Improved Public Management and Development

Question: Discuss about the Improved Public Management and Development. Answer: Introduction Public Financial management, or PFM, is the set of rules, laws, processes, and systems which are used by various nations, so as to mobilize their revenues, in the allocation of the funds of the public, the undertaking of public spending, accounting for funds, and the audit results. In the following parts, the importance of PFM, as well as, the six key principles of PFM has been highlighted. Importance of PFM For an effective, as well as, sustainable public service delivery, and economic management, a strong public financial management is essential. When the states are underpinned by proper and good institutions, as well as, systems of PFM, they are more effective and more accountable (OECD, 2016). A strong PFM system is able crucial in ensuring that the funds are being utilized to achieve the stated development objectives. Principles of Public Financial Administration To ensure that there is a stability, as well as, long term sustainability in the budgets, the budgetary parameters are too be forecasted in a manner which is in the outline of the integrated monetary and macroeconomic policies. This also includes the creation, as well as, maintenance of the suitable financial reserves, which includes the stabilization of resources for the upcoming generations, especially in the cases of nations which have a high percentage of revenues from the exports of commodity (Kudrin, 2006). Accountability One of the broad principles which have a profound implication over the different levels of public management is accountability. Accountability deals with holding the people, as well as, the institutions responsible for their actions. The governments emphasize on the organizational form, where the responsibility is arrange in a hierarchical manner, and the ultimate responsibility for the actions or decisions rests on the top, with the legislature or the executives (United Nations, 1995). But in the recent decades, there has been a shift towards decentralization, which endorses the knowledge that retention of financial accountability over the use of public resources is needed for a well managed government. Transparency Along with the development of the management methods, schemes are designed by the governments to promote, as well as, enhance transparency and make available efficient information to the general public, along with the interested parties (United Nations, 1995). Such efficient information helps in the strengthening of motivation for the politicians, as well as, managers in ensuring the achievement of results and proper management of resources. Effective Financial Control, Reporting And Monitoring For an effective PFM, a proper system of financial control, reporting and monitoring is crucial. This is done in many ways, some of which include the annual audits, which are done by independent external persons, of the budget reporting, and the findings of these audits are then reviewed by the legislature; audit mechanisms, and internal control systems are developed and applied; the quality of financial management is regularly analyzed and assessed, and measures for improving it are also provided (Kudrin, 2006). All this helps in proper monitoring, as well as in better control, which includes the compliance with the budget legislations. Fiduciary Risk Management An intuitive, as well as, a flexible fiduciary risk management system is essential so that the anticipated, as well as, the unanticipated risks which are faced by the public entities are mitigated, while they chase their goals (Shaikh, Naeem, 2013). A proper monitoring of the progress in the set goals helps in the correction of errors in a timely manner, along with the proper identification of the problematic areas, as well as, the risks of the future. Public audit is one of the ways of identifying the risks, which can act as a barrier in achievement of the desired goals. Results-Oriented Budgeting In order to attain result oriented budgeting, the goals, targets, and objectives for each of the spending bodies is set and designed in a manner to ensure the achievement of these. The competitive principles are used for allocation of the budgeted funds which includes the comparison of the achieved results from the planned ones by the use of budged appropriations (Kudrin, 2006). A result Oriented budgeting helps PFM in ensuring the motivation, responsibility, independence and accountability of the public bodies, and their success in achieving the goals, contained by the pre-ascertained financial limits. References Kudrin, A.L. (2006). Principles for Good Governance of Public Finance. Retrieved from: https://old.minfin.ru/common/img/uploaded/library/no_date/2007/pfggopf_eng.pdf OECD. (2016). Public Financial Management: An overview. Retrieved from: https://www.oecd.org/dac/effectiveness/pfm.htm Shaikh, A., Naeem, N. (2013). An Introduction To Public Financial Management. Retrieved from: https://www.accaglobal.com/content/dam/ACCA_National/pk/mem/Members_network_panel_2013.pdf United Nations. (1995). Financial Management for Improved Public Management and Development. Retrieved from: https://unpan1.un.org/intradoc/groups/public/documents/un/unpan000760.pdf

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