The Planning and Zoning department of the City of Emerald was faced with issues such as: slow turnaround times, shoddy work and unresponsive service. Mr. Frank Palos was hired as the new city manager and it was his job to restructure the department. After conducting an internal audit of the changes needed to take place, recommendations were: (a) streamlining planning and zoning procedures; (b) establishing a performance standard for timeliness of plan reviews; and (c) simplifying of the zoning codes. Although these were great recommendations what helped improve the efficiency of the department, it led the department into financial issues.
After the final audit recommendation was implemented, the Finance Director, Frank Toto, made Mr. Palos aware of the deficit the department will be facing for the next few years. The departments issues were clear, the fees charged for permitting large, complex projects did not offset the increased staff time, more intensive equipment use, additional clerical support, and numerous of other resources the projects demanded. Now, how will the department address the issue? Mr. Toto has recommended gearing away from the equal cost allocations for each project and focus more on an activity-based process that would allocate cost based on performance.
The changes recommended for the department were equitable for the community, but were not effective for the department. The overall goal is to implement a system what will be effective for P&Z while providing equitable services to the community....
... middle of paper ...
...y and reasonably utilize capitals and stop and reduce the wastes of capitals (Hu, 2010) (Chea, 2011).
Now after taking the benefits of PFABC and EVA into consideration, it will be left up to the Citizen Advisory Committee and the department’s board on whether the system should be implemented or not. In order for P&Z to have a successful implantation of the ABC system and product meaningful results, employees must be made to embrace PFABC and be held accountable. Effective sponsorship and how the rationale for PFABC adoption is communicated to employees determines its success (Chea, 2011).
If Emerald City would like detailed information about integrating economic value added along with performance focus activity-based costing, our firm will provide you all with detailed information and implementation process. Please let us know if you have any questions or concerns.
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