Economics, Business and Management: Recent Advances Vol. 2

Financial Management (FM) deals with resource mobilisation and expenditure for either private firms or public institutions. More specifically, Public Financial Management (PFM) involves planning and controlling public institution funds through capital expenditure management, working capital, working with the institution's Treasury, funding for expenditure, and making informed funding decisions for the institution (World Bank, 2020). Therefore, the main objective of PFM is to manage raised or about to be raised financial resources economically and efficiently, at the same time delivering the targeted outputs for the desired outcomes (effectiveness) and achieving the community needs (appropriateness). Most countries require proper management of financial resources to ensure proper service delivery to the community. It is emphasised that most developing countries need to develop proper ways of ensuring accountable public fund management. The need for prudent management of funds is critical for most public institutions to achieve their objectives, as widely emphasised in different international forums. Efficient fund management consists of five key aspects: budgeting, proper financial reporting, good auditing practices, a well-structured regulatory framework, and a revenue collection base. In any economy, proper PFM is critical to economic development and growth.  Such practice enhances revenue generation and sourcing, which improves service provision and the welfare of the communities by reaching all corners, which in turn improves growth. Following the key steps of PFM helps reduce corruption and improve the accountability of public funds. It is noted that proper PFM accounting is important for the institution to achieve community and national development at large. This is realised through improved service quality, public trust, community buy-in, and improved performance of public institutions.