Discuss the scope of financial administration.

It can be explained as the activities which further help in the availability of money and resources to the different branches of an organisation so that the objectives laid down are well carried out. Irrespective of the department in the government sector money is available to one and all. This can be railways, roads, health, agriculture and many more.

As per L.D. White, “fiscal management comprises of operations which are meant to have funds available to the officials and to see that the funds are used most appropriately”. And according to G.S. Lall “the Financial Management relates with the aspects of financial management of the state.

The public and private finance are two different concepts. In case of public finance there is an adjustment of income made to expenditure and in case of private finance there is adjustment of expenditure to income. There is popular control in former case and corporate control in the latter case. Public finance holds elastic resources and limited resources are held by private finance. Public finance has a tendency towards deficiency and private finance has only tendency towards balanced budgets.

Scope of Financial Administration (Fa)

The finance department and its subordinate agencies work for the

(a) Collection, Preservation and disbursement of public funds.

(b) Coordinates between public revenue and its expenditure. 

(c) The credit eperations are managed.

(d) The financial affairs of the government are controlled.

The financial department looks after financial management and not only financial administration. It deals with the economic decision-taking part of the government.

The scope of FA can be summarised as preparing of estimates, appropriation of funds, control on expenditure, accounting of funds, auditing, reporting and finally revieving. There are some core areas which are concerned with financial administration. These are:

1. Financial Planning: It is a misnomer that budgeting is only planning. But is true sence it includes whole range of government policy and the relationships which it contains because of planning with the different policies.

2. Budgeting: It is the most important part of financial administration or in other words focus the nodel point. It consists of principles and practices required for making a neat budgetary system.

3 Resource Mobilisation: This part deals with taxes which are collection or imposition of taxes. Other than these taxes evasion and having growth in parallel economy are the main features.

4. Investment Decisions: A great amount of investments are alone in the public sector because of which it becomes imperative that the knowledge of investments is must for the financial administrative officers.

5. Expenditure Control: In every country one faces the problem of resources deficiency and that too in todays time with so much of recessions in the countries. Therefore, it is must that the expenditure done is with a great control to save the economy of the country.

6. Accounting, Reporting and Auditing: C & AG and Audit department of our country sees to this aspect of finance.

Composition of Financial Administration: The three elements of public finance are: (a) Public Revenue, (b) Public Expenditure, (c) Public Debt. Any system in order to run needs manpower, a structure set to run the working atmosphere and a set system with a procedure. The financial administration can be identified with the elements as below:

(a) Human Element: These can be the tax payers, fee remitters, suppliers employees, politicians or enterprises, customers and common people.

(b) Work and Structures: The legislatives and the members of financial committees, the cabinet, the finance department, the administrative department, the executive department and the audit department, forms the structure of FA.

(c) Systems and Procedures: This comprises of a planning system, a budgeting system and procedure and auditing system.

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