Financial planning and budgeting are claimed to be vital in public organizations, but how can you tell if all that planning actually is paying off? The answer is simple: by conducting financial evaluations. Evaluating financial activities primarily consists of performing independent audits and reviews, which look for errors or abuses in financial reports and compliance with laws and regulations. Auditing is, in fact, a requirement in most government organizations for a variety of reasons that you will consider this week.
1. At the insistent urging of President Obama, Congress has enacted massive spending bills totaling over $1 Trillion. This is sold to the public as “economic stimulus”. What is the purpose of this orgy of spending? Explain the macroeconomic rationale for this action by the Federal government, as justified by the economic theory.