CHAPTER 5 – Good Governance and Public Sector Financial Management by Patricia A. Adamu
Public financial management is a key instrument of economic management. It refers to the procedures, established by law or regulation, for the management of public monies through the budget process, which includes formulation, execution, reporting and analysis (Potter and Diamond, 1999). Public financial management is not confined to those finances appropriated to render particular public services or goods but to all transactions where financial value is prevalent. The emphasis on good governance is connected to financial mismanagement and official corruption that impede development goals. It includes corruption in all its manifestations such as bribery, embezzlement, fraud, extortion, abuse of power, conflict of interest, favouritism, nepotism, theft/collusion; since corruption either sees public funds misused, applied to benefit selected individuals or entities or gets potential public funds diverted away from the national revenue to private income.