CITYWIDE: ACTIVITY-BASED COSTING
The City has made minimal efforts to establish the specific costs of targeted service functions.
Estimated Annual Impact:
Estimated Implementation Costs:
Barriers to Implementation:
For every identifiable activity of government, activity-based costing determines the cost of everything that goes into conducting that activity. Accurate information about costs provides a foundation for managers to identify inefficiencies, apply managed competition principles, and establish performance measures. By measuring the real cost of providing a service, the City will know what it actually spends, how its funds are spent, establish a baseline for costs, and pinpoint areas where savings might be achieved. Activity-based costing provides real performance indicators, in which costs can be measured on a per-employee, per-task, or per-project basis. This allows decision-makers to determine which divisions are incurring the greatest costs, examine the reasons for this, and make informed decisions as to whether the process should be reeningeered or considered for outsourcing. (Analysis section adapted from the Manhattan Institute’s publication The Entrepreneurial City: A How-To Handbook for Urban Innovators.)