Abstract
Most examples of activity-based costing/management (ABC/M) are found at the federal level.3 Nonetheless, all levels of government are advised to use it as an effective financial model as part of a broader performance-based management system.4 "Activity-Based Management for Service Industries, Government Entities, and Nonprofit Organizations" outline the benefits of activity-based management for service industries, government entities and nonprofit organizations.5 The use of an activity-based costing (ABC) system is only meaningful if government employees use the causal data to manage business processes toward the achievement of the organization's strategic objectives and service excellence.6 Increased use of quantifiable performance measures and performance-based budgeting in the public sector may lead to increased use of ABC systems. Establish employee buy-in - Spend considerable time planning for potential problems and to moderate cultural resistance and help gain employee support. Because CAISO employees had previously undergone mapping exercises with external consultants that resulted in an unusable deliverable, they resisted new mapping. The one-percent rate change was based on actual time sheets, and this stability in rates increased customers' acceptance of the process. Since ABC implementation, CAISO's headcount has remained very stable, while the organization continues to advance its technology and strategies. 10. Assessments of employee work activity and whether the performance expectations needed to be adjusted became easier. [...]valuable input toward further refinement of the ABC codes was made available