Abstract
Orientation: It is impossible to accurately determine the detailed costs of running courses offered at South African technical and vocational education and training (TVET) colleges, as none of them practises activity-based costing (ABC). The perceptions and knowledge of their finance staff regarding ABC adoption are unknown, making it impossible also to know their reasons for non-adoption.Research purpose: This article reports the awareness of and attitudes towards ABC held by finance staff at six TVET colleges in KwaZulu-Natal and proposes a novel model for its successful adoption.Motivation for the study: The lack of empirical studies demanded understanding of those factors that address ABC adoption at South African public TVET colleges. This study therefore assessed finance staff members’ perceptions of those factors that would support the introduction of this costing system.Research approach/design and method: This study ascertained these opinions and knowledge by surveying 30 members of the finance staff at six TVET colleges using a questionnaire.Main findings: The study’s population perceived that lack of top management support, the colleges’ cost structure and technical factors are barriers to the implementation of ABC in their institutions.Practical/managerial implications: South African public colleges should address those obstructing factors as the successful adoption of ABC will facilitate the accurate calculation of their operational costs.Contribution/value-add: The study identifies those factors that would facilitate the adoption of ABC and proposes a model that would assist in the implementation of this costing system in South African public colleges.
Highlights
South African technical and vocational education and training (TVET) colleges do not use an inclusive costing instrument to determine the true and detailed costs of their courses
activity-based costing (ABC) is widely used in the business world, its adoption rate is very low at higher education institutions (HEIs) and it is not applied in any of the South African TVET colleges (Aldukhil 2012)
Very few studies have been devoted to South African HEIs, to assess the opinions and awareness of finance staff members on those factors that affect the introduction of ABC, especially by South African public TVET colleges
Summary
South African technical and vocational education and training (TVET) colleges do not use an inclusive costing instrument to determine the true and detailed costs of their courses Such a financial mechanism would give the student and parent, as key stakeholders of these institutions, a clear view of the fees being charged as well as providing college administrations with an effective means to monitor their budgets. The finance personnel questioned in this study perceived that the lack of top management support, the colleges’ cost structure and technical factors impede its implementation These findings are novel in the TVET sector and have implications for policymakers, such as the Department of Higher Education and Training (DHET) under which these colleges fall, as more resources and training would be required to change accounting practices as recommended. A new costing model of this kind, to act as a guide to the adoption of this costing system in public colleges in South Africa, is reported in this study
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