Cost accounting as a decision-making tool in public services delivery

Francesco Agliata, Danilo Tuccillo


The cost accounting has the function to support the decision making process and to inform the management about the resources acquisition and the level of resources utilization. With reference to the public service sector, the cost accounting verifies, for each service, the acquired financial resources, the costs of each productive factor, the obtained qualitative and quantitative results and the revenues.

Activity-based costing is now an accepted element of the accounting and control systems of industrial and service firms, and it has been employed in both governmental and not-for-profit organizations. The characteristic of public sector organizations, as overhead-intensive service entities, suggest the use of ABC. The adoption of ABC in private sector was propelled by increasing proliferation of all businesses outputs (including types of suppliers, products, services, channels, and customers) that cause increased complexity and increased indirect expenses to manage the complexity. But for public administration the variety of services offered, of suppliers and the cross-sectored demand of various category of citizens with differentiate needs is not an effect of transformations in its own environment, but rather a characteristic of its own activity.

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Registered by the Cancelleria del Tribunale di Pavia N. 685/2007 R.S.P. – electronic ISSN 2038-5498


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