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Good financial management matters. It can be a huge driver for greater efficiency and productivity and for making the most of taxpayers’ money.
This is especially the case for public sector organisations, who face a real challenge to make the best use of scarce resources to deliver public services which provide value for money. This raises the question: how can you, as a finance professional working in the public sector, meet these ever growing demands and expectations?
We believe this represents not only a challenge, but an opportunity. And our work tries to show areas where finance leaders can make a huge impact through their work.
The NAO has a unique perspective.
To help public sector organisations be more efficient and resilient – and ultimately make better and more informed financial decisions – we’ve published a series of good practice guides aimed at improving financial management.
It’s essential reading, although not mandatory advice.
In bite-sized chunks, that cover the entire financial management lifecycle, these guides are there for you to pick up and give you ideas of how you can move your finance function forward.
So, how did we get here?
We’ve reviewed our extensive body of work to bring you the insights that matter most - connecting the dots so you don’t have to.
We also wanted to hear directly from senior finance leaders about the biggest challenges they face. We spoke with a range of professionals from across the public and private sector to get to the bottom of this question - what is really important when it comes to good financial management?
Everyone we spoke to had a different perspective. But what was compelling was that the vast majority of views coalesced around leadership and culture, skills and capabilities and data and management information.
These areas formed the foundation of our first guide, Enablers of success in financial management. Our second guide delves into strategic planning and budgeting, and the third – recently released – focuses on the critical topic of allocating resources.
What does good look like when it comes to allocating resources?
Allocating resources effectively is vital when resources are scarce and difficult trade-offs need to be made.
Our guide outlines three principles that define what good financial management looks like, with actionable steps and valuable tips for success.
Our first principle is using information intelligently. We outline how finance leaders can encourage their organisation to use trusted and objective information intelligently, so decision-makers can allocate resources to support their organisation’s strategic objectives.
Our next principle is to prioritise effectively. Here, we show how finance leaders should support decision-makers to make those difficult decisions and trade-offs to generate good value-for-money outcomes based on agreed priorities.
And our third principle is to build for the long term. Decision-makers need to balance short-term pressures with long-term priorities and align with the strategic objectives of your organisation. Finance leaders play a crucial role in advising and influencing this outlook, which is crucial to building resilience in any organisation.
This series of work doesn’t sit on its own.
A golden thread of improving financial management lies at the heart of the NAO. Take a look at Making public money work harder and our Lessons learned on a planning and spending framework that enables long-term value for money to get even more of a grounding on this priority.
Find our latest guide here: Financial management in government – allocating
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