Financial Management and Public Procurement
Budget and control cycle
Public financial management covers budget preparation, approval, execution, monitoring, accounting and audit. Controls include segregation of duties, commitment control, cash limits, proper authorisation, reconciliation and asset registers.
- Economy means buying at a fair price; efficiency means the best input-output ratio; effectiveness means meeting the objective.
- Procurement principles: transparency, competition, value for money, fairness, accountability and integrity.
- Methods: open competitive bidding is the default above threshold; limited or direct methods are exceptions requiring justification and approval.
- Bid evaluation: responsiveness first, then the lowest evaluated responsive bid; price alone is not enough.
Worked example: An office needs 30 laptops. The estimated value exceeds the open-bidding threshold. A supplier offers a 10% discount if the order is split into three purchases of 10. The correct reasoning is that splitting to avoid the threshold is contract splitting, a procurement integrity breach. The office should use open bidding, publish criteria, check specifications and award to the lowest evaluated responsive bidder. A lower price from a non-responsive bidder does not win.
Traps
Treating the lowest price as best value; ignoring bid responsiveness; splitting purchases; failing to declare conflicts of interest; spending before budget commitment.