fiscal lesson 1

• Public fiscal administration


  The formulation, implementation, and evaluation of policies and decisions on taxation and revenue administration, resource allocation, budgeting, and public expenditure, public borrowing and debt management, and accounting and auditing
• Other definitions of fiscal administration, also called public finance, refer to it as "the inflow and outflow of government" or a branch of economics that deals with the income and expenditures of government and their impact on the economy
• Having a solid understanding of the principles, concepts, approaches, and practices in defining the critical components of public fiscal administration can help us comprehend how it works pertaining to the government
• Critical components of public fiscal administration

  • Development planning
  • Resource generation
  • Budgeting
  • Accountability tracking
• Development planning


  • It is helpful in anticipating future risks
  • It provides certainty and improves the quality of the decision-making process for all parts of government, from national to regional to local, as well as for the private sector
• Without a plan that serves as a compass, we are likely to be all over the place, creating unnecessary overlaps and wasting scarce resources
• Development planning


  The planning of societal goals or objectives and the mobilization of natural, human, and financial resources needed for their achievement
• Fiscal planning


  Planning future budgets, current and future budget decisions, the implications for financing, and the methods of obtaining the necessary resources and allocating them in accordance with overall national goals
• Development planning is now practiced in one form or another in more than a hundred countries
• In developing countries, planning is primarily concerned with the delineation of the role of the government sector in national economic development
• In industrial countries, the government's role as investor, regulator, and stabilizer has been a major influence on the planning of the private sector activities
• In developing countries, the formulation of development plans and related strategies is a distinct activity, while in industrial countries, some of these functions have been allocated to budget agencies
• The persistence of such problems and the continuing search for new policy and institutional alternatives merit comprehensive consideration
• Development planning approaches


  • It comes up with a shared vision of where the country should be in the future and a concerted program of action to achieve the certain vision that we are aiming
  • It ensures that government resources and investments are channeled to programs, projects, and activities that best achieve the country's goals and objectives
• Development plan


  • It outlines the vision, mission, and goals of a country
  • It outlines the strategies and specific actions that will be taken
  • It helps residents, businesses, and local governments understand the priorities for the country
• Resource Generation


  The process of creating or producing resources, such as natural resources, human resources, financial resources, or technological resources, that are necessary for a particular purpose or objective
• Concept of resource generation


  The process of creating or producing resources that are essential for various purposes or objectives
• Key aspects of the concept of resource generation

  • Resource identification
  • Resource development
  • Resource utilization
  • Resource sustainability
• Approaches to resource generation

  • Innovation-driven approach
  • Collaborative approach
  • Investment-driven approach
  • Sustainable approach
  • Community-based approach
• Practices of resource generation

  • Needs assessment
  • Research and development
  • Capacity building
  • Partnership building
  • Investment and fundraising
  • Monitoring and evaluation
  • Sustainable resource management
• Budgeting


  • The critical exercise of allocating revenues and borrowed funds to attain the economic and social goals of the country
  • The management of government expenditures in such a way that will create the most economic impact from the production and delivery of goods and services while supporting a healthy fiscal position
• Government budgeting is important because it enables the achievement of economic and social goals
• Budgeting


  • The critical exercise of allocating revenues and borrowed funds to attain the economic and social goals of the country
  • Entails the management of government expenditures in such a way that will create the most economic impact from the production and delivery of goods and services while supporting a healthy fiscal position
• Government budgeting is important because it enables the government to plan and manage its financial resources to support the implementation of various programs and projects that best promote the development of the country
• Through the budget, the government can prioritize and put into action its plants, programs, and policies within the constraints of its financial capability as dictated by economic conditions
• Principles of budgetary governance

  • Manage budgets within clear, credible and predictable limits for fiscal policy
  • Closely align budgets with the medium-term strategic priorities of government
  • Design the capital budgeting framework in order to meet national development needs in a cost-effective and coherent manner
  • Ensure that budget documents and data are open, transparent, and accessible
  • Provide for an inclusive, participative, and realistic debate on budgetary choices
  • Present a comprehensive, accurate and reliable account of the public finances
  • Actively plan, manage, and monitor budget execution
  • Ensure that performance, evaluation and value for money are integral to the budget process
  • Identify, assess, and manage prudently longer-term sustainability and other fiscal risks
  • Promote the integrity and quality of budgetary forecasts, fiscal plans and budgetary implementation through rigorous quality assurance including independent audit
• Government budget


  • The financial plan of a government for a given period, usually for a fiscal year, which shows what its resources are, and how they will be generated and used over the fiscal period
  • The government's key instrument for promoting its socio-economic objectives
• Processes/phases of national government budgeting

  • Budget preparation
  • Budget authorization
  • Budget execution
  • Accountability
• Budget level


  The level of detail as well as the level of legal authority that is authorized for expenditure during the budget period
• Types of budget levels

  • Fund level
  • Department/program level
• Accountability tracking


  The process of monitoring and measuring an individual's or an organization's progress towards achieving their goals and objectives
• Approaches to accountability tracking

  • Self-monitoring
  • Peer monitoring
  • Managerial monitoring
  • Audit monitoring
  • Social monitoring
• Principles of accountability tracking

  • Clarity of goals and objectives
  • Metrics and performance indicators
  • Regular monitoring and review
  • Transparency
  • Responsibility and ownership
  • Continuous improvement
• Accountability tracking


  A critical component of personal and organizational development as it helps individuals and organizations stay focused on their goals, measure progress towards those goals, and act to continuously improve performance
• Best practices for accountability tracking

  • Set clear goals
  • Define performance metrics
  • Regularly track progress
  • Review and analyze progress
  • Celebrate successes
  • Adjust and revise
  • Maintain transparency
• Needs assessment


  Resource generation typically starts with a needs assessment to identify the specific resources that are needed to achieve a particular goal or objective
• Research and development


  Resource generation often involves investing in research and development to create new technologies, processes, or products that can enhance or create resources
• Different approaches to resource generation

  • Innovation-driven approach
  • Collaborative approach
  • Investment-driven approach
  • Sustainable approach
  • Community-based approach
• Capacity building


  Developing human resources is a critical practice of resource generation. This may involve providing education, training, or mentorship to individuals to enhance their skills and capabilities
• Innovation-driven approach


  • Focuses on the development of new technologies or processes that can create or enhance resources
  • Involves investing in research and development and encouraging creative thinking and experimentation