Managing Public Funds: The Core Concepts, Key Challenges, and Future Prospects

Abstract

This section provides an economic rationale for the rising focus on public financial management (PFM). The study delves into the heart of PFM by comparing and contrasting the public and private sectors' approaches to financial management and analysing. The challenges with evaluating PFM quality are examined as well as other problematic aspects of the PFM system's operation. Measures of PFM quality include how successfully it promotes its stated societal purpose of improving people's lives and how efficiently it does it. The declaration demonstrated that the size of government expenditures does not indicate the efficiency of the PFM system. The aspects that affect the PFM system's efficiency are exposed. Accrual-based IPSAS-based state accounting systems highlight the value of fiscal data in informing policy choices. The conventional wisdom behind the construction of economic data is challenged and an alternative is proposed.