Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the project. It means applying general management principles to financial resources of the project.
The financial management is generally concerned with procurement, allocation and control of financial resources of a project. The objectives of financial management under the non profit making social programme can be- 1. To ensure regular and adequate supply of funds under the programme. 2. To ensure optimum and effective funds utilization. Once the funds are available, they should be utilized in effective way that leads the programme towards the objective set for the programme. 3. To prepare the budget and budget calendar for all the activities planned. 4. To avoid misuse of funds/ resources available for the project. 5. To enable decision makes to take corrective action during the course of implementation of the programme.
Financial management under RMSA programme has following key elements:
1. Budget for the project: Budgeting involves identifying specific tasks, objectives of the project and express these activities in financial terms as ‘Budget for the RMSA’.
2. Financial Planning: Financial planning comprises of planning fund flow, procurement plan, staffing, capacity building of staff, preparation of budget calendar etc.
3. Financial Control and Monitoring: It is the responsibility of the finance head to monitor the utilisation of funds and ensure compliance of rules and regulations laid down for the implementation of the project. The financial tools for control and monitoring are statutory audit, internal audit, procurement review, financial MIS etc.