This preview shows page 1. Sign up to view the full content.
Unformatted text preview: ccess to the government’s
taxation revenues to spend; a loser has nothing. With the
increasing pressures on government both to provide services
and to contain or reduce its costs, the budgetary process has
become a crucial battleground, one which exists within the
bureaucracy no less than in the community at large.
5 Sensing Public Financial Management Financial management is as old as government. It is a critical
management function that fuels the engine of public
administration, and it is the only function that touches every
employee in an organization.
In broad terms, public financial management consists of three
(1) determining fiscal policies, a process in which community or
political leaders identify the general programs and authorize
appropriations to get them implemented (problems such as
employment, taxation, inflation, revenue raising, and borrowing
or deficit financing);
(2) ensuring accountability, so that public funds are spent
honestly and wisely for the purpose duly authorized by the
public at large; and
(3) providing the required organizational structures and controls
to effectively carry out the fiscal duties and responsibilities.
6 The financial management process consists of the following
1. Planning identifies the goals and objectives that a
government unit or agency determines that it will pursue at
some specified time in the future.
2. Programming identifies and selects the activities that will
achieve the plans outlined in terms of stated goals and
3. Financing involves securing and raising funds (creating a
pool of financial resources) necessary to carry out identified
programs and activities.
4. Budgeting requires that plans (long or short range), policies,
and priorities be reduced to specific courses of action and that
the level of funding be specifically identified within a defined
period of time such as the work plan for a one-year period.
77 5. Controlling attempts to ensure that programs and
activities are carried out as planned, programmed, and
budgeted and that activities are executed according to
established work plans. This phase subsumes the
accounting function, measuring the activities in monetary
terms, recording, ordering, reporting, and analyzing
information about financial resources.
information 6. Evaluating measures, tests, and judges the
appropriateness, utility, and congruence between the
stated and achieved goals. It attempts to assess the extent
to which programs and activities that have been properly
planned, programmed, budgeted, implemented, and
controlled have achieved the stated goals and objectives.
controlled 88 Financial management plays a critical role in every
business enterprise. Without money and its successful
management, a firm would...
View Full Document
This note was uploaded on 02/11/2014 for the course FIN 9891 taught by Professor Wu during the Fall '11 term at Kazakhstan Institute of Management, Economics and Strategic Research.
- Fall '11