Financial Management
This section explains financial management, and therefore forms the basis for
the other sections that follow.
F
inancial management is an integral part of district health management. It is made up of a
number of distinct processes that happen in a cyclical way. Service and district managers
receive support from their finance sections to manage the finances.
The processes that make up financial management are explained in the table below. Note
that these approaches are implicit to the district management cycle explained in Section 3.
Process Description
Financial Planning Assessing the current resource position, linking resources to service
● Budgeting plans and determining a budget.
● Setting targets ● Drawing up a budget which will guide how money is spent in
In-year ● Ensuring that funds are spent and revenue collected according
management: to the financial plan and according to the norms and standards
Operating, set by the Treasury.
monitoring, ● Making sure that there are good internal control measures and
safeguarding monitor that these are applied.
Financial Management: An Overview and Field Guide for District Management Teams 17
In the past the management of services and finances happened separately from each other.
This is now changing in an integrated district health management approach as was discussed
in Section 2.
The figure below shows the order of the different processes of financial management. These
processes happen within the Medium Term Expenditure Framework (MTEF). The MTEF is a
3-year rolling expenditure showing a detailed present year budget with projected figures for the
next two years. The MTEF requires that the Financial Plan must include longer term planning
for a further two years.
Planning and
Budgeting
(Section 5)
Evaluation Resource
and reporting allocation
(Section 8) (Section 6)
In-year management:
Operating,
monitoring and
safeguarding
(Section 7)
18 Financial Management: An Overview and Field Guide for District Management Teams
Good performance in this phase
Financial Management: An Overview and Field Guide for District Management Teams 19