"Teaching the ABCs".

• Author: Michel, R. Gregory
• Position: Accounting, Auditing, and Financial Reporting - Slow acceptance of activity-based costing by government entities - Abstract

Jason Peckenpaugh

Government Executive, April 2002, pp. 41-46.

This article discusses the federal government's efforts to implement activity-based costing in various federal agencies. Despite its use in several federal agencies, ABC has been very difficult to implement successfully. In some cases, employees view the data collection for ABC as an unnecessary burden. In other cases, ABC is viewed as a potential threat that may lead to outsourcing government services. Agencies that implement ABC systems sometimes make the system too cumbersome to use. Another obstacle is the lack of ABC advocates in the federal government. Many chief financial officers--potential advocates of ABC--are too preoccupied with obtaining clean audits. ABC requires a major cultural change from preventing fraud and abuse to reducing costs and improving management decisions. One of the biggest obstacles to implementing ABC is...