Financial Management in Public Administration Sector
Financial management is paramount in public administration. Misappropriation of funds or poor tracking of funds can lead to a cascade of issues and scrutiny from the public. As stated in Proverbs 13:11 “Dishonest money dwindles away, but whoever gathers money little by little makes it grow” (NIV). This passage from proverbs holds true in the concept that at times, individuals in power misappropriate government funds and get caught up in financial scandals.
Whether the public funds are being used for personal gain or to aid political agendas, misappropriation of public funds is criminal and by no means in line with the statesmanship model. “The funds you manage as a public administrator are not the government’s money. It is not yours either.
The money is the public’s; the taxpayer” (Liberty, 2020, p.4). Financial management practices are always the main topics of conversation amongst the public. Adhering to the statesmanship model, a government’s best practices should include a checks and balance system and full transparency to the public in which they serve.
“The greater demand for transparency, accountability, and efficiency forces governments all over the world to adopt new accounting, auditing, and budgeting techniques and to improve the scrutiny and timeliness of their reporting” (Marti & Kasperskaya, 2015, p.165).
Having full participation from individuals within the agency and input from stakeholders is a strong start to face challenges for a would-be statesman dealing with financial management in public administration. Practicing participatory budgeting allows stakeholders participation in the preparation of a public budget and at the same time addresses budget dysfunction (Smith & Bempah, 2017).
Allowing full transparency when any public funds are involved is the best practice to avoid any type of misconduct allegations. In 1998, the World Bank provided a list of items for assessing the best public budget practices. Items on that list included: evidence-based planning and budgeting, an equitable resource allocation criteria, transparent plans and budgets, effective spending control, efficient cash management and accountability for expenditure (Smith & Bempah, 2017).
All of the items on the list provided by the World Bank follow the art of statecraft, showing transparency when dealing with public funds to those who you dedicated your life to serving. A misappropriation of funds or poor financial management may lead to hardship for future generations.
“Higher levels of debt may represent a burden of future interest costs and principal repayments that would reduce a governmental agency’s ability to meet demand for services and thus increase the fiscal pressure on future generations of taxpayers” (Alcaide Munoz, Rodriguez Bolivar, & Lopez Hernandez, 2017, p.555).
Best practices for a Christian statesman when diluted to their simplest terms are not that complicated, do the right things even when no one is looking. A Christian public administration is a servant to the public and practices selfless serve. Doing what is best for the public with public funding despite personal opinion is how a statesman would succeed in the financial management of public funds. Proverbs 21:3 “To do what is right and just is more acceptable to the Lord than sacrifice” (NIV).
Alcaide Munoz, L., Rodriguez Bolivar, M. P., & Lopez Hernandez, A. M. (2017). Transparency in Government: A Meta-Analytic Review of Incentives for Digital Versus Hard-Copy Public Financial Disclosures. American Review of Public Administration, 47(5), 550–573. doi: 10.1177/0275074016629008
Liberty University (2020) Budgeting Theories in Public Organizations. retrieved from https://learn.liberty.edu/bbcswebdav/pid-36372703-dt-content-rid- 439928258_1/courses/PADM610_B02_202020/PADM610_LUO_8WK_MASTER_Imp ortedContent_20180723025359/Presentations/Module%206/html5.html
Marti, C., & Kasperskaya, Y. (2015). Public Financial Management Systems and Countries’ Governance: A Cross Country Study. Public Administration and Development, 35, 165–178. doi: 10.1002/pad.1711
Smith, B., & Bempah, O. (2017). Determinants of sound budgeting and financial management practices at the decentralised level of public administration. OECD Journal on Budgeting, 16(2), 109-128. doi:http://dx.doi.org.ezproxy.liberty.edu/10.1787/budget-16-5jg19mnf3vr1