Remedying the "Pedagogic Deficit"

Remedying the "Pedagogic Deficit"State and Local Government Finance and Financial Management: A Compendium of CurrentResearch by John E. Peterson; Catherine Lavigine Spain; Martharose F. Laffey; Essays inPublic Finance and Financial Management: State and Local Perspectives by John E. Peterson;Catherine Lavigne Spain; Is Your City Heading for Financial Difficulty: A Guidebook forSmall Cities and Other Governmental Units by C. Wayne Stallings; A Guideb ...Review by: Thomas D. LynchPublic Administration Review, Vol. 40, No. 5 (Sep. - Oct., 1980), pp. 531-535Published by: Wiley on behalf of the American Society for Public AdministrationStable URL: http://www.jstor.org/stable/3110208 .

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531

REMEDYING THE "PEDAGOGIC DEFICIT"

Thomas D. Lynch, Mississippi State University

State and Local Government Finance and Financial Man- agement: A Compendium of Current Research. John E. Peterson, Catherine Lavigine Spain, and Martharose F. Laffey. Washington, D.C.: Government Finance Re- search Center, Municipal Finance Officers Association, 1978. Pp. 690. $18.00.

Essays in Public Finance and Financial Management: State and Local Perspectives. John E. Peterson and Catherine Lavigne Spain, eds. Chatham, N.J.. Chatham House Publishers, Inc., 1980. Pp. 176. $8.95.

The following guidebooks and handbooks were prepared by the Municipal Officers Association in conjunction with Peat, Marwick, Mitchell and Co., and the Institute of Gov- ernment, University of Georgia. The project director for each publication was Philip Rosenberg.

C. Wayne Stallings (principal contributor). Is Your City Heading for Financial Difficulty: A Guidebook for Small Cities and Other Governmental Units. Chicago: Municipal Finance Officers Association, 1978. Pp. 43. $6.00.

C. Wayne Stallings (principal contributor). A Guidebook to Improved Financial Managementfor Small Cities and Other Governmental Units. Chicago: Municipal Finance Officers Association, 1978. Pp. 115. $9.00.

C. Wayne Stallings (principal contributor). A Capital Im- provement Programming Handbook for Small Cities and Other Governmental Units. Chicago: Municipal Fi- nance Officers Association, 1978. Pp. 76. $15.00.

C. Wayne Stallings (principal contributor). An Operating Budget Handbook for Small Cities and Other Govern- mental Units. Chicago: Municipal Finance Officers As- sociation, 1978. Pp. 145. $15.00.

C. Wayne Stallings (principal contributor). An Accounting Handbook for Small Cities and Other Governmental Units. Chicago: Municipal Finance Officers Associa- tion, 1978. Pp. 145. $15.00.

C. Wayne Stallings and Charles K. Coe (principal contributors). A Debt Management Handbook for Small Cities and Other Governmental Units. Chicago: Mu- nicipal Finance Officers Association, 1978. Pp. 65. $15.00.

C. Wayne Stallings and Charles K. Coe (principal contributors). A Treasury Management Handbook for Small Cities and Other Governmental Units. Chicago: Municipal Finance Officers Association, 1978. Pp. 98. $15.00.

SEPTEMBER/OCTOBER 1980

Edward A. Lehan's "Public Budgeting" chapter of State and Local Government Financial Management: A Com- pendium of Current Research makes the following important observation and conclusion: . . . Apparently, most budgeteers are trained on-the-job and thus dependent on the quality of supervision found in their budget units-a most unsatisfactory state of affairs from a pedagogical point of view. Further, the literature of budgeting is silent on the pedagogy of budgeting. Given the strategic placement of budgeteers in the decision-making process, and the profusion of budgeting models which provoke broad and deep thinking about so- cieity and its problems, this 'pedagogic deficit' should alarm the academic and training community-and stir it into action.'

The State of Affairs

To understand why the "pedagogic deficit" cited by Lehan exists, one must look to the literature and the reasons for its paucity. The teaching of public budgeting is directly related to the teaching of public administration since budgeting has, from the beginning, been considered an integral part of the study and practice of public administration. Luther Gulick, one of the founders of the American Society for Public Administration, wrote his dis- sertation on budgeting and taught budgeting in the New York Bureau of Municipal Research. A colleague of his, A. E. Buck, also taught budgeting for the Bureau and wrote the first textbook on the subject. In this reviewer's opinion, it was an outstanding text and worth re-reading by anyone interested in the field.

