Introduction
In the public sector, public sector accounting and government budgeting are vital to ensure financial transparency and efficiency in resource allocation. This advanced course is designed to provide an in-depth overview of the fundamental principles and key functions within the ever-evolving field of public sector finance. Non-financial employees and managers in public institutions are increasingly required to contribute to the budgeting process and interpret financial information presented in departmental reports.
This training will serve as a practical introduction for non-financial managers, as well as an invaluable refresher and update for finance professionals working in the public sector. The course also includes important updates on International Public Sector Accounting Standards Board (IPSASB) guidelines and recent developments in the field of New Public Management (NPM), with a focus on the approaches and reasons behind the rise of New Public Financial Management (NPFM).
Course Objectives
By the end of this course, participants will be able to:
- Understand the role of financial accounting in public sector management.
- Prepare financial statements in compliance with the IPSASB framework.
- Analyze and interpret public sector financial reports effectively.
- Use forecasting techniques to plan for income and expenses.
- Actively participate in the government budgeting process.
- Understand and apply capital investment appraisal methods within the public sector.
- Implement strategies for effective public finance management.
Course Outlines
Day 1: Fundamentals of Public Sector Finance
- Basic principles of macroeconomic and fiscal policy.
- Types of public sector financial decision-making.
- The purpose of public sector accounting and budgeting.
- The dimensions of New Public Management (NPM) and its impact on public finance.
- Financial accounting basics:
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- Key concepts in financial accounting.
- Cash vs. accrual accounting in the public sector.
- Qualitative characteristics of financial statements.
Day 2: Financial Reporting in the Public Sector
- Comparing the IPSASB framework with the IASB framework.
- Distinctive characteristics of public sector financial accounts.
- The five elements of financial statements in public sector reports.
- Reporting standards relevant to public sector financial reporting.
- Assets and liabilities: Principles for recognition and measurement.
- Nature and classification of public sector income and expenses.
- Key principles of public sector financial management.
Day 3: Financial Analysis of Public Sector Accounts
- Understanding and analyzing cost behavior in the public sector.
- Cost-volume-profit relationships and their impact on financial analysis.
- Why analyzing financial statements is critical for public sector decision-making.
- Tools in the financial analyst’s toolkit.
- Interpreting financial ratio analysis of public sector financial reports.
- Strategies for managing and improving spending deficits.
Day 4: Public Sector Budgeting
- Setting goals and outcome requirements in government budgeting.
- Financial and non-financial performance measures.
- Objectives of public sector budgets and how they align with public service goals.
- Outcome-focused budgeting in the public sector.
- Layers of budgeting in the public sector.
- Forecasting income and costs using effective techniques.
- Human aspects and dysfunctional budgeting behaviors.
- Principles of capital budgeting in the public sector.
Day 5: Capital Investment Decision-Making
- Characteristics of capital investment decision-making in the public sector.
- Investment appraisal techniques for public projects.
- Principles of discounted cash flow analysis (DCF).
- Understanding Net Present Value (NPV) in investment decision-making.
- Outsourcing services: Objectives and decision criteria for public sector decisions.
- Public-Private Partnerships (PPP) and Private Finance Initiatives (PFI): Decision-making criteria and objectives.
- Reforms in public sector financial management.
- Understanding the need and purpose of financial reforms in the public sector.