16.5 Managing finance#
NSOs and other producers of official statistics are government-financed institutions, and as such are expected to be transparent and cost-effective in terms of the use of resources. As the main share of the budget is usually related to wages, optimal utilisation of workforce is extremely important even when/where general government considerations determine their level outside of the influence of the statistical office. Issues related to budgetary allocations, optimal strategies to face cost-cutting or ensure additional financing and the ability to gain additional resources by providing services to the market are covered in Chapter 6.3 — National statistical office as an organization, while this chapter addresses general issues that are related to finance and cost management that are not covered in other chapters.
16.5.1 Monitoring costs#
Some NSOs have set up systems that link statistical activities with costs incurred at each phase of the production process (cost accounting systems). This allows for cost monitoring of statistical activities but also monitoring of costs of each phase. This type of information provides valuable insights into the allocation of budgets and enables evaluation of plans and performance. By analysing the results of cost accounting systems (or ad-hoc estimates), priorities for optimisation can be identified. Further, this type of information makes negotiating for funding easier, as they provide concrete evidence that can be used in negotiations with Ministries of finance or other relevant line ministries.
Austria statistical office accounting system (regulation and system) (🔗).
16.5.2 Reducing costs#
As household survey collection costs correspond to a significant part of the total budget, measures aimed at optimising survey collection (such as hiring surveyors for specific areas of the master sample for a longer period or by reducing the response burden through integration with administrative data) may be used to rationalise the total costs. Costs of software licences can be high, so it may be rational to consider developing a strategy to move the statistical production to open-source solutions. Investing in digitisation may also reduce the long-term cost, as printing many paper forms may be quite costly, however, sometimes digitisation also requires a change in legislation, as in some countries NSOs are obliged by law to use a paper-based collection system.
16.5.3 Managing budgetary difficulties#
NSOs may encounter situations in which expenses must be prematurely restricted, due to lack of financial foresight, and often with little regard for the effects of such abrupt reductions. This is generally the case when, just before the end of a fiscal review, the head of financial administration realizes that certain obligations will not be met unless some immediate sacrifice is made. It may also transpire that financial administrators find that the NSO still possesses a considerable portion of its resources at the end of a fiscal review. In such a case, a response might be to find a way to spend these funds to not lose funding for the next fiscal period. However, arbitrary spending can be more harmful than hurried measures to curtail expenditure, leading to poor managerial decisions and waste of the public treasury. Regular monitoring of the expected gaps between expenditures and resources should be taken to prevent such situations. To fulfil this requirement, the financial administration unit must have the information base and the analytical capacity to provide warnings. Effective management often comprises determining and allocating resources where they are needed. Sometimes this includes reallocating resources from areas where they are abundant. Strategies on how to gain additional resources and minimise cuts are presented in Chapter 6.3.1 — Administrative structure and finance of the national statistical office.