FINANCIAL CONTROL AND MANAGEMENT SYSTEM
Financial Management and Control is a comprehensive system of internal controls put in place by and under the responsibility of budget user heads, which, by way of managing risks, provides reasonable assurance that budget and other resources will be used in a regular, ethical, economical, effective and efficient manner towards the achievement of objectives. This means that they will be used in keeping with laws and other regulations, safeguarding the assets and resources against loss, abuse and damage.
In simpler terms, Financial Management and Control may be defined as a system which directs and controls the financial effects of budget user’s operations in a way that makes them supportive of the achievement of objectives.
Financial Management and Control covers all business transactions, and especially those relative to:
Tendering procedures and contracting
Recoveries of unduly and illegally spent budget resources
Key persons who areaccountable for the way the system of financial management and control functions and how efficiently include managers, especially the heads of budget users and heads of individual organisational units within the scope of their authorities and responsibilities.
Those who are in charge of organising the operations, proposing and making decisions as the groundwork for conducting the activities need to be aware that they are accountable for:
The manner in which the operations are being managed
Financial effects arising from such operations
Risks associated with such operations
Control activities to be put in place and applied
Ongoing monitoring of the management system and its timely updating
An organisational unit in charge of budget and finance shall be competent for coordinating the activities relative to financial management and control at budget user level.
Coordination of activities related to financial management and control at the user level budget operationally is implemented by organisational units in charge of finance.
This Units have task to supportt managers to assume management responsibilities for financial performance.
Systems of financial management and control are founded upon five interrelated components of internal controls which are detailed in the methodological framework for the implementation of financial management and control which is an interal part of the Public Financial Management and control implementation Rulebook
Methodological framework provides an overview of activities, methods and procedures of financial management and control.
Within the methodological framework, budget users, taking into account numerous laws and regulations that govern specific areas of business, but also their specific characteristics and special features in the business, implement financial management and control.