Chapter 6

Thinking Government: Public Administration and Politics in Canada

Financial Management

This chapter describes the elements involved in macro-financial management and public sector budgeting, first describing the two halves of the traditional financial management system: revenue and expenditure. It explores various approaches to expenditure budgeting:

  • budgetary incrementalism;
  • performance budgeting; and
  • budgetary rationalism.

It describes the pros and cons of each and some of the many variations on budgetary rationalism that have been practised by the past several governments. In that context, the chapter includes an analysis of the politics and administration of fiscal restraint in a climate of budget deficits and public indebtedness.

The chapter also appraises budget-making tactics, breaking them down into concise descriptions of the strategies employed by spenders and guardians of public sector finance.

Finally, it explains how auditing functions in the public sector with respect to

  • departmental audits;
  • the Office of the Auditor General; and
  • the Public Accounts Committee.

The chapter concludes with an assessment of the auditing process.


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