Social market services: A necessary evolution of the performance measurement system
The Public Establishments are placed at the center of the "good governance" project by strengthening their financial control system through the development of performance contracts with the State. The measurement of performance within the Regional Directorate of Oriental DR6 (ONEE-Water Branch), is based on financial indicators, derived from accounting summary statements, so investment decisions are taken independently of the study of the profitability of activities: Liquid Sanitation (AL) and Drinking Water Supply (AEP). In this regard, it is questionable whether the results found following the implementation of a system for calculating the profitability of the activities of the DR6, insofar as they are compatible with the investment decisions relating to the activities. The purpose of this article is to study the convergence of strategic decisions inherent in the investments for the sustainability of the activities: AL and AEP with the financial performance of the said activities, generated via the direct variable cost method.
The research methodology deployed is "action research", by analyzing the profitability of the flagship activities of the DR6 via the system of direct variable cost calculation. The results found are discussed from the perspective of the relevance of investment decisions in relation to the profitability of the activities. Indeed, using the variable cost method, the liquid sanitation activity is more profitable, but the investment envelope actually allocated to this activity is very modest compared to that allocated to the drinking water supply activity which generates a negative result. However, the method used in the empirical study has practical limitations, notably the reclassification of expenses according to their level of variability, which was based on a method of calculating the proportion of expenses in relation to the level of activity, which could lead to more or less biased results. In addition, to support the research results, it was necessary to redeploy the same method in another Regional Directorate under the ONEE-Water Branch, however, at the time of research, it had been found that the management control was in the phase of implementation at the level of DR6 compared to other regional directorates what it was difficult to generalize the experience on the other regional directorates under the ONEE-Water Branch whose management control has reached its maturity
Key words: Public establishment, performance, direct variable costs, profitability, investments.
JEL Classification : M41
Paper type: Empirical research
Copyright (c) 2022 Salma TARMIDI, El Ayachi BENCHEIKH
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