Get premium membership and access questions with answers, video lessons as well as revision papers.

What are some of the reasons why financial management in government departments is different from financial management in an industrial company?

      

What are some of the reasons why financial management in government departments is different from financial management in an industrial company?

  

Answers


Judy
1. Government departments do not operate to make a profit, and the objectives of a department or of a
programme of spending cannot be expressed in terms of maximizing the return on capital employed.
2. Government services are provided without the commercial pressure of competition. There are no
competitive reasons for controlling costs, being efficient or, when services are charged for (such as
medical prescriptions), keeping prices down.
3. Government departments have full-time professional civil servants as their managers, but decisions
are also taken by politicians.
4. The government gets its money for spending from taxes, other sources of income and borrowing
(such as issuing gilts) and the nature of its fund-raising differs substantially from fund-raising by
companies.
Judiesiz answered the question on August 16, 2018 at 23:13


Next: What are the basic assumptions of capital asset pricing model?
Previous: Outline the benefits of capital budgeting in public sector

View More Finance Questions and Answers | Return to Questions Index


Learn High School English on YouTube

Related Questions