Financial Crime World

Financial Management in the Royal Government of Bhutan

Chapter III: Financial Management

Procurement Management

Procurement management is a critical component of financial management that involves the planning, execution, and monitoring of procurement activities. The following are the key principles and steps involved in procurement management:

Principles of Procurement Management

  • Achieve economy and efficiency in the procurement of goods and services.
  • Ensure transparency, fairness, and competition in procurement procedures.
  • Protect the rights of bidders and contractors.
  • Safeguard Government assets and interests.

Budgeting

Budgeting is a critical component of financial management that involves the preparation of estimates of future revenues and expenditures. The following are the key principles and steps involved in budgeting:

Objectives of Budgeting

  • Financial resources are allocated efficiently and effectively.
  • Government programmes and activities are implemented in accordance with approved plans.
  • Revenues and expenditures are matched to achieve fiscal sustainability.

Steps Involved in Budgeting

  1. Preparation of budget proposals by Agencies: Agencies submit their budget proposals for review and approval.
  2. Review and approval of budget proposals by MoF: The Ministry of Finance reviews and approves the budget proposals submitted by agencies.
  3. Consolidation of budget proposals into a national budget: The approved budget proposals are consolidated into a national budget.
  4. Approval of the national budget by the Government: The national budget is approved by the government.

Accounting

Accounting is a systematic process for recording, classifying, and reporting financial transactions and events. The following are the key principles and steps involved in accounting:

Objectives of Accounting

  • Provide accurate and reliable information on Government finances.
  • Support decision-making by providing timely and relevant financial reports.

Steps Involved in Accounting

  1. Recording financial transactions and events: Financial transactions and events are recorded in a systematic manner.
  2. Classifying and reporting financial data: Financial data is classified and reported to provide useful information.
  3. Preparing financial statements, such as balance sheets and income statements: Financial statements are prepared to provide a comprehensive picture of the Government’s finances.