"Benchmarking and Cost Accounting: The North Carolina Approach".

• Position: Review

Rivenbark, William C. and Carter, K. Lee

Journal of Public Budgeting, Accounting, & Financial Management, Spring 2000, pp. 123-137.

The North Carolina Local Government Performance Measurement Project (NCLGPMP) was designed to allow local governments to compare their performance with other governments. One of the most important aspects of the project was the use of a full-cost accounting model. Such a model is important for making comparisons between jurisdictions possible, because it results in the total cost of services being captured. This means that cost data is compatible because all costs reported are full costs, not direct costs. Direct costs would be at varying portions of full cost, depending on the jurisdiction. Full-cost reporting also was desired by the member jurisdictions of the project because they wanted full cost data available in order to better evaluate privatization options. Fortunately for the NCLGPMP, the North Carolina Local Government Commission publishes illustrative charts of accounts, which form the foundation of many localities' chart-of-accounts. Thus, there was a ready-made baseline from which the full-cost mo del could proceed. There are three basic components of the NCLGPMP model: Direct costs, indirect costs, and capital costs. Direct costs are standard direct costs taken from the general ledger. Indirect costs are...