Public administration developed further as a study and two important contributors were Frederick C. Mosher of Syracuse University's Maxwell School and more recently of the University of Virginia, and Jesse V. Burkhead, a dis- tinguished university professor at the Maxwell School. Both wrote enduring public budgeting books. During this period of the 1940s, 1950s, and 1960s, other important con- tributions were being made. V. 0. Key wrote about the problems of constructing a theory of budgeting. Aaron Wildavsky wrote his brilliant Politics of the Budgetary Pro- cess which discussed the political strategies of budgeting. Allen Schick wrote his PAR article concerning the three

Thomas D. Lynch is associate professor of political science at Mississippi State University and author of the popular textbook, Public Budgeting in America (Prentice-Hall, 1979). He is also the founder of The Bureaucrat, which he has also edited, a founding member of ASPA's Section on Budgeting and Financial Manage- ment, and a former member of the ASPA National Council.



532 PUBLIC ADMINISTRATION REVIEW

stages of budgeting. Each is a classic today. Another pair of contributors was Lennix L. Moak and Kathryn W. Killian. They produced a remarkable number of books directed toward helping the municipal finance officer. These books were the nuts and bolts of budgeting.

Although the above may sound like a great deal of teaching and training material existed on the subject of public budgeting, the facts were, that relatively speaking, little material existed and, furthermore, only a few practitioners of budgeting received any formal education or training in budgeting. Also, there was and still is a shortage of public budgeting and financial management professors.

In today's college book market, the instructor does have some choice. For example, Lee and Johnson's Public Bud- geting Systems and my Public Budgeting in America are two commonly used comprehensive treatments of budgeting. Two smaller texts are Dennis S. Ippolito's The Budget and National Politics and John Wanat's Introduction to Budgeting. The field is rich in fine readers such as Gov- ernment Budgeting edited by Albert C. Hyde and Jay M. Shafritz, Contemporary Approaches to Public Budgeting edited by Fred A. Kramer, Perspectives on Budgeting edited by Allen Schick, and many others. Also, instructors can choose to use the International City Management Asso- ciation book Management Policies in Local Government edited by J. Richard Aronson and Eli Schwartz, the MFOA series written mostly by Moak and Killian, or the more recent Moak and Hillhouse volume.2

There are some significant omissions. An exercise book and casebook on budgeting have not existed. Given the small number of people taking budgeting in the past, publishers could not make a profit on such books and therefore the incentive to publish them did not exist. Also, both types of books would, by definition, be new; and in today's book publishing business, there is reluctance to venture into new uncharted directions, unless the sales potential is strong.

In this reviewer's opinion, until only quite recently there has not been a rich variety and indepth treatments of public budgeting in the literature. This situation has greatly con- tributed to the "pedagogic deficit" in public budgeting and financial management.

A New State of Affairs

In the latest figures from the National Association of Schools of Public Administration and Affairs, the graduate public administration and related degree enrollment was 10,550 full-time students and 17,700 part-time students for a total of 28,250. Undergraduate enrollment was 4,966 full- time and 8,854 part-time. Almost every one of these students have taken or will take a public budgeting course. The number of students is significant enough to encourage the various publishers to commission core course (e.g., budgeting) textbooks. This will translate into a much richer selec- tion of textbooks and readers for all of us.

The larger enrollments will also encourage publishers to risk commissioning exercise and case books. Those enrollments may also encourage others to fund computer program budget and financial management exercises. Another

possibility is the marketing of video-taped hearings or mock-hearings and budget messages. The market has expanded, and now the private sector can sell their "pro- ducts" at a price we can afford, and therefore can buy.

Another recent development was the founding of the ASPA Section on Budgeting and Financial Management (SBFM). In 1977, when the section was established, many questioned if sufficient interest existed to justify such a section within ASPA. Now, SBFM is the second largest and possibly the most viable section within ASPA. For example, SBFM recently decided to co-sponsor, with the Ameri- can Association of Budget and Program Analysis, a new journal with Allen Schick as their editor. The study of, as well as the profession of, public budgeting is progressing at a truly remarkable and impressive pace.

A third development of particular note is the research and developmental work of the Municipal Finance Officers Association under the leadership of Phillip Rosenberg. This group, with the sponsorship of the National Science Foun- dation and the U.S. Department of Housing and Urban Development, has updated and greatly expanded the material previously produced by Moak and Killian. They have produced training materials particularly useful to local government budgeteers, which have gone a long way toward contributing to the solution of Lehan's postulated "pedagogic deficit."

