Going Back to School on Public-Private Partnerships

Governments are under constant pressure to operate more efficiently and effectively. At the root of the challenge, three common factors are almost always present: increasing demand for results, shrinking resources, and an increasingly complex operating environment.

While public-private partnerships (PPPs) are frequently prescribed as a possible solution, they are not without their own inherent challenges. Whether a PPP is aimed at the outsourcing of a function that remains under the government's control, the divestiture of an operation and privatization of its management, or a blend that results in a functional re-engineering of some sort, the outcomes of the PPP activities we have observed are often mixed. Details, including the reality of personnel cuts and debates about loss of control over activities, often cloud the discussion of the benefits to be derived from planned PPPs, undermining the opportunity for a win-win collaboration.

While public-private partnerships (PPPs) are frequently prescribed as a possible solution, they are not without their own inherent challenges. Whether a PPP is aimed at the outsourcing of a function that remains under the government's control, the divestiture of an operation and privatization of its management, or a blend that results in a functional re-engineering of some sort, the outcomes of the PPP activities we have observed are often mixed. Details, including the reality of personnel cuts and debates about loss of control over activities, often cloud the discussion of the benefits to be derived from planned PPPs, undermining the opportunity for a win-win collaboration.

We recently uncovered an exciting and largely overlooked opportunity for a successful PPP collaboration through our Firm's college recruiting program, which involved students searching for real-world experiences and a local community in need of resources to address an important project. Several staff accountant candidates we interviewed expressed excitement and passion for the project they were working on in their governmental accounting class.

The students were divided into several consulting teams and given a common assignment – to assist the local town's financial management team with the review, analysis, and updating of the community's investment policy. Each team was tasked with an independent review and analysis of the current investment policy statement as well as the development of a recommended course of action, which each team presented to the town's management in a competition-style evaluation process. Once management selected the winning team's proposed solution, the teams would re-assemble as a unified group and collectively work toward the production and presentation of the final, revised investment policy.

The exercise enabled the students to build their team work skills and hone their ability to critically read and research the existing policy, legal requirements, accounting standards and industry best-practices, all while accepting feedback and creatively developing an alternative course of action, which they were challenged to present and defend. It is difficult to imagine a more valuable experience for any student wanting a glimpse of what a post-graduation career will entail.

Benefits to the town go beyond the obvious updated investment policy statement; they include not only the goodwill generated by the university partnership the recognized leadership position conveyed by the relationship, but also the pool of talent which might be channeled into professional government service. Hopefully, this successful program will become a model for other municipalities.

While speaking with local cities and towns about future collaborations such as this one, we have discussed ideas for other student projects, such as reviewing and updating of accounting manuals, internal audit projects, and the development of financial reporting templates. So, if you are in need of resources to tackle a project, why not consider going back to college and giving some talented students an opportunity to help? We think you'll be impressed with the results.