Public Financial Management (PFM) relates to the management of government resources, including assets and expenditures, and it also explains the short-, medium- and long-term impacts of the resources on the economy and society.
As a result, government's financial management can be related to the processes such as the way the government manages, as well as the results such as the short-term, medium-term and long-term consequences of financial trends.
Actually, the concept of financial management focuses on both dimensions and provides a picture of the reforms required to develop Iran's financial management system.
The financial management systems are embedded in and influenced by a broaden set of procedures, systems and bodies.
Government's financial management systems are part of a wider group of national policy processes, which determine the allocation of government resources by creating maps and guidelines, but such a kind of impacts differ from a country to another one, turning governmental financial management into a matter for each country.
Nonetheless, despite the differences because of the exact characteristics of each country, parts of the processes of the government financial management system are similar in numerous states.
The mentioned processes can be divided into four stages: budget legislation, budget endorsement, budget implementation, and budget assessment, and each of the four stages can in turn be separated into one or more main procedures.
In accordance with the concept and picture, which have been proposed to provide a comprehensive study of the government financial management, it can cover all aspects and stages to achieve what is called government financial management and public sector in Iran. The research has been conducted in two phases.
In the first phase, we will try to present a picture of the existing circumstance of government financial management to address the following issues:
-History of the budget system in Iran and challenges ahead:
This topic seeks to provide a general idea of Iran's experiences in budgeting, through analyzing the process and seeking to explain the challenges that we will face in budgeting procedure.
-Challenges and legal issues of the government financial management system:
This topic seeks to study public sector tax law, in which the four phases of the Constitution, the Law on Budget and Planning, the Law on Plans and the Law on Public Accounts will study the challenges and legal problems that can be effective in the government financial management system.
-Budget and budgeting stage in the cabinet:
This topic will be studied as part of the budget principles section of the government financial management system, and the issues of the budget circular, budget provisions, budget resources and spending will be discussed in this stage.
-Budget in Parliament:
The focus of the budget regulation in parliament is the base of the budgeting of the government financial management system, which will analysis the budget approval in parliament, including the stages of reviewing it in the Integration Commission, and its approval publicly.
-Budget confirmation in the Guardian Council:
The confirmation of budget in the Guardian Council is part of the budgetary principles of the financial management system and it consists of reviewing the budget approval in the Guardian Council.
Ups and downs of government budget implementation:
The aforementioned stage is also part of the budgetary basics of the government financial management system and seeks to study the implementation of the budget in the government.
As a final point, the first phase of the financial management of the government and public sector study seeks to examine financial supervision on the government financial management system, which will be followed up under the following stages:
-Explanation of the present situation of financial reporting and accounting of public sector in Iran and its vital challenges
-The role of subtraction and auditing government's performance in financial management
When it comes to the second phase, we will try to provide a picture of the favorable condition of the government financial management; then , we will focus on the following sections and stages:
-Institutional pillars of reforming budget system
-Analysis of stakeholders of public finance in Iran
6 issues will be examined in section of public finance law:
-Financial regulation in government financial management system
-Medium-term budgeting plan
-Independence of the budget management institution (Challenges and risks)
-Financial governance and development guidance (challenges and risks)
-Favorable situation of budget and program management institution
-The role of parliament in Iran's budgeting system
In the section of economic and social principles and impacts, the following issues will be mentioned:
-Financial management system in the oil-rich country
-Fiscal policies and macroeconomics
-Fiscal policies, inflation and Dutch Disease
In the section of the budgetary principles of the government financial management system, we also pursue to revise cases that will be cited in the following topics:
-Stabilizing budget resources (taxes and assets)
-Controlling government expenditures: Selecting prioritized missions and reforming the structure of executive institutions
-Controlling government expenditures: Social security and pension system
- Controlling government spending: Health system
- Controlling government spending: Education
-Performance-based budgeting system
- Controlling financial risks: Need for avoiding financial erratum
-Debt and cash flow management as two sides of the same coin
-Budget credit implementation (payment) system
-Favorable model of treasury's unified account in line with necessities of Iran's financial system
In the financial regulation section of the government financial management system, the following topics have been mentioned to cover the related discussion as good as possible:
- The Explanation of the favorable condition of inclusive financial reporting of public sector, and its necessities and infrastructure
- The Structure of government financial management system
-The relationship between public and budget
In addition, the issues of government investment and a chapter of public and private participation have been addressed in order to complete the matters related to explanation of favorable state of the financial management of government and public sector in the country.
