The following text is drawn from GASB Concepts Statement No. 2, Service Efforts and Accomplishments Reporting (GASB Concepts Statement No. 5, Service Efforts and Accomplishments Reporting, did not amend these paragraphs).
Governmental accountability in a representative democracy has its roots deep in history and is based on the underlying principle that the ultimate power to decide is vested in the people. Under a democratic system of government, the making of laws and the taking and use of public resources carry with them the responsibility to answer to the people as a whole. Although the essence of accountability is firmly embedded in the basic principles of democracy, the details of what is required to demonstrate accountability have evolved and continue to do so as the nature and scope of government and the needs of the people change.
Before the Industrial Revolution, accountability normally was enforced through personal contact and direct participation in the public processes of governance. Industrialization modified that process as society found that there was a need for more services to be provided by the public sector. State and local governments increasingly became active in the regulation of commerce and industry, the protection of life and property, and the provision of social services.
As a result, state and local governments grew in size and complexity and became more distant from the citizens they served. The public administration reform movements of the early 1900s grew out of the realization that the traditional methods of enforcing accountability no longer were sufficient. Out of these efforts came the balanced-budget laws, debt and tax restrictions, the civil service system, professional city management, and improved accounting and financial reporting practices.
The modification and expansion of the accountability systems associated with the reform movements and later developments were not sufficient, however, to provide the information needed to assess accountability for the increasingly complex programs of large governmental entities. Despite the improvements in the public administration process that resulted from those reform movements, concerns continued to mount about whether governmental entities were operating in an economical, efficient, and effective manner. As an outgrowth of these concerns and through the efforts of elected and appointed officials, external auditors, citizen groups, and others, new methods of assessing accountability and providing information for decision making have developed.
Techniques such as management by objectives, performance budgeting, operations research, compliance and performance auditing, program evaluation, cost accounting, financial analysis, and citizen surveys have provided tools for enhancing performance measurement and reporting and for improving the quality and effectiveness of services. These methods in turn have contributed to improving the information available for decision making and to strengthening the accountability system. For example, management has been using goals, objectives, and measures of results to plan, direct, evaluate, and modify operations and improve performance. Performance auditing has expanded the scope of traditional auditing to encompass audits designed to assess the economy, efficiency, and effectiveness of programs. Budget professionals have been developing methods of gathering and using information on the performance of agencies, departments, programs, and services as part of the analysis of resource needs. The increased use of citizen surveys has improved government's understanding of how citizens perceive the performance of the agencies, departments, programs, and services of their government.
The increasing need for, and the expanding scope of, governmental accountability is highlighted in the Guide to Productivity Improvement Projects prepared for the National Center for Productivity and Quality of Working Life by the International City Management Association (1976). It concludes with the following points: (a) The need to establish accountability for the operations of government programs generally is recognized; (b) establishing accountability for government operations or programs is directly analogous to the post audit function presently used in the area of financial accounting; (c) methods for conducting the evaluations necessary to establish accountability have been developed to the point that they may be generally applied; and (d) the next logical step is to develop a comprehensive model for the application of these methods to governments and their programs.
Responsibility to provide performance information as part of a system of public administration is based on a fundamental tenet of a democratic society that holds that ". . . governments and agencies entrusted with public resources and the authority for applying them have a responsibility to render a full accounting of their activities. . . . Thus governmental accountability should identify not only the objects for which the public resources have been devoted but also the manner and effect of their application."
Based on the foregoing, it is evident that there is a clear link between the needs of public administrators in making decisions and the needs of the citizenry in assessing the accountability of those administrators. The information needed by public administrators to allocate resources to programs and to assess the effectiveness of those programs is the same type of information needed (although not necessarily at the same level of detail or analysis) by the citizenry to hold elected and appointed officials to account.