IN THE PUBLIC ADMINISTRATION ~U~RI~ULU~

Journal of Accounting
Vol. 3, No. I
Spring 1985

Education

PUBLIC SECTOR ACCOUNTING IN THE PUBLIC
ADMINISTRATION
~U~RI~ULU~
Robert V. Egenolf
UNIVERSITY

OF TEXAS

AT SAN ANTONIO

and

Fred Nordhauser
UNIVERSITY

OF TEXAS

AT SAN ANTONIO

Abstract: Many studies have shown that state and local government
units frequently are not in
conformance
with GAAP because their financial statements do not fairly reflect the activities of
the organization.
Insufficient education
and training of public personnel, particularly
in the
accounting area, is believed to be a major reason for this deficiency. This study surveys the master
of public administration/affairs
curricula to determine if college administrators
have responded
to this problem. Fifty-one percent of the responding
master of public administration/public
affairs programs either require or offer graduate level accounting
courses. Is this accounting

requirement adequate?

Public administrators are principal users of public sector accounting data
and financial reports. They also have a major influence on the quality of these
reports. Their ability to use and interpret accounting data and financial
reports is largely determined by their knowledge of public sector (or governmental) accounting.’ This paper examines several aspects of accounting
education for public administrators. It reports on an investigation of the
status and content of public sector accounting courses in master of public
administrations public affairs (PA/ A) programs. More specifically, this study
focuses on three major questions concerning master of (PA/A) programs at
United States colleges and universities:
1. How do the administators of the various master of PA/A programs
perceive the importance of graduate public sector accounting?
2. What are the public sector accounting requirements in the various
master of PA/ A programs?
3. What are the principal topics included in public sector accounting
courses in master of PA] A programs?
‘Public sector accounting - sometimes called governmental
accounting, not-for-profit
accounting, or

non-business accounting includes a broad range of subject matter as taught at the graduate level in American
colleges and universities. Topics frequently covered include financial, management control, auditing, fund
accounting, etc. The content of public sector accounting courses is pursued further in the text of the paper.

I 24

PREVIOUS

STUDIES

HAVE SHOWN THE NEED
SECTOR ACCOUNTING

FOR PUBLIC

A recent study on “The Quality of Financial Reporting By General Purpose
Local Governments”
by Hassman and Strauss [ 198 1, p. 211, concluded that “.
. . there are a large number of counties, cities, and townships in the United
States whose financial

statements
do not fairly reflect their activities in
accordance
with GAAP [generally accepted accounting
principles].”
The
reasons given for this deficiency were “inadequate
control and inadequate
record-keeping.”
Several other studies have reached similar conclusions
regarding the adequacy of accounting,
financial reporting, and disclosure in
the public sector.2
Although the reasons for the deficiencies in financial reporting and disclosure of governmental
and not-for-profit
entities may be varied and complex,
insufficient education and training of personnel employed in the public sector
is believed to be a major factor. Copeland and Ingram [1979, p. 221 in their
study on the financial reporting of cities, concluded that the primary cause of
disclosure deficiencies is insufficient auditor and client knowledge of governmental accounting principles.

In his paper, “The Relevance Question,” Henry [ 1979, p. 331 addressed the
question of how master of public administration
(MPA) programs might be
improved to better prepare graduates for employment in the public sector. In
a nationwide
survey, Henry contacted
1351 graduates of 12 major MPA
programs to determine which college courses they considered most relevant to
their present employment.
All of the graduates surveyed had received their
MPA degree within the previous five years and were currently employed in the
public sector. The responses of the MPA graduates showed that they considered accounting to be the single course most relevant to their employment.
Several studies have focused on auditor and accountant educational opportunities in governmental
accounting by investigating the availability of public
sector accounting courses in college level accounting programs. These studies
have demonstrated
a scarcity of course offerings in public sector accounting at
both the graduate and undergraduate
levels.
Neeley and Robason [ 1967, p. 3681 were the first to survey departments

of
accounting
at American
Association
of Collegiate
Schools of Business
(AACSE) member institutions
to determine course offerings in public sector
accounting. They found that only I3 schools (15 percent) of the 85 responding
schools offered public sector accounting at the graduate level.
After the Neeley and Robason study, Engstrom [1978], Engstrom and
Green [1981], and Egenolf and Willis [ 19831 investigated
public sector
accounting courses at the undergraduate
level. Studies by Holder [ 19781, and
Egenolf and Nordhauser
119821 examined
graduate
level public sector
accounting

courses. Holder surveyed 123 master of business administration
see e.g..Elltnan

(1973).