MFOA Publications

This book review examines the first wave of new MFOA publications. Specifically, this review looks first at a set of two guidebooks and five handbooks addressed to improv- ing budgeting and financial management at the "small city and other governmental units" level. The second subject examined is a set of well-written essays on the state-of-the- art of public finance and financial management.

The two guidebooks are (1) Is Your City Heading for Fi- nancial Difficulty? and (2) A Guidebook to Improved Fi- nancial Management. Both are addressed primarily to small cities. Both are cardboard bound so that the publication looks like a spiral notebook. The format is designed for easy reading with use made of very large type and signifiL- cant amounts of white space.

In Is Your City Heading for Financial Difficulty?, the guidebook is organized into two parts: (1) conditions contributing to fiscal decline and (2) procedures for developing and maintaining the trends. The first part is organized into five very direct and practical "chapters": (1) economic vitality is declining, (2) financial independence and flexibility is being lost, (3) municipal productivity declining, (4) a large amount of current costs are being deferred to the future, and (5) use of unsound financial management practices. The second part explains how to (1) assemble data, (2) calculate trends, (3) identify trends and assess underlying causes, and (4) continuous maintenance and analysis of the indicators. The exhibits complimenting part two are (1) a sample financial data worksheet, (2) a calculation of trend formulas, and (3) graphing a financial trend. Also included in this 43-page guidebook is a glossary of terms.




BOOK REVIEWS 533

The format of Is Your City Heading for Financial Dif- ficulty? is very practical. For example, the "economic vitality is declining" chapter is composed of first a statement of why economic vitality is important and that specific identifiable trends could be indicators of possible decline. Second, the chapter cites seven trends, i.e., number and value of builidng permits declining, explains (if appropriate) the basic formulae used and what a decline in the trend over several years might indicate. This reviewer would have liked to have read an illustration of the trends and a thorough discussion of how to interpret the data as well as common interpretation mistakes to be avoided. The guidebook is merely a concise and simple presentation of the fun- damental framework for analysis. For that it should be ap- plauded, but it could have been better. This reviewer found no fault with the indicators suggested, but the contextual importance of interpreting the indicators and trends was not fully explained.

In A Guidebook to Improved Financial Management, the book is a programmed learning text designed to help the prctitioners identify their problems and help them understand what knowledge is important to best deal with those problems. The entire book is 115 pages and 30 pages consist of a unique section called "problems index." The reader in "How to Use This Guidebook" is told to take a small piece of paper and a pencil and follow two steps: (1) read the 13 problem index pages and check the three or four statements which most closely correlate to their concerns, and (2) go to the subsequent pages which discussed the marked statements and "follow the directions there." When those steps are followed, the reader discovers a clear concise discussion of the problem and desirable financial management practices listed, plus a reference to other places in the book where more indepth treatment of the "practice" is discussed.

In order to understand this refreshing approach to training material, a brief illustration is cited. Let us say upon ex- amining the 13 problems cited on page 5, the reader notes "some of our local departments can't seem to stay within their budgets." Other problems might also be checked, but let us only focus on this problem. The next step is to turn to page 12 for a brief discussion of the problem. (This reader would have found a helpful page number reference on page 5.) The discussion explains some of the common reasons for departments not staying within their limits and stresses identifying the real reasons why it is difficult to accomplish. The discussion then cites seven practices often useful in helping local officials overcome that problem. For example, the practice of "quarterly expenditure plans for each department are used to monitor expenditures made by departments throughout the fiscal year" is cited. On page 13, the reader is given the opportunity to check off "Does your jurisdiction follow this practice, Yes, No, or Not Sure." This helps the reader determine for himself or herself if further learning on that subject is worthwhile. Also, further information on that practice reference is given so that a reader can learn more about that subject in the guidebook.


This reviewer found this programmed learning approach to be outstanding. The lay or beginner person often does not understand the whole subject of budgeting and financial management. However, they can identify their perceived problem. This approach, used in the guidebook, permits a person to bridge from their perceived problem into a concise understandable discussion of the problem and potential solutions. Fault can be found in the oversimpli- fication of the problem statements and "solutions," as well as in omissions. For example, one reason for the over- spending problem is poor expenditure forecasting and checking appropriate accounting reports can verify the exis- tence of that problem. If forecasting is the difficulty, a whole range of improved forecasting can be discussed. The guidebook did not discuss that problem or that "solution."

