1.

0 INTRODUCTION

Finance is the life blood of very business. As personnel and materials which are necessary for the functioning of any office, industry, enterprise can be made available through money. Hence, finance plays an important role in the business. Socio-economic forces

unleashed by industrial revolution have given a new meaning and dynamic content to financial administration. The term Financial Administration consists of two words, finance and administration. The word administration refers to organization and management of collective human efforts in the pursuit of a conscious objective. The word finance refers to monetary resource. Financial administration refers to a set of activities which are related to making available money to the various branches of an organization to enable it to carry out its objects (Musa Ahmad, 1999). Finance Administration or sometimes also known as Government Finance Administration is a field that is quick expanding in its scopes, and is consider as among the most important portfolio in the government.In Malaysia and also most parts of the world, the finance administration varies from year to year. New programs are inculcated, and likewise old programs are either discarded in whole or in part (Musa Ahmad, 1999). Existing of financial administration is to ordered policies and financial strategies to achieve objectives and organization goals. Example: Malaysia aims to achieve on eradicate poverty level and recompiling the diversity of society under the special policies like national development policy. Whole philosophy and concept about public financial administration are has been the same goal to achieve the effectively and efficiency. Even government has diversity

of agencies and division by using a different approach but the objective and goal still the same in action and implementation (Musa Ahmad, 1999).

2.0 DEFINITION OF FINANCIAL ADMINISTRATION Finance is the fuel for the engine of public administration. Mr. Lloyd George is reported to have once remarked that government is finance. This is quite correct, because almost everything the government does, require money. Financial administration consists of those operations the object of which is to make funds available for the governmental activities, and to ensure the lawful and efficient use of these funds. These operations are performed by the following agencies; the executive which needs funds, the legislature which alone can grant funds, the finance ministry which controls the expenditure and the audit which sits in judgments over the way in which the funds have been spent (Shaukat Ali, 1982). According to L. D. White, fiscal management includes those operations designed to make funds available to officials and to ensure their lawful and efficient use. Jaze Gaston defined the term financial administration as the part of government organization which deals with the collection, preservation and distribution of public funds, with the coordination of public revenue and expenditure, with the management of credit operations on behalf of the State and with the general control of the financial affairs of public household. Even though these definitions cover some important aspects of fiscal management, it fails to project a comprehensive scope of financial administration. G. S. Lall states that financial administration is concerned with all the aspects of financial management of the State. Since public administration is more and more concerned with public affairs and public interest, the frontiers of financial administration are expanding and therefore there is a need for a comprehensive definition of financial administration.

3.0 BUDGET Budget concerns how the government plans its revenues and expenditures at the Federal level, State level, and Local government level, to carter for the needs of its development programs and projects. Various state and local democratic constitutions give the executive branch the power to propose a budget and collect taxes, but the authority to authorize and appropriate funds is lodged in the legislative branch (Phang Siew Nooi, 1997). There is no unanimity among writers regarding the definition of the term budget. It has been defined differently by different writers of public administration. According to the Websters Dictionary, budget is a plan that clearly defines the estimate expenditure and revenues of a program or project. Felix & Nigro (1983) defined the term budget as the financial plan of the government, which determines the proposed revenues and expenditures, so as to achieve the goals and objectives (of the nation). It also can be defined as a financial plan of action of the government, in directing the funding of improvement, facilities, and equipment, for the immediate, intermediate, and long-term future (B.J. Reed, 1990). For other words, budgeting is focusing or pay attention to higher efforts to exist the financial sources to fulfill the needs of society. Caused money is limited, budgeting are one part of alternative to choose the sources and when the chosen are made by government to achieve one goal, its call one planning.

4.0 PROCESS OF BUDGET CIRCLE IN MALAYSIA

In formulating this budget, the government consulted and took into considerations views from various parties comprising the public and private sectors, focus groups, media, 1Malaysia blog as well as lab sessions. There are for stages of budget which is the preparation stage, approval stage, implementation stage and audit stage. The 2011 Budget will emphasize efforts to transform the nation into a developed and high-income economy with inclusive and sustainable development, spearheaded by the private sector as well as focus on the well-being of the citizen. With the theme Transformation towards a Developed and High-Income Nation, the 2011 Budget will centre on the following four key strategies which are reinvigorating private investment, intensifying human capital development, enhancing quality of life of the citizen and strengthening public service delivery. There are for stages of budget which is the preparation stage, approval stage, implementation stage and audit stage.

