Question

outline the key components of public financial management system.

Answer 1

As per the theory, there are eight key elements of public financial management system. Below are the key elements

1. The Climate reform        

2. Capacity and capability

3. Performance Management

4. Reporting

5. Scrutiny and assurance

6. Fiscal and policy framework

7. Governance- The value system

8. Governance- The legal and institutional framework

Now we will describe each key element one by one:

1. The Climate Reform: Climate Reform having a widespread recognition and acknowledgement the change is required. For that, we have to take the commitment from the stakeholders to effect the required reforms.

2. Capacity and Capability: This key element is ensuring that the required resources are available to support the application of each component of Public financial management. This element is for people and machinery. Without the appropriate people and machinery, no public financial management reform process can be successful.

3. Performance Management: This element is for the successful implementation of the budget. The budget that we prepare for the project must be well prepared, monitored with the projected outputs. The budget is essential for three things, which are value of money, efficiency and effective delivery of services.

4. Reporting: This key element is required for knowing about the between the degree of fiscal transparency and measures of fiscal sustainability.

5. Scrutiny and assurance: The reported between the degree of fiscal transparency and measures of fiscal sustainability. This element is subject to the information to effective scrutiny and assurance, thus generating confidence in its veracity.

6. Fiscal and policy framework: A credible budget is essential, reflecting the expected financial impact of the government’s policies and its use of resources. For a credible budget, well-defined and widespread fiscal and policy framework is required.

7. Governance- The value system : The public having a trust on government and they want that the tax money paid by them should be used in well-defined and proper manner. For the proper governance- the value system, therefore an open, honest and responsible approach to the way services are planned, executed and reported, which signifies a strong intent to work in the public interest.

8. Governance- The legal and Institutional framework: For the proper public financial management, well defined legal and regulatory framework is required which are useful to implementation of     efficient and effective public service arrangements.