a.

lokman/Mar2018
 At the end of the chapter, student
should be able to;
› Explain public financial administration.
› Identify the purpose of financial
administration.
› Discuss the significance of financial
administration.

a.lokman/Mar2018
 Public Finance administration is also
known as the Government Finance
Administration.
 One of the most important portfolios in
the government.
 It is the study of the income and
expenditure of the government.

a.lokman/Mar2018
 A process of making decision on how to
generate public revenues and
expenditures.

 A stated revenue and expenditure for the

future used as a tool for planning and
management of the country’s economic
resources in order to fulfill society’s needs.

 A yearly economic planning with purpose

to implement of the country socio
economic policies as per period of years.
a.lokman/Mar2018
 Includes the various aspect of
budgeting, financial controlling and
monitoring, accounting, auditing,
purchase and supply management, tax
administration and treasury
management.
 Is a process from the collection of taxes
until expenditure spent.

a.lokman/Mar2018
 It acts as a Policy Statement or Blueprint or Master Plan for
the government.

 It involves the estimation of country’s revenues and

expenditures.

 It acts as a financial plan that involves the short-term, mid-

term, and long-term plans of the government.

 It acts as a management device in ensuring effectiveness

and efficiency.

 It acts as a performance measurement in ensuring the

accountability and transparency of public finance
administration
a.lokman/Mar2018
 To ensure the proper revenue system and expenses is
carried out correctly.

 To ensure the purchasing/procurement is done

appropriately, correctly and legally.

 To ensure the uses of resources is assessed its

efficiency, effectiveness, productivity and quality.

 To ensure no wastage.

 To ensure no deception (trick/ mislead) and breach

of trust.

a.lokman/Mar2018
 To implement the government’s policy.

 To have a legal control.

 As an important resources to the public.

 To achieve the government’s objective,

such as to develop and stabilize economy
through effective management expenses
and tax policy.
a.lokman/Mar2018
 Taxes – land taxes, business taxes, personal taxes, and etc.

 Custom duties/ tariffs – levy, import and export taxes and

etc.

 Penalties and fines – summons and etc.

 Gifts – public donations, wakaf, international donations

and etc.

 International loans – IMF, World Bank and etc.

 Quid Pro Quo Payment – “something for something” such

as you pay bill after you use the water and electricity or
fees, charges, payment and etc.
a.lokman/Mar2018
 Planning and programming

 Budgeting

 Funding

 Accounting

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a.lokman/Mar2018
 Planning :
› organizing and arranging program and activity
in order to gain maximum return or profit. A study
should be done before any planning can take
place.

 Programming:
› involves arranging and implementing selected
programs in the most effective way.
› An effective planning and programming will
produce programs that can help to increase our
economic growth and development.

a.lokman/Mar2018
 A government’s forecast outlining the
estimated revenue, expenditures and return
for a particular year.
 Government annual budget is a statement
that explains the amount of country’s
expenditure, types of expenditure and
return gains by the country.
 The budget is enacted into a law by the
legislature which authorizes the government
to spend fund according to the set of
appropriations.
a.lokman/Mar2018
 Is a process of allocating financial
resources for projects that will be carried
out.
 Financial resources are used to defray
(provide money for something) the
expenditure used in managing and
developing projects.

a.lokman/Mar2018
 Is a process of recording, giving
comment and interpreting of all financial
transactions that occurs in organization.
 The objective of accounting is to give
accurate and complete financial
information, at the right time.

a.lokman/Mar2018
 Ekstein (1973) define budget as a
statement detailing the revenues and
expenditures of the government.
 Nigro & Nigro - is financial plan of the
government, which determines the
proposed revenues and expenditures, so
as to achieve the government goals and
objectives

a.lokman/Mar2018
 An account of the state, showing how much the
government spends and on what and how it finance the
expenditure.

 As an economic planning made annually with the main

objective of implementing the country’s economic policy.

 In our country, budget normally drafted every year to face

the specific economic condition predicted for the
following year.

 The budget is for one (1) year period and also act as a
media to present the government policies and how those
policies is going to carried out.

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a.lokman/Mar2018
a.lokman/Mar2018
 Is the financial plan of the government-
timely and accurately.
 Specific purpose- has clear defined
objectives and action plans.
 Has time frame or time limit @ limited
time period.
 Has estimate expenditures and revenues
of a certain project or program.

a.lokman/Mar2018
 Deficit budget - spending exceed
income or revenue.

 Surplus budget - Income exceed

expenditure.

 Balanced budget - income and

spending are equal

a.lokman/Mar2018
 As a Policy Statement
› explain the government policy.

 As a Financial Planning
› Forecast on the revenue and expenditure.
› Need to plan for the most effective use.

 As a Management Tool, Method or Device

› explains how government plans are going to
carry out towards programs, activity, and
project to achieve government objectives.

a.lokman/Mar2018
 As a controlling document
› ensure that money/fund is spend for its
purpose.
› involves control in managing public
expenditure.
› Steps that need to be taken in ensuring
control is in place are:
 Identification of need
 Establishment of policy objectives
 Preparation of forecast
 Planning
a.lokman/Mar2018
 As a tool for Performance Measurement
› assists in measuring the performance of a
government
› HOW?? Through report and feedback.
› is measured based on the quality of work,
effectiveness and efficiency.

 As a statement of Government business

transaction.
› Government transaction statement for a certain
period (i.e. 1 year).
› must be tabled in Parliament before 31 December
every year.

a.lokman/Mar2018
 4 stages in preparing budget:
› Preparation Stage
› Approval Stage
› Execution/ Implementation Stage
› Auditing Stage

a.lokman/Mar2018
a.lokman/Mar2018
 Financial administration as;
› Budget-the process of allocating funds.
› Treasury- overall financial management of
government’s money.
› Taxation- imposition and collection of tax
› Supply & Procurement- ensure procurement
of assets for the government are properly
made

a.lokman/Mar2018
› Auditing- ensure that every government’s
transaction are properly recorded in relevant
account.
› Accounting- to ensure every transaction
involving government’s money is accurately
and appropriately recorded in the relevant
account.

a.lokman/Mar2018