4.1 PREPARATION STAGE The preparation of Malaysias Budget starts between 12 to 18 months earlier of the year budget. Normally, it starts on March of every year. It started from the stage of unit, bureau or department. Then it will move up until to ministry level to obtain decision. Budget office at bureau or government department stage which produces decision on policy accepted after getting approval from ministry. Then technical information concerning on forms and reports which to be prepared by administration unit is disseminate to all party involve in budget. Later, Budget Office at Government Department will gather the demand from administration unit called consolidation. Budget Office will contact Bahagian Belanjawan Perbendaharaan which later will outline the policies being made (Musa Ahmad, 1999). In preparation budget policy and budget draft, Exchequer will obtain a set of estimate return from international economic analyst division. This information will produce the estimate economic condition in our country. Budget Department then will produce feedback by sending letter to every department that contains guideline on how to prepare estimate budget of their department. Budget department will give instruction called call-for-estimate and give the due date on which the estimate budget to be sent to Budget Department and Exchequer. The estimate budget being accepted from every department will be checked by Budget Examiner later get the approval from the Legislative Body (Musa Ahmad, 1999). In this stage, the strategies have been made. Based on the Budget of 2011, the strategies are first strategy: reinvigorating private investment, second strategy: intensifying human capital development, third strategy: enhancing quality of life of the citizen, fourth: strengthening public

service delivery. This concurs that the budget 2011 will be used to improve the Malaysians living standard. The first strategy which reingoverating private investment. The Government has been assuming a significant role in driving economic growth since the financial crisis in 1997/98. The time has come for the private sector to resume its role as the engine of growth. In this context, the Government announced and strategized that the 10MP commencing in 2011 will emphasise the role of private sector. In 2011, private investment is estimated to expand 12.5% to RM86 billion. The implementation of the 12 National Key Economic Areas (NKEA) is expected to generate investment exceeding RM1.3 trillion or USD444 billion and create 3.3 million job opportunities. The private sector will finance 92% of the NKEA and the remaining by the Government The second strategy which intensifying human capital development. The most important asset of a nation is its human capital. It is proven that a nation without natural resources but which effectively manages its human capital will achieve greater success than a nation that relies on natural resources. Malaysia cannot afford to be too dependent on its depleting natural resources. Although th government have successfully managed the natural resources, they have a responsibility to plan human capital development in a sustainable manner, failing which will not be able to optimise the nations potential. A quality, skilled, knowledgeable, creative and innovative human capital is a prerequisite towards achieving a developed and high-income nation. As such, education and training will be restructured and strengthened. For this, a sum of RM29.3 billion is allocated for Ministry of Education, RM10.2 billion for Ministry of Higher Education and RM627 million for Ministry of Human Resource.

The third strategy which increasing quality of life of the citizen, it is widely accepted that the main role of the Government is to enhance the well-being of the citizen. Achieving a developed and high-income economy is meaningless if the quality of life of the citizen deteriorates. In efforts to become a developed and high-income nation, we need to strengthen socioeconomic development in an inclusive manner. It is important to attain a more balanced development and ensuring a better quality of life. In steering Malaysia towards a developed nation, the fourth strategy, by strengthening the public service, the Government, comprising 1.2 million civil servants needs to continuously improve to enhance productivity. By improving the Public Service Delivery, the citizen will lead a peaceful life towards enhancing the standard living of life.

4.2 APPROVAL STAGE At this stage, the Exchequer which is represented by Finance Minister will present the Budget Day. The budget then will be debated by Dewan Rakyat starting with first reading, second reading, committee stage and lastly third reading (Federal Constitution, 2011). First reading is when the budget is introduced only, its title is actually read. After the bill is passed at this stage, its text is printed and distributed. The second reading is when the member debate the budget. If accepted, it is passed on the consideration by a committee of the House. Committee stage considers the budget in detail and may amend any part of it. The Committee then submits a report on the budget to the House. If the report is approved, the budget goes on to a third reading in the house. The third reading debate takes place and amendments may be put to a vote. The House then either passes or defeats the budget. For example, based on the Budget 2011, if the program being accepted by others in term by winning 2/3rd of the majority votes, the budget will be approved and can be implement (Federal Constitution, 2011). Budget normally approved by Dewan Rakyat without much changes being made. At this stage, the treasury will finalize and consolidate all the estimates. The budget draft will be submitted to the Finance Minister which then will table the draft at the Cabinet meeting. The Finance Minister will table the bill in the House of Legislative which later being debated and endorsed by the YDPA (Federal Constitution, 2011).

