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The CIPFA Financial Management Model

The CIPFA Financial Management Model
Assessment of Financial Management in Public Service Organisations - Statements of Good Practice (2010)

The third iteration of the FM Model has been tailored for the harsher financial climate in which the public services must now operate. There is a clear emphasis on risk management through change, transactional efficiency and productivity, collaborative working, the commercial acumen of finance staff – and, following the Iceland banking trauma - on treasury management, with a relentless focus on priorities, costs and income to drive out further savings both within and between organisations.

The CIPFA FM Model is designed as a resource for the whole organisation. It is a repository of good practice and an assessment framework. Its scope ranges from the essential controls that should be in place to safeguard assets and demonstrate accountability, to the aspirations of top quality organisations.

The CIPFA FM Model is structured around three progressive styles of financial management:

Securing stewardship — an emphasis on control, probity, meeting regulatory requirements and accountability.
Supporting performance — responsive to customers, efficient and effective, and with a commitment to improving performance.
Enabling transformation — strategic and customer led, future orientated, proactive in managing change and risk, outcome focused and receptive to new ideas.

It is also organised by four management dimensions.

Leadership, which focuses on strategic direction and business management, and the impact on financial management of the vision and involvement of the organisation’s Board members and management team. The tone set from the top will be critical.
People, which includes both the competencies and the engagement of staff, within and throughout the organisation.
Processes, which examines the organisation’s ability to design, manage, control and improve its financial processes to support its policy and strategy.
Stakeholders, which acknowledges the relationships between the organisation and those with an interest in its financial health. Public service organisations interact with a web of stakeholders from government, inspectors, taxpayers, partners, suppliers, customers or clients. External stakeholders have legitimate expectations about the finances of the organisations. This is enveloped by the public interest.

The Model’s component good practice statements sit within a matrix.

	Leadership	PEOPLE	PROCESS	STAKEHOLDERS
SECURING STEWARDSHIP	L1, L2	P1, P2	PR1 – PR11	S1, S2
SUPPORTING PERFORMANCE	L3 – L6	P3, P4	PR12 – PR16	S3, S4
ENABLING TRANSFORMATION	L7	P5, P6	PR17 - PR19	S5, S6

Boards of public bodies, finance professionals and business managers can together apply the CIPFA FM Model. It will give the Board a picture of FM practice in their organisation, creating a profile of strengths and weaknesses, its predominant style, and how far this is aligned to supporting the organisation’s strategic goals. It can be put to a variety of uses, including testing existing arrangements against good practice and identifying improvements, encouraging change, and specifying standards.

For further information about applying the FM Model in your organisation, please visit
www.cipfa.org.uk/fm-model

Good financial management is a key corporate discipline and a feature of successful organisations. Applying the CIPFA FM Model will help ensure robust financial management arrangements, shaped to support your organisation in challenging times ahead.

For further information about the model and to place your order click here.