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“For nearly a decade, financial management has been built on shifting sands. Unprecedented spending cuts across government, ballooning demand and political upheaval have seen strategic priorities change rapidly” – Rob Whiteman, CEO, CIPFA.
It is therefore more important than ever that departmental boards, director generals of finance and their management teams are absolutely on top of everything that they can control, in order to ensure their organisations are financially and operationally resilient and that they can deliver their agreed outcomes in the short, medium and longer term.
Recently CIPFA published an Insights report, Accountability, Performance and Transformation (PDF, 1 MB), that sets out the strengths and styles of sound financial management in terms of delivering accountability, supporting performance and enabling transformation.
The report highlights that the most basic financial management style derives from the traditional role of finance, which is often referred to as 'keeping the score' or compliance dealing with regulatory and accountability requirements. The second, more sophisticated style of public sector management requires more attention to be paid to identifying objectives/targets and managing their achievement, as well as ensuring delivery of value for money. The third, most advanced style is required to respond successfully to the demands of austerity and increased service expectations by fundamentally transforming the way the organisation operates.
The report outlines what can be done to improve areas of financial management and sets out different approaches and techniques for implementing transformational change. The report’s insights are supported by the new CIPFA Financial Management Model.
The financial management model provides very practical ways of implementing change. As an online self-assessment toolkit, it helps the finance function assess financial management taking into consideration other core elements. Government departments and agencies are therefore invited to perform the self-assessment to gain full understanding of the strengths and weaknesses of their organisation’s financial management and create/update their prioritised action plan to meet their needs.