, Section A: Financial Planning
1.1. Significance of Functional Objectives in Public Sector Financial Planning
Functional objectives refer to the specific, measurable goals set by public institutions to achieve
their service delivery mandates. In public sector financial planning, functional objectives provide a
framework that guides the allocation and utilization of financial resources to ensure alignment with
government priorities and public needs (Fourie & Opperman, 2019). These objectives help
departments translate national development strategies into actionable programmes and budgets.
Without clear functional objectives, financial resources risk being misallocated, resulting in
inefficiency, duplication of efforts, and poor public service delivery (Schaeffer & Serdar, 2019).
Therefore, functional objectives are essential because they strengthen accountability and
performance measurement by linking spending to outcomes and outputs.
Role of Future Planning in Public Sector Financial Management
Future planning involves forecasting future financial needs and developing strategies to meet them
in a sustainable manner. In the public sector, future planning is critical because it enables
government entities to anticipate changing socio-economic conditions, service demands, and policy
priorities (National Treasury, 2022). It supports long-term development by integrating
medium-term expenditure frameworks (MTEF) and multi-year budgeting into decision-making
processes. Future planning also promotes fiscal discipline by ensuring governments do not spend
beyond their means, and it allows for proactive risk management in areas such as inflation,
economic downturns, or unexpected crises (Pauw et al., 2018). Through effective future planning,
governments can balance current expenditure needs with long-term investment in infrastructure,
education, and public welfare.
Impact of Resource Scarcity on Public Sector Financial Planning
Resource scarcity is a common challenge in public sector financial planning due to limited public
funds and increasing service delivery demands. Governments face constraints in revenue
generation while being expected to meet broad social and economic development goals (Van der
Waldt, 2020). Resource scarcity forces public managers to make difficult prioritisation decisions,
ensuring that limited funds are directed to the most critical areas such as healthcare, education,
and public safety. It also encourages efficiency, innovation, and cost-saving measures within public
administration (Cloete, 2016). However, if not managed strategically, resource scarcity can result in
underfunded programmes, service delivery backlogs, and public dissatisfaction. Therefore, effective
financial planning helps mitigate the impact of scarce resources by promoting equitable
distribution, transparency, and strategic budgeting.
1.1. Significance of Functional Objectives in Public Sector Financial Planning
Functional objectives refer to the specific, measurable goals set by public institutions to achieve
their service delivery mandates. In public sector financial planning, functional objectives provide a
framework that guides the allocation and utilization of financial resources to ensure alignment with
government priorities and public needs (Fourie & Opperman, 2019). These objectives help
departments translate national development strategies into actionable programmes and budgets.
Without clear functional objectives, financial resources risk being misallocated, resulting in
inefficiency, duplication of efforts, and poor public service delivery (Schaeffer & Serdar, 2019).
Therefore, functional objectives are essential because they strengthen accountability and
performance measurement by linking spending to outcomes and outputs.
Role of Future Planning in Public Sector Financial Management
Future planning involves forecasting future financial needs and developing strategies to meet them
in a sustainable manner. In the public sector, future planning is critical because it enables
government entities to anticipate changing socio-economic conditions, service demands, and policy
priorities (National Treasury, 2022). It supports long-term development by integrating
medium-term expenditure frameworks (MTEF) and multi-year budgeting into decision-making
processes. Future planning also promotes fiscal discipline by ensuring governments do not spend
beyond their means, and it allows for proactive risk management in areas such as inflation,
economic downturns, or unexpected crises (Pauw et al., 2018). Through effective future planning,
governments can balance current expenditure needs with long-term investment in infrastructure,
education, and public welfare.
Impact of Resource Scarcity on Public Sector Financial Planning
Resource scarcity is a common challenge in public sector financial planning due to limited public
funds and increasing service delivery demands. Governments face constraints in revenue
generation while being expected to meet broad social and economic development goals (Van der
Waldt, 2020). Resource scarcity forces public managers to make difficult prioritisation decisions,
ensuring that limited funds are directed to the most critical areas such as healthcare, education,
and public safety. It also encourages efficiency, innovation, and cost-saving measures within public
administration (Cloete, 2016). However, if not managed strategically, resource scarcity can result in
underfunded programmes, service delivery backlogs, and public dissatisfaction. Therefore, effective
financial planning helps mitigate the impact of scarce resources by promoting equitable
distribution, transparency, and strategic budgeting.
