Fiscal administration is the act of managing incoming and outgoing monetary transactions and budgets for governments, educational institutions, nonprofit organizations, and other public service entities. For example, local fiscal administration for a town or municipality involves receiving, budgeting, and dispersing monies to support local infrastructure. In terms of governmental administration, fiscal responsibility necessitates numerous departments or divisions to manage the large task of funding government operations. Each division or department carries responsibility for different aspects such as budgeting, reporting, collecting revenues in the form of fees and taxes or purchasing.
Constituents charge leaders, whether governmental or organizational, with establishing fiscal policy as part of their duties in relation to responsible fiscal administration. Fiscal policies are tools for the development of fiscal planning budgets, based on the receipt of anticipated funding. As fund disbursement in the form of payroll, purchases, or other expenses occur, management reports appropriate accounting information back to organizational leaders. Historical data, future revenue projections, and current budget demands determine needed adjustments. The entire process forms the basis for future fiscal decision making.
Leaders of government, nonprofits, and other public service entities have a fiduciary responsibility to those who put them in office, individuals better known as constituents. Effectively managing the fiscal administration of an entity contributes to its overall financial health and ability to continue serving constituents. As such, laws dictate much of the particulars with regard to preparing financial statements, recording transactions, and balancing budgetary demands for such organizations. Fiduciary responsibility dictates that these reports demonstrate responsible management and recording of all activities involving monies paid to or spent by the organization.
Government fiscal administration, specifically of the federal kind, creates many opportunities for error. By their very nature, governmental organizations are large and complex, requiring numerous divisions, departments, committees, and other bodies. While revenue streams follow only a few paths through these many departments, disbursements and expenses come from all areas. With so many sources of information concerning monetary transactions, errors and omissions may easily slip through unnoticed, creating compromising and difficult to decipher problems. The complexity and sheer volume of information necessary to find such errors explains how corruption often goes unnoticed in certain government sectors.
Private sector organizations, such as nonprofit agencies and public postsecondary schools, also experience difficulties deciphering errors in fiscal administration. While these organizations are also large and complex, public reporting documents require far less time to analyze. For this reason, problems with financial management in a nonprofit or public university usually present faster than governmental agencies.
