Return on investment in the public sector

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Authors
Bigham, Joshua D.
Goudreau, Thomas R.
Subjects
ROI
return on investment
public sector finance
Advisors
Jones, Lawrence R.
Summers, Donald
Date of Issue
2004-12
Date
Publisher
Monterey, California. Naval Postgraduate School
Language
Abstract
In an environment of scarce resources and rising federal deficits the people not only expect, but demand greater accountability for the spending of public funds. This demand has created a trend in the public sector, not only in the United States, but worldwide as well, towards the importation of private sector business practices to improve accountability-oriented analysis. One example is increased emphasis on return on investment (ROI) analysis in public sector organizations. Development and application of ROI analysis is challenging in the public sector since most government organizations do not generate profit necessary for calculation of ROI in the manner in which it is done in the private sector. This thesis develops the methodology necessary for use of ROI analysis in the public sector. ROI methodology is applied for test evaluation with the Space and Naval Warfare Systems Command (SPAWAR) in San Diego. The test demonstrates that ROI can be applied successfully to assess the relative efficiency of value-added work and to improve the process of choosing between investment alternatives. Properly designed ROI analysis reveals how and for what goods and services money is spent and provides a means for comparing the value derived from investment and work performed.
Type
Thesis
Description
Series/Report No
Department
Organization
Naval Postgraduate School (U.S.).
Identifiers
NPS Report Number
Sponsors
Funder
Format
xiv, 65 p. : ill. (some col.) ;
Citation
Distribution Statement
Approved for public release; distribution is unlimited.
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.
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