Accounting reform in the public sector: a case of Thai public universities


Upping, Phetphrairin

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This research presents a contribution to the government accounting change literature by highlighting financial reform in public sector agencies in a developing country. The purpose of this study is to investigate factors influencing and affecting accounting reform in Thai public universities. Drivers for change, both internal and external, barriers to change and facilitators of change are highlighted in this study. The original models of accounting change in both the public and private sectors were based on contingency theory. The models focus on both the external and internal factors affecting the change process in order to understand the stimuli and factors influencing the implementation of accounting change. This current study applied an adapted model to understand accounting reform in the public universities in the Thai context. A quantitative research method was used, together with a review of prior literature and government reports. The quantitative data was collected through a mail survey to the Chief Financial Officer of all 78 Thai public universities and 63 Chief Financial Officers responded, which constitutes an 81% response rate. The results of this study indicate that the majority of Thai public universities are implementing changes to both the financial and management accounting systems. The focus at present is on changes which include: the adoption of accrual accounting practices; adapting the budgeting system to suit block grant funding; and implementing cost control. The main stimuli for change in the universities have come from both external pressures and internal pressures. After the 1997 Thai economic crisis the Thai government introduced financial reforms including the need for all public agencies to adapt their accounting practices in line with New Public Management (NPM). Secondly, in 2001 the government enacted a Royal Decree to require output costing for all public agencies. Coupled with this was the push for public universities to transition to autonomous public universities to enable self-management of university activities in an environment of reduced government funding. The changing nature of the university sector, with many universities moving to autonomous status, and the need for all universities to be more accountable, has led to the need for more relevant information for financial management. Due to a lack of costing information and the lack of a systematic accounting system to record and thereby control revenue and expenditure in Thai public universities, University management require improve information for planning and control purposes. With support from both government and university management 31 universities have either implemented or are in the process of implementing Activity Based-Costing (ABC). Respondents identified that the major benefits gained by their university adopting ABC is the ability to meet the government requirements for unit costing and the provision of improved cost information for internal decision making. However, the finding shows that the perceived actual benefit of ABC was slightly lower than the expected benefit. The likely reason for this is the lack of understanding of the change process and the time and resources necessary to fully implement ABC. Problems identified during the ABC implementation were: lack of necessary resources, such as an appropriate software package; difficultly in gathering data on cost drivers; and noncompletion of the cash to accrual accounting project. Training was identified as key for knowledge transfer to enable staff to understand the requirements to implement the changes; however the lack of full-time staff has slowed the pace of change. Overall, the findings suggest that in a developing country before change occurs those involved in the change process must be fully trained to understand what is required and be given the knowledge and skills to fulfil their responsibilities. The findings may be helpful to those who are involved in accounting reform in the public sector as this study provides further insigh into the introduction of NPM practices in a developing country.

Publication year


Thesis supervisor

Judy Oliver

Publication type

Thesis (PhD)


Copyright © 2010 Phetphrairin Upping.

Thesis note

Thesis submitted in fulfilment of requirements for the degree of Doctor of Philosophy, Swinburne University of Technology, 2010.