Developments towards holistic perspective for strategic financial management in the public sector

This paper investigates the major conceptual and institutional developments in the public sector financial management, which have been taking place worldwide in the recent decades. Based on literature review and the authors'' insights, the paper outlines the perspectives towards implementation of holistic strategic financial management in the public sector of the EM countries. EM-specific challenges for definition of a public sector entity, such as those related to unclear legal and institutional boundaries, accountability and externalities are investigated. The authors explore the impact of an extensive global rethinking of the roles and purpose of government on emphasizing its role as a provider of services and greater expectations in terms of its respective accountability towards users of the public services, stakeholder groups and society in general and investigate the respective substantial changes to institutional structures. The mechanism of strategic financial management for improvement of performance of the public sector is explained. The findings allow concluding that integrated financial management and integrated reporting throughout the public sector may become important factor for holistic viewing of community interests and development potential contributing to safeguarding a wide spectrum of community rights, interests and opportunities in the EM countries.