Question

Explain the relationships among environmental factors, organizational factors, and financial factors in determining governmental financial condition

Answer 1

Environmental factors consist of community requirements and resources, disaster risk, intergovernmental constraints, political culture, and external economic conditions; and mainly determine revenue capacity and demand for services. Organisational factors include response of management and legislative policy, including fiscal policies. Financial factors are composed of expenditures, revenues, debt structure, operating position, unfunded liabilities, and the condition of capital plant; and these financial factors impacts largely organizational factors especially how fiscal policy within the government responds to environmental demand and environmental changes