FISCAL

ADMINISTRATION
Harold Clayton C. Leonardo
CONTENTS
Theories of Public Fiscal Administration​
Organization and Procedures of Fiscal Administration
​Significance of Public Fiscal Administration to Students
of Public Administration
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INTRODUCTION
Public Fiscal Administration is the backbone of
effective governance.

 Public Finances
 Government Operations
 Public Service
 THEORIES OF PUBLIC
FISCAL ADMINISTRATION
Theories of public fiscal administration 5

DEFINITION

Public Fiscal Administration refers to the systematic

management of government revenues, expenditures, and debt to achieve the
public policy objectives of a nation.
Theories of public fiscal administration 6

INCREMENTALISM THEORY

Incrementalism suggests that budget

decisions are made based on past
budgets with incremental changes.
Theories of public fiscal administration 7

INCREMENTALISM THEORY

Key Points:

• Decision-makers build on existing budgets, making minor alterations to

account for changes in circumstances or priorities.
• Incrementalism is rooted in the idea that it is easier to secure incremental
changes than to undertake large-scale budget reforms.
• This theory reflects the political realities and budget negotiations often seen in
government, where existing programs and expenditures tend to be protected.
Theories of public fiscal administration 8

PUBLIC CHOICE THEORY

Public Choice Theory applies economic principles to the public sector. It posits
that individuals in government act in their self-interest, and government actions
are the result of a complex interplay of competing interests.
Theories of public fiscal administration 9

PUBLIC CHOICE THEORY

Key Points:
• Public Choice Theory assumes that individuals in government are rational
actors.

• It sheds light on how government decisions may be influenced by lobbying,

special interest groups, and political maneuvering.

• The theory highlights the importance of considering incentives, transaction

costs, and the distribution of benefits when analyzing public policy.
Theories of public fiscal administration 10

NEW PUBLIC MANAGEMENT

(NPM)

NPM emphasizes managerial and

market-oriented approaches in the
public sector. It focuses on efficiency,
accountability, and customer-centric
service delivery.
Theories of public fiscal administration 11

NEW PUBLIC MANAGEMENT

(NPM)
Key Points:
• NPM advocates for a shift from traditional bureaucratic models to more
business-like practices in government.
• It encourages results-oriented management, cost-efficiency, and the use of
performance metrics.
• NPM often includes concepts such as privatization, outsourcing, and
performance-based budgeting.
• The focus on customer satisfaction and responsiveness to citizens' needs is a
defining feature.
Theories of public fiscal administration 12

FISCAL FEDERALISM THEORY

Fiscal Federalism explores the allocation of

financial responsibilities between different
levels of government in a federal system. It
addresses issues of revenue sharing,
expenditure responsibilities, and
intergovernmental grants.
Theories of public fiscal administration 13

FISCAL FEDERALISM THEORY

Key Points:
• Fiscal Federalism is relevant in federal systems where there are multiple tiers
of government (e.g., federal, state, and local).
• It explores how revenue is collected and distributed among these levels of
government.
• The theory addresses the division of responsibilities and the challenges of
coordinating fiscal policies among various levels.
• Intergovernmental grants, subsidies, and shared taxation are key components
of fiscal federalism.
Theories of public fiscal administration 14

PRINCIPAL-AGENT THEORY

Principal-Agent Theory examines the

relationship between policymakers
(principals) and government officials
(agents). It looks at how to align the interests
and incentives of agents with the goals of
principals.
Theories of public fiscal administration 15

PRINCIPAL-AGENT THEORY

Key Points:
• In the public sector, principals (e.g., elected officials) delegate authority and
responsibilities to agents (e.g., civil servants) to carry out government policies.
• The theory focuses on the potential conflicts of interest between principals and
agents, as agents may not always act in the best interest of the principals.
• Solutions often involve mechanisms to align the interests of agents with those
of the principals, such as performance-based incentives, monitoring, and
accountability measures.
• Principal-Agent Theory helps us understand how to manage the moral hazard
problem, where agents may not have the same incentives as the principals.
 ORGANIZATION AND
PROCEDURES OF FISCAL
ADMINISTRATION
Organization and procedures of fiscal administration 17

OVERVIEW
Organizational Structure: Fiscal administration typically comprises various
government departments, agencies, and units, each with specific roles and
responsibilities.

Procedures: Include the steps and processes in revenue collection, budgeting,

accounting, auditing, and intergovernmental relations.

Coordination: Effective coordination among different units is vital to ensure

compliance with fiscal laws and regulations and to hold public official
accountable.

