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PFM4 – Public Sector Financial Management

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PFM4 - Public Sector Financial Management

Course Features

Course Details

PFM 4: PUBLIC SECTOR FINANCIAL MANAGEMENT

4.4.1. LEARNING OUTCOMES OF THE COURSE Upon successful completion of this course, a student should be able to:
  1. Explain the principles of Public Finance and Economics that relate to Public Budgeting and the budgetary process;
  2. Demonstrate knowledge of the budget preparation process;
  3. Explain how government sources funds;
  4. Undertake investment appraisals of a project; and
  5. Outline various Financial Management activities.
4.4.2. MODULE UNITS AND WEIGHTINGS
Unit Title Weight %
 1 Principles of Public Finance 10
2 Budget Preparation Process 10
3 The role of Financial Management in the Public Sector 10
4 Public Sector Financing 15
5 Investment Appraisal in Public Sector 15
6 Treasury Management activities in Public Sector 15
7 Risk Management Concepts 10
8 Performance Management in the Public Sector 10
9 Public Sector Financial Management Reforms  5

4.4.3. COURSE CONTENT

UNIT 1: PRINCIPLES OF PUBLIC FINANCE Unit Topic:
  • 1.1 Public Finance
    • 1.1.1 Economic theory and the Role of Government in the Economy
    • 1.1.2 Market failures
    • 1.1.3 Public Goods
    • 1.1.4 Externalities
UNIT 2: BUDGETARY PREPARATION PROCESS Unit Topics:
  • 2.1 Budgetary theory
    • 2.1.1 Budgetary theory and Practice
    • 2.1.2 Legal and institutional frameworks in budgeting
    • 2.1.3 The Budgetary Process and logic
    • 2.1.4 Functions of the Budgetary Process
  • 2.2 The Budget Cycle
    • 2.2.1 The Government Budget Process
    • 2.2.2 Supplementary Budgets
    • 2.2.3 Budget Deficits and Balanced Budget Requirements
  • 2.3 Operating Budgets
    • 2.3.1 Budgeting methods
    • 2.3.2 Analyzing Budget Requests
    • 2.3.3 Budget Balancing Techniques
    • 2.3.4 Budget execution
  • 2.4 Capital Budgeting
    • 2.4.1 Rationale for Capital Budgeting
    • 2.4.2 Capital Budgeting Process
    • 2.4.3 Determining Costs
    • 2.4.4 Investment Decisions
    • 2.4.5 Cost Benefit Analysis
UNIT 3: THE ROLE OF FINANCIAL MANAGEMENT IN THE PUBLIC SECTOR Unit Topics:
  • 3.1 The Public Sector Financial Management and its Stakeholders
  • 3.2 Role of Accountant in Public Sector Financial Management
    • 3.2.1 Asset Stewardship
    • 3.2.2 Debt Management
    • 3.2.3 Internal Controls and systems management
    • 3.2.4 Risk Management
  • 3.3 The Financial system and Government’s role
  • 3.4 Financial Management as a function
UNIT 4: PUBLIC SECTOR FINANCING Unit Topics:
  • 4.1 Sources of finance
    • 4.1.1 Non Tax Revenue
    • 4.1.2 Tax Revenue
    • 4.1.3 Borrowings
    • 4.1.4 Grants
    • 4.1.5 Exceptional Revenue
  • 4.2 Financial Structure of Public Entities
  • 4.3 Financing Options for Public Sector Entities
UNIT 5: INVESTMENT APPRAISALS IN PUBLIC SECTOR Unit Topics:
  • 5.1 Investment and financing plans
  • 5.2 Revenue and Capital expenditure
  • 5.3 Importance of non financial factors in capital expenditure decision making
  • 5.4 Cashflow, benefits, risk identification and risk attitude
  • 5.5 Funding options and financial structure
  • 5.6 Investment Appraisal Techniques:
    • 5.6.1 Payback Period
    • 5.6.2 Net Present Value (NPV)
    • 5.6.3 Accounting Rate of Return (AAR)
    • 5.6.4 Internal Rate of Return (IRR)
  • 5.7 Analysis of Capital Expenditure Decision Making
    • 5.7.1 Weighted benefit criteria
    • 5.7.2 Cost benefit analysis
    • 5.7.3 Cost effectiveness studies
  • 5.8 Measurement of Risk on Capital Expenditure Decisions
    • 5.8.1 Simulation
    • 5.8.2 Sensitivity Analysis
UNIT 6: TREASURY MANAGEMENT ACTIVITIES IN PUBLIC SECTOR Unit Topics:
  • 6.1 Cash Resource Management
  • 6.2 Asset and Liability Management (Maturity Matching)
  • 6.3 Investment and Debt Management
  • 6.4 Banking Services
UNIT 7: RISK MANAGEMENT CONCEPTS Unit Topics:
  • 7.1 Risk Management framework
  • 7.2 Different types of risks in the public sector
  • 7.3 Types of risk management tools
  • 7.4 Application Risk Management tools
UNIT 8: PERFORMANCE MANAGEMENT IN THE PUBLIC SECTOR Unit Topics:
  • 8.1 Performance Management in the Public Sector
  • 8.2 Theory of Performance Management
  • 8.3 Indicators of Performance Management in the Public Sector
  • 8.4 Evaluating Public Sector Performance
UNIT 9: PUBLIC SECTOR FINANCIAL MANAGEMENT REFORMS Unit Topics:
  • 9.1 Scope and focus of Public Sector Financial Management Reforms.
  • 9.2 Assessment of Public Sector Financial Management Performance.
  • 9.3 Factors impacting on Public Sector Financial Management Reforms.
4.4.4 The Examination Paper Format:
Structure of the Paper Marks
Section A: 1 Compulsory question of 40 marks 40
Section B: Any 3 out of 4 questions, 20 marks each  60
TOTAL  100
The candidates will be allowed fifteen (15) minutes reading time. 4.4.5 Recommended Readings: ZICA PFM 4 Study Materials
This course does not have any sections.

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