The last 76 pages focus upon specific practical guidelines for better (1) operating budgeting, (2) capital improvement programming and budgeting, (3) accounting, (4) debt management, and (5) treasury management. Note that these topics are the same as the handbook's. This guidebook is meant to be the bridge into the more sophisticated handbooks. This intentional bridge effect is not adequately explained in the guidebook and handbooks, but it is one of the strengths of the series. For each guideline topic, the material is presented concisely with excellent use of graph- ics, headings, and side statements which summarize important concepts. This reviewer would like to have seen more examples and illustrations of the concepts explained in the text. Like any brief summary, some important concepts were omitted. However, the guidelines are an excellent summary and well suited for the purposes for which they were designed.

Handbooks

The five handbooks are (1) operating budgeting, (2) capital improvement programming, (3) accounting, (4) debt management, and (5) treasury management. Each handbook is in a separate orange three-ring notebook with col- ored paper. The type used is large and care has been taken to use clear tables and charts. The handbooks range in length from 65 to 145 pages. Each is designed to be ex- tremely practical for the professional actually involved in budgeting and financial management.

The operating budget handbook presents the principal components of the budgeting process including budget preparation and implementation. The handbook contains sections on the following primary budget functions: organizing the budget, using the budget to plan for municipal services, preparing the annual budget, adapting the budget, implementing the budget, and long-range budget planning. In order to give the practitioner better access into the handbook, 21 "good budgeting practices" are identified such as "the annual operating budget balances approved expenditures with anticipated revenue and estimated surplus" and "a reserve for contingencies is established each year to pro- vide for emergencies or unforeseen needs." For each practice, the reader is referred to a part of the handbook. To a large extent, this handbook is a text. This and the other



534 PUBLIC ADMINISTRATION REVIEW

handbooks would be strengthened by having a reference or bibliography section so that the reader can find out where to go beyond the handbook for more details. This reviewer would have preferred much greater detail in several of the sections, especially revenue and expenditure forecasting.

The capital improvement handbook presents the basic components of a sound capital improvement program and budget. The handbook is organized around the seven steps of the capital improvement process: (1) establish the ad- ministrative and policy framework for the capital improvement process (CIP), (2) prepare an inventory of existing facilities; (3) determine the status of previously approved projects; (4) perform financial analysis and financial programming, (5) compile and evaluate project requests by agencies, (6) adopt the CIP, and (7) implement the CIP. The handbook is purely "how to do" with simple and direct guidance given. The handbook does have many excellent exhibits and a useful glossary of terms. As a normative model, the handbook is quite good, but it assumes a one best approach which this reviewer believes is an oversimpli- fied view of budgeting. Budgeting procedures and practices must conform to many of the unique contextual decision- making needs of the community. Also this reviewer would have preferred an expansion and elaboration in various "chapters" and sections.

The accounting handbook describes the principles and practices that lead to a "sound accounting system" and it includes such topics as principles underlying a sound accounting system; organizing for effective accounting; procedures necessary to accomplish basic accounting functions; advanced accounting procedures; auditing; and data processing. As in the other handbooks, desirable practices are cited and references are given to specific chapters so that easier access to the material is possible. The treatment given the subject is exactly "how to do accounting." This reviewer finds no serious fault with the material although expansion and elaboration on many points would have been useful. The material is merely presented without an explanation of "why" nor is the reader encouraged to see the wisdom behind the suggestions made in the handbook. Also, sometimes complex and complementing features of budgeting and accounting are not stressed, thus leaving one with the impression that accounting and budgeting do relate, but exactly how is unclear. One last complaint this reviewer had was the superficial treatment given financial reporting which is where much of the truly insightful information on budgeting can be presented. One is left not ap- preciating why the reports are significant to the budget process nor how the reports can help jnanagers better understand their organization.

The debt management handbook describes the practices and procedures for issuing and administering debt, including such topics as deciding whether to use debt, the role of the specialized bond consultants, securing voter approval, designing the bond issue, marketing the bonds, and administering the outstanding debt. Again the material is very much "how to." This reviewer felt that this was the weak- est handbook in the series. It was too superficial. Subjects like bond prospectus, the importance of local banks as buy-

ers, the syndicate bond buyer, the investor's view, and many other topics were not mentioned or only mentioned in passing.

The treasury management handbook explains ideally what should happen between the point that revenue is earned and expense payments clears the bank, especially how a community should invest its idle cash. The book is organized using the following seven steps which are designed to help the community maximize yield while ensur- ing the safety of the principal: (1) establish sound financial control and cash information systems, (2) detail legal, policy, and procedural requirements, (3) obtain bank services at the lowest cost, (4) understanding the full range of investment securities, (5) establish effective cash collection, deposit and disbursement procedures to maximize cash availability, (6) use sound investment procedures, and (7) establish and evaluate treasury management goals. This reviewer believes this is one of the better handbooks, but still more depth of treatment on such topics as repurchase agreement and pooling would have added greatly to the substance of the handbook.

