- Book your PQ and IPFM exam(s)
- Book your CETC course(s)
Local government is used to accounting in a complex system of rules for reporting, monitoring, governance and scrutiny. Finance teams may spend months looking back, consolidating and finalising the accounts that summarise what the organisation has been doing in the last year. With pressure on the sector to save money, many are looking to find ways to enable them to spend more time looking to the future, and giving priority to planning.
The publication Regular as Clockwork gave an evaluation of the core accounting tasks in local government. Its clear message was that local authorities should not be complacent in prioritising the production of their financial statements, providing reasons why prompt production should be the norm rather than the exception.
These reasons included that the authority should take seriously its responsibility to account properly for the use of public funds, that it provides evidence of its operation of sound financial systems and procedures, and that it demonstrates its commitment to full and public disclosure of financial information.
Nearly 30 years later it is difficult to challenge these basic reasons. Since then, codification of financial reporting has continued and included the adoption of international financial reporting standards.
In a perfect world the value to be derived from public financial reporting can finally be properly exploited. The future for the finance department, however, could be different. According to Oxford University, as cited by the BBC, the finance professional has already been told that they are 95% at risk of being automated by technology.
The finance department will, by repositioning the source of the assurance of information, release resources to be true drivers of business decisions. In short it would finally realise their latent value to the business rather than maintain what for many is simply a technical process.
This article is an extract from a comprehensive review and thought leadership paper written by CIPFA and EY; more details can be found at www.cipfa.org/closedown.