Public financial oversight in government departments : a strategic approach

Abstract

This dissertation researches the concept of the Public Financial Oversight in Government departments. It portrays the existing set-up within Government and implementation stage reached in relation to the PFO concept as promoted by the EU. It examines the particular features of PFO concept, which are Financial Management and Control systems, Functionally Independent Internal Audit and Central Harmonisation. It also highlights the significant problems associated with PFO implementation and recommends ways how this concept can be fully implemented to be beneficial to Government. The findings and recommendations have been arrived at on the basis of interviews conducted with officers both in selected private companies plc and in units within the Ministry of Finance. The main conclusions can be summarised as follows: a. PFO concept recognises today's challenges and provides a useful guide to implement modern management control systems. b. Four noteworthy features in the implementation process are: i. Regular reviews have to be undertaken to assess strengths and weaknesses of controls within the departments; ii. Drafting of PIFC legislation and regulation; iii. Decision makers have to build financial management and control systems on internationally recognised standards; iv. Good information and communication strategy should be set-up and maintained. c. The most significant problems hindering the full implementation of the PFO concept are (i) cultural change as seen as a threat to employees' job security and status and (ii) the fact that most of the Government Units are understaffed, particular in finance and accounting areas. d. By establishing how the PFO principles are applied in private sector, the study provided a detailed overview of how the Government can benefit by implementing further this concept.