75437 - Management Accounting in Public and Non Profit Sector

Learning outcomes

This course provides students with frameworks for understanding how public-sector and nonprofit organizations can use management control systems to improve organizational efficiency. A management control system comprises the processes, practices, and information that managers use to allocate resources, analyze costs, support decisions, and align organizational activities with strategic goals and mission.

The course emphasizes cost analysis and the use of cost information to make organizations more efficient and effective.

Students who successfully complete the course will be able to:

• Explain how the key success factors of private-sector, public-sector, and nonprofit organizations differ and how these differences influence decision-making and management control systems.
• Apply cost-accounting concepts and methods to identify, analyze, and allocate organizational costs.
• Use cost information to support resource-allocation decisions and identify opportunities to improve organizational efficiency.
• Understand how selected performance measures can complement cost analysis and help public-sector and nonprofit organizations assess whether resources are being used effectively.

Course contents

The course meets for 10 sessions according to the detailed program below.

Class #1 - Introduction to course
Goal of the class: To review the syllabus, discuss course expectations, answer questions about the course, and discuss the process of analyzing the final case.
Assignment: read Chapters 2 & 3
Content of the class: Brief discussion of Chapters 2 & 3.

Class #2 - Full Cost Accounting and Pricing
Goal of the class: To discuss and train on fundamentals of full cost accounting.
Assignment: read Chapter 7.
Content of the class: Be prepared to actively participate in solving the problems presented by the teacher.

Class #3 - Full Cost Accounting and Pricing (continued)
Goal of the class: As class #2.
Assignment: re-read Chapter 7.
Content of the class: As class #2.

Class #4 - Activity-Based Costing (ABC)
Goal of the class: To discuss and train on Activity-Based Cost (ABC) concepts.
Assignment: re-read Chapter 7, especially pages 193-194.
Content of the class: Be prepared to actively participate in solving the problems presented by the teacher, applying the ABC concepts.

Class #5 - Cost Behavior and Differential Cost
Goal of the class: To discuss and train on cost behavior and the related differential cost concepts.
Assignment: Chapter 8 (up to page 227 - The Outsourcing Decision).
Content of the class: Be prepared to actively participate in solving the problems presented by the teacher.

Class #6 - Cost Behavior and Differential Cost (continued)
Goal of the class: As class #5.
Assignment: re-read Chapter 8 (up to page 227 - The Outsourcing Decision).
Content of the class: As class #5.

Class #7 - Mid-term assessment & Measuring Performance
Goal of the class: To evaluate your level of knowledge of full cost, ABC, cost behaviour, and differential cost; To discuss the multidimensional facets of performance in public and nonprofit sectors.
Content of the class: (1) Be prepared to solve two exercises in your team (1h 30min), (2) break (30 minutes), (3) measuring performance (1h)
Assignment: Training on practice cases provided within the e-learing platform and re-read Chapters 7 & 8; read Chapter 9.

Class #8 - Reporting and action
Goal of the class: To compare actual results to the budget using cost drivers and to apply the variance analysis for decision making.
Content of the class: Introduction of the concept of variance analysis; starting case analysis and discussion in teams.
Assignment: read Chapter 10 and the case problem published on the e-learning platform.

Class #9 - Reporting and action (continued)
Goal of the class: As class #8.
Content of the class: Case analysis in teams continues.
Assignment: case problem analysis.

Class #10 - Reporting and action (continued) & Closure
Goal of the class: As class #8.
Content of the class: Case discussion all together.
Assignment: case problem analysis and discussion presentation.

Readings/Bibliography

Textbook

Padovani, E., and Young, D. W. Managing Local Governments: Designing Management Control Systems that Deliver Value. London: Routledge, 2011, Chapters 2, 3, 7, 8, 9, and 10.

Supplementary Materials

Additional materials will be posted on the e-learning platform. Further readings may also be recommended upon request, based on students’ prior knowledge and academic backgrounds.

Teaching methods

The course uses a teaching approach that combines assigned readings, interactive lectures, and case discussions. Further details will be posted on the e-learning platform at the beginning of the course.

Assessment methods

Attending students

Grading is based on a combination of a mid-term assessment done in teams, one written case analysis done in teams and an interview. The final grade corresponds to the sum of the points obtained in each part.

1. Mid-term team exam: 0-6 points, for the mid-term assessment (in teams) on class number 7: each team's member is awarded with the team's grade
2. Case problem solved in team: 0-6 points, for team's solution of a case problem analysed and discussed on classes number 8 to 10: 6 points awarded per each member of the team if the solution is assessed at least fair
3. Final individual interview: 0-24 points, for the individual interview.

Non attending students

1. and 2. are replaced by further questions during the interview.

Grading system (0-30 scale)

• <18: fail, the student can't apply the basic concepts of the course to real problems
• 18-23: fair, the student applies the basic concepts of the course mechanically to real problems, but lacks to understand how to use them for decision making
• 24-27: good, the student applies the concepts learnt during the course to real problems and proves to have a somewhat critical analysis perspective, suggesting courses of actions
• 28-30: very good, the student applies the concepts learnt during the course to real problems, proves to have a critical analysis perspective suggesting courses of actions, and present his/her ideas in a clear and convincing way
• 30 with honors/cum laude: excellent, the student applies the concepts learnt during the course to real problems, proves to have a critical analysis perspective suggesting courses of actions, presents his/her ideas in a clear and convincing way, and demonstrates capacity to links different disciplinary areas

Office hours

See the website of Emanuele Padovani