Bài giảng quản trị công chapter 6 pgs ts sử đình thành

CHAPTER FINANCIAL MANAGEMENT SU DINH THANH LEARNING OBJECTIVES GOVERNMENT BUDGET REVIEW ƒ B Budget d t is i finance fi off governmentt ƒ There are two main functions for the government b d t in budget i an overall ll sense: economic, i andd financial fi i l (Musgrave and Musgrave, 1989) Economic functions of the budget ƒ Th These are usually ll described d ib d as policies li i for: f ƒ allocation (the relative size of the public and private i t sectors); t ) ƒ distribution and; ƒ stabilization t bili ti Financial functions of the budget ƒ Th The financial fi i l functions f ti off the th budget b d t are analogous l to accounting Balance sheets need to be drawn up f the for th whole h l off governmentt activity ti it ƒ The financial functions of the budget are: ƒ an evaluation l ti off total t t l governmentt andd public bli authority expenditures within the budget sector; ƒ to t actt as the th legislature’s l i l t ’ instrument i t t off accountability and control over the government i its in it handling h dli off financial fi i l matters tt THE THREE MODELS OF PFM ƒ Th The classical l i l model d l ƒ The ‘new public management’ (NPM) model ƒ The Th Barnard–Simon B d Si governance model d l The classical model „ There are two cardinal/main rules in the classical PFM model: „ „ (1) a governmentt should h ld balance b l it budget its b d t (2) a government unit should not overspend its appropriations These rules are codified in laws and regulations „ In conformity with this provision, there are statutes and regulations g on budget g ppreparation, p , approval pp and execution,, and eventual cash disbursement by the Treasury Financial management makes budgetary resources available to officials to carry out authorized h i d purposes „ Can you give some weakness of this model? To refer to p 102 - 103 103 The classical model „ Such as: Financial management is an invisible bureaucratic function uninvolved in policy decision making and largely unaffected by budgeting approaches „ As PPBS, ZBB and mission budgeting The ‘new p public management’ g model „ NPM model d l conveys the h implications i li i off private i sector practices: „ „ „ „ „ Citizens Ci i are considered id d as customers Performance and results – not inputs – are stressed Outputs and outcomes should be measured, compared with benchmarks and verified by value-for-money audits audits Universal rules of the marketplace: economy and efficiency Double-entry recording should replace the singleentry y system y The ‘new p public management’ g model „ NPFM has the potential to energize an ossified bureaucracy, but there are several problems with it „ First, it does not address the core issue in ggovernment If ggovernment exists to take care of the consequences of market failure, doing those things for which business lacks incentives or is not equipped to handle But equity rather than efficiency, economy or even effectiveness is the ultimate criterion in public or political decision making in a democracy The ‘new p public management’ g model „ Second, corporate model has several scandals It is not perfectible in practices „ Third, It elevates administrative discretion at the expense p of legislature g ppower It ppromotes the ethos of the business-minded managers against the politically savvy policy analysts It does not appreciate the primacy and resiliency of budget rules in government The ‘new p public management’ g model „ => What is needed is a governance model that recognizes the respective roles, competences and advantage of government, civil society and businesses The Barnard–Simon ggovernance model „ Chester Barnard and Herbert Simon are pioneers to trace to an organization theory „ Barnard (1968, originally 1938) and Simon (1945) viewed an organization g – ggovernment or business – as being in equilibrium when its managers succeed in balancing the contributions from its stakeholders (table 1) The Barnard–Simon ggovernance model Table The Barnard–Simon ggovernance model „ Barnard and Simon focused on individual organizations However, the solution of many complex societal problems requires the co-operation of a network of public and private institutions „ Working through network provides government with more tools Besides direct provision of goods and services, government could enter into contracts with, or give grants to business and nonprofit organizations It could provide loans, loan guarantees or insurance coverage (Table 2) The Barnard–Simon ggovernance model Table COMPARATIVE APPRAISAL OF THE MODELS „ The role of financial management is influenced heavily by its environment Specifically, the nature of the entity being managed and the higher level manager tend to affect what financial managers Comparative appraisal „ Its I different diff roles l in i altered l d contexts have h serious i implications for the content of public financial management management „ Financial managers are rewarded for their contributions to conformity (classical model), model) shortshort term efficiency and economy (NPM model), and longterm effectiveness and equity (governance model) „ Consequently, they think of what is managed differently, and monitor different aspects of financial performance Comparative appraisal Comparative appraisal „ Public financial management – in the broad sense – is aided by budgeting, accounting and auditing „ The input and control orientation in the classical model ggives wayy to the mission-driven output p budgets favoured by the NPM model „ The macro perspective of the governance model requires a more encompassing budget to see how resources are allocated to various service providers (global) Comparative appraisal ... customers Performance and results – not inputs – are stressed Outputs and outcomes should be measured, compared with benchmarks and verified by value-for-money audits audits Universal rules of the... Barnard (1 968 , originally 1938) and Simon (1945) viewed an organization g – ggovernment or business – as being in equilibrium when its managers succeed in balancing the contributions from its stakeholders... classical PFM model: „ „ (1) a governmentt should h ld balance b l it budget its b d t (2) a government unit should not overspend its appropriations These rules are codified in laws and regulations „