Transparency: Many fiscal administration procedures are designed to enhance

transparency, providing citizens with insights into how public funds are utilized.
Organization and procedures of fiscal administration 18

REVENUE ADMINISTRATION

Revenue administration involves the collection, management, and enforcement

of government revenues, such as taxes and fees. It's a critical aspect of fiscal
administration, providing the financial resources necessary for public services
and programs.
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REVENUE ADMINISTRATION

ROLE OF REVENUE REVENUE ADMINISTRATION

ADMINISTRATION PROCEDURES

• Resource Generation • Tax Collection

• Financial Stability • Revenue
• Economic Management
Development • Tax Enforcement
• Taxpayer Services
• Audit and Evaluation
Organization and procedures of fiscal administration 20

BUDGETING

Involves the allocation of financial

resources and the planning of
government expenditures to
achieve policy objectives.
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DIFFERENT TYPES OF BUDGETS AND THE
BUDGETING PROCESS:

TYPES OF BUDGET THE BUDGETING PROCESS

• Operating Budget • Preparation

• Capital Budget • Review and Analysis
• Program Budget • Approval
• Zero-Based Budget • Execution
• Monitoring
• Evaluation
Organization and procedures of fiscal administration 22

ACCOUNTING

Encompasses the systematic

recording, reporting, and
management of financial
transactions and assets.
Organization and procedures of fiscal administration 23

AUDITING
Role of Auditing

• Ensuring Accountability
• Preventing Fraud and Mismanagement
• Compliance with Laws and

Significance
• Auditing is a cornerstone of fiscal administration, providing
transparency and accountability in the use of public funds.
Organization and procedures of fiscal administration 24

TYPES OF AUDITS
• Financial Audit
• Performance Audit
• Compliance Audit
• Operational Audit
Presentation title 25

INTERGOVERNMENTAL
RELATIONS
• Definition: Intergovernmental relations refer to the interactions,
collaborations, and negotiations among different levels of government, such as
federal, state, and local governments.
• Scope: It encompasses discussions on resource allocation, policy coordination,
and cooperative efforts to address shared challenges.
Presentation title
26

INTERGOVERNMENTAL
RELATIONS
Role in Fiscal Administration
Resource Allocation
Policy Coordination
Cooperative Initiatives
Benefits
Presentation title 27

SIGNIFICANCE OF PUBLIC FISCAL

ADMINISTRATION TO STUDENTS OF
PUBLIC ADMINISTRATION
Presentation title 28

SIGNIFICANCE OF PUBLIC FISCAL ADMINISTRATION TO STUDENTS OF

PUBLIC ADMINISTRATION

Understanding Governance
Effective Resource Management
Transparency and Accountability
Career Opportunities
Policy Development
Citizen Engagement
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CONCLUSION?
• It is important that accounting
administrators or auditing practitioners and
managers in the government should
exercise their responsibilities with utmost
care and attention to ethical standards.
Failure to adhere to these standards may
cause the government itself to collapse or
be subjected to legal suits and public
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REFERENCES
• Oates, W. E. (1972). Fiscal • Löffler, E., & Poness, A. (2007).
Federalism. Harcourt Brace Public finance and public policy:
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• ensen, M. C., & Meckling, W. H. in government budgeting.
(1976). Theory of the Firm: Springer.
Managerial Behavior, Agency • Wildavsky, A. (1975). The politics
Costs and Ownership Structure. of the budgetary process. Little,
Journal of Financial Economics, Brown.
3(4), 305-360. • GAO (Government Accountability
• Joyce, P. G., & Paquin, M. S. Office). (2018). Principles of
(2015). Public budgeting systems. Federal Appropriations Law (Red
Jones & Bartlett Learning. Book). U.S. Government
• Rubin, I. S. (2016). The politics of Publishing Office.
public budgeting: Getting and • Financial Accounting Standards
spending, borrowing and Board (FASB) Statement No. 31,
balancing. CQ Press. "Accounting for Certain Loans or
• Lee, R. D., & Johnson, R. W. Debt Securities Acquired in a
(1998). Public budgeting systems Transfer" (Paragraph 11).
(7th ed.). Aspen Publishers.
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REFERENCES

• International Public Sector • International Accounting

Accounting Standards (IPSAS) 3, Standards Board (IASB) official
"Accounting Policies, Changes in website
Accounting Estimates, and Errors" • Rosenbloom, D. H., Kravchuk, R.
(Paragraph 4). S., & Clerkin, R. M. (2015). Public
• Reference: Government administration: Understanding
Accounting Standards Board management, politics, and law in
(GASB) Statement No. 15, "The the public sector. McGraw-Hill
Hierarchy of Generally Accepted Education.
Accounting Principles" (Paragraph • Ostrom, V., Ostrom, E., &
22) Whitaker, G. P. (1984). Local
• International Accounting Standard government in the United States.
(IAS) 1, "Presentation of Financial Wadsworth Publishing.
Statements" (Paragraph 89 • Australian Government. (2021).
• Financial Accounting Standards Intergovernmental relations.
Board (FASB) Accounting Retrieved from
Standards Codification (ASC). https://www.dpmc.gov.au/intergov
ernmental/overview
THANK YOU