring out how to ensure responsibility is difficult.
Enforcing Accountability
The more important issue is how to ensure accountability. Most
scholars of public administration have determined that
administrative accountability is even more difficult to enforce
than it is to define, thanks to the complex web of accountability
mechanisms and systems that characterize the current American
governmental system.
A Framework for Accountability
A useful framework for understanding these multiple
perspectives on accountability identifies four primary types of
accountability, each of which is either internal or external and
70. the levels of individual autonomy present (Romzek & Dubnick,
1987).
HIERARCHICAL ACCOUNTABILITYThe first type
is hierarchical accountability, based on close supervision of
public servants who have little work autonomy. Under this
approach, public administrators have expectations that are
managed through focusing attention on the priorities of those at
the top of the hierarchy. At the same time, a wide range of
agency activities is tightly controlled and supervised. This type
of accountability system involves an organized and legitimate
relationship between a superior and a subordinate (in which the
need to follow orders is unquestioned, barring illegality) and
close supervision or a surrogate system of standard operating
procedures or clearly stated rules and regulations.
LEGAL ACCOUNTABILITYThe second is legal accountability,
which involves detailed external oversight of performance for
compliance with established mandates such as legislative and
constitutional structures. Fiscal audits and oversight hearings
fall under this category of accountability. In contrast to
hierarchical accountability, legal accountability is based on
relationships between a controlling party outside the agency and
the agency’s members. That outside party is the person or group
who is in a position to impose legal sanctions or assert
contractual obligations. These people make the laws and other
policy mandates that the public administrator enforces or
implements. In policymaking terms, the outsider is the
“lawmaker” while the public administrator has the role of
“executor.”
PROFESSIONAL ACCOUNTABILITYThe third
is professional accountability, based on high degrees of
autonomy to people who based their decision-making on norms
of appropriate practice. Public servants must rely on skilled and
expert employees to provide appropriate solutions, and those
employees are held fully accountable for their actions. If they
71. fail to meet job performance expectations, they can be
reprimanded or terminated. They expect to be given sufficient
discretion so that they may complete their jobs. The key to the
professional accountability system is deference to expertise
within the agency. While outside professional associations may
indirectly influence the decision making of the in-house expert,
the source of authority is essentially internal to the agency.
POLITICAL ACCOUNTABILITYThe fourth
is political accountability, which requires responsiveness to key
external stakeholders, such as elected officials, clientele groups,
and the general public. If deference characterizes professional
accountability, responsiveness characterizes political
accountability systems. The key relationship under these
systems resembles that between a representative (the public
administrator) and his or her constituents (those to whom he or
she is accountable). Under political accountability, the primary
question is, “Whom does the public administrator represent?”
The potential constituencies include the general public, elected
officials, agency heads, agency clientele, other special interest
groups, as well as future generations. The public administrator
is expected to be responsive to the policy priorities and
programmatic needs of his or her constituency (Romzek &
Dubnick, 1987, pp. 228-230).
A Question of Ethics
If one were to focus solely on the constitutional and legal
framework in answering this question without considering other
sources of knowledge and resources, the purpose becomes
decidedly negative. With a broader approach, accountability can
have the more positive purpose of enhancing responsibility
across the public sphere. From this perspective, then, the focus
should be on the character and ethics of the individual
administrator.
Ethics provide accountability to the public and the
administration and ensure that the public receives what it needs
72. from the people who are appointed to serve them. It also gives
the administration guidelines for integrity that helps foster the
trust of the community. This atmosphere of trust helps the
public understand that their public administrators are working
with their best interests in mind.
Some have suggested that accountability is essentially a
question of ethics. This indicates that the role of administrator
should be reconceived as an ethical actor. In this vein, four
components of responsible conduct can be identified:
· Individual Attributes
· Organizational Culture
· Organizational Structure
· Societal Expectations
Individual ethical behavior requires individual ethical autonomy
and self-awareness as well as limits to the reach and power of
organizations (Cooper, 1998, p. 149).
Privatizing Public Services
During the Great Depression many dams, buildings, bridges and
other structures were built by men hired as part of government
programs such as the:
· Civilian Conservation Corps
· Public Works Administration
Many of the tasks that government agencies are charged with
today, such as conducting scientific research and building
highways and dams, were once undertaken by private industry.
Since the 1980s, a shift has occurred in which more and more of
these tasks are returning to the private sector, with prisons,
schools, electrical utilities, railroads, and many other
institutions leaving the hands of the government agencies that
once controlled them.
Whether this is a good idea or not has been hotly debated.
Proponents of privatizationbelieve that it will increase the
efficiency and quality of government activities, reduce taxes,
and shrink the size of government as the profit-seeking behavior
of new, private sector managers will lead to cost-cutting and