Fall 2021 - 61135 - PA 391 - Public Financial Management

Public Financial Management


This course provides a basic understanding of the financial activities of governments at all levels in the United States. It is usually taken during the first year. The course acquaints students with the purposes, characteristics, processes, and operations of financial management systems and develops their capabilities to analyze financial operations, coordinate such operations with relevant public policies and programs, and effectively manage the financial resources of public entities. Topics in the course include: the economic, political, and administrative environment of financial management systems and operations; budgeting theory and practice--including program and performance budgets; accounting and internal control; financial reporting; auditing--financial and performance; debt management; treasury and cash management; and revenue/tax administration. 


Public financial management (PFM) involves the administering, leveraging and optimizing of scarce government fiscal resources.  In this sense, PFM draws on several disciplines including economics, accounting, political science and finance. This course can be broken down into three sections: expenditure policy, revenue policy and financial reporting/condition analysis.  The course begins with the expenditure of fiscal resources for day-to-day activities through the operating budgeting process.  It then proceeds to capital budgeting which involves spending on long-lived assets like roads, buildings and bridges.  Within capital budgeting the course delves into the ways federal, state and local governments finance their capital activities mainly through the sale of treasury and municipal securities.  Following the expenditure topic, the course focuses on the myriad way governments raise revenues including a discussion of income, sales and property taxes as well as grants and various user fees.  The final section details issues related to financial reporting the manner in which one can assess a government’s financial condition. This section involves analyzing government financial statements and thus relies on the application of financial and accounting principles to a government’s financial reports.

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