The Future of Financial Management in the Public Service

1. The Future of Financial Management in the Public Service Rocky J. Dwyer, PhD, CMA

2. Agenda • Governance – why is it important; • Passive Compliance vis-à-vis Great Governance; and • Practical Considerations.

3. Great Governance Foundation & Dynamics of a Great Governance Process • Honesty • Competence • Commitment • Courage Oversight Monitoring Laws & Regulations Risk Business Practices & Ethics Information & Transparency Communication

4. Great Governance • Great governance is a matter of balance. However, an increase in citizens’ & stakeholders’ satisfaction helps to justify its costs. • Great governance is a concept applicable to the public and corporate world alike. • Great Governance is based on principles rather than rules.

5. Passive Compliance vsGreat Governance Great Governance requires more than just a focus on Passive Compliance with laws and regulations • Work culture based on sound business practices & ethics. • Strong emphasis on results management. • Risk management is “top of mind”. • Less adherence to the “process” of risk management & monitoring and more attention to the “doing”.

6. Interested Parties • Public – the taxpayer; • Stakeholders - Parliament, MPs, OAG; • Public Service Employees; • Financial Markets; • Industry; and • Other Governments.

7. Why is it Important? Comply with legal and fiduciary requirements, and a continued movement to increase Accountability to the public and stakeholders. Other reasons: • Attract and Retain Great People; • Fiscal Soundness & Public Trust; • Earn Stakeholder Support; and • Competitive Advantages.

8. What is Transparency? Transparency means providing all interested parties with as much relevant information as possible without compromising competitive advantages.

9. There are the qualitative attributes that define “transparency” in the financial field: Understandable: It is clear and uses language clear to the target audience. Relevant: it means something to the target audience. Reliable: Consistent; Substantive / Specific and not merely generic; Neutral, not biased / fair; Prudent and conservative; and Complete. Comparable: between time periods and among similar entities. What is Transparency of Information

10. Challenges • Change and uncertainty are constants; • Increased public demand for greater transparency; • Better educated and discerning citizens; • Globalization and technological advances; and • Operating efficiency.

11. What is Risk ? Risk = Degree of Uncertainty as to the potential for gain as well as exposure to loss. • Risk includes all events that impact performance either positively or negatively. • Risk should be viewed as essential to the health of the organization. • To eliminate or minimize all risks would result into weak or ineffective results. • Risk Must be continuously managed to exploit opportunities and achieve objectives.

12. Practical Considerations • Every organization’s journey is different. • You must build off “your” current state in all areas of management. • Focus on great execution of tasks and not just following the “process”. • Find real champions to advance the cause. • Set realistic goals. • Secure the foundation; • Integrate into core management practices; • Achieve transparency within the institution; • Utilize continuous improvement mindsets & practices; • Everyone knows their role and are held accountable; • Stay forward looking / anticipate events sooner; • Measure results; and • Give constant feedback. – praise in public and criticize in private.

13. A Common Framework will Facilitate Usage • Need a common language. • Need criteria against which to benchmark. • Familiarity of concepts is useful • Application guidance is critical. piece. • Issuance of framework is only the beginning.