Financial management ratings
In the 1990s, the Swedish Government embarked on a programme to modernise public-sector financial administration. This involved recognising there was a need for a new monitoring instrument, as a complement to audit, for exercising control over the financial management of government agencies.
The Government decided to introduce a system for rating the financial management of government agencies (FM ratings). The FM rating serves as a monitoring instrument that can be used not only by the Government, but also by the agencies themselves. The FM rating is not intended to be used for the purposes of financial management, but merely as an observational tool.
The Government charged the Swedish National Financial Management Authority (ESV) with the role of compiling the FM rating. The ESV is the central government authority with responsibility for government accounting and for providing forecasts and driving the harmonization of financial and performance management. The ESV submits a report in the format established by the Government in April each year. The role of compiling FM ratings is included in the Government’s instructions to the ESV.
FM ratings for each government agency are drawn up by the ESV and reflect how well the agency in question’s financial management practice conforms to the financial rules and regulations. The FM rating measures compliance with the financial management rules by pointing out negative deviations or where there is room for improvement or development.