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); and Financial Management Maturity Model (Jan 2010)
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.
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.
The Building Public Trust Awards recognise outstanding corporate reporting that builds trust and transparency. This interactive document illustrates a range of good practice examples in public sector reports.
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.
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.
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.
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.
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.
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.
Good financial management is at the core of good management in government. It supports decision making and the effective running of organisations.