PUBLIC FINANCIAL MANAGEMENT: ALL YOU SHOULD KNOW (+DETAILED GUIDE)


What is public financial management, what are the objectives, principles, elements, public financial management system, in Nigeria, course, PDF? These questions are what I will basically be answering on this post.

WHAT IS PUBLIC FINANCIAL MANAGEMENT


Most times the question of what is public financial management get some individuals confusing. Well here is what public financial management means is. It is all components of a country’s budget process ranging from its annual budget, strategic planning. And medium-term expenditure framework down to its reporting, accounting, revenue management, procurement, audits, oversights, monitoring, and evaluation.

This is oftentimes a joke to most people. But the truth is that this financial management will be a lot of value to any country that applies it well and effectively. The system aids bring stability to a country as well as reduces poverty. Many democratic countries need this management systems for the purpose of macro-economic stability and effective use of resources.

A good public financial management system should be able to prevent corruption as well as promote aid effectiveness. However a bad and weak one hampers development and increase corruption.


The effective administration of funds by the government including all government activity. And its budget making process or cycle is all basics you need to know about what is public financial management.

OBJECTIVES OF PUBLIC FINANCIAL MANAGEMENT

For any financial institute to achieve its desired ambition, the institute must possess an aim and also objectives. Showing you that the management is among the few ‘here to stay’ institute, it posses quite a number of aims and objectives that it hope to achieve.


Accessing public financial management, you will need to define its end objectives firstly; meanwhile, its final outcome takes measures by its performance. Objectives of public financial management include:

. Ensure an operational efficiency, in the aim of achieving maximum value for money in the delivery of services.

. The maintenance of an aggregate fiscal discipline is much required most times this is been regard as the most important objective of the public financial management. Aggregate level of tax collection and public spending are consistent with aims for the fiscal deficit, and also not to generate unsustainable levels of public borrowing.

. Public financial management aims at ensuring that peoples resources are well allocated to the specified strategic priorities. By so doing, the efficiency of allocates is achieved.


. The management system should be seen following due process. Such doing they promote the virtues of transparency, accountability, checks and balance and public accessibility of information.

PRINCIPLES OF PUBLIC FINANCIAL MANAGEMENT

Principles of public financial management can be classified to six forms namely:

ACCOUNTABILITY

This principle of public financial management simply implies that those individuals that are handed over the responsibility of dealing with peoples funds regularly should be called upon to be accountable of funds. These individuals handling the public fund should be put in the position of detailing for the use of funds. This account can be made possible through the audit process and the legislative reviews.

PROBITY

Legislators and administrators should remember that these funds are not for their personal use because it is at their disposal. Hence, the use of public funds should be with utmost integrity and honesty. Exactly what this principle of financial management wants you to understand.

PRUDENCE

Individuals which are the stewards of these funds should on no account use this particular fund of the public to take unnecessary or undue risks. Be it for the purpose of their selfish interest or that of the public isn’t acceptable. The funds are specifically set out for the public welfare.

EQUITY

Government on its part should be fair in the distribution and rising of these funds. This principle of public financial management states that. People should be made to feel the same, and also to be treated same in similar circumstances in the situation of raising and spending taxes.

TRANSPARENCY

In this principle of public financial management. Doings and activities of the government in the case of handling these funds. The activities they indulge in to raise these funds should as well be brought to the eyes of the people. Like exactly what our leaders do with the public funds in the areas assigned.

This principles of financial management states that. The consent of the governed must be fully represented. Meaning that before any major action is taken regarding these public funds the owners, which are the people should be informed as well follow their will. This includes no taxation without representation, spending must also go through democratic approval.

ELEMENTS OF PUBLIC FINANCIAL MANAGEMENT

In order for the public financial management to be effective in its work, it will definitely require elements. Those executive elements of the public financial management are what we call in this aspect the elements of public financial management.

Having the right executors under this element is also a very advantageous concept. The elements of public financial management needs the best individuals it can get to affect its form in the right cause. Some of these elements include:

Organize government will set up to oversee the implementation and facilitating of effective and efficient public service arrangements. Standards, codes, standards, practices and institutions in place will be set up appropriately.

THE VALUE SYSTEM

Funds that are put in trust to the government by the people should be used very well. Responsible and a sincere approach to the manner of planning services as well as its execution and reporting activities should be by the government to its people. Interest of the public should be a priority in any action the government takes regarding the public funds. Most countries consulting services to handle these activities.

CLIMATE REFORM

Identification and acknowledgment that positive change is always the best also real commitment for the major stakeholders to implement all necessary reforms. Reforming the system of public fiancé management means its betterment for the sole benefit of the people.

FISCAL FRAMEWORK AND POLICY

You already know that the major output of the system is their budget. Which also serves as a means by which public policies receive finance. A credible budget should reflect anticipates of the financial impact of the government policies and as well as crucial in stating how it uses these resources.

