Public Financial Management

Session 13– Public Financial Management

Session Objectives:
On completion of this session, the student will have a better understanding of:

(1) The Budget process and its contribution to basic government.
(2) The Concepts and Practices associated with financial management.
.

Readings:
During this session, read the following material:

Public Administration, Chapter 13- Public Financial Management

The text, states that at the heart of the American system of public financial management are six principals. Democratic consent, Equity, Transparency, Probity, Prudence and Accountability. The text links these together and points out some shortcomings in the principals.

The budgetary process provides a mechanism for allocating and regulating available resources from the budgetary pie. Public budgets are not just managerial guidelines but they are in a way, political statements. Budgets reflect choices of what government will do and what governments will not do. Budgets reflect priorities of the kinds of services government should provide and what citizens are entitled too.

In the beginning, the Founding Fathers vested the power of the purse to Congress. Up until 1920, the executive branch agencies sent their funding requests directly to Congress. In 1921, in an effort to improve the process, President Warren G. Harding signed the Budget and Accounting Act into law. This act required each government department to request its budget to the legislature by way of the president (with assistance from the Bureau of the Budget). This was done to reduce graft and corruption. The General Accounting Office was also formed in connection with this act and was intended to serve as an independent policing authority.

In 1971, the Bureau of the Budget became the Office of Management and Budget and worked directly for the President with the General Accounting Office supporting Congress. More changes occurred in 1974 with the Congressional Budget and Impound Control Act of 1974. This established a budget committee for each house. There are three basic types of budgets. There are line-item budgets, Program budgets and Performance Budgets.
From Wikipedia.

Public Financial Management

Public financial management in its broadest sense links a country’s aspirations with its resources, and the present with the future. It therefore lies at the very heart of the operations and the fiscal policy of government.
The transformation of the country’s aspirations into feasible policies with well-recognized financial implications is at the heart of financial management. Issues not addressed during policy formulation tend to grow in magnitude during implementation and may frequently contribute to major reversals in the pursuit of policies or major slippages that may lead to contrary results. Moreover, policy measures aim at building confidence in the financial markets, and to that extent policy formulation should be seen as transparent and empirical, too.
Money Talks Bureaucracies cannot exist without money. Congress controls the flow of money to the bureaucracy therefore Congress has the ability to influence control over activities. This is generally done through legislative committees since they can limit or curtail funds to organizations or programs that are not in line with their desires. This approach is a strong incentive for administrators to be aware of, consider and coordinate with the legislature. Do you see any conflicting interests here/

What Does a Public Financial Manager Do?
A public financial manager is involved in preparing budgets, tracking spending, examining revenue opportunities, tracking financial markets, evaluating capital improvements and may other tasks. The public financial manager maintains the financial well being of our government, city or regional government.

Pulled directly from the web:
Emergency Financial Management
The disasters in the Gulf Region have highlighted the critical role of financial management in disaster planning. Throughout 2007 and 2008, the Council traveled across the country to discuss strategies to effectively prepare for, respond to and recover from major disasters with federal, state and local experts in financial management and planning during an emergency. Throughout this initiative, the Council collected local data on preparedness from a financial perspective and the alarming results were showcased to the federal community in June 2008. With a goal to produce an online-based tool to assist other jurisdictions, this page provides a checklist of key actions for financial managers during an emergency that we observed throughout the country, as well as helpful links and documents that can be used throughout the process.
Emergency Financial Management Checklist
1. Include Procurement and Financial Managers in Disaster Planning
Financial and Procurement Managers are often left out of preparedness strategy discussions; this is a fundamental flaw in disaster planning. There is a direct link from the resources required to react in an emergency and the financial managers responsible for acquiring and accounting for those resources. The key financial officials must be prepared with a plan for loss of revenue – payroll back-up pay to pay accounts payable. Purchase cards (EBT) are a critical tool to ease the disbursement of benefits quickly; flexibility in EBT cards for citizens is difficult while keeping the accountability.
2. Relationships
Relationships with peers and vendors must be in place before an emergency occurs. These relationships must be proactive and include pre-set arrangements for vendors to facilitate a smooth procurement process. Examples include pre-established vendors, EBT (Electronic Benefits Transfer) Cards and pre-existing MOUs (Memorandum of Understanding). These relationships must also be effectively communicated.
3. Memoranda of Understanding
Pre-established partnerships with financial institutions are also important; including collaboration among banks and credit card companies before the emergency. MOUs for office space, computer capacity, infrastructure, web-based agreements, etc., must also be taken into consideration.
4. Collaboration – Government Must Work Across Organizational Boundaries
It is evident that in emergency situations, success comes from collaboration – with the private sector, and non-profit organizations. Innovative collaborations have included counties working across state-lines to develop agreements in the case of emergencies.
5. Documentation of property and systems
It is vital to have one source for documentation and that keeping good records that are accessible and well-communicated in an emergency is crucial to a sustainable system. The Massachusetts Emergency Management Agency was recognized as a best practice because it has standardized forms with a common format that increases the fluidity of reporting across localities, through the state and federal levels, all of which are available online.
6. Practice, Practice, Practice
Emergency Managers dedicate tremendous time and resources to training for emergency preparedness and response. Financial and procurement managers are too often left out of emergency preparedness drills and activities. To address that issue, financial managers must also make a solid commitment of time, education, and exercise around preparation and recovery.
7. Recovery
Recovery takes just as much, if not more collaboration and support than the response stage; too often, everyone focuses on the short-term response, and lack long-term strategy for true recovery.

Discussion Thread: Emergencies and Financial Management Do you as an emergency planner see a need to include the financial manager in emergency drills/planning. I am thinking about resources, vendor relationships, and contracts or purchase orders. Are there other considerations?

Written Assignment: Additional Internet References:
While there is a great deal of information in the text, the student should also independently research the topic (s) of the week. I am asking the student to cite three or four pertinent articles or websites on the topic of Public financial management. I am looking for you to include a brief summary or some type of review/comments on any article/web citation. I am looking for approximately two pages of material from the student to demonstrate an understanding of the topic.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET AN AMAZING DISCOUNT 🙂