Fiscal Health of Public Administration

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Five future trends in Public Administration are 1) global interconnectedness and self-sufficiency; 2) changes to public health policy; 3) incorporation of advanced technology into administration; 4) more grassroots advocacy; and 5) emphasis on sustainability (Florida Tech, 2019). The first trend—the global interconnectedness of public administrations and a focus at the same time on self-sufficiency—may seem like two diametrically opposed trends going in opposite directions, but the reality is that global interconnectedness and self-sufficiency are compatible and public administrators in the future will need to realize how. First off, globalization is a fact of life in the modern world. The China-U.S. trade war is a perfect example of how what is happening on one side of the world can have a tremendous impact on the entire rest of the planet: the reason is that we live in a global economy, and every country’s economic output is integrated with every other nation. Thus, public administrators will have to be willing to work more closely with administrations in other countries in order to bring stability to their own communities. At the same time, they must not appear weak on the global stage and must be able to show that they are self-sustainable—otherwise they are more likely to be taken advantage of. Tomorrow’s public administrators must be “tech-savvy, communicative, globally minded and efficiency driven” (Florida Tech, 2019) in order to succeed.
Second, public administrators in the future will have to address the issues of public health, including expanding access to care for underprivileged populations and making sure that everyone is covered. Public administrators are going to have to face problems such as making sure that drinking water for school children is clean and safe from chemicals and minerals that could harm. They will have to address the issue of vaccinations and the extent to which they will be made mandatory. They will have to address the issue of drug abuse and the opioid epidemic and how society can solve it without having to turn people over to the justice department.
Third, technology is going to be a major factor in public administration going forward. This means that public administrators will need to be experienced in and knowledgeable of tech concepts and tools that will make the work of public administration more efficient. This falls under the category of scientific management and public administrators will need to know both how to use these tools effectively and also how to safeguard and protect data, for as the world becomes more technological the risks of hacking increase as well.
Fourth, public administrators will be relying more and more on grassroots advocacy in order to get policies moving and implemented. Social media has became a major tool of the grassroots community and because it is such a powerful tool it means that the grassroots community has obtained more power for itself. Public administrators will need to work with these communities to help keep the state progressing forward.
Finally, public administrators will have to address the issue of sustainability and whether the world can switch over fully to green energy or whether it is an impossibility. The issue must be addressed because more and more focus by the grassroots communities is being put on the problem of climate change and even though not everyone agrees it is happening, the problem will not go away and it will be a major policy focus in the coming years for public administrators.
2
According to VCU (2019), public personnel administration is the practice of “acquiring the best folks you can find, paying them the least you can get away with, and matching the strongest skills to your public organization's priorities.” In other words, it is about creating efficiencies in the public administration through the area of human capital. Overpaying employees and staff will undermine the objectives of public administration; thus public personnel administration focuses on doing what one can to reduce the costs of human capital while maintaining the highest degree of efficiency and effectiveness.
Five future trends in public personnel administration will be: 1) using digital technology to build virtual teams, 2) recruiting workers from the global talent pool; 3) training workers in order to maximize their potential by focusing on the scientific management approach, 4) emphasizing the principles of diversity and inclusivity, and 5) retaining employees and improving their performance through the use of mentors and an improved onboarding process (VCU, 2019).
These trends will impact public employment and public administration in numerous ways. First, the trend of using digital technology to build virtual teams means that people from all over the world will be able to work for an office without actually being in the office physically. This will reduce costs for the public administration while maximizing the potential to reach as many talented individuals as possible to join the office. That is why the trend of recruiting workers from the global talent pool will coincide with the building of virtual teams. The two go hand in hand and both will impact public employment by expanding the field of potential hires and candidates and both will impact public administration by allowing it to meet its goals of improved efficiency.
Training workers in order to maximize their potential and thus increase efficiency will also impact public employment because it will mean that management will be looking to hire candidates who show the ability to be trained and who are flexible in their attitudes and approaches and are willing to be molded and shaped by the policies and practices that administration deems most effective. This will impact public administration in general because it will mean that more will be expected of those who work in the field and there will be a higher standard of accountability.
The principles of inclusivity and diversity will also be a future trend in the field, and individuals will be expected to demonstrate openness to both. It will impact public employment by opening the doors to employment to all regardless of disabilities or background. In the past discrimination has been an issue but in the future administrations will be held accountable if they close their doors to hiring persons because of a perceived disability or because of something in the person’s background.
Finally, employee retention through the use of mentoring and onboarding processes will be very important in the future because turnover is costly and mentoring and onboarding are effective ways to make new employees feel like they belong and are part of the family, so to speak. This will increase retention rates, and anything that increases retention rates will be better for the field of public administration overall. As for public employment, retention will lead to a tighter job market and more competition among candidates for higher, which will drive up the degree to which candidates focus on developing their skills and professional selves so as to be most appealing.
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The fiscal health of a public agency can be evaluated by numerous ways. One can turn to audited financial information, develop internal benchmarks as measures and indicators of performance, compare one’s fiscal health to other agencies—all things being relative. The use of ratios and trends can also help, and financial trend monitoring systems (FTMS) can assist. The FTMS looks at nearly 50 indicators across a dozen fields to assess the financial health of an agency and is a popular method of evaluation. However, there are numerous others. As McDonald (2017) notes, “dozens of measurement approaches have been used within the literature and still more have been developed by practitioners, often as an ad hoc version of one from the literature that has been modified to fit the government’s needs” (p. 3). Thus, it often depends on the individual public agency when deciding the best way to evaluate the agency’s fiscal health.
