Lecture-1-Understanding+Public+Financial+Management

A party or group in government has access to the

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Unformatted text preview: ccess to the government’s party 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 Financial 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 In main concerns: main (1) determining fiscal policies, a process in which community or (1) determining process 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 (2) ensuring so honestly and wisely for the purpose duly authorized by the public at large; and public (3) providing the required organizational structures and controls (3) organizational to effectively carry out the fiscal duties and responsibilities. to 6 The financial management process consists of the following The components: components: 1. Planning identifies the goals and objectives that a 1. government unit or agency determines that it will pursue at some specified time in the future. some 2. Programming identifies and selects the activities that will 2. achieve the plans outlined in terms of stated goals and objectives. objectives. 3. Financing involves securing and raising funds (creating a 3. pool of financial resources) necessary to carry out identified programs and activities. programs 4. Budgeting requires that plans (long or short range), policies, 4. 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. period 77 5. Controlling attempts to ensure that programs and 5. 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 6. 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 Financial business enterprise. Without money and its successful management, a firm would...
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