Factors affecting the adoption of activity-based costing at technical and vocational education and training colleges in KwaZulu-Natal, South Africa

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.