Sloan School Of Management (2)
Estimating capital requirements : The company must estimate its capital requirements (needs) very carefully. The contemporary definition of internal control includes a broader context, which not only refers to the traditional role of financial expenditure controls, but also provides management with the capability to supervise service delivery effectiveness.
Financial management comprises multiple processes, including financial accounting, management (and cost) accounting, assets accounting, cash and money markets accounting, financial reporting, internal controls, and internal audit, with external audit providing a report and opinion on the reported financial status and performance.
Though the calculation and budgeting for recurrent costs of physical assets created by the government budget is a well established budgeting principle, the problems arise from several causes: poor planning and poor information sharing across different processes; lack of planning for future spending within resource constraints, and inability to coordinate sources of finance and domestically-financed budgetary operations.
The second relates to the preparation of reliable published financial statements, including interim and condensed financial statements and selected financial data derived from such statements, such as budgetary control releases that are reported publicly.
This course is almost entirely about the expenditure side of public financial management: issues of taxation, borrowing, debt and aid are dealt with in Public Financial Management: Revenue, while issues concerning the financial relationships between tiers of government are covered in Decentralization and Local Governance.