Public Finance and Recent Statistics

One critical responsibility assumed by public service leaders, managers, and administrators involves general mastery of economic principles so they may effectively oversee monetary policies and participate fully in the regulatory practices observed by governments and public officials. Public financial management is an area of specialization within public administration that involves assessing government revenues and expenditures to reach desirable results for a municipality, a state, or a country and its public. The wide range of functions and responsibilities of accountants, controllers, treasurers and public leaders encompass include designing financial policies, formulating budgets, allocating public funds, accounting for public spending and performing external audits.

Understanding Public Finance and Recent Statistics

What are the main objectives of public finance management?

The central goal of managing public finance is to maintain an adequate fiscal balance; this means a number of separate goals are achieved, the following are among the most important. The level of tax collection is appropriate for and in line with public spending so that fiscal targets are met and deficits are as expected. Excessive public borrowing is avoided. Public resources are allocated in accordance with financial policy and strategy. Governmental entities and their public receive the greatest value in the delivery of services for their money. Transparency is another key goal of public finance management; public finance information should be accessible to the public to ensure that due process is being performed and the proper checks and balances are in place to guarantee accountability. This is why many government agencies store a detailed of their budget online and available to the public for review.

How does good financial management benefit the public?

Effective public financial management is essential to the growth and progress of a city, state, or country and its citizens. In a market-based economy like the US, this enables the equal and efficient delivery of public services and the fair regulation of markets, which aids in reducing poverty among the public while promoting opportunity and economic growth. Continued improvements in public finance practice and responsible public spending can significantly strengthen a nation by generating trust between citizens and public officials, fostering innovative energies and enabling societies to flourish overall. To this degree, many countries have strong fiscal management that aids global trade and cooperation, while reducing tensions and international disputes.

Public Finance Innovations and Statistics

The global financial management leaders survey conducted in 2015 by Grant Thornton International in association with The International Consortium on Governmental Financial Management and the MIT Center for Finance and Policy measured innovations and reforms taking place in the advancing field of public financial management. The following statistics draw from public financial management leaders from 40 countries throughout Europe, Asia Pacific, Africa, the Middle East and the Americas.

Public Financial Management Reform

The field of public financial management has experienced tremendous growth throughout the world, resulting in a shift in focus from simply budgeting and allocating funds to all levels of government and the public sector. Reforms are critical to give public finance departments the necessary resources to address the growing infrastructure needs and the increased adoption of technology and the concomitant increase in global trade. To succeed in public finance management reform, 38 percent of survey respondents stated they needed technical assistance, followed by a need for increased employee training and updated legal frameworks.

Addressing Infrastructure Needs

Another concern expressed by public finance managers is finding funding to address weak civil infrastructures in nations worldwide. The most critical areas of improvement cited were education, noted by 38 percent of survey respondents, healthcare at 31 percent, transportation at 21 percent, information technology (IT) at 17 percent and renewable energy at 13 percent. Many countries are looking to public-private partnerships (PPPs) to undertake these massive projects. PPPs can be complex and require adequate risk management efforts, which include understanding a private company’s capacity to undertake the project and effective oversight management to protect the investment of public funds.

Increased Transparency and Accountability

Another innovation in the field of public finance is increased transparency brought about by a public engaged in monitoring government expenditures and taking part in how taxes and funds are spent; this engagement is facilitated through technology and digital communications, and rules assuring public access to government documents. Leaders and public administrators worldwide see the trend toward transparency and accountability as positive for continued growth. It keeps governments honest, and informs the public on how agencies provide services and meet expectations. According to the survey, 75 percent of respondents utilize websites to increase transparency to their citizens, while 43 percent use social media and 37 percent use electronic direct mail. Governments using social media found that it brings more transparency to budget allocations, greater responsiveness to public priorities and overall performance improvement for public finance programs.

Public sector leaders, managers, and administrators need to stay up-to-date with trends and innovations in public finance. As the field becomes more complex, greater resources are made available for managing public finance, including increased training and open communication with citizens. These steps will benefit government agencies as they deliver public services and complete infrastructure projects.

Learn More

If you seek to change the world on a local, national, or global level, the University of San Francisco is a great place to start. By learning more about the University of San Francisco Online Master of Public Administration (MPA), you take an important first step toward pursuing your professional goals and your commitment to social justice. Our program is designed for professionals who want to become more effective managers and civic leaders who affect change through policy management and advocacy.

Recommended Readings

5 Great Places for Government Jobs Outside Washington, D.C.
What is government’s role in advancing social justice?
US Swing States

Sources

http://www.gsdrc.org/professional-dev/public-financial-management/

https://www.grantthornton.global/globalassets/1.-member-firms/global/insights/article-pdfs/2015/ca1511-04-icgfm-report-final-online_kkupdate1.pdf

http://www.oecd.org/dac/effectiveness/pfm.htm

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