Governance in public sector can be explained by the implementation of efficient performance driven results, it inculcates aspects of transparency, result based outcomes, accountability and discipline. However, to accept these targets or result driven achievements without questioning their functionality and effectiveness would be like following a pack mentality with blinders. Policy setters and managers have always used a wide range of evidence sources to propose interventions for the organization of companies. These interventions in the recent decades have been called into scrutiny to address the nature of proposed management systems and the significance of their impact (Mays et al. 2005).
These measurement benchmarks keep evolving with time with new findings and evidences evaluated by the management, they are a reflection of the management’s intentions and therefore require reworking and adoption. With these simultaneous changes taking place in the public sector, their complexities are also raising the need for measurement legitimacy, validity and functionality (Bouckaert, G. 1993).
An indirect form control for the necessary governance of complicated systems is theory of governance by targets and performance measured index parameters (Beer 1966)
Audit has become central to ways of talking about administrative control (Power Mike, 1994). Countering governance and accountability has borne better than a natural and self-supporting technical response in the field of auditing. There are multiple settings where auditing has extended more smoothly like schools, law or water companies, research and development laboratories and sector wise processes. Generally auditing is concerned with standardized system in place to govern quantity efficiency and quality effectiveness of said systems.
Historical data has shown how numbers have affected the procreation of social measures. In the 19th century, in order to address public services, the states started collecting data and as a result received a flood of numbers (Hacking 1990, pp. 1–10) that defined our day to day functioning, survival and perception systems in todays’ date. Numbers and their quantitative measures have been associated with evaluation and accountability for so long that in the modern world it is difficult to imagine other forms of discipline and transparency without it. So much so that quantification or auditing is being used to remove conflict, rule out distrust and integrate nations, government bodies and even international organizations like the IMF in the present.
Challenges and Implications
These measurement systems can be controversial since their impact and effect can take unintentional directions. Quantitative measures are increasingly being associated with accountability (Hoskins 1996) and moving towards auditing rather than an overall accountability in the managerial systems. Many have argued over its harmful repercussions such as when employees focus on fulfilling the measures (tick box mentality) instead of evaluating their performance based on quality. For example, ranking performances on certain criterion can result in individuals focusing on improving only those aspects in order to retain a higher rank, even if at the cost of qualitative work. Measurement of performance therefore is reactive and blurs the distinction between what is being measured and respective under study.
The position of trust shifts from experts patrolling measures to forms of data evidence if those who are involved in everyday work are not trusted. Since system-based audits can be ritualistic in nature that are more inclined to monitoring processes and standards outlined rather than the substance and its quality, they inevitably move institutions away from their main focus. It is also important to note that auditees can easily find loopholes to evade auditing. Eventually, audits may lead to failed transparency since their focus is on simple measured practices without any account of their valid and efficient monitoring.
The shift of trust from social workers and public sector workers to auditors has also led to empowering auditing companies in a sense that these workers cannot address certain issues with the auditing process without seeming defensive or secretive. Auditing social work can also be destructive by way of creating an elementary explanation of practices and targeting service outputs with minute focus on user outcomes (Munro 2004, p. 1075).
Disclosures, another aspect of audit system can pacify public into believing sound patrolling by auditors, therefore, discourages them from critically analyzing the results. An audit moves the public from inquiry of results to trusting blindly the discovered material.
Credibility is also questioned since both the target setters and managers can have incentives to cheat the system. Once pressure is applied on systems garnering statistical regularity for control purposes, these systems will crash since they will bring about a change in conduct of actors knowing the data presented will be controlling of their actions (Goodhart 1984, p.94)
Examples Highlighting Challenges
Expectation Gap
In 1991, the Bank of Credit and Commerce International was closed and led a substantial debate over the auditing function in banks. The official report on the closure was more inclined to a direct reporting of auditors to the senior bank management instead of the actual audit process and their reasoning was that information should be accessed by senior experts with the technical knowledge only. It highlighted the expectation gap between how the company sees itself through the lens of their knowledge and how financial auditors are recognized for their expertise in fraud detection.
Social Work
1) In 1992 a voluntary scheme was introduced as a regulation by the name – EC Environmental Management and Audit (EMA) scheme in UK. It was introduced to validate a restricted statement for support in terms of legal compliance, cost management and reworked efficient systems. The contribution of said system was imprecise on how it would empower public sector or public in general. Government however, decided to withdraw it before it was introduced due to the uncertainties which were clearly highlighting the statistics of contaminated land. The transparency of this report could have affected the government plans and therefore was removed from public scrutiny to hide the details that could have landed the government in problems.
