Financial Management Capability Model
Exhibit 1—Objectives of Financial Management
Providing support for decision making means that managers have available to them the information and knowledge they need to support operational decisions and to understand the financial implications of decisions before they are taken. It also means that managers monitor decisions for any potential financial implications and for lessons to be learned from experience, and that they can adapt or react as needed.Ensuring the availability of timely, relevant and reliable financial and non-financial information means ensuring that managers have available the information that forms the basis for calculating financial information or that is used for management control and accountability. The information is relevant (useful and understandable); reliable (complete, accurate and authorized); and timely.
Managing risks means that an organization identifies, assesses and considers the consequences of events that could hinder its achievement of goals and objectives and/or result in significant loss of resources. Risks that require monitoring and assessing go beyond the traditional financial risks. They include the full range of business risks, such as operational and strategic risks as well as social, legal, political and environmental risks.
Making efficient, effective and economical use of resources means ensuring that an organization has enough resources to carry out its operations and that it uses these resources with due regard to economy, efficiency and effectiveness.
Accountability means that an organization understands and can demonstrate how it has used the financial resources entrusted to it and what it has accomplished with them.
A supportive control environment means the organization has an organizational climate that fosters the achievement of financial management objectives - a climate that includes commitment from senior management, shared values and ethics, communication and organizational learning.
Complying with authorities and safeguarding assets means that an organization carries out its transactions in accordance with applicable legislation, regulations and executive orders; that spending limits are observed; and that transactions are authorized. It also means that an organization has a system of controls over assets, liabilities, revenues and expenditures to protect against fraud, financial negligence, violation of financial rules or principles and losses of assets or public money.