In summary, the guidebooks and handbooks are excellent sources of ideas on how to accomplish many of the "nuts and bolts" tasks of public budgeting and financial management. The series could be improved by expanding the treatments of several topics, citing more illustrations and examples, and adding references for the more serious reader. One of the most positive aspects of the series is the excellent referencing used in the text. In general, the books are outstanding and should be purchased by those wishing specific ideas oIn how to actually do budgeting.

The Compendium

A second and entirely different type of MFOA publication is the State and Local Government and Financial Man- agement: A Compendium of Current Research edited by John E. Peterson, Catherin Lavigine Spain, and Martha- rose F. Laffey. It is a very impressive paper-bound 690- page book. The first 177 pages are 15 essays quite properly labeled "finance and financial management" as most of the authors are economists with a primary focus upon public finance. The remaining 513 pages consist of an inventory of then current (1978) research projects, guide to reading the research descriptions, list of abbreviations, and an incredibly long collection of research descriptions. From this reviewer's perspective, the two parts should have been published separately. Chatham House in 1980 did exactly that by publishing Essays in Public Finance and Financial Management: State and Local Perspective. It is the first 177 pages of the compendium repackaged by a private pub- lisher.

The 15 essays include topics such as cash management, debt management, impact of pensions on local budgets, in- tergovernmental finance, revenue and expenditure forecasting, regional economic disparities, school finance reform, urban fiscal studies, productivity, and capital budgeting. The stated and obviously met mandate given each author was to summarize the state-of-the-art and they accom-

SEPT EMBER/OCTOBER 1 980



BOOK REVIEWS 535

polished that objective splendidly. This is not a "how to do" book, thus it is more suited to an academic audience. Any such collection of essays becomes quickly dated, but they do serve as a milestone and indicator of the evolution of the more applied public finance thinking. This reviewer shares with John Shannon the ". . . hope that this systematic review of the public finance literature will not turn out to be a 'one shot' affair."3 A periodic updating is needed.

Conclusion

In referring back to Edward A. Lehan's remarks about a "pedagogic deficit" in public budgeting, we can see what

Notes

1. Edward A. Lehan, "Public Budgeting." In State and Local Government Financial Management: A Compendium of Cur- rent Research. Edited by John E. Paterson, Catherine Lavigne Spain, and Martharose F. Laffey. (Washington, D.C.: Gov- ernment Finance Research Center, Municipal Finance Officers Association, 1978), pp. 39-40.

2. Lennox L. Moak and Kathryn W. Killian, A Manual of Tech- niques for the Preparation, Consideration, Adoption and Ad- ministration of Operating Budgets (Chicago: Municipal Fi- nance Officers Associatin of the United States and Canada, 1963).

Lennox L. Moak and Kathryn W. Killian, A Manual of Techniques for the Preparation, Consideration, Adoption and Administration of Operating Budgets (Chicago: Municipal Fi- nance Officers Association, 1973).

prompted his remarks and the many significant positive steps being taken to remedy the problem. More textbooks and related materials are being produced today and more are likely in the future. We are particularly fortunate to see material such as the MFOA guidebook, handbooks, and compendium being produced. More, however, is needed to create advanced teaching and training aides. More is needed to better utilize the material to give new and even old budgeteers an adequate education, training, and continued training in budgeting and financial management. The profession and its study are growing, and we will continue to need to be concerned about the "pedagogic deficit."

Lennox L. Moak, Administration of Local Government Debt (Chicago: Municipal Finance Officers Association, 1970).

Lennix L. Moak, Budgeting for Smaller Governmental Units (Chicago: Municipal Finance Officers Association of the United States and Canada, 1965).

Lennox L. Moak and Kathryn W. Killian, Capital Program and Capital Budget Manual (Chicago: Municipal Finance Offi - cers Association, 1964).

Lennox L. Moak and Kathryn W. Killian, Operating Budget Manual (Chicago: Municipal Finance Officers Association, 1963).

Lennox L. Moak and Albert Hillhouse, Concepts and Prac- tices in Local Government Finance (Chicago: Municipal Fi- nance Officers Association, 1975).

3. John Shannon, "Foreword." In Essays in Public Finance and Financial Management: State and Local Perspectives. Edited by John E. Paterson and Catherine Lavigine Spain. Chatham, N.J.: Chatham House Publishers, Inc., 1980, p. vii.




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Remedying the "Pedagogic Deficit"