2) In child care, the unambiguity with establishing defined standards is still under construction. Therefore, it is natural to focus on efficient cost cutting and basic parameters that are mutual to industrial standard setting instead of narrowing down to an improved rapport between outputs and inputs in terms of productivity.
NHS
England in 2001 introduced an annual ‘star rating’ system for the public health care institutions. As a result, managers in health care were prone to being fired if the results reflected poor performance when measured and were subjected to ‘naming and shaming’ for poor performance (Anonymous 2001). It was believed to bring a positive change, however, the central government intervened constantly to avoid destabilization of hospitals in the market (Tuohy 1999). Labour tried to introduce a new system that allowed for better functioning and fund management through a target and terror system in tandem with the annual ratings system for governance. This system was widely applied to organizations in England and formed a part of an extensive control system monitoring public service performance. Two agencies central to this were the Prime Minister’s Delivery Unit (focusing on key targets of public service) and the Treasury (connecting budgeting with performance targets). Another additional overseer was the Department of Health.
With multiple monitors, the system produced improvements (on the face of it) in English NHS reports. It showed reduced time spending by patients in the accidents and emergency rooms, increased satisfaction, waiting times were shortened dramatically after the introduction of star ratings between 2000-01. However, the NAO (2001) produced reports highlighting the adjustments made by 9 NHS trusts to their waiting lists, some due to pressure from outsiders. These adjustments could be attributed to the staff who manipulated the figures and following established procedures incorrectly. This study then gave way to another report conducted by the Audit Commision with similar deliberate manipulations and misreporting of the waiting list statistics. Few of the misreports were caused by cancellation and delaying of appointments which were recorded as an outlier of the target and terror system. Rowan et al. (2004) discovered no connection between the quality of critical care for adults and performance-based star rating systems.
Suggestions for Improved Measurement
Just like scientific representations, measures should hold objectivity, accuracy and non-reaction in its definition and adaptation. At the same time these standards should reflect worker’s performances and shape their goals. Reactivity should only follow careful consideration by an individual, offering a break between measurement and its reactivity. The blur between object and standards caused by reactivity threatens the efficiency and validity of said standards. When a standard becomes a target or goal, it ceases to be a good performance measure (Strathern 1996, p.4).
Auditing – There should be an alignment of expectations between the audit product and the opinions of the actor analyzing the reports such as the auditees. These expectations must also be realistic and more transparent in nature. Molding the preoccupation of individuals with their perception of performance and quality.
Re-incorporation of trust into institutional languages and rehabilitation of autonomy in some way to displace the distrust empowered by auditing institutions and bring back critical analysis of reports without turning a blind eye to it based on faith in autonomous auditing organizations. These standards can be supplemented by both qualitative and quantitative concepts. Reworking the auditing boundaries by segregation of tasks between the insiders and the outsiders (separation of task from ownership). Also, by hindering the propagation of self-structured image of companies through networks. Internal seniors and auditing company can also define information sharing system that is more transparent for the actors analyzing the final report (sans any restriction from either institution).
Conclusion
Measures give structure because they force the aspects of on environment to conform to the interventions set up by the superior hierarchy in order to allow for comparison and better development of the environment overall. Industries and sectors are complex and different from one another in many ways, they are complicated and vague. Therefore, they can never capture all aspects of activities or performances that are measured. Even with the continuous evolution of standardization process, there will always be areas left uncovered or not completely standardized to enable better performance.
These changes will always be a moving target for those who invest their time in finding way to manipulate the system, and search for loopholes. Transparency is a referral more than practiced even if it is believed to lead to a stronger governance. Auditing too, will take on many forms in different sectors based on the needs for standardization for example the weight awarded to detection vs prevention. These methods will always be needed for in their absence there would be poor administration, a higher chance of deception and inefficient culture in the organization.
Not all aspects that are measured are the ones that matter as we saw in the cases described above, in a social environment, these standards cannot blindly adopt to the rules set up by the mainstream industries since they have different areas that need attention. Similarly, with the presence of individuals looking to manipulate the system, there will be aspects that even when measured do not fully capture the depth and end up missing out the key aspects from a complete intervention.
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