PUBLIC SECTOR REFORM IN THE EDUCATION SECTOR: SCOPE FOR PROGRESS IN PERFORMANCE MEASUREMENT, ACCOUNTING AND PERFORMANCE AUDITING

Prof David Mayston

Department of Economics and Related Studies

University of York

York Y010 5DD, UK

Abstract

The paper examines a number of outstanding problems in the theory and practice of performance measurement, in accounting, and in performance auditing, in the context of the education sector. As a major public service, primary and secondary education has become a prime target for public sector reform. In the UK, these reforms have included the increased use of devolved budgeting through the Local Management of Schools initiative and associated funding formulae, of performance measurement and auditing through OFSTED and Audit Commission inspections, and of school league tables. Central to the success of many of these reforms is the question of whether one can improve educational resource allocation and resource management to the benefit of educational outcomes. However, many questions remain as to the role of resources in influencing educational performance, and how one can validly include value for money assessments within performance measurement and auditing frameworks in the education sector. Research in this area has been hindered by deficiencies in the existing accounting framework for education. There is currently a need for accounting reform to facilitate the construction of a national comparative database that includes disaggregated educational expenditure patterns to support further progress in performance measurement, auditing and research in this important area.