Mgt202_lecture_04.ppsx 4m1b15

Finance Management in Education

MGT202 Lecture # 04 How Adequate Are Current Financial Management Systems? Muhammad Toseef Aslam M.B.I.T (Finance), MSBA

Recap (Lecture # 03) 1. The secondary role of educational authorities in major decisions on educational finance. 2. The high degree of centralization in the management of educational finance. 3. Lags in the flow of money to s in the educational field. 4. Poor relations between the management side of educational finance and the technical aspects of education. 5. The concern with financial inputs rather than with their relation to educational outputs. 6. The domination of traditionalism and rigid formalism in the management of educational finance. 7. The lack of efficient istrative personnel. El-Ghannam (1970)

Financial Management System The absence of effective financial management can become an obstacle to the optimum use of resources and may thwart development of an entity.

How to Improve Financial Management In order to improve financial management, developing countries must: • Develop effective ing and auditing practices • Ensure the presence of skilled personnel to effectively run their financial management systems • Develop a comprehensive and up-to-date training program at both the national and regional level of the developing countries • Increase their commitment to the realization of an effective training development program and work more closely with the internal donor community in this effort US General ing Office (GOA)

“The link between planning and budgeting processes is weak in many developing countries and needs to be strengthened. Successful working of program budgeting calls for significant reforms in prevailing ing systems, training of officials in the new skills and strong from the political and istrative leadership. The developing countries should accord priority to these measures.”

( US GOA Report – with approval from UN publication “Report on Fourth Meeting of Experts on the UN Program in Public istration and Finance )

“Government ing is still seen mainly as an ability device for public receipts and expenditures; its evaluation, performance, measurement and managerial function tend to be neglected. ing in the public sector has, by and large, adhered to a book keeping or istrative / legislative approach; the s are generally kept according to the cash basis system rather than the accrual system… The amount of paperwork is vast, but neither efficiency, ability nor financial control is improved… budget items are rarely assessed from a managerial (performance budget) point of view. A tremendous gap might exist between budgetary estimates and actual receipts or expenditures.” ( US GOA Report – with approval from UN study “Government ing in Economic Development Management” )

Weaknesses in FM • Lack of integrated financial information • Incomplete and unreliable information • Extended reporting delays • Not synchronized with past and present ing data • Future requirements without projecting past data • No real comparison of planned and actual financial performance • Shortage of trained financial managers

Recap •

Financial Management System

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How to improve Financial Management

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Quoted text from report

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Weaknesses in Financial Management

Precap Lesson # 05 Budgeting and Budget Practices

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Thank you very much Take Care…!