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Financial management

Financial management is the system by which the resources of an organisation are planned, directed, monitored and controlled to enable the organisation's goals to be met.

Good financial management means an organisation anticipates and responds to changing circumstances and risks, delivers programmes to budgets and plans, constantly improves efficiency and services, and provides accurate and meaningful information to its stakeholders. All of this is more important than ever given big cuts in public spending, increasing delivery of services locally and through contracts, new financing mechanisms, greater demand due to demographic changes and new risks, such as cyber crime.

Financial management must therefore be a key part of public bodies' strategic and operational decisions and plans; they must have the financial information needed to make decisions and monitor operations; and their staff must have the right financial and commercial skills.

Find out more about lessons and good practice identified in NAO's work across government in Asset sales and privatisation; Cost reduction and affordability; Fraud, error and debt management; Infrastructure finance; and Managing assets and liabilities.

Key NAO publications:

Good practice from the Excellence in Reporting in the Public Sector Award (Apr 2017)
The choice of finance for capital investment (Mar 2015)
Delivering value and accountability – CIMA and NAO expert panel report (Oct 2014)
Reporting financial management information to the Board (Jan 2012)
Financial Management Maturity Model (Jan 2010)

A memorandum on the Crossrail programme

This memorandum sets out background information about the Crossrail programme and the current position

Sector(s): Infrastructure, Transport

Performance Improvement area(s): Financial management, Managing major projects

Department(s): Department for Transport

Published:
28 Feb 2019

Accountability to Parliament for taxpayers’ money

The incentives on government Accounting Officers to prioritise value for money are weak compared to those associated with the day-to-day job of satisfying Ministers.

Sector(s): Central Finance and Treasury, Government, efficiency and transparency, Local services

Performance Improvement area(s): Accountability in local service delivery, Financial management, Oversight of service delivery, Strategic centre of government

Published:
23 Feb 2016

Building Public Trust Awards – Examples of good practice in annual reports

The Building Public Trust Awards recognise trust and transparency in corporate reporting. This is the 12th year in which PwC has presented these annual awards.

Performance Improvement area(s): Financial management

Published:
29 Jan 2015

Companies in Government

Since 2010 there has been an increase in the number of companies in government at the same time as a reduction in the number of public bodies which raises issues of transparency, accountability, governance and review.

Sector(s): Government, efficiency and transparency

Performance Improvement area(s): Financial management, User choice and consumer protection

Department(s): Cabinet Office

Published:
10 Dec 2015

Controlling the consumer-funded costs of energy policies: The Levy Control Framework

The government has missed opportunities to exploit the full potential of the Levy Control Framework and this has contributed to decisions which have not secured value for money.

Sector(s): Energy and environment

Performance Improvement area(s): Financial management

Department(s): Department for Business, Energy and Industrial Strategy

Published:
18 Oct 2016

Crown Commercial Service

It is not possible to show that the Crown Commercial Service has achieved more than departments would otherwise have achieved by buying common goods and services themselves.

Sector(s): Government, efficiency and transparency

Performance Improvement area(s): Commercial capability and contract management, Financial management

Department(s): Cabinet Office

Published:
13 Dec 2016

Delivering the defence estate

The MoD has developed a strategy that identifies the estate it needs and the 25% of its estate it can dispose of by 2040. However, the strategy and current funding levels allow only for a partial reversal of the decline in the condition of the remaining estate. There is a significant risk that the poor condition of the estate will affect the Department’s ability to provide the defence capability needed.

Sector(s): National security

Performance Improvement area(s): Financial management, Managing assets and liabilities

Department(s): Ministry of Defence

Published:
15 Nov 2016

Delivering value and accountability – CIMA and NAO expert panel report

Fiscal pressure on government departments is set to continue through the next Parliament, with citizen expectations continuing to rise. With the ‘more for less’ challenge continuing indefinitely and an increasingly complex public sector landscape, a strong and integrated finance function across government is crucial.

Sector(s): Government, efficiency and transparency

Performance Improvement area(s): Cost reduction and affordability, Financial management

Department(s): HM Treasury

Published:
9 Oct 2014

Due diligence processes for potential donations

With charities such as museums and galleries relying increasingly on donations to supplement public grant funding, this report summarises the issues faced and best-practice management of the risks associated with donations as a source of income.

Sector(s): Arts, media and sport, Commissioning and contract management

Performance Improvement area(s): Financial and service sustainability, Financial management

Department(s): Department for Digital, Culture Media and Sport

Published:
4 Aug 2017

Financial Management Maturity Model

Good financial management is at the core of good management in government. It supports decision making and the effective running of organisations.

Performance Improvement area(s): Financial management

Published:
20 Jan 2010