Department of Finance Term Paper
- Length: 8 pages
- Subject: Business - Management
- Type: Term Paper
- Paper: #58116095
Excerpt from Term Paper :
Department of Finance is the lead agency supporting the Government's key economic and financial policy outcomes through the provision of advice and coordination of resource allocation for Government programs. It also provides financial services to the Government and the community, covering asset and liability management, collection of state taxes and insurance and superannuating administration. The organization is made up of a diverse group dedicated people with a wide range of skills, including accounting, finance, economics, business service, insurance, superannuating and management.
The Finance Department is comprised of three divisions:
Finance Administration Division
This division is responsible for the overall direction and policy implementation. It is also responsible for coordination of the Finance Department, which includes:
a) Budgeting and Accounting
Finance is responsible for the preparation, implementation and monitoring of the City's Operating, Utility and Capital budgets. The focus is to administer these processes to meet the needs of the community, City Council and other City departments.
In addition, Budgeting and Accounting are responsible for designing and implementing adequate financial controls for the City's accounting functions, thereby ensuring the integrity of all financial transactions. The Section, as part of its fiscal responsibilities, also produces the City's financial statements and Annual Report.
Purchasing purchases and secures materials, supplies, equipment and services required by the City including contracts for all non-inventory items, construction contracts and consulting services.
c) Treasury Services
The Treasury Services Section effectively manages highly cyclical cash flows ensuring adequate funds are available to fulfill the strategic plans and initiatives undertaken by the City. Additionally, all sources and inflows of revenues are identified and allocated to key capital projects. All work and services rendered by the City are billed by accounts receivable.
The Finance Administration Division also provides financial advice to the City Manager and City Council.
2) Financial Operations Division
This division includes the Accounting Section, which maintains the accounting system, the fixed asset system, reconciles bank accounts, and prepares various financial reports. The Treasury Section provides centralized cashiering, collection and accounting for improvement district bonds, collects for all business licenses, collects all receivables and audits various tax sources for compliance.
3) Financial Planning Division
This division includes preparation and administration of the City's Annual Budget, completes special research projects assigned by the City Manager and City Council. The Purchasing function of the Financial Planning Division procures all services, supplies and equipment for all departments of the City and surpluses items no longer needed by the City.
Main functions of Finance Department
1) Preparation of budget, appropriation of accounts, re-appropriations, surrender and savings.
2) Control of expenditure and ways and means position.
4) Treasury administration
5) Administration of Taxes example Sales Tax, Entertainment tax, Luxury tax and Entry tax etc.
6) Service conditions
7) Resource mobilization through loans, Institutional Finance, Small Savings, Credit and Investment and public debt.
8) Financial concurrence and advice.
9) Compilation of codes, rules and procedures concerning financial transactions and having bearing on State Finance and their implementation.
10) Safety and investment of funds from consolidated funds, contingency fund and public account.
11) Contract, recovery and refund revenue etc.
As a support function the Finance Department does not provide a service directly to members of the public. In organizational units responsibilities can be summarized as follows:
1) Financial Accounts Section is responsible for cash and liquidity management and the production of the Annual Financial Statements in compliance with the accounting standards and policies of the Department of Health & Children.
2) Management Accounts Section is responsible for the monthly Management Accounts. Annual budget preparation and the provision of monthly departmental / divisional reports for the monitoring and review of expenditure against budget.
3) Costing Section provides information to support service planning and assists with the budgetary process and expenditure review. Responsibilities and duties include Clinical Budgeting, Specialty Costing and Patient-Based Costing.
4) Accounts Payable Section processes payments for trade creditors based on goods and services provided.
5) Debtors Section processes patient invoices based on statutory and private/semi-private accommodation charges for public and private beds.
6) Salaries Section processes payment of all salaries, wages and pensions.
7) Cashier Section is responsible for all cash receipts received.
Staff records including payroll advice notes, tax free allowance certificates and deduction mandates
National pay scales and statutory/voluntary payroll deduction returns
Tax Clearance Certificates
Withholding Tax Deduction Details
Cash Management Reports
External Audit Reports
Transactions with financial institutions
Return to the Department of Health and Children
The head of the Department of Finance shall be the Director of Finance, which is the most senior officer in a local authority with corporate responsibility for the finance functions across authority. The officer given this role might have a variety of titles, but in essence has the same responsibility placed upon by law. Alternatives titles include "Chief Financial Officer," Responsible Financial Officer," or "Treasurer." There are two main responsibilities placed upon the Finance Director:
1) A statutory duty as the Responsible Financial Officer for the authority;
2) A fiduciary duty to local citizens.
To fulfill these duties, the Finance Director should be at the heart of the Authorities in decision making process. The Finance Director needs to inspire respect, trust and confidence with members, colleagues and the general public by demonstrating a range of skills, competencies and personal qualities. High standards of performance and professionalism should be set for members and staff dealing with financial matters supported by appropriate training. The Finance Director needs to be a team player, but be able to intervene with confidence when key financial principles are infringed or when corrective action is needed. The role of the Finance Director is to ensure that there is a sound and robust corporate governance framework and an effective approach to financial management. As authorities, look at innovative solutions in the way services are provided that bring extra risk, the Finance Director should give positive support, but assess the risks involved. Honesty in the use of public money and secure sound financial management and effective controls, must not be compromised. The authority's organizational and managerial structures should support the fulfillment of this role. The Chartered Institute of Public Finance and Accountancy (CIPFA) has suggested four key requirements that should be observed to achieve this:
1) There should be a single Finance Director who is a qualified member of a specified accountancy body.
2) The Finance Director should be a member of the authority's corporate management team.
3) The Finance Director post should not normally be combined with other roles such as Chief Executive.
4) The work of Internal audit should come under the control of the Finance Director to fulfill the duties require.
This in part fulfills the fiduciary duty to local citizens so that they have confidence and trust that their funds are being used wisely and properly. There are five key roles that describe the work of the Finance Director:
1) Maintaining strong financial management underpinned by effective financial controls
The Finance Director has a responsibility to the authority for sound financial management, administration and stewardship of the authorities resources. There is also a "Trustee" duty to the local taxpayers to manage the authority's resources prudently on their behalf. This is achieved by having strong financial management and administration, accurate financial reporting and effective internal financial controls.
New policy initiatives emphasize the need for sound financial management to ensure that public money is safeguarded. Therefore, the Finance Director must assess the risk and ensure that all activities that impinge on the financial affairs of the authority are consistent in standards and transparency.
2) Contributing to corporate management and leadership
The Authority's members decide service priorities and policy objectives, but it is the responsibility of the corporate management team to implement those decisions within the law.
The Finance Director needs to build strong working relationships with leading members, other chief officers and the authority's partners. These relationships need to be based upon mutual trust and respect and a clear understanding of role and responsibility.
Developing a medium term financial strategy linked to the authority's policy development and service planning is essential. This requires a framework of systems, processes and controls that give an assurance of sound financial management and good corporate governance that complements quality service delivery, and accurate, timely and impartial advice and information.
3) Supporting and advising democratically elected representatives
The Finance Director must be independent, impartial and objective when giving
supports and advice to members as individuals, as political groups and to both Executive and Scrutiny functions. All members should recognize this overarching responsibility.
The performance of this role will create some tensions. It will include giving accurate and impartial advice on resource and financial planning, setting capital and revenue budgets that fit with policy priorities and objectives and monitoring financial performance against the budget plan.
The confidence and trust of all members must not be compromised at any time. This means that advice and support given to individual members, or political…