School of Policy Studies

MPA 827 Financial Management in Canada’s Public Sector

2010 Spring Session

Andrew Graham
Adjunct Professor,
School of Policy Studies
Room 421
Andrew.Graham@queensu.ca
Tel: 613 533-6000 ext 77364
Cellular: 613 583 0096
Fax: 613 533-2135
http://post.queensu.ca/~grahama/

All course outlines and lectures are posted to:

http://post.queensu.ca/~grahama/ and are available
through WebCT.

Course Outline – MPA 827 – Financial Management in the Public Sector 1

Objectives of the Course

This course focuses on the tools and understanding that public

managers in all parts of the public sector require to ensure the
successful use of resources to carry out good public policy.

The objective of the course is to give students a good understanding of

the basic elements of public sector financial management. In achieving
this, it will give students an understanding that financial considerations
play in
 How the financial planning cycles of government and other
public sector organizations affects policy decision-making
 How to understand and interpret financial information
o Basic accounting principles
o Financial statements
 The elements of sound financial management in public
sector organization
o Resource allocation
o Effective budget management
o Cash forecasting and management
o Management control
 Elements of financial accountability both within public
sector organization and outward to the public.
o Reporting
o Accountability
o Internal and external oversight

Are there any Prerequisites?: “Do I need to be good with

numbers?”

This course assumes little or no previous formal training in financial

management or accounting. In addition, no work experience is
needed. It is an introductory and survey course. Students will need to
have or rapidly acquire some familiarity with Excel spreadsheets or
their equivalent. However, this is at a basic level.

Readings

Text: Canadian Public Sector Financial Management, by Andrew

Graham available through McGill-Queens press at
http://mqup.mcgill.ca/book.php?bookid=2079, through the Campus
Bookstore or amazon.ca

Course Outline – MPA 827 – Financial Management in the Public Sector 2

 Structure and Flow of the Course

Course Outline – MPA 827 – Financial Management in the Public Sector 3

 Assignment Due Dates

Please Note: Assignments can be submitted in writing or electronically.

Test 1: Due: May 10, 2010

Test 2: Due: May 30, 2010

Cash Management Exercise: Due: June 18, 2010

Late Assignments: Assignments that fail to meet these dates are subject
to deduction. Material that is two weeks beyond the due date will not be
considered. It is important that students communicate with the
Instructor if circumstances beyond their control create deadline
problems.

Evaluation
Tests on Technical Sections Test 1 – 20
Test 2 – 20
Cash Management Exercise 50
Participation: Includes attendance, class work, 10
overall engagement, challenging assumptions
and seeking clarifications
100

Course Outline – MPA 827 – Financial Management in the Public Sector 4

Unit 1: The Framework
Session 1: Financial Management in the Public Sector Context

April 29, 2010, 1300-1600

Reading: Introduction, Chapter 1, Financial Management in the

Public Sector

a. Objectives and structure of the Course

b. Financial Management in the Public Sector Context
c. Defining public sector finances
d. The Relationship of the Budget to Economic
Planning and Policy
e. The Financial Management Framework: Getting
the Money, Spending the Money and Accounting for What
Your Did with It.

Unit 2: Accounting Concepts: Bean Counter’s

Corner
Session 2: Accounting Concepts
May 1, 2010, 1300-1600

Reading: Chapter 2: Public Sector Accounting

Principles/Accrual Budgeting and Accounting and Chapter 4,
Accrual Budgeting and Accounting: The New Basis for Public
Sector Financial Management

a. Defining accounting
b. The role of financial information
c. The users of financial information and reports
d. Financial accounting and management accounting
e. Financial reporting: public and private sector
f. Accounting standards: GAAP
g. Quality of accounting information
h. GAAP: Creation of common definitions and means
to assess financial statements and their meaning
i. Application of GAAP to the public sector

Course Outline – MPA 827 – Financial Management in the Public Sector 5

 j. Understanding the cash and accrual basis for
accounting
k. Non-cash transactions

A take-home assignment will be distributed and post on the website and on

WebCT on April 28, 2010. Due date: May 10, 2010. Please note that electronic
returns are preferred. Also, only one file, please.

Sessions 3: Accounting Concepts – continued

May 17, 1300-1600

Reading: Chapter 3: Reading Financial Statements

a. Accounting Cycle
b. Double entry accounting
c. The fundamental accounting equation
d. Journal and ledger functions
e. Key Definitions of terms: Assets, liabilities, equity,
net assets
f. Types of financial statements:
i. Balance sheet/ Statement of financial
position
ii. Income statement/ Statement of
operations
iii. Changes in financial position

g. Management Discussion and Analysis

h. Entity Definition
i. Relationship of Financial Statements to external
reporting and internal use.

Unit 3: Budgets: Getting the Money

Session 4: Budgets: What They Do and How They Do It

May 18, 1300-1600

Course Outline – MPA 827 – Financial Management in the Public Sector 6

Reading: Chapter 5: Budgets and Budget Processes

a. Budgeting in the policy and administrative

context
b. Budgeting as a management process
c. Types of operating budgets: line, function,
program, performance
d. Budgets by general purpose: Operating and
capital budgets
e. Funds and funds structures
f. Off budget expenditures and funds
g. Trends in budgeting: budget reforms and
changes: historical overview
h. The Budget Game: Winning Ways

Although not required reading, Appendix A to Chapter 3, Budget Games

People Play is posted and recommended.