It is necessary to mention that every section and subject addressed in the two phases will be prepared with the help of academics and intellectuals familiar with the topics of public financial system.
As a result, government's financial management can be related to the processes such as the way the government manages, as well as the results such as the short-term, medium-term and long-term consequences of financial trends.
Actually, the concept of financial management focuses on both dimensions and provides a picture of the reforms required to develop Iran's financial management system.
The financial management systems are embedded in and influenced by a broaden set of procedures, systems and bodies.
Government's financial management systems are part of a wider group of national policy processes, which determine the allocation of government resources by creating maps and guidelines, but such a kind of impacts differ from a country to another one, turning governmental financial management into a matter for each country.
Nonetheless, despite the differences because of the exact characteristics of each country, parts of the processes of the government financial management system are similar in numerous states.
The mentioned processes can be divided into four stages: budget legislation, budget endorsement, budget implementation, and budget assessment, and each of the four stages can in turn be separated into one or more main procedures.
In accordance with the concept and picture, which have been proposed to provide a comprehensive study of the government financial management, it can cover all aspects and stages to achieve what is called government financial management and public sector in Iran. The research has been conducted in two phases.
In the first phase, we will try to present a picture of the existing circumstance of government financial management to address the following issues:
-History of the budget system in Iran and challenges ahead:
This topic seeks to provide a general idea of Iran's experiences in budgeting, through analyzing the process and seeking to explain the challenges that we will face in budgeting procedure.
-Challenges and legal issues of the government financial management system:
This topic seeks to study public sector tax law, in which the four phases of the Constitution, the Law on Budget and Planning, the Law on Plans and the Law on Public Accounts will study the challenges and legal problems that can be effective in the government financial management system.
-Budget and budgeting stage in the cabinet:
This topic will be studied as part of the budget principles section of the government financial management system, and the issues of the budget circular, budget provisions, budget resources and spending will be discussed in this stage.
-Budget in Parliament:
The focus of the budget regulation in parliament is the base of the budgeting of the government financial management system, which will analysis the budget approval in parliament, including the stages of reviewing it in the Integration Commission, and its approval publicly.
-Budget confirmation in the Guardian Council:
The confirmation of budget in the Guardian Council is part of the budgetary principles of the financial management system and it consists of reviewing the budget approval in the Guardian Council.
Ups and downs of government budget implementation:
The aforementioned stage is also part of the budgetary basics of the government financial management system and seeks to study the implementation of the budget in the government.
As a final point, the first phase of the financial management of the government and public sector study seeks to examine financial supervision on the government financial management system, which will be followed up under the following stages:
-Explanation of the present situation of financial reporting and accounting of public sector in Iran and its vital challenges
-The role of subtraction and auditing government's performance in financial management
When it comes to the second phase, we will try to provide a picture of the favorable condition of the government financial management; then , we will focus on the following sections and stages:
-Institutional pillars of reforming budget system
-Analysis of stakeholders of public finance in Iran
6 issues will be examined in section of public finance law:
-Financial regulation in government financial management system
-Medium-term budgeting plan
-Independence of the budget management institution (Challenges and risks)
-Financial governance and development guidance (challenges and risks)
-Favorable situation of budget and program management institution
-The role of parliament in Iran's budgeting system
In the section of economic and social principles and impacts, the following issues will be mentioned:
-Financial management system in the oil-rich country
-Fiscal policies and macroeconomics
-Fiscal policies, inflation and Dutch Disease
In the section of the budgetary principles of the government financial management system, we also pursue to revise cases that will be cited in the following topics:
-Stabilizing budget resources (taxes and assets)
-Controlling government expenditures: Selecting prioritized missions and reforming the structure of executive institutions
-Controlling government expenditures: Social security and pension system
- Controlling government spending: Health system
- Controlling government spending: Education
-Performance-based budgeting system
- Controlling financial risks: Need for avoiding financial erratum
-Debt and cash flow management as two sides of the same coin
-Budget credit implementation (payment) system
-Favorable model of treasury's unified account in line with necessities of Iran's financial system
In the financial regulation section of the government financial management system, the following topics have been mentioned to cover the related discussion as good as possible:
- The Explanation of the favorable condition of inclusive financial reporting of public sector, and its necessities and infrastructure
- The Structure of government financial management system
-The relationship between public and budget
In addition, the issues of government investment and a chapter of public and private participation have been addressed in order to complete the matters related to explanation of favorable state of the financial management of government and public sector in the country.
It is necessary to mention that every section and subject addressed in the two phases will be prepared with the help of academics and intellectuals familiar with the topics of public financial system.