Accounting for Financial Sustainability. Different Local Governments Choices in Different Governance Settings

The chapter discusses Financial Sustainability (FS) in relation with governance setting for service delivery adopted by Local Governments (LGs). The changing corporate governance setting in public entities and their relationships with other entities that are co-makers in service delivery requires a wider vision of FS, encompassing all entities involved. The chapter aims to analyze how specific accounting tools and techniques can assist in the control of a LG’s FS based on the governance setting adopted for service delivery. More precisely, a standard accounting tool or technique to detect fiscal distress would not be effective for all LGs. Through the analysis of five case studies, the chapter demonstrates that promoting FS requires the adoption of accounting tools and techniques consistent with the governance model adopted.