To encourage a stronger focus on the cost of investing in assets, the Government requires a return on investment in net assets through a capital use charge. The Parliament has also introduced legislation for the management, acquisition and disposal of property . Initiatives such as these recognise the Commonwealth as owner or shareholder of all government agencies and seek to promote best-practice asset management within the Commonwealth. Cash flow management is an important element of effective financial management. It ensures that cash is available when it is required, for example to pay for goods and services, employee entitlements or for asset replacement.
Managers use information in the cash flowstatement to assess the liquidity of their agency.
The Government has devolved the responsibility for managing cash flow to individual agencies through its agency banking initiative. This encourages agencies to manage departmental resources in a business-like manner, by providing greater flexibility for agencies to tailor their banking arrangements to their business needs.