Accounting for Financial Health: Different Local Governments’ Choices in Different Governance Settings

Abstract

The purpose of this paper is to assess the extent to which a local government needs to have a specific set of accounting tools and techniques for financial health assessment attuned to the governance model in use for services delivery. In contrast with previous literature, which has discussed financial health measurement systems in local governments as an all-compassing tool, we stress the idea that measuring financial health must be assessed in the context of the governance setting in use.

Keywords: financial health, financial distress, performance measurement, local governments, service delivery, governance models

JEL Classification: H72, H74, H77, L32, L33, M41