More than five years ago, as a result of the EU accession process, a requirement was introduced for all public fund users to implement and actively use financial management and control tools, commonly known as FMC. Viewing this as an additional administrative and bureaucratic burden, many of them hoped the “storm” would pass, until the State Audit Institution of the Republic of Serbia brought this issue to their attention through regular financial statement audits. At that point, perceiving FMC as a penalty, public fund users sought various ways to address this problem, with many resorting to the well-known “ticking the boxes” approach. The form was met, but what about the substance?
Financial management and control is a legal obligation prescribed by the Budget Law of the Republic of Serbia, but above all, it represents a system of internal process organization for the use and expenditure of public funds and public sector management. While the head of a public sector institution is formally responsible for introducing and applying this system, the responsibility for maintaining, updating, and applying the FMC system lies with every individual public servant.
However, this is not the most important point in this story. Financial management and control is an excellent system that not only protects the budget of the Republic of Serbia but also safeguards each individual public servant. Procedural organization of internal work processes leads to easier task execution, more clearly defined levels and types of responsibility, and an organized system where it is clear who does what, how they do it, and how they are held accountable.
The introduction of this system begins with the identification of business processes, which are then formalized within the system through procedures. Each business process is described through steps, general and specific goals, as well as internal and external risks that may affect the outcome. In this way, all key elements of the process are recognized, facilitating the understanding of delegated tasks and how they unfold, the boundaries of activities (where they start and end), as well as the limitations of all positive regulations that must be followed. FMC insists on legality in operations, which is not assumed, but mandated.
For all of the reasons mentioned, and especially due to the specific nature of each public fund user’s work, this system cannot be copied if it is to function effectively. FMC enables a deep understanding of the purpose of each public sector organization, the importance of its field of work, and the valuable impact of every public servant in achieving institutional goals and results that add value for the citizens of the Republic of Serbia.