Session 5: Planning and Budgeting

May 19, 2010, 1300-1600

a. Planning and budgeting cycles

b. Revenue and workload forecasts in budgets
c. Cost analysis and forecasting
d. Costing tools
e. Fixed and variables costs
f. Capital Budgeting: Definition and scope of capital
in budgeting
i. Capital assets, their valuation, depreciation
and replacement costing
ii. Information Technology Assets – planning
complex systems
iii. Funding Major Projects: sources of funds:
methods of evaluation: use of cost-benefit
analysis
g. The Role Of Business Cases: what are they, how
do they work, how to do them.

Reading: Chapter 6 and 7

Course Outline – MPA 827 – Financial Management in the Public Sector 7

Exercise: Teams will review a series of business case proposals
presented in the context of the budget planning documentation. They
will be asked to do the following:
a. Establish a process for reviewing business cases
b. Develop criteria to apply in considering each
submission
c. Discuss the various proposals
d. Propose a priority list of the cases with rationale
e. Recommend modifications, changes and strategies
for improving the business cases for future
application

Session 6: Cutting Your Budget: Reductions and Reallocations

May 20, 2010, 1300-1600

a. Budgeting in a period of deficits

b. Budget review options and experience
a. Program Review
b. Strategic Reviews
c. Reallocation within budgets
d. Setting budget reduction priorities
e. Shields, defenses, managing downsizing

Exercise: Group exercises in budget reduction strategies, reallocation

management.

Evaluation: Take home assignment on Unit 2 and 3: Due May 30, 2010

Unit 4: Managerial Control and Controllership

Session 7: Management Control: A Risk Based Approach
May 21, 2010, 1300-1600

Reading: Chapter 8: Managerial Control

a. The concept of managerial control

b. Management Control Frameworks
c. Management Control Process
d. Risk and risk management
e. Control Procedures and Policies

Course Outline – MPA 827 – Financial Management in the Public Sector 8

 f. Materiality and due diligence
g. Trust and ethics in control

Unit 5: Cash Management

Sessions 8 and 9: Cash Management
May 25-26,2010, 0830-1130

These sessions will consist of lecture material and discussion.

The Main Assignment: Given the complex nature of the major

assignment, it will be introduced in class and discussed. The
assignment will be distributed in hard copy and posted along with any
relevant Excel spreadsheets on May 26th. Further, although this is an
individual assignment, the second half of the lecture period on May
27th will be devoted to teams working in collaboration to better
understand the case and issues that are involved.

Reading: Chapter 9: Real Time Control: In-Year Budget

Management and Monitoring

a. Defining Budget Management

b. Objectives of Effective Budget Management,
Monitoring and Control
c. In-Year versus Plan Management
d. Forecasting on a Cash Basis: Cross Walking from
Accrual Budgets
e. Discontinuities between Budgets and the Ability to
Plan
f. Establishing a Budget Management System
g. Preparing a Budget Plan
h. Arriving at an Adjusted Budget
i. Estimating Budget Performance for the Reporting
Period
j. The Basis of Forecasting
k. Monitoring Financial Performance and Variance
Analysis
l. Governance
m. Reallocation and Readjustment

In-class case management exercise

Course Outline – MPA 827 – Financial Management in the Public Sector 9

 Cash Management Exercise will be distributed on May 26, 2010. Return
date due: June 18, 2010

Unit 6: Reporting and Accountability

Session 10: External Reporting and Accountability
May 27-28, 2010, 0830-1130

Reading: Chapter 10: Demonstrating Control: Accountability

and Reporting

a. Accountability continuum
b. Nature of public sector accountabilities
c. Defining accountability in the financial management context
d. Objectives of financial and performance reporting
e. Internal applications of accountability
f. Public sector reports: annual reports, performance reports
g. Social accounting and accountability
h. Federal: Public Accounts, Reporting on Plans and Priorities,
Performance Report

Note: The May 27 Session will prove for a 90-minute discussion

in groups of the final assignment.

Session 12, June 25, 2010, 0830-1130:

“Financial Management: A Survivor’s Guide”

An extensive look at how financial management relates to getting

things done, getting them done well and getting them done right. –
Caroline Davis, vice-Principal, Finance and Administration, Queens
University

Session 13: Risk, Audit and Oversight in Managing Your Money

June 26, 2010, 0830-1130

Course Outline – MPA 827 – Financial Management in the Public Sector 10

 a. Forms of oversight – internal and external
b. Learning to love your auditors
c. Answering, explaining, educating
d. Risk in determining what to inspect, oversee and audit
e. An exercise in determining risks and setting their level of
potential impact on an organization, discussing what kind of
control should be put in place.

Course Outline – MPA 827 – Financial Management in the Public Sector 11