Time-Driven Activity-Based Costing in the Public Sector. The Case of Greek General Chemical State Laboratory under the Greek Crisis

The international globalized environment and the financial crisis have generated new demands with internals (citizens-users) and externals (creditors) pressuring the governments to control public spending and improve efficiency in the supply of public goods/services. The control of the public sector costs seems more important now, in the context of the financial and fiscal crisis of 2008. Activity Based Costing (ABC) and Time-Driven Activity-Based Costing (TD-ABC) are recent innovations in cost accounting methods used for determining ‘true’ costs. In the light of current practices, this paper aims to showcase the need and importance of activity based costing in the public sector, in order to promote more effective financial management, a higher degree of transparency and accountability of public spending and to disseminate a ‘cost culture’ in the public administration. In the case of the Greek General Chemical State Laboratory (GCSL), the TD-ABC method and monitoring system have been applied in order to determine the resources (inputs) and activities drivers, to allocate the activity cost to the cost objects and to monitor the public services/goods (outputs).