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The financial environment in

public sector organization
Give a the theoretical background of
the topic and then analyze its practical
application in an organization selected
by you.

W financiaI pIan
W is a series of steps which are carried out,
W or goals that are accomplished,
which relate to an individual's
or a business's financial affairs.
This often includes a budget which organizes specific
goals for spending and saving future income
W Therefore, the primary objective of financial
planning and management is to maximize
benefits for any given set of resource inputs.

anaging Public Resources

W basic thought in financial management is that costs
should be incurred only if by so doing;
W The community or organization can expect to move
toward agreed upon goals and objectives.
W etermining whether the commitment of governmental
resources improves conditions in the broader community
can get complicated.
W any public choices are still open to political decision.

asic components of Financial anagement.

W The essential tools for managing financial resources
include:-
techniques for the assessing the long term fiscal need of the
organization
acquiring these resources, rational procedures for allocating
resources and managing costs.
appropriate mechanisms for recording and disseminating
relevant financial information.
W the role and responsibilities of financial management in
the public sector are even greater than those in profit
oriented organizations.

inkages among the financial management cycles

W Financial management involves the acquisition and allocation of organizational
resources and tracking of performance resulting from such allocations.
W n profit oriented enterprise, financial statements form the basis for the stakeholders
assessment of performance of management.
W n not for profit organizations, management seeks to satisfy the needs and desires of
its constituents within a set of financial (budgetary) constraints.
W Financial resources are the focal point for managerial decision making, action, and
accountability.
W traditional role for financial management is that of score keeping.
W Reports of past performance are prepared for internal management as well as
outside groups, such as stake holders, creditors, and the general public.
W The allocation of existing resources and the management of costs to derive future
benefits are key responsibilities of financial managers.
W The relationship between current resource allocations are future benefits is a
symmetrical.
W The financial resources required to support personnel, equipment, materials, and so
forth.

ash management cycle

W t involves:-
nalysis of revenues and expenditures
Financial analysis of the utilization of assets
Short and long range forecast of resource needs
ash mobilization
Formulation of sound short term investment
strategies.
W The basic objectives of cash management are to
maximize the effective use of resources and minimize
opportunity cost, while at the same time, maintaining a
sufficient cash balance to meet the day to day needs of
the organization.

nalysis of Revenue and Expenditure

W Government produce and supply public goods and services
W and may encourage or discourage the production and consumption
of other goods and services through the regulation of economic
behaviour
(e.g through tax incentives or tax levies, performance standards, codes
and inspections).
W ncome taxes have been applied at the local level to:
Gross income from salaries and wages of residents earned both within
and outside the jurisdiction;
Gross income from salaries and wages of non residents earned within
the jurisdiction
Net profits of professions and business of residents from activities
wherever conducted.

Financial nalysis
W Financial analysis identifies how discretionary funds might be used
to implement new programs and strategies.
W aseline funds support current, ongoing operations of the
organization and are used to pay current operating expenses.
W Strategic funds are used to purchase new assets,
such as equipment, facilities, and inventory, to increase working capital'
to support direct expenses for research and development, marketing,
advertising and promotions;
W The strategic funds available to an organization can be determined
by subtracting baseline funds from total assets (revenue or
appropriations).
W The available strategic funds should be allocated to each program in
priority order according to its potential contribution to the
achievement of identified goals and objectives.

