Academic Scientific JournalsThe Rule of Rational Management of Public Funds
DOI:
https://doi.org/10.4467/22996834FLR.19.019.11275Keywords:
public funds, rational management rule, rule of transparency of public funds, rule of openness of public funds managementAbstract
The rule of rational management of public funds means managing the funds in a transparent and open manner, and – in particular as far as public spending is concerned – in a purposeful and economical way, timely and efficiently. The principle of transparency in managing public funds is a value, which – backed up by the rule of openness – determines the degree of reliability and predictability of actions taken within the financial management in question. And the purposefulness in public spending provides that the expenditures should be made properly in terms of their reasonability (regularity) and (cost) efficiency. The examination of efficiency is aimed at determining the result of the activities by comparing the effects achieved with the outlays made. Two situations can be distinguished here: that of the entity being guided by the intention to achieve maximum effect at given expenditures or that of minimising outlays to arrive at a specified effect. Examining the efficiency of public expenditures is a demanding task, considering the way in which public funds are accumulated, and the administrative procedure of their allocation. The difficulties also arise from the fact that the areas on which public outlays are made do not lend themselves to measurement. Determining the cost-efficiency relation is not possible, for instance, as far as expenditures on national defence (in short-term perspective, in particular) are made, and is also hard to do in the case of healthcare and education, where measurement of the efficiency of the public funding, consisting in establishment of the relation between the level and structure of the spending and the actual advantages gained by the society, meets with an obstacle being the quality of the results achieved.
The rule of reasonable spending of public funds is definitely an uncontested principle and the legal steps taken in Poland’s legal system to consolidate it certainly go in the right direction. It must not be lost of sight, though, that the measures are not able to provide adequate assurances of implementation of the rule. There is still a risk that the list of the solutions is not complete and perhaps other tools whereby rationalisation of public spending could be achieved should be sought.
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