Review of Financial Management – Part 2

Background

Effective financial management is essential for securing value for money in the use of resources. It requires effective systems for the planning, direction, monitoring and control of the States’ finances.

In 2015, the C&AG issued a report focussing on the effectiveness of:

• the current framework for allocation of resources
• financial governance and leadership; and
• financial planning.

Scope

This second report considers:

• financial monitoring and forecasting; and
• financial and performance reporting.

Having concluded two major reviews of financial management and a review of the States’ Financial Directions, the C&AG also considers the way forward.

Conclusions

There is a need for substantial change in the financial management of the States to support reform:

• management of money should be better aligned to the management of performance and delivery
• a cultural shift is needed in the approach to financial management supported by changes in systems, processes and structures and by the development of financial management skills of staff across the States; and
• a modernised finance function will spend less time on transaction processing and control activities, freeing up resources to support decision making and change.