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Sound financial management


Budget appropriations shall be used in accordance with the principle of sound financial management, namely in accordance with the principles of economy, efficiency and effectiveness.

The principle of economy requires that the resources used by the institution for the pursuit of its activities shall be made available in due time, in appropriate quantity and quality and at the best price. Therefore implementing partners shall be able to demonstrate that resources have been selected with reference to identified criteria (which ensure that resources are necessary and at a reasonable cost).

The principle of efficiency is concerned with the best relationship between resources employed and results achieved. Thus implementing partners shall be able to demonstrate that the planned results refer to clear and qualitative outputs/outcomes to be achieved at the best price (the result to be achieved justifies the costs).

The principle of effectiveness is concerned with attaining the specific objectives set and achieving the intended results.

Specific, measurable, achievable, relevant and time-bound objectives shall be set for all sectors of activity covered by the budget. Achievement of those objectives shall be monitored by performance indicators for each activity and information shall be provided to the budgetary authority. Such information, as referred to in Article 33(2)(d), shall be provided annually and at the latest in the documents accompanying the preliminary draft budget.



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