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Ensuring Judicious financial management in government

Financial management in government, also known as public sector finance, involves the government’s raising, application, and management of funds. It’s important to emphasize that the government has a responsibility to the nation, which requires financial resources. The government must obtain and utilise the necessary funds to fulfill its legitimate duties.

Moreover, in modern times, the government’s activities extend beyond maintaining peace, security, law, and order. Economic, industrial, and social schemes have become integral parts of a modern state’s functions.

Financial management is therefore a critical capacity and responsibility of governments, enabling them to deliver on their priorities and fulfill promises made to citizens.

Good financial management is essential for the government to achieve value for money from public expenditures, reduce the budget deficit, and improve budget structure and reporting.

t is well-known that public financial management plays a crucial role not only in meeting fiscal aims, monitoring progress against targets, and ensuring effective resource utilization but also in establishing future priorities and ensuring fiscal sustainability. It also ensures that all ministries, departments, and agencies in the public sector are accountable for financial records, including proper tracing of receipts and payments.

Failed to live up to expectations

Despite its importance in the economy, the sector has failed to live up to expectations in bringing government policies and programs to fruition due to mismanagement of public funds, leading to misuse and potential loss of funds.

Mismanagement represents the highest form of fraud in the public sector, where individuals intentionally divert public funds for personal gain without any ethical concerns.

Instances of financial indiscipline are prevalent nowadays, with people disregarding their moral values, chieftaincy titles, academic qualifications, political or economic status, and even religious teachings to perpetrate fraud.

This type of fraud occurs through various means, including outright misappropriation of corporate or government assets for personal use, payment of salaries to ghost workers, payment for dubious purchases and contracts, and inflation of contract amounts.

Other examples include personal use of office allowances, payment against uncleared checks, forfeiture of deceased staff’s gratuity and pension benefits, misuse of medical allowances and reimbursements, among others.

It is unfortunate that misappropriation of funds, whether in the public or private sector, leads to grave consequences such as high poverty rates among citizens, insecurity, lack of infrastructure development, limited access to healthcare, education, and basic amenities.

Adhering to proper procedures

Consequently, there must be honest and compliant utilisation of funds, adhering to proper procedures, and ensuring that funds are allocated to approved items within the budget limit.

Additionally, the government should consistently engage individuals of integrity, develop and share anti-fraud policies, implement internal controls, and conduct periodic reviews.

Fortunately, financial regulations have established detailed rules and regulations on the collection, custody, and disbursement of government funds on a day-to-day basis.

It is incumbent upon government officials to familiarize themselves with these functions and be well-equipped in the prudent management of government funds to foster sustainable economic development of the country.

Writing by Maurice Asuquo, public affairs analyst; editing by Saadatu Albashir