4.3 IMPLEMENTATION STAGE Budget is approved by Parliament (which is estimated administration expenses of both dewan, and estimate development by Dewan Rakyat and Rang Undang-UndangPerbekalan) and the conformation has obtain Royal agreement, budget implementation and all related programs will be carried out through several government agencies. However, before any expenditure is done by any agencies, finance minister must produce a warrant to National Accountant to allow the money to be draw from Kumpulan Wang Disatukan to defray that public service cost. This rule is needed for both Estimate Development Expense and Estimate Administration Expense. Any warrant being produced for the year of the budget will expired at the end of that year (Musa Ahmad, 1999). National accountant will produce a notice to officer who responsible to control the agencys expense stating that the amount needed to enable the execution of programs and projects can be spend to defray the needed obligations and expense. A control officer acts as a leader in government agency. His is responsible to manage all matters in his agency. Other than ensuring that all programs are done efficiently and effectively, he also acts as manager of public money in his agency. He is elected by Finance Minister and among his other duty is to control expenditure and manage public money, as well as the property being accepted, collected and spent. He also can represent his agency in Public Account Committee (a committee established by Parliament) to appraise the reports prepared by Juruaudit Negeri and assist in investigation of coercion of public money as well as inefficient of public program administration (Musa Ahmad, 1999).

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For example, the government upholds the concept of 1Malaysia as the fundamental philosophy in driving the nations development path. The Government Transformation Programme or GTP and Economic Transformation Programs or ETP in this journey. The six National Key Result Areas (NKRA) and the New Economic Model with its eight Strategic Reform Initiatives implemented the framework for the nations economic transformation. The implementation of the development programmes will be realised through the Tenth and Eleventh Malaysia Plans (10MP and 11MP). In budget 2011, the ministry of defense spent more than millions to improve the defense tactics in Malaysia. By improving each battalion of AD ( Armored division), infantry squads which comprising PASKAL and PASKAU, air force and navy, the security of the nation increase rapidly. An estimate of 4.4 billions allocated for the development of the military defense.

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4.4 AUDIT STAGE Audit is a process performed by Auditor General to investigate the elements of accountability. Audit is conducted on the account of Federal, State, Local Government and any companies where government holds majority shares. Auditor General will table his report in the House of Representative. This stage function to ensure that government department and agency follow the rules of financial manner so that it will parallel Parliament approval. The weakness of government financial administration will be investigated by Public Account Committee (PAC). There are two types of Audit which is an internal auditing and external auditing (Federal Constitution, 2011). Internal auditing is established by the government agencies themselves which is the full time employees or called as an internal staff. This type of audit assists the management to improve and update the operations. It is also strictly safeguard the organizational assets. External audit is an independent bodies as we known as National Audit Department. This auditory exist to assists and fulfill the needs of the third party inside the country. Their function is to audit the financial statement and budget. An external auditors also prepare a financial report and to submit the proposal to be analyze by Public Account Committee (PAC) . The budget of 2011 will be audited by Auditor General 7 months after end of the financial year. Therefore, we can know that the budget will goes to the projects or programs that has been planned earlier by the government.

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5.0 CONCLUSION The strategies and programs in this budget have been designed to meet the aspirations of the citizen. The main objective of the budget is to build a nation where every citizen will be able to enjoy the benefits of development. Therefore, everyone can attain success through hard work and perseverance. This budget has taken into account the needs of the citizen. This budget is possible due to the efficient and prudent financial management. Facts and history have proven that the government is capable of bringing development to the greater heights. The government have successfully transformed the nation from a low-income agriculturebased to a modern middle-income industrial-based economy and succeeded in increasing the income per capita from USD260 during early independence to more than US$D8,000 today. The governments also have reduced poverty from 60% to 3.8% and are on target to eliminate hard core poverty as well as succeeded in creating a dynamic middle class. In fact, prudent financial management has enabled to weather the 1997/1998 financial crisis through firm and unorthodox measures. As a result, criticism has turned to praise and prejudice to admiration. This budget is the 53rd Budget after Independence tabled by the same government. Through 53 Budgets, 10 Development Plans, three Outline Perspective Plans and one National Mission, the 2011 Budget is crucial and is the first step towards positioning Malaysia as a developed and high-income economy.

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6.0 REFERENCES

B.J.Reed & John W.Swain, (1990). Public Finance Administration. London: Sage Publications. Websters New World Dictionary. New Jersey: Prentice-Hall. Felix A. Nigro& Lloyd G. Nigro, (1980).Modern Public Administration.(5th Ed.). New York: Harper & Row. Musa Ahmad (1999) The Principles Of Public Budgeting. Centre of Education Development,UiTM Shah Alam, p. 29-30. PhangSiewNooi. (1997). Financing Local Government in Malaysia. Kuala Lumpur: University of Malaya Press. Shaukat Ali, (1982). Nation Building, Development and Administration: A Third World Perspective. Lahore, Pakistan: Aziz Publishers. Legal Research Board, Federal Constitution (As At 10th April 2011), Part 7, International Law Book Services, 2011. pp.118-134. L. D. White, (1958). Introduction to the Study of Public Administration, Macmillan, NewYork. Lall, G.S. (1976). Public Finance and Financial Administration in India, Kapoor:New Delhi

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