The CIPFA Financial Management (FM) Model is the centrepiece of CIPFA’s professional services portfolio. This year brings a landmark redesign. Drawing on years of experience in applying the model to over 400 organisations worldwide, we have created the single most sophisticated model to test, strengthen and streamline public financial management.
For nearly a decade, public financial management has been built on shifting sands. Unprecedented spending cuts, ballooning demand and political upheaval have seen strategic priorities change rapidly. The impact of political and economic shocks has hit finance departments hard. On their shoulders rests the responsibility to keep services, on which so many people depend, properly resourced in an environment that is hardly conducive to long-term planning.
Today, uncertainty marks almost every external factor that affects the finances of public sector organisations. Therefore, it is more important than ever that executives and directors are absolutely on top of all that they do control. This is the key to ensuring financial resilience.
The CIPFA FM Model provides an online self-assessment engine that systematically combs through operational data to reveal potential threats and weaknesses.
The FM Model has been designed to provide public sector organisations with a gap analysis between their current financial management and recognised best practice. Best practice in this context is reliant on three central tenets of sound public financial management: delivering accountability; supporting performance; and enabling transformation.
When it comes to transformation, the role of the chief financial officer is critical. The finance team should be in a position so that it can actively make an input into the strategic and operational plans at the heart of the organisation, delivering highly effective strategic directions and focus-based outcomes.
Supporting performance is also a crucial, long-term requirement, with finance teams actively seeking improvements around delivery and organisational performance. Finally, they should form the bones of organisational stewardship through delivering accountability, by ensuring accruals-based financial information is accurate, timely and that the organisation has robust controls, probity, compliance and accountability.
Another attribute of the new version of the FM Model is the achievement of full alignment with the whole system approach to public financial management, which is designed to support governments in improving the functioning of public financial management systems, and the internationally based Public Expenditure and Financial Accountability programme.
By assessing the contribution that leadership, people, processes and stakeholders make, the FM Model can give senior managers and key decision makers a full picture of financial performance capability across their whole organisation.
Using this information, finance teams will be better able to steer their way through this harsher financial climate in which public services now operate. By gaining a clear picture on financial capability, they will understand better whether they are achieving their strategic goals so they can then identify where improvements should be made.
Ultimately, this will help finance professionals better achieve the objectives they have now been set. These have a clear emphasis on efficiency, productivity and collaboration, and require commercial skills beyond those of a traditional public sector accountant. To achieve this new model of working and deliver change, finance professionals desperately need first class financial capability analysis which the FM model is designed to give.
My friends and colleagues across the public sector have endured some of the toughest times in the history of public finances. Today, the future remains uncertain. But CIPFA, our professional institute, is giving finance leaders the power to fortify their organisations and face future challenges with confidence. Of this, I am very proud.
A financial capability assessment will reveal whether strategic goals are being met and areas that need improving. Photo: Shutterstock
