Public Financial Management
Public Financial Management (PFM), provides a framework for parliamentary authorisation and scrutiny of the Government's expenditure proposals and the Government's management of its assets and liabilities, including:
* establish lines of responsibility for effective and efficient management and use of public financial resources<ref name="NZTreasury" />
* specify the principles for responsible fiscal management in the conduct of fiscal policy and require regular reporting on the extent to which the Government's fiscal policy is consistent with those principles<ref name="NZTreasury" />
* specify the minimum financial and non-financial reporting obligations of Ministers, departments, Offices of Parliament and certain other agencies<ref name="NZTreasury" />
* provide for the application of financial management incentives and for the accountability of specified central government organisations<ref name="NZTreasury" />
* safeguard public assets by providing statutory authority and control for the borrowing of money, issuing of securities, use of derivative transactions, investment of funds, operation of bank accounts and giving of guarantees and indemnities<ref name="NZTreasury" />
Public sector performance management approach emphasises, among other things, clear objectives and clear lines of responsibility, greater freedom to manage, and a corresponding expectation of greater accountability for results. Such a system requires good measures of performance that interested external parties can trust. This requires that public sector entities to prepare financial information that:<ref name="NZTreasury" />
* uses accrual accounting concepts and statements<ref name="NZTreasury" />
* is in accordance with financial reporting standards approved by an independent standard setter, and<ref name="NZTreasury" />
* in the case of annual financial statements, complies with generally accepted accounting practice (IPSASB) and is audited by an independent auditor.<ref name="NZTreasury" />
* establish lines of responsibility for effective and efficient management and use of public financial resources<ref name="NZTreasury" />
* specify the principles for responsible fiscal management in the conduct of fiscal policy and require regular reporting on the extent to which the Government's fiscal policy is consistent with those principles<ref name="NZTreasury" />
* specify the minimum financial and non-financial reporting obligations of Ministers, departments, Offices of Parliament and certain other agencies<ref name="NZTreasury" />
* provide for the application of financial management incentives and for the accountability of specified central government organisations<ref name="NZTreasury" />
* safeguard public assets by providing statutory authority and control for the borrowing of money, issuing of securities, use of derivative transactions, investment of funds, operation of bank accounts and giving of guarantees and indemnities<ref name="NZTreasury" />
Public sector performance management approach emphasises, among other things, clear objectives and clear lines of responsibility, greater freedom to manage, and a corresponding expectation of greater accountability for results. Such a system requires good measures of performance that interested external parties can trust. This requires that public sector entities to prepare financial information that:<ref name="NZTreasury" />
* uses accrual accounting concepts and statements<ref name="NZTreasury" />
* is in accordance with financial reporting standards approved by an independent standard setter, and<ref name="NZTreasury" />
* in the case of annual financial statements, complies with generally accepted accounting practice (IPSASB) and is audited by an independent auditor.<ref name="NZTreasury" />
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