PERFORMANCE MANAGEMENT

Budgets must be thorough in reporting, monitored, and managed in order to attain their desired results. When these budgets are thoroughly checked, its implementation in both an organizational level and in macro terms will be successful. The expected results of budgets includes: value for money, effective and efficient service delivery and financial compliance.

CAPACITY AND CAPABILITY

Right sources made available for supporting the application of every single aspect of the management most especially in the terms of systems as well as individuals is very important. If personnel with skills are not the ones to carry these activities, as well as implement them, the management will definitely result to a failure.

REPORTING

The right individuals as executors in the management are important in the empirical evidence that highlights the positive relationship between the fiscal sustainability actions and the fiscal transparency degree. Hence, proper reporting is the first step to transparency and accountability for fiscal actions.

PUBLIC FINANCIAL MANAGEMENT SYSTEM

Public financial management system consists majorly of the public sector with a little population of its administrators. Resource generation, allocation and expenditure management are essential in the public financial management system.

Some of the public financial management system basic subject matter forms include:

Public revenue

Public expenditure

Financial administration

Public debt

Federal finance

Size government

The composition and complexity of these forms of the public financial management system. Will however, determine the success of these operations in the public sector of the economy.

The government finance statistics manual in 2001 dis-aggregates the general government into sub-sectors which are the central government, state government, and the local government. This concept of general government does not include public corporations. However, the general government plus the public corporations comprise the public sector.

The public financial management consists of the people which is majorly the owners of the public funds. Utilization of these funds is the work of the government majorly why they are inclusive in the public sector.

PUBLIC FINANCIAL MANAGEMENT IN NIGERIA

It is important that we know what the management does in a developed country as well as its benefits as well as the civil unrest in the under developed countries because of lack of it. African countries strengthening their economies should also lead in good governance so that the financial management could be strong.

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Good governance has always been a backbone for the management while public misuse of public funds is the result of financial chaos. And in 2018 a conference by the chartered institute of public finance and accounting the conference details was about the situation of the public finance management in Nigeria and how to reform it so as to serve its initial purpose.

The whole institute of public finance management has been corrupt and unaccountable prior to this conference. That is why the conference holds so as to discuss the public finance management specific successes and challenges in Nigeria. Supervising the institute thoroughly ranging from its financial reporting and scrutiny to promote service at all levels to budget execution.

A well-rounded view of the system approach promotes will enable public finance managers to understand where they need to channel their efforts for betterment in service delivery, transparency and accountability.

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Some of the lacking in the proper administration of the public finance management in Nigeria includes: lack of accounting, lack of transparency, misuse of public funds, no service delivery in the three levels of government, corruption, bad decisions and bad governance. 

Critical standards that should apply by any reforming public finance management to meet the standards of good public finance management suitable for a state. And, reforms include Good governance, high and quality accounting standards, effective use of resources, an improvement on accountability, transparency.

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 If these reforms are visible in the service, then the service of the public finance management will improve and also have better outcomes not just to our country but to people’s lives.

Boosting the people’s self-confidence, trust in the government, and a stable business environment. Is also one of the benefits good public finance management will bring to Nigeria. While a weak one will only result to waste, corruption reduces the ability to collect taxes, bad impact on services, and bad investor perception of the country.

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The international public sector accounting standards (IPSAS) is the only international body reporting standards for public sector. A recognized set of independent and international board of public sector finance experts that aids public sector bodies address particular key public sector issues

Although there have high awareness about the IPSAS as well as high demand for their services and training, however, progress is slow. A strong PFM and IPSAS is the only solution to strengthen the Nigeria economy and development.

PUBLIC FINANCIAL MANAGEMENT COURSE

The public financial management course is a study in schools, workshops, business programs. And also, universities. Depending on your need for knowledge of public finance management, you can enroll in your desired public financial management course.

These public financial management courses available online. And their topics and sub topics are a study on daily bases sometimes months. The courses include

Public funds management

public sector boot camp

General public finance management

The public financial management course to study drafted from schools and workshops running these courses. Also, it is a guide for what you should expect in studying the public financial management courses.

 PDFS ON PUBLIC FINANCIAL MANAGEMENT

PDFS on a normal serves the purpose of knowledge enhancement. The PDFS on the public financial management will throw more light about everything you need to know on the topic as stated on this post with more.

A guide to public funds . PDFS on public financial management

Public financial management

economy and public funds

The international handbook PDFS on the public financial management

PDFS on the public financial managements are backups for a verse knowledge on the topic. You can chose to download these PDFS on public financial management.

Conclusion

The management knowledge should be essential for every one because you need to be aware of how funds for the public which you are inclusive goes about. Simply meaning I recommend this post for every citizen of a country up to legal age to engage in and be active.

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