The laws, rules, procedures, and systems that control the collection, handling, and expenditure of public monies are collectively referred to as public financial management, or PFM. Constitutional clauses, public finance acts, procurement regulations, budgeting legislation, and audit requirements are commonly included in PFM’s legal framework. These rules guarantee that public institutions’ financial operations are accountable, transparent, and in line with the objectives of national development. The legal framework serves as the basis for the government’s budgetary planning and implementation, tax collection, public debt management, and financial performance reporting.
In PFM, a robust legal framework is essential for resource allocation and budgetary restraint. It outlines the functions and duties of important government agencies, including the Auditor General, Parliament, the Ministry of Finance, and line ministries. While procurement laws guarantee that expenditure is carried out in a fair and competitive manner, budget laws control the planning and authorization of public funds. Public audit laws assist curb corruption, fraud, and poor management by enforcing external scrutiny. These laws work together to create a framework that encourages confidence in the financial operations of the government.
Additionally, national laws frequently incorporate adherence to international norms and principles, such as those established by the International Monetary Fund (IMF), the Public Expenditure and Financial Accountability (PEFA) framework, and the International Public Sector Accounting Standards (IPSAS). These legislative tools direct governments toward increased openness, prompt reporting, and effective service provision. In the end, a strong legislative framework for PFM not only safeguards public assets but also improves governance, promotes economic stability, and increases public trust in financial management.
Author: Mohamed Yasin
