transforming the finance function don peebles, policy and technical manager, cipfa dave baldam,...
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Transforming the finance functionDon Peebles, Policy and Technical Manager, CIPFA
Dave Baldam, Senior Consultant, CIPFA
Steven Mair, Borough Treasurer, Oldham Council
CIPFA Conference 2013 – Workshop
Transforming the Finance Function
11 July 2013
cipfa.org.uk
Today’s Team - Introductions
Don Peebles Policy & Technical ManagerCIPFA
07919 [email protected]
Dave Baldam Senior Finance AdvisorCIPFA
07919 [email protected]
Steven Mair Borough Treasurer Oldham Council
07786 [email protected]
cipfa.org.uk
Some Questions We Hope to Answer
Why “transform”my finance
department?
What do we mean by
“transformation”
Has anyone else
tried this? How can I do this?
Transformmy finance
department? – don’t think
I need to
cipfa.org.uk
Transformation….The Vision
“…a modernised and integrated financial management system which is fit for purpose for the modern public body…”
This means:A whole systems approach to budgeting, in-year budget management and reporting, with a seamless link to end of year reporting
cipfa.org.uk
Ambition
Is there an opportunity to redesign the closedown process for local government (initially)?
Development of a robust and reliable standardised process for year end close down
No standardised process exists across local government?
Why redesign the final accounts process? - improves financial management- to save time and resource - focus on ‘added value’ work- Staff benefits
cipfa.org.uk
So what is happening? (1)
Oldham Council has been doing its own pioneering work
New product development – look for early adopters and innovators – Oldham!
CIPFA will be working closely with Oldham to develop the new product
Adopting a three stage process to final accounts redesign
cipfa.org.uk
So what is happening? (2)
Stage 1 - Standardisation Process map Oldham’s closedown processes
Identify scope for further improvements to Oldham’s processes
Identify barriers that Oldham had to overcome, and solutions (people and technical)
Explore opportunities to standardise processes
cipfa.org.uk
So what is happening? (3)
Explore different processes needed for different types of authority (Oldham is a unitary)
Having regard to the previous points: identify adaptations required to Oldham’s processes having regard to:- completeness (different types of authority)- compliance/ robustness (Code)- reliability (system)
Review, test and go live!
cipfa.org.uk
So what is happening? (4)
Process map another LA’s closedown process that has not replicated Oldham’s pioneering work
Illustrate differences i.e. where LAs are currently versus where we want to move them in terms of the Oldham way
cipfa.org.uk
So what is happening? (5)
Stage 2 - Automation To design a software solution which is capable of
being attached to multiple systems (both corporate financial system and service department systems) to extract all the information required to produce a set of Code compliant accounts, which has significantly reduced the level of manual input
Market research available technologies
Identify appropriate partners and select a preferred partner
Build, test, refine, test and go live!
cipfa.org.uk
So what is happening? (5)
Stage 3 – Advice, Assistance & Support Move into developing new ways of working on
closedown
Local authorities pro actively review and engage with others on improving their closedown (different delivery models?)
Sharing of best practice, standardisation of processes/ systems, all share in the benefits (improved quality & cost)
cipfa.org.uk
Product Launch – Indicative Timetable
Phase 1 – Standardisation: Oct – Dec 2013
Phase 2 – Automation: 2014?
Phase 3 – Advice, Assistance & Support: 2015?
cipfa.org.uk
Transforming the Finance Function The Oldham Council Story
The Ambition
The Reason
Why the Accounts?
The Track Record
How Did We Do It?
The Benefits
cipfa.org.uk
Transforming the Finance Function The Ambition
It is not about the accounts
It is about:
transformation, financial management standards, innovation …………….
improved quality and reduced cost (highest performance, lowest quartile cost)
step change not incremental, starting with the fundamentals moving rapidly on, through and up
cipfa.org.uk
Transforming the Finance Function The Reason
Need for change, need to kick start transformation
There were: Pockets of excellence Elements of ambition Some aspiration and occasional new ways of working
There was also the usual: We’ve always done it this way Does he know what’s talking about …….. It’ll never last, give it a year Never work in “Oldham” If only those services/other teams/third parties ……… Why?
cipfa.org.uk
Transforming the Finance Function Why The Accounts
Wanted something that was:
Significant
SMART Visible Service wide Easily “messaged” Externally verifiable About quality, pace and transformation
A catalyst
cipfa.org.ukTransforming the Finance Function The
Track Record
Financial Year
Submitted for External Audit
Audit Opinion & Publ. Accounts
National Ranking
2008-09 30 June 2009, material errors
End September 2009
Low
2009-10 27 May 2010, no material errors
31 August 2010 Top 6 Council & 1st Met Authority
2010-11 19 May 2011, no material errors
29 July 2011 Joint 1st Council
2011-12 3 May 2012, no material errors
25 June 2012 1st Local Gov. Body (LGB)
2012-13 26 April 2103, no material errors
31 May 2013 1st LGB, top 60% FTSE 100
2013-14 TBD, but earlier and better
TBD, but earlier and better
1st LGB and top 30% FTSE 100
cipfa.org.uk
Transforming the Finance Function How Did We Do It? - Initially
At the start great deal of sheer xxxxxx mindedness A great deal of hard work Lot of dependence on key individuals Also identified enablers, doubters and blockers
Also: Applying project management methodology Challenging current timelines Technical expertise Refining quality assurance techniques
cipfa.org.uk
Transforming the Finance Function How Did We Do it? - Project Management and Timelines
Detailed timetable and list of working papers Defined roles and responsibilities Communication plan Stakeholder and risk management
Early planning – extensive & timetable review as soon as close Earlier assurance gained from monthly close & FFS audits External audit support – incorporate resources to timetable Technical groups – on going programme of activity
cipfa.org.uk
Transforming the Finance Function How Did We Do It? - Technical Expertise and QA
Technical Expertise
Key individuals identified as technical experts and backup for these people identified so knowledge and workload shared
Technical Issues picked up in the monthly monitoring programme so resolved prior to year end
3 Stage quality assurance process:
Preparer Reviewer Quality Assurer
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Step Change Process Adopted
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Transforming the Finance FunctionThe Benefits
Improved processes More resource from end of April QA is normal business Rotation of staff – building resilience, and resistance is
changing to requests Broader understanding Tackling by way of example:
Two year budgets Integrating systems Embedding self service “Added Value” finance Themed developments
cipfa.org.uk
Transforming the Finance Function – Other Benefits
Drives continuous review and improvement: Embeds refined project management skills Focuses resource to improve systems for further efficiency
and streamlined financial reporting
Cost effectiveness: Frees up finance staff months earlier Forward looking focus, rather than the historic Early programme builds in capacity to address emerging
issues
Raises the financial management “bar”: Sets a standard of quality, aspiration and timeliness Applied to other financial work. Provides confirmed information for all stakeholders months earlier
cipfa.org.uk
Transforming the Finance Function – Other Benefits
Culture change: Can do - and what else can we do Being bold Ideas
Staff benefits: Staff experience, motivation and career development is
enhanced Develops the reputation of Oldham and its finance service Pride in the job is promoted Attracts and retains excellent top quality staff
In a nutshell…. Short Term Pain Longer Term Gain to Organisation and Finance Team
Transforming the finance functionDon Peebles, Policy and Technical Manager, CIPFA
Dave Baldam, Senior Consultant, CIPFA
Steven Mair, Borough Treasurer, Oldham Council