Our intentions: Looking at strategic financial management

21 May 2025: We are carrying out a performance audit to look at how public organisations manage their finances to support their ability to achieve their current and longer-term objectives.

In the public sector, “strategic financial management” is the process by which an organisation integrates strategy, planning, and performance in managing its spending.

Most of the public scrutiny of the Government’s Budget focuses on new spending initiatives, which are often less than 2% of the Government’s total operating budget. An enduring public sector challenge is how best to ensure that existing spending (that is, the other 98%) benefits from strategic thinking and planning, and reflects the best use of public resources.

What we are focusing on

We will look at a sample of public organisations to understand how they ensure that they use their financial resources effectively and are positioned to respond to cost pressures or a shift in strategic objectives.

To do this, we will look at how these organisations understand the cost and value of the services they provide, and the contribution of those services to achieving their organisations’ objectives. We will also look at the extent to which they think about challenges, risks, and opportunities and their impact on financial resources and objectives.

Finally, we will look at how well they bring together their understanding of their costs, performance, financial resources, and strategies to inform their plans to meet their current and longer-term organisational objectives.

The difference we expect to make

We plan to publish a report that highlights good practice as well as issues for public organisations to consider.

Our report will look to provide insights and lessons on how public organisations can:

understand the costs of the services they provide, the value of what they do, and their contribution to achieving the organisation’s objectives;
consider and respond to opportunities, challenges, and pressures; and
maintain the capability and tools to be effective managers of public money.

We expect to complete this work in the first quarter of 2026.

Please use the feedback link on the right if you would like to speak to a staff member about this work, make a suggestion, or ask a question.