Financial management principles

Every local fund authority will be guided by the following financial management principles, namely:-

1. (a) ensuring transparency at all stages of policy making and implementation;
2. (b) introducing performance linked budget policies;
3. (c) providing for effective and sustained fiscal monitoring systems;
4. (d) introducing robust financial management principles;
5. (e) maintaining local fund authority's debt at prudent levels;
6. (f) managing guarantees and other contingent liabilities prudently, with particular reference to the quality and level of such liabilities;
7. (g) ensuring that policy decisions of the local fund authority have due regard to their current financial position and the financial implications on future generations;
8. (h) adopting accrual system of accounting for payables and receivables;
   • (i) ensuring that borrowings are used for productive purposes and accumulation of capital assets, and are not applied to finance current expenditure;
9. (j) ensuring a reasonable degree of predictability in the flow of funds;
10. (k) pursuing tax policies with due regard to economic efficiency and compliance costs;
11. (l) pursuing fiscal policies with due regard to cost recovery and equity;
12. (m) pursuing expenditure policies that would provide impetus for economic growth, poverty reduction and improvement in human welfare;
13. (n) ensuring that physical assets of the local fund authority are properly maintained;
14. (o) disclosing sufficient information to allow the public to scrutinize the conduct of fiscal policy and the state of local fund authority finances;
15. (p) ensuring that local fund authority uses resources in ways that give best value for money, and also ensure that public assets are put to best possible use;
16. (q) managing expenditure consistent with the level of revenue generated;
17. (r) formulating budget in a realistic and objective manner with due regard to the general economic outlook and revenue prospects, and minimize deviations during the course of the year;
18. (s) ensuring collection of dues and taxes in an expeditious manner;
19. (t) ensuring discharge of current liabilities in a timely manner;
20. (u) adopting appropriate techniques for measuring the cost of the services provided by the local fund authority.