Coopers

& Lybrand

[I9761

and

Ernst

& Whinney

[I9791

125

(MBA) programs accredited by the AACSB and found that only 11 (13.6
percent) of the responding
institutions
offered a public sector accounting
course. Egenolf and Nordhauser examined public sector accounting courses
in master of public administration
programs at AACSB member institutions
accredited at the graduate level. They found that 27.1 percent of the respondents offered a graduate course in public sector accounting.
Knighton f 1975, p_ 1961 has said that public sector accounting courses are
offered to three major groups of students, viz., accounting majors, who will
pursue careers in public sector or not-for-profit
organizations;
accounting
majors, who will become CPAs and audit such organizations
and finally,
non-accounting
majors, who look to the accounting departments
for service
courses. It is the accounting education of this latter group of students who are

majoring in PA/A together with the PA/A Administration
that are the
principal concern of this paper.

PA/A

PROGRAMS

PA/ A programs may be characterized
as, principally, graduate programs.
Most students attend the PA/A program part-time, while employed in the
public sector. In 1981, there were 24,696 student enrollments
(76 percent) in
master of PA/ A programs and only 7,842 enrollments
(24 percent) in PA/ A
undergraduates
programs [Directory,
1982, pp. iii-iv]. The majority of PA/ A
students were part-time students (65 percent) rather than full-time students
(35 percent) and were in “mid-career” (69 percent) as opposed to “pre-service”

(3 1 percent). The largest percentage (80 percent) of master of PA/ A degree
graduates obtained employment
with local, state and national governments
and other not-for-profit
organizations.
Only six percent of the graduates
entered the private economy [Directory, pp. iii-iv.] These percentages did not
vary significantly
over the period 1979-S I.

RESULTS

OF A SURVEY

OF NASPAA

SCHOOLS

The population
surveyed in this study consists of school coordinators

for
master of PA,/ A programs of member institutions of the National Association
of Schools of Public Affairs and Administration
(NASPAA).
A survey
instrument
was designed and pilot tested. Next a current list of each school’s
principal representative
was obtained from the Executive Director of the
NASPAA.
In 1982, the NASPAA consisted of approximately
200 member
schools with master of PA/ A programs. In 1983, questionnaires
were sent to
all NASPAA members believed to have master degree programs. However,
nine representatives
reported their programs
did not include a master’s
degree. A total of 135 usable responses were received. The relatively high

126

response rate, 72 percent, was considered representative
of the population and
follow-up mailings and telephone calls were not considered necessary.3
The number of students enrolled in the programs for which responses were
received varied from 10 to over 1,000 (at two schools) with a median of 70
students enrolled.
The schools submitting
usable responses represented
14,599 enrolled graduate students in master of PA/ A programs or approximately 60 percent of a total of 24,696 master of PA/A students enrolled in
NASPAA member institutions
[Directory,
1982, p. iii].

Program Administrators
The respondents
were asked to characterize
a graduate course in public
sector accounting as either “very important”,
“important”,
“unimportant”
or
“undecided”
for achieving success in a public administration
career. Eightyone percent of the respondents
said they considered a graduate level public
sector accounting
course as either “important”
or “very important”
for a
successful career in public administration
(Table 1).

Table
Importance

Of A Graduate

To A Successful

1

Level Public
Career

Sector

In Public

Accounting

Course

Administration

of Programs

Percent

Very Important

71

56.8%

Important

30

24.0%

Unimportant

13

10.4%

Response

Undecided

Number

11
125”

‘Ten

schools did not respond

8.8%
100.0%

to this question

This result supported the findings of the study by Henry [ 1979, pp. 32-331.
Since PA/A representatives
(in the present study) and graduates of MPA
programs (in Henry’s study) both responded that accounting was important
for the careers of public administrators,
it might be expected an accounting
course would be a prerequisite course for entering a master of PA/ A degree
program. However, the survey results show that only a relatively small percentage ( 14.6 percent) of the respondents required undergraduate
accounting as a
prerequisite course (Table 2).

‘Earlier studies by Holder [1978], Engstrom and Green [1981], examined the extent of bias by nonresponding schools and they concluded
that the bias introduced would not be great enough to affect the results.
The present study LSsimilar in methodology to these earlier studies.

