Atlas106M Public Financial Management

… a half-course module within the core Atlas Courses

PubFinMgtAtlas module syllabus

This six-topic Atlas module syllabus covers the core topics and concepts in the public management subject of Public Financial Management. It increases students’ competency in managing financial resources as part of the execution of public policy.

Learning outcomes

On successful completion of this course students will have the skills and knowledge to be able to analyze public management problems by appropriately utilizing the theories and principles in the normed topics and concepts noted below.

Normed topics

The topics are normed in having a volume of content capable of being taught in one course-week of instruction − nominally 3 hours of in-class work and 7 hours of outside-class reading.

  1. The Study of Financial Management in the Public Sector
  2. Planning and Budgeting
  3. Costing and Forecasting
  4. Capital Budgeting
  5. Management Control: A Risk-Based Approach
  6. Audit and Oversight in Managing Public Money

Like other normed topics on the Atlas, each of these has a topic description, links to core concepts relevant to the topic, learning outcomes, a reading list drawn from available course syllabi, and a series of assessment questions.

Concepts to be learned
(listed alphabetically under topics)

The Study of Financial Management in the Public Sector

Accounting

Accounting Controls

Accrual Basis of Accounting

Amortization

Assets

Balance Sheet

Basic Financial Statements

Double-Entry Accounting

Financial Management

Financial Reporting

Generally Accepted Accounting Principles (GAAP)

Statement of Financial Position

Planning and Budgeting

Appropriation

Bottom-Up Budget

Budget Cycle

Budgetary Transaction

Direct Program Spending

Financial Management

Line-Item

Major Statutory Spending

Non-Budgetary Spending

Operating Fund

Output/Outcome Budgeting

Solvency

Top-Down Budget

Costing and Forecasting

Activity-Based Costing

Break-Even Analysis

Opportunity Costs of Inventory

Spending Variance

Capital Budgeting

Assets

Bond

Capital Assets

Capital Budget

Capital Equipment

Capital Goods

Capital Project

Depreciation

Depreciation Expense

Physical Capital

Straight-Line Depreciation

Useful Life of an Asset

Internal Audit

Organizational Culture

Risk-Based Auditing

Risk Identification

Risk Mitigation

Risk Strategy

Management Control: A Risk-Based Approach

Due Diligence

Risk Identification

Risk Management

Accounting Controls

Financial Management

Management Practices and Controls

Audit and Oversight in Managing Public Money

Audit Program

Audit Team

Compliance

 

Course syllabi sources

Queen’s MPA827 Public Sector Financial Management; UCLA (Luskin): PP-251; NYU (Wagner): PADM-GP.2143 & PADM-GP.1021; Queens: MPA-827; Harvard (Kennedy): MLD-401M;  Carleton: PADM-5416; Maryland: PUAF-670; USC (Price): PPD-541

Recommended readings

NOTE: Readings from open access sources will be developed

Week 1: Financial Statements and Accounting Concepts

CANADIAN TEXT: Graham, Andrew.  Canadian Public Sector Financial Management. Kingston: McGill-Queen’s University Press, 2014 (2nd Edition) or 2007 (1st Edition). Chapters. 2 (CHAPTER 2: PUBLIC-SECTOR ACCOUNTING PRINCIPLES), 3 (FINANCIAL STATEMENTS), and 4 (ACCRUAL ACCOUNTING AND BUDGETING). <PAGES 23-72>

AMERICAN TEXT: Bartle, John, W. Bartley Hildreth, and Justin Marlowe. (2013). Management Policies in Local Government Finance, 6th ed. ICMA Press. Chapters 4 (Organization of the Financial and Budgeting Function) & 5 (Accounting & Financial Reporting)

Antonio M. Oftelie and Pari Sabety, “Leadership for the Next Generation of Government Financial Performance,” Government Finance Review (December 2013), pp. 19-20.

Naomi Caiden, “Challenges Confronting Contemporary Public Budgeting: Retrospectives/Prospectives from Allen Schick,” Public Administration Review (March/April 2010), pp. 203 – 210.

Granof and Khumawala, Government and Nonprofit Accounting 5th edition, “Chapter 1 – The Government and Not-for-Profit Environment” pages 1-23

Warren Ruppel, Not-for-Profit Accounting Made Easy, “Chapter 2 – Basic Financial Statements of a Not-for- Profit Organization” pages 43-63

Week 2: Planning and Budgeting

CANADIAN TEXT: Graham, Andrew.  Canadian Public Sector Financial Management. Kingston: McGill-Queen’s University Press, 2014 (2nd Edition) or 2007 (1st Edition). Chapter 5 (BUDGETS: OVERVIEW AND FUNCTION) and 6 (THE BUDGETARY PROCESS up to p.96).

AMERICAN TEXT: Bartle, John, W. Bartley Hildreth, and Justin Marlowe. (2013). Management Policies in Local Government Finance, 6th ed. ICMA Press. Chapter 6 (Budgeting)

Allen Schick. 2007. “Performance Budgeting and Accrual Budgeting: Decision Rules or Analytic Tools” in OECD Journal on Budgeting, Volume 7, No. 2. http://www.oecd.org/gov/budgeting/42188101.pdf

Hayes, Frederick O’Reilly. (1974) “How to read a budget.” Columbia Journalism Review. Vol. 14 Issue 5, p21.

Wildavsky, Aaron, The New Politics of the Budgetary Process (Boston: Scott, Foresman and Company, 1988), Chap. 3: “The Dance of the Dollars: Classical Budgeting.”

Heady, C. (1993). “Optimal Taxation as a Guide to Tax Policy: A Survey”, Fiscal Studies, 14(1): 15-41.

