FINANCIAL DIAGNOSIS AS A TOOL OF IMPROVING THE PERFORMANCE OF AN ORGANISATION

The financial difficulties of many countries have led to the need of finding solutions for a better use of public money. Emphasis is placed in a more significant extent on more efficient use of state resources in each public institution. To achieve this goal, management tools specific to private companies have been adapted and implemented in the public sector. As this approach is relatively new, there is little information on the impact of using these instruments by public institutions. Based on these considerations, the aim of this research is to analyse the extent to which performance of a financial diagnosis improves the results of organizations within the public sector. Following the case study conducted at the County Museum of Art «Baia Mare Artistic Center», it was found that after three years since the diagnosis was performed, the institution’s own revenues increased by more than 60%. However, some recommendations have not been implemented, reason why the performances are below the expected level. One of the causes of this situation is the legal system in Romania, which does not stimulate the efficient use of public money, despite the numerous restrictions that exist in terms of spending financial resources of the government.