127

Table
Graduate

PA/A

Programs

2

With

Undergraduate

Accounting

As A Prerequisite
Number

Percent

of Programs

Prerequisite
Not a Prerequisite

19
111

85.4%

14.6%

130

100.0%

Public Sector Accounting Requirements
It might also have been anticipated that accounting courses generally would
be required or at least be available in master of PA/A programs. Thirty-two
and one-half percent of the responding programs did require a graduate level
accounting course for the degree and an additional 18.5 percent said that while
graduate level accounting is not required, it is available as an elective course.
Thus, a total of 51.0 percent of the responding institutions
at least offered a
graduate level accounting course (Table 3).
Table
Graduate

Level Accounting
Degree,

3

Course

Elective,
Number

Required
Elective
Not Available
No Response

-

Required

For The Master’s

Or Not Available
Percent

of Programs

44

32.6%

25
63
3

18.5%
46.7%
2.2%

135
*Includes

rounding

100.0%”

errors.

The number of graduate level accounting courses required was typically
or two cdurses (3 to 6 semester hours); see Table 4.

one

Table 4
Number
Semester

Of Public
Hours

Sector Accounting
The Master’s

Required”

Number

Less than 3 hours
3 hours
4 to 5 hours
6 hours
More than 6 hours

Semester
Degree

hours were converted

Required

For

of Programs

Percent

2
21
5
9
7

4.5%
47.7%
11.4%
20.5%
15.9%

44
*Quarter

Hours

to semester

100.0%
hours.

128

In the studies discussed earlier in this paper fewer public sector accounting
courses were available at the graduate level than the present study indicates
are available in master of PA/ A programs (5 1 percent). However, the earlier
studies are not comparable to this one because of differences in the population
studied (accounting
programs versus PA/ A degree programs, and AACSB
accredited versus NASPAA member schools). Many respondents in the previous studies said that they expected to increase their public sector accounting
course offerings in the future. The results of this study may indicate that some
have done so. But, the most important reason for the increase (from 11 and 27
percent to 5 1 percent) in course offerings is the difference in the definition of
“public sector accounting”
in the two types of programs.
Public Sector Accounting: Course Content
Topics covered in the required graduate level accounting courses vary from
program to program and from instructor to instructor,
thereby making it
difficult to generalize concerning course content. Table 5 displays the principal areas of accounting
studied in the various PA/A programs. Financial
topics make up the largest percentage (46 percent) followed by fund accounting (19.1 percent) and managerial topics (17.5 percent).
Additional
information
on public sector accounting
topics in Master of
PA/A programs was obtained by carefully reviewing 133 syllabi (including
reading lists) in public sector courses from 61 different universities for the
1979-1980 period [Curriculum
Development
Project, 19811. There was a
considerable
variety of subject matter covered by these syllabi. However, the
areas of emphasis appeared to be consistent with the areas of emphasis shown
in Table 5.
Additionally,
PA/A administrators
indicated that the topic of public
budgeting is also required in 66 graduate programs. These responses were not
counted as accounting requirements
because most of these courses would not
be taught by accounting faculty and the general thrust of the course would be
toward Public Budgeting and Financial Management
(PBFM).4

For Programs

Requiring

Table 5
Accounting

Accounting
Number

Financial
Managerial
Fund
Information
Other

Systems

-

Principal

of Programs

Percent

29
11

46.0%
17.5%

12
4
7

19.1%
6.3%
11.1%

63
*Includes

rounding

Area Of

Required

100.0%”

error.

‘This assumption IS consistent with Thai [I9811 who reported that the basic function
categories: Public Budgeting, Accounting, Fmancial Management, and others.

of PBFM includes 4

129

SUMMARY

AND CONCLUSIONS

The results of a survey of NASPAA
member schools showed that 32.5
percent of the 135 respondent
programs require a gradate level accounting
course while an additional
18.5 percent have graduate level accounting available on an elective basis. Financial accounting topics were found to be offered
more frequently than fund accounting,
managerial,
or auditing topics. Only
14.6 percent of the respondents
to the survey required any accounting
as a
prerequisite for admittance
to the master of PA/A degree program.
Eighty-one percent of the Program Administration
indicated that graduate
level public sector accounting is important or very important for a successful
career in public administration.
This perception
is consistent with former
PA/A students who sighted accounting
as the most relevant course in their
present Public Administration
careers.
Taking the present PA/ A programs as a whole, are the present public sector
accounting
requirements
adequate?
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Coopers & Lybrand and the University of Michigan (1976) Financial Disclosure Practices ofthe
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Copeland, R.M. and R. W. Ingram( 1979);‘Municipal
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Vargo and Paula A. Dierks, Eds., (Dame Publishing, Inc., 1982): 36-39.
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Accounting
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Governmental
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of
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130
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