understanding public financial administration
Introduction
Module 4 focused on various topics that are important for understanding public financial administration. These topics include capital budgeting, capital finance, cost-benefit analyses, the taxation system, and tax structures. The module explored some of the significant issues associated with capital budgeting and further discussed the time value of money. The readings also explored the importance of using cost-benefit analyses as a decision-making technique, specifically in the public sector. Through these topics, various objectives were met in module 4. From the experience that I had with the module, I was able to conclude that the learning outcomes were compatible with the overall learning objectives of the course.
Learning Outcomes
Through the class readings of module 4, I was able to understand the rationale for public sector capital budgeting. Based on what I learned, capital budgeting encompasses the preparation, adoption, and implementation of a budget for either major capital projects or acquisitions. Capital budgeting also involves funding of projects or acquisitions through a combination of debt financing and pay-as-you-go. The readings also revealed that it is crucial for government agencies to have a separate capital budget process from their annual operating budgets. One of the reasons provided for the argument is that separate considerations can improve the efficiency and equity of providing and financing nonrecurrent projects with long-term service flows. Another supportive argument is that special treatment of capital expenditure can assist in stabilizing tax rates, especially when individual capital projects are large relative to the tax base (Mikesell, 2016). The learning outcome was compatible with the course objective of how the principles of public finance are important in decision-making. Capital budgeting is a principle of public finance and an essential contributor to the quality of investment processes, amount of goods and services produced, and the quality of life that the public enjoys. Capital budgeting is, therefore, important in decision-making processes as their considerations would have a significant impact on investment processes, goods and services produced, and quality of life enjoyed by the public.
Another learning outcome that I took away from the readings of this week was understanding the difference between the value of money now and the value of money in the future. Based on the class readings, present private consumptions are more valuable compared to future public benefits. As a result, a dollar spent today is more valuable than one that is to be spent in the future.
This is the basis for time value of money, which is built on the argument that if all things are equal, it is better to have money now rather than later. If a person has money today, one can invest it and earn interest over a period of time. In simple terms, money available now can be used to yield a flow of valuable services. The learning outcome is compatible with the course objective ethics in public finance. Time value of money reveals how individuals and public organizations can make good use of money at the present moment. The discussions touch on factors such as compounding and discounting, which are crucial aspects of investment and finance. Other learning outcomes from module 4 that were compatible with the course objective include the usefulness of conducting cost-benefit analyses and characteristics of a good tax system.
Conclusion
The readings of module 4 provided significant knowledge crucial for understanding public financial administration. The module touched on topics such as capital budgeting, time value of money, cost-benefit analysis, and taxation, and the tax system. Based on the topics covered, there were various learning outcomes that I managed to learn a lot of information that was compatible with my overall learning objectives. I believe that in the future, the knowledge that I have gained from module 4 would help me in my career in the public sector.