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ZHRC/HTI Financial Management Training

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ZHRC/HTI Financial Management Training Session 1: Financial Management Overview Total time is 35 minutes. TELL participants to pair up. REFER participants to ... – PowerPoint PPT presentation

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Title: ZHRC/HTI Financial Management Training


1
ZHRC/HTI Financial Management Training
  • Session 1 Financial Management Overview

2
Learning Objectives (1)
  • By the end of the session, participants will be
    able to
  • Define financial management
  • List challenges to strong financial management in
    the ZHRCs/HTIs
  • List the 7 Principles of Financial Management
  • List the 4 Building Blocks of Financial
    Management

3
Learning Objectives (2)
  • Describe how to apply concepts of financial
    management to the ZHRCs/HTIs
  • Describe the central role of financial management
    in achieving an organizations objectives
  • Recognize that financial management is everyones
    responsibility

4
What is financial management?
5
Definition
  • Financial management is the process of planning,
    organizing, controlling and monitoring the
    financial resources of an organization to achieve
    its objectives
  • In the ZHRC/HTI context, financial management is
    comprised of processes and actions taken by
    administrative leaders and financial staff of the
    ZHRC/HTI

6
Why is financial management important?
7
Importance of Good Financial Management
  • Helps managers make effective and efficient use
    of resources to achieve objectives and fulfill
    commitments to stakeholders
  • Helps the organization achieve long-term
    financial sustainability
  • Helps the organization be more accountable to
    stakeholders and development partners

8
Financial Management of an Organization is like
Maintenance of a Car
9
Functions of Financial Management
  • In Tanzanian Government entities, the functions
    of financial management include
  • Maximizing the sustainability of service
    provision
  • Making financing and investment decisions
  • Managing liquidity and cash flow

10
Tanzania Public Finance Act of 2001
  • The principle Act governing the financial
    operations of all government institutions in
    Tanzania
  • Purpose of the Act is to make provision for
    revenues, management of funds and resources of
    government authorities, and for other matters
    connected to securing proper collection and sound
    management of finances in local and central
    government systems.

11
Public Finance Act 2001 Outline (1)
  • There are 7 parts to the Act
  • Part I Preliminary Provisions
  • Part II Control and Management of Public
    Finance
  • Part III Estimates of Revenue and Expenditure
  • Part IV Preparation, Audit and Examination of
    Accounts

12
Public Finance Act 2001 Outline (2)
  • Part V Audit of Public Authorities and Other
    Bodies
  • Part VI Finance and Audit of the Controller and
    Auditor-General and Related Provisions
  • Part VII Other Provisions

13
Elements of Financial Management
  • There are three broad elements of financial
    management
  • Allocation of finances
  • Controlling resources
  • Financing decisions

14
Methods Used to Achieve Financial Management
Elements
  • Management methods, including contracting out
    service delivery
  • Accounting methods, including record keeping and
    financial reporting
  • Budget methods and processes like Medium Term
    Expenditure Framework (MTEF)
  • Financial analysis such as examining resource
    utilisations
  • Management Information Systems
  • Auditing

15
Four Key Components of Financial Management (1)
  • 1. Managing scarce resources
  • Matching available resources to the activities
    planned by the ZHRC/HTI
  • Monitoring the efficiency of resource use
  • Finding ways to finance new initiatives
  • Identifying methods to reduce and recover costs

16
Four Key Components of Financial Management (2)
  • 2. Managing Risk
  • All organizations face internal and external
    risks that can threaten operations
  • Risks must be identified and actively managed in
    an organized way to limit damage they can cause

17
Four Key Components of Financial Management (3)
  • 3. Managing Strategically
  • Financial management is part of management as a
    whole
  • Strategic management includes
  • Identifying trends in past resource usage in
    order to determine future budget requirements,
    project cash needs, and forecast financial growth
  • Developing long-term financial plans to meet
    future resource requirements

18
Four Key Components of Financial Management (4)
4. Managing by Objectives
Review
19
Features of Good Financial Management Systems in
the ZHRCs/HTIs (1)
  • Financial information is available to plan and
    control the use of resources
  • Clear objectives are set for planning and
    budgeting
  • Revenue/resources are mobilised
  • Officers are accountable for ensuring that
    expenditure and revenues comply with the
    regulations

20
Features of Good Financial Management Systems in
the ZHRCs/HTIs (2)
  • Relevance is clear between the achievements
    accomplished and the resources used
  • Strong systems, controls and audit processes
  • Guided by the Public Finance Act and Ministry of
    Health financial circulars and regulations
  • Public Procurement Act No. 21 of 2004, Standing
    Orders
  • All financial affairs should be subject to both
    internal and external audits

21
Challenges to Strong Financial Management in the
ZHRCs/HTIs
  • Insufficient funds and resources for planned
    activities
  • Staff turnover and delays in hiring to fill
    vacant positions
  • Limited opportunities for professional
    development and training for the ZHRC/HTI
    financial employees
  • Insufficient time available for thorough
    budgeting, planning and reviewing results

22
7 Principles of Financial Management
  • Consistency
  • Accountability
  • Transparency
  • Viability
  • Integrity
  • Stewardship
  • Accounting standards

23
  • Work in Pairs
  • 7 Principles of Financial Management

24
4 Building Blocks of Financial Management (1)
  • 1. Accounting Records
  • Accurate records of how funds have been used
  • 2. Financial Planning
  • Budget
  • 3. Financial Monitoring
  • Financial reports
  • 4. Internal Controls
  • System of controls, checks, and balances

25
4 Building Blocks of Financial Management (2)
  • Getting the Basics Right

26
4 Building Blocks of Financial Management (3)
  • All building blocks must be in place continuously
  • Effective financial management will not be
    achieved by partial implementation

27
  • Work in Pairs
  • 4 Building Blocks of Financial Management

28
Key Points (1)
  • Financial management is the process of planning,
    organizing, controlling and monitoring the
    financial resources of an organization to achieve
    its objectives
  • It is essential for an organization to meet its
    financial objectives
  • 4 key components of financial management are
  • Managing scarce resources
  • Managing risk
  • Managing strategically
  • Managing by objectives Plan-Do-Review

29
Key Points (2)
  • The 7 principles of financial management include
    consistency, accountability, transparency,
    viability, integrity, stewardship and accounting
    standards
  • Use of these principles is good practice for
    building strong systems
  • The 4 building blocks of financial management
    include accounting records, financial
    monitoring, financial planning and internal
    controls
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