Evaluation of balanced scorecard targets with internal control system in measuring corporate performance: Example of Kocaeli Metropolitan Municipality

The concept of performance which can be described as fulfilling any work or service is an important concept for both private sector and public institutions. 1980s is a turning point in the measurement of the performance which is a significant concept. Whereas the main emphasis of performance measurement focused on the financial measurement such as profit and productivity until 1980s, the multi-dimensional performance measurement methods were introduced after 1980s, one of which is the Balanced Scorecard method modeled by David NORTON and Robert Samuel KAPLAN. The concept of "Balanced Scorecard" has been translated into Turkish in various ways but the expression of "Kurumsal Karne" is preferred as a Turkish equivalent throughout the thesis. Although the Performance Measurement Project in Municipalities (BEPER) was put into practice in 2020 for the performance measurement in municipalities which are public institutions, the project has not yielded the expected benefit in current situation and could not be an accepted model for performance measurement in municipalities. In this thesis, the applicability of the balanced scorecard model developed for the private sector and expressed by model founders themselves to also be used for the public institutions was examined. The content and ranking of the dimensions of the balanced scorecard model was adapted for the municipalities which are public institutions and the activities under each dimension and targets for these activities were determined. At the end of the period, the realization levels of the activities and the targeted levels were compared, the reasons for the emerging deviations were scrutinized and it was aimed to enhance the performance by planning activities to eliminate deviations. The thesis composes of four sections. In the first section, the general information regarding the concept of performance is included and the multi-dimensional performance measurement methods are explained. And the Balanced Scorecard model which is one of the multi-dimensional performance measurement methods is discussed and the changes in the ranking and content of the dimensions arising from the adaptation of balanced scorecard model for the public institutions and ultimately the application stages of the balanced scorecard model are specified. In the second section, the concept of budget in municipalities is addressed and the preparation process of the budget is elaborated. In the third section, the concept of internal control is explained and the internal control models are introduced, particularly the relationship of internal control with the internal audit, those involved in the internal control process and COSO internal control model. In the fourth and last section of the thesis, the application of Balanced Scorecard model across Kocaeli Metropolitan Municipality and the resulting deviations are examined in the light of the Communiqué on Public Internal Control Standards by comparing the designated targets for the balanced scorecard dimensions and the realized targets.