Week 3: Costing and Forecasting

CANADIAN TEXT: Graham, Andrew.  Canadian Public Sector Financial Management. Kingston: McGill-Queen’s University Press, 2014 (2nd Edition) or 2007 (1st Edition). Chapter 6 (THE BUDGETARY PROCESS p.97-110)

AMERICAN TEXT: Mikesell, John L., Fiscal Administration: Analysis and Applications for the Public Sector, 8th Edition, Wadsworth Publishing, 2011. Chapter 12 (Revenue Forecasts, Revenue Estimates, and Tax Expenditure Budgets).

Chetty, R. (2009). “Sufficient Statistics for Welfare Analysis: A Bridge Between Structural and Reduced-Form Methods”, Annual Review of Economics, 1: 451-488.

Thomas F. Stinson. “State Revenue Forecasting: An Institutional Framework,” Government Finance Review (June 2002), pp. 12 – 15.

Christopher J Swanson. “Long-Term Financial Forecasting for Local Governments,” Government Finance Review (October, 2008), pp. 60-66.

Robert Rodgers and Philip Joyce. “The Effect of Under Forecasting on the Accuracy of Revenue Forecasts by State Governments,” Public Administration Review (January/February 1996), pp.48 – 56.

Week 4: Capital Budgeting

CANADIAN TEXT: Graham, Andrew.  Canadian Public Sector Financial Management. Kingston: McGill-Queen’s University Press, 2014 (2nd Edition) or 2007 (1st Edition). Chapter 7 (CAPITAL PLANNING AND BUDGETING)

AMERICAN TEXT: Bartle, John, W. Bartley Hildreth, and Justin Marlowe. (2013). Management Policies in Local Government Finance, 6th ed. ICMA Press. Chapter 11 (Capital Planning & Budgeting) & Chapter 15 (Procurement)

Week 5: Management Control: A Risk-Based Approach

CANADIAN TEXT: Graham, Andrew.  Canadian Public Sector Financial Management. Kingston: McGill-Queen’s University Press, 2014 (2nd Edition) or 2007 (1st Edition). Chapter 8 (MANAGERIAL CONTROL)

AMERICAN TEXT: Mikesell, John L., Fiscal Administration: Analysis and Applications for the Public Sector, 8th Edition, Wadsworth Publishing, 2011. Chapter 15 (Managing Public Funds: Cash Management, Employee Retirement, and Sovereign Wealth Funds)

Alfred Tat-Kei Ho and Anna Ya Ni. “Have Cities Shifted to Outcome-Oriented Performance Reporting? A Content Analysis of City Budgets,” Public Budgeting & Finance (Summer 2005), pp. 61-83

John Sugden and Robin Prunity. “Management Characteristics of Highly Rated U.S. Public Finance Issuers,” Government Finance Review (August 2012), pp. 45-50.

Larry Maholland and Patrick Muetz. “A Balanced Scorecard Approach to Performance Measurement: The Balanced Scorecard Provides a Useful Framework for Focusing Performance Measurement Efforts on the Critical Drivers of Success,” Government Finance Review (April 2002), pp. 12 – 16.

Anderson Williams. “Trusting the Numbers: The Power of Data Verification,” Government Finance Review (April 2002), pp. 18 – 21.

Week 6: Audit and Oversight in Managing Public Money

CANADIAN TEXT: Graham, Andrew.  Canadian Public Sector Financial Management. Kingston: McGill-Queen’s University Press, 2014 (2nd Edition) or 2007 (1st Edition). Ch. 10 (DEMONSTRATING CONTROL: ACCOUNTABILITY AND REPORTING)

AMERICAN TEXT: Bartle, John, W. Bartley Hildreth, and Justin Marlowe. (2013). Management Policies in Local Government Finance, 6th ed. ICMA Press. Chapter 17 (Auditing and Financial Condition)

Robert D. Behn. “Why Measure Performance? Different Purposes Require Different Measures,” Public Administration Review (September/October 2003), pp. 586 – 606.

Moynihan, D. P. (2006). Managing for results in state government: Evaluating a decade of reform. Public Administration Review66(1), 77-89.

Sample Assessment Questions:

1a) What does the acronym GAAP stand for, and why is it important for public management practitioners to be familiar with GAAP? 1b) Define the term “double-entry accounting” 1c) What is full accrual accounting? Why did full accrual accounting become a generally accepted accounting principle for federal and provincial governments in 2005? (i.e. what are some of the advantages of full accrual accounting?). 1d) What information is contained in a statement of financial position?

2a) What are line ministries and agencies? Describe the relationship between the finance ministry and these entities in Canada. 2b) What is non-budgetary spending? What types of expenditures are sometimes classified as non-budgetary spending. 2c) What is top-down budgeting? How does it differ from bottom-up budgeting? 2d) What is zero-based budgeting?

3a) What is forecasting? Why is this an important concept for public sector managers to understand for strategic planning purposes? 3b) What is life cycle cost analysis?

4a) What is a capital budget? Briefly explain why separate capital budgets and operating budgets are created and maintained. 4b) What is depreciation? Why is this an important accounting concept?

5a) What is risk management, and why is it an important concept in public management? 5b) Why is managerial control an important topic in the field of public administration? What types of problems are management control processes designed to prevent or address? 5c)  What are some of the key policies and procedures that exist in Canada to respond to management issues and help ensure effective and appropriate financial management?

6a) What are some of the most important instruments available to governments in their efforts to oversee the use of public funds? 6b) What is an audit? Why are audits an important part of the public policy process? 6c) What is the difference between a performance audit and a compliance audit? What is the role of performance audits in the policy process?

Page created by: James Ban on 23 July 2015 and edited for the new Atlas by Ian Clark,  last updated on 15 June 2016.

Image: Business Directive Development Group, at http://businessdirective.co.za/services/financial-management, accessed 5 June 2016.