For the private sector, the normative aim underlying financial management theory is owner wealth maximisation.

In the absence of this motive and the departure point that Government intends to maximise service delivery to the community, financial management in the public sector is defined as :

"all decisions and activities of management, as guided by a chief financial officer, that impact on the control and utilisation of limited financial resources entrusted to achieve specified and agreed strategic outputs."

The aim of financial management in the public sector is the following :

"to manage limited financial resources with the purpose to ensure economy and efficiency in the delivery of outputs required to achieve desired outcomes (effectiveness), that will serve the needs of the community (appropriateness)".

Financial management ranges from daily cash management through to the formulation of long term financial objectives, policies and strategies in support of the strategic and operational plans of the department. It includes the planning and control of capital expenditure, working capital management, interaction with the relevant Treasury, funding and performance decisions. It supervises the supporting financial and management accounting functions, which are predominantly concerned with the collection, processing and provision of financial information and the planning, operation and control of the supporting financial information systems.