How the City does its cost accounting will greatly impact the numbers you see in its reports. Unless we know how the city does its accounting we don't even know if the city's reported costs are an apples to apples comparision with a private sector business.
Let me explain. There are underlying assumptions to any accounting system and those assumptions will be based on for what the accounting system is most used. For example, one state agency that I worked for set up their accounting so that everything looked as expensive as possible because usually they submitted their figures to the feds reimbursement. By making everything look expensive they got more dollars back into the state than the state paid into the feds through taxes. (They did this by putting a large amount of costs into a general category called "overhead" and then slathering this "inflated" overhead over all departments. This is not "padding the figures", it's just a way to account for costs). An alternative use of an accounting system would be to use it to manage for costs. If you want to understand and manage costs, you keep overhead as lean as possible and itemize the rest of your costs. Neither assumption is "right" or "wrong" -- it all depends on what use you are going to use the accounting system for. Another important thing to know is whether or not the City accounting system is using a comprehensive budget -- one that includes and reconciles all of city government, or whether each department is it's own separate "chimney" and never the twain shall meet. Once again, you can make something look expensive by applying a comprehensive overhead to a single business' budget. You can also make it look cheaper than it really is -- to prove you are more efficient than the private sector -- by the way you define a "business unit". Another thing that can happen if the budget isn't comprehensive is that costs for the same item can be charged in two places, especially if departments aren't communicating. I'm not saying that anyone would intentionally mislead the Council -- I am saying if the Council doesn't know how the cost accounting works, they don't know jack about what story the numbers in the budget tell. I am also saying -- from experience -- that making apples to apples comparisons between government budgets and private sector budgets is not a simple matter. You have to know how the numbers were compiled. Barbara Nelson Burnsville formerly Seward _______________________________________ Minneapolis Issues Forum - A Civil City Civic Discussion - Mn E-Democracy Post messages to: [EMAIL PROTECTED] Subscribe, Unsubscribe, Digest option, and more: http://e-democracy.org/mpls
