The Accounting for 'Rational Management' and Financial Management in New Zealand Education Sector

Abstract

This paper examines the intent and consequences of 'new' accounting (the 'New Public Financial Management') (NPFM) procedures invoked to facilitate a macro-micro interface within the context of the significant administrative reform of the New Zealand (NZ) state education system. The 1989 educational reform of the NZ education system can be seen as part of a wider set of public sector reforms, which are characterised by the umbrella heading of 'New Public Management'. It was claimed that NPFM provided a link between the sets of values highlighted through the NPM reform process and the internal workings of various public sector organisations.

The study provides case studies of the organisational budgeting practices of four schools, some ten years after the reform. The observed practices are analysed and interpreted within a theoretical framework comprising two competing theories of change - NPM which provides the 'normative' intent for public sector organisational change, and institutional theory that offers an explanation of the 'operational' consequences of public sector organisational (i.e. schools) response to change. The findings suggest that accounting and management technologies have served a useful, political purpose, although not in the way espoused by NPM proponents.

Keywords: 'Rational Management', New Zealand Education Sector, Accounting

JEL Classification: M4, M41, M42, M49, I21, I22