Section 3

 

 

 

 


The Scope and Purpose of the National Profile         
                  
                    

3.4 Definition of Sound Financial Management

3.4.0    For the purposes of this Guidance Document, "sound financial management" means the aggregate set of practices and procedures which allow for the accurate, transparent, and effective handling of all government monies and government contracts. A system of sound financial management should be characterised by the existence and proper functioning of the following attributes :

A coherent set of accounting procedures and standards which reveal that public monies were spent in accordance with due authority, that all transactions were recorded accurately, and that a complete audit trail exists to facilitate a post expenditure review.
Transparent national budget mechanisms (involving parliamentary control and full public disclosure of spending plans) for the allocation of monies to various expenditure programmes.
An effective system of state audit and parliamentary scrutiny of all expenditure programmes.
An efficient and equitable revenue (tax) raising mechanism which is effective in the sense of causing minimum economic disruption or dis-location to tax-payers.
A set of performance indicators associated with all expenditure programmes, so that the economy with which programmes are managed, and their effectiveness in meeting declared targets can be measured.
A decision making and approval system which limits the span of influence exercised by any individual official over a particular spending programme.

                                 

Guidance Document: Assisting Countries in Preparing a National Profile to Assess the National Legal Infrastructure for Sound Financial Management
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