One way to do so is to engage in ratio analysis. Ratio analysis is defined as “the examination of a financial relationship between items as a means of identifying trends in financial behavior or position” (McDonald, 2017, p. 3). One common form of ratio analysis is to evaluate the ratio of current assets to current liabilities. That allows the agency to determine what it owns and what its debts are, and it is a quick and easy way to see if the agency is financially healthy or deep in debt.
Another method is to use Brown’s 10-Point Test, which takes into consideration that every agency is going to have its own special ratios that are more meaningful to it than would be to other agencies. Thus the Test focuses on ratio analysis but only those ratios that are most commonly used in the agency (McDonald, 2017). For example, the Test may look at Total Expenditures per Capita and conduct the measurement by evaluating the “total expenditures for all governmental funds (excluding capital project funds) divided by population” (McDonald, 2017, p. 4). This enables the agency to see where it is relative to others and thus establish its financial health relative to the rest of the field.
Then there is Wang, Dennis, and Tu’s Solvency Test, which is meant to improve upon the previously mentioned evaluation methods. Their Test focuses “on the measurement of a government’s financial condition rather than on the factors that drive or determine it” (McDonald, 2017, p. 4) and their approach is to assess just how solvent the agency is and whether it can actually meet all of its long-term obligations. Thus, an agency like Social Security would fail this Test very quickly. The Wang, Dennis and Tu Test looks at several indicators, such as cash ratio, current ratio, quick ratio, operating ratio, net asset ratio, long-term liability ratio, expenses per capita, revenue per capita, and so on.
Each of these evaluation methods is a way to determine the fiscal health of a public agency, but the key to each is that there is generally going to be an examination of some form of ratio with the intention being to see how the agency is doing either compared to the rest of the field or with respect to whether it can handle its debts based on the revenue streams it has going for itself. Fiscally healthy agencies will be able to meet their long-term obligations and should be cash flow positive. Agencies that are deep in debt and unable to meet their long-term obligations will not be considered fiscally healthy. Social Security is a clear example of the latter, though it continues to exist in spite of the evidence of it being a fiscal failure.
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Technology can be used to impact the delivery of public services in myriad ways now that the world has firmly stepped into the Digital Age. Some of these ways include 1) adopting National ID systems for the purpose of improving tax compliance and facilitating the provision of public services; 2) using blockchain technology to reduce corruption in public services, such as land management systems and financing; 3) using technology and virtual learning systems to promote free education and training for populations so that they can pursue jobs that require the use of certain skills; 4) using telehealth systems to provide healthcare for people using government health services; and 5) developing technology to improve public transportation systems, like a monorail or green buses (Abiad & Khatiwada, 2019).
First, a National ID system would make the public safer in terms of making sure there is tax compliance and that all individuals are receiving the benefits they are due. The system would be integrated using finger print or facial ID and the latest in ID technology software so that people could not abuse the system to receive funds, for example, from welfare or Social Security, that are not actually due to them. This system would enhance the existing system and reduce the scale and scope of errors and criminal abuses.
Second, blockchain technology could help as it acts as a digital ledger on a decentralized platform. This means there is more transparency and trust involved in its usage as it cannot be controlled or manipulated by any one agency. It belongs to everyone and cannot be changed or altered except by an actual, legitimate transaction, at which time the transaction is written (encoded) on the blockchain—the digital ledger—and shown to all. This would cut down on abuses in the delivery of public services by reducing the ability of individuals in public administration engage in fraud or deny people services that are their rightful due.
Third, using virtual learning systems can promote the application of free education and training for people in the community so that they can obtain skilled jobs for themselves. One way to do this is through the system of public libraries already in place. Public libraries can offer online learning courses through their system that patrons can log into and learn from so that they can cultivate and develop skills that will be useful in a trade, such as Information Technology, where a lot of jobs have been appearing in recent years.
Fourth, telehealth systems can provide virtual care to patients who receive medical benefits from the government but cannot drive long distances or overcome obstacles related to time and distance to receive check-ups and other types of care. Telehealth systems allow doctors and nurses to check up on patients without patients have to leave their homes. Doctors and patients connect over the Internet using their computers to contact one another, exchange information and so on. It can improve the quality of care that people receive in the community.
Finally, technology can be used to improve public transportation systems. The monorail could be developed to ease congestion, and trains could be improved to get people to their destinations in big cities more quickly. This can ease the strain on cities dealing with overcrowded districts by allowing more people to live outside the city in the suburbs and take a commuter train into town to work, avoid the rush of morning car traffic, and reduce pollution.
References
Abiad, A. & Khatiwada, S. (2019). 5 ways technology is improving governance, public service delivery in developing Asia. Retrieved from https://blogs.adb.org/blog/5-ways-technology-improving-governance-public-service-delivery-developing-asia
Florida Tech. (2019). Five global trends in public administration. Retrieved from https://www.fit.edu/your-college-decision/trends-in-public-administration/
McDonald, B. (2017). Measuring the fiscal health of municipalities. Retrieved from https://www.lincolninst.edu/sites/default/files/pubfiles/mcdonald_wp17bm1.pdf
VCU. (2019). Public personnel administration. Retrieved from https://commed.vcu.edu/IntroPH/Management/management/personnel.html