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To:
The Honorable Rick Perry
The Honorable William R. Ratliff
The Honorable James E. "Pete" Laney
Members of the Texas Legislature

From:
Activity-Based Costing Project Management Team

Date:
January 15, 2001

Subject:
Activity-Based Costing Report

House Bill 1, 76th Legislature, Regular Session, Article IX, Section 9-6.43 requires that a report be submitted to the Legislature no later than January 15, 2001 detailing the experience of five state agencies with the use of activity-based costing (ABC). This report is intended to fulfill this requirement and includes a conclusion by the project management team regarding further expansion of activity-based costing in the state.

Pursuant to the provisions of House Bill 1, the Comptroller’s office administered a multi-agency ABC project with the assistance of a project management team including representatives of the State Auditor’s Office, the Legislative Budget Board, the Governor’s Office of Budget and Planning, and the Comptroller’s office.

This report summarizes the advantages of activity-based costing and activity-based management tools in estimating the direct and indirect costs of selected state activities and identifying opportunities to streamline business processes, improve customer service and save public funds. The estimates of costs and potential savings in this report were prepared by Mevatec Corporation, a national consulting firm, through workshop sessions conducted with personnel from participating agencies.

This report can be found on the Comptroller’s Web site at http://www.window.state.tx.us/specialrpt/abc/. You may also call the Comptroller’s Government Improvement Division at 512-475-1086 or toll free at 1-800-531-5441, extension 5-1086.