The Importance of Public Expenditure Management class=

The Importance of Public Expenditure Management

What is Public Expenditure Management?

Public expenditure management (PEM) is the process of managing all functions related to government spending and public expenditure control. Due to the unique needs of government – including budget and commitment controls – this exceeds typical accounts payable functionality common in the private sector which is why ERP systems designed for businesses often fail in government. Public expenditure management is a critical function of government that helps ensure fiscal responsibility and accountability.

Public expenditure management is essential for achieving macroeconomic stability and promoting economic growth. By effectively managing government spending, PEM can help to control inflation, reduce the deficit, and improve the allocation of resources. In addition, PEM helps to ensure that public funds are spent efficiently and effectively, supporting the delivery of important public services. Public expenditure management is therefore a key element of good governance.

Given the importance of public expenditure management, governments should be sure that the Integrated Financial Management Information System (IFMIS) in use delivers the fiscal discipline, accountability and outcomes required for long term sustainable growth.

FreeBalance’s Government Resource Planning (GRP), the FreeBalance Accountability Suite™, was designed with government, for government and includes a comprehensive set of (PEM) Public Expenditure Management modules.

What Are the Benefits of Public Expenditure Management?

There are many benefits of public expenditure management, including:

  • Improved fiscal responsibility and accountability
  • Greater transparency and efficiency in government spending
  • Better allocation of resources
  • Improved delivery of public services

Perhaps most important of all, is the ability to combat corruption in government procurement which is one of the greatest drains on the fiscus in some countries.

FreeBalance (PEM) Public Expenditures Management Modules

Public Expenditure Management - Learn More

The Public Expenditures Management (PEM) pillar of the FreeBalance Accountability Suite™ assists governments by providing discipline in finances on both small and large-scale government acquisitions. It offers support for tendering, eProcurement, contract and spend management. The pillar also covers the core government purchase and commitment cycle – requisitions, purchase orders, goods receipt, goods returned, expenses and payment vouchers. PEM provides transparency on procurement process, suppliers, pricing and terms – building trust in government. It also has payment features to manage all aspects of contract payment accounting. Finally, PEM enables the initiation of payment processes and collection management by expense voucher from any source.


Government Resource Planning (GRP) systems serve as accounting and reporting tools for governments. They help to ensure transparency and accountability in the use of public funds and prevent corruption. This ensures that the best value is obtained for the taxpayer’s money. By improving PEM, governments can better meet the needs of their citizens.

To find out how FreeBalance can help your government improve Public Expenditure Management, please get in touch.