UK:
Finance Transformation For The Public Sector
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The Public Sector is undergoing radical reform and Finance is at
the heart of the change. You know your function needs to transform
to meet the ever-increasing demands, but do you know what needs to
change and how you are going to make it happen?
Public Sector Finance is under increasing pressure from
a variety of sources:
Addressing the strategic agenda
- Gershon cost efficiencies must be delivered and business
processes reviewed.
- Government departments must analyse their spending and be able
to link these to outcomes and output-based measures. Such a
structured performance framework will aid preparation for future
spending reviews.
- Stakeholders have raised expectations of stewardship and the
use of public money.
- There is an increased focus on World-Class Financial Management
from stakeholders such as the Treasury.
- Government departments and local authorities have expressed a
desire for Finance to be a more strategic function, acting as a
true business partner. This involves a renewed focus on
stakeholders who are demanding accurate, authenticated and fully
disclosed results and projections on a "real time"
basis.
- There is a move towards consolidating transactional processes
into Shared Service Centres to reduce the time and effort spent on
low value-added tasks and release more resources into front-line
service support.
- Capability reviews require the Finance function to have a clear
articulation of its role in directing and adding value to the
organisation.
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Professionalising the Finance function
- Many Finance Directors are finding a shortfall of skills in
their Finance function. This is a barrier to delivering strategic
Finance services and may stem from the legacies of past structures
and a historic lack of qualified personnel.
- Recent directives have outlined the need for all Finance
Directors to be qualified accountants by 2008.
- The wider Finance function needs to be aligned with these
requirements. Competency frameworks and career development plans of
the Talent Agenda are key.
Establishing a clear governance structure
- It is becoming increasingly evident that the organisational
structure in many local authorities and central departments
cultivate an environment in which there is duplication of tasks and
a lack of clear governance.
- Finance is frequently seen as the sole owner of the financial
results, and not enough collaboration is demonstrated either with,
or by, other departments.
- The organisation needs to identify the optimal balance between
corporate governance and individual autonomy.
Taking control of the Finance function
- The performance of the Finance function is increasingly
becoming a focal point with the National Audit Office and Audit
Commission qualifying accounts.
- With clear accountabilities of the Chief Accounting Officer, in
an environment where transaction processing is performed within a
Shared Service Centre, strong controls and counter fraud
arrangements need to be in place to ensure proper accounting of
public monies.
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To read this Report in full, please click
here.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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