Forecasting
W The objective of forecasting is to provide a basis on
which to measure differences between actual events and
the plan that was adopted to achieve certain objectives.
W Problems can be identified quickly and the nature and
extent of corrective actions clearly defined.
W The cash requirements of government are based on
budgeted expenditures, which are finite and known as
advance.
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ecision affecting the flow of cash
W perating decision from the policies of the organization-
such as the creation or elimination of a service unit or department,
increases in the charges for services or in the tax rate in the case of
local government,
changes in the salaries and fringe benefits extended to staff,
and so forth and result in the inflow and outflow of cash.
W apital expenditure decision that affect
the infrastructure of the organization give rise to the outward flow of
cash.
n organization's infrastructure involves the construction, repair and
maintenance of fixed, physical assets.
W redit decision involves
the length of time an organization takes to make payments to its
vendors for goods and services provided,
as well as the length of time a client/customer may take to make
payments to the organization without penalty.
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ash mobilization
W ash mobilization fall into two areas.:
cceleration of receivables
W Receivable are those funds that come into organization
treasury.
W ash flow can be expedited by collection systems that
provide for advance billing and payment on or before receipts
of goods and services.
ontrol of disbursements.
W isbursements are funds paid out to vendors and others who
have provided services to the organization.
W The timing of disbursement is a important decision that has
implications for the liquidity position of an organization.
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ase study: wasa
W asa is water & Sanitation gency is a water and waste
water utility providing drinking water and waste water
system in the city of ahore except the following areas.
W antt
W odel Town
W P colonies
W Private Housing Schemes
W Function
Forecasting of demand for services of water supply,
sewerage and drainage, preparation of plans and
design for their extension, rehabilitation and
replacement.
onstruction, improvement, maintenance and
operation of water works, sewerage works and main
storm water drainage channels and pumping stations.
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W The organization of S is headed by a anaging
irector and includes three eputy anaging irecotors
i.e (Engineering ), (Finance, dmin &
Revenue) and (peration & aintenance
W employees
W Get revenue from sale of water, sewerage, and aquifer
charges.
W The provisional Govt. allocates share of property tax.
W The budget increase in user charges as approved by the
Govt. of Punjab.
W The sanction of expenditure and procurement is carried
under financial rules of government.
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Function of finance department of asa
W iability/fund alance Records are not carried forward. However, to
keep the year to date ledger for the new year in balance, the annual
closing program generates a special offsetting entry to balance the
multi year records that are carried forward. ne entry is generated
per fund per fiscal year to balance the multi year records. These
records have the following attributes:
W Fiscal year is the being year closed.
W udget Fiscal year is the original fiscal year.
W ccount type is gency liability/Fund balance record (0)
W escription is ulti off set
W Fund
W gency
W alance Sheet ccounts is the fund balance account from special
System ccounts (SPE) for the year being closed.
W mount the special balancing entries created in previous year for
multi year expenses and revenues for those years are also carried
forward to the year
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Revenue irectorate
W The following revenue divisions are functioning
W omputerized billing independently and are responsible
for collection against connections in their respective
areas.
W asa has more than 0. million connection under the
administrative control of irector Revenue.
W illing System
asa has launched his own computer network in its each
revenue divisions the bimonthly is made y each of the above
revenue divisions. Similarly the complaints pertaining to billing
are also dealt with by the concerned revenue divisions.
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W The following complaints are finalized on the
spot at S customer Service enter of
revenue divisions without written application.
W uplicate bill
W Parts/installments
W ne term Surcharge djustment
W ill History
W ther information about illing
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W ll other complaints are required to be submitted in writing along
with a copy if N as well as necessary supporting documents. The
general complaints are alphabetically listed as under:-
W djustment of wrong debit
W djustment of wrong payment
W djustment of more than one surcharge
W djustment of unmeet payment account on conversion
W djustment of security
W djustment of meter cost
W ill not issued/not received regularly
W orrection of bill
W orrection of area
W orrection of property no.
W orrection of address
W onfirmation of payment
W onstruction of domestic
W onstruction to commercial
W ommercial to domestic
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hange of Name
W For change of name, the applicant will have to
submit the following documents.
ttested photo copy of sale deed in favour of
applicant.
ttested photo copy of N
Photo copy of the last bill paid
n case the sale deed is registered in favour of more
than one person, attested affidavit from the others in
favour of the applicant must be given along with their
N copy.
f the property involves 0 parties since the
installation of water connection, then the third sale
deed copy will also to include otherwise an affidavit
from the applicant as an under taking must be
obtained in the best interest of S.