ITEM AU9
AUDIT COMMITTEE - 21 JANUARY 2009
FINANCIAL MANAGEMENT ACTION PLAN
Report by Assistant Chief Executive & Chief Finance Officer
1. In the second half of 2008 Local Government Futures Ltd (LGF) reviewed financial management arrangements across Oxfordshire County Council. There were no particular weaknesses that the review was intended to address, the main purpose was to further improve and move towards best practice financial management. All services were included in the review, with the exception of schools.
2. The review concluded that Oxfordshire County Council scores well against the CIPFA Model, and compared to other authorities. Stewardship is identified as the strongest financial management style indicating that the foundations of financial management are firmly in place. As expected there are also a number of areas where further improvement is required. These include improving and enabling financial accountability at budget holder level, financial training and competencies for budget holders and enabling the finance function to move towards a challenge/business advisor role.
3. The report findings have been reviewed by the Strategic Finance Group and other representatives of the finance function. The key issues identified are grouped around: · People – Budget Holders/Service Managers and Finance staff; · Improved Communication of Financial Policies, Procedures and Guidance; · Further integration of Finance and Performance information; · Improve the user friendliness of SAP, the Authority’s Financial Management Information System.
4. This report presents the proposed Financial Management Action Plan (FMAP) for review and approval by the Committee. The detailed action plan is attached as Annex 1 (download as .doc file) and the key actions arising are summarised below.
Budget Holders and Service Managers
5. The areas identified for improvement are:
· Further clarification of respective roles and responsibilities of finance staff and budget holders following the move to Shared Services; · Consideration of financial performance as part of the appraisal process and accountability of managers on process issues; · Tackling the perception that basic administrative tasks have been pushed down to managers; · Assessment of training needs to enable more tailored training for budget holders including improvement of forecasting skills; · Improving level of involvement of budget holders in preparing and profiling their budget.
Training and Development of Finance Staff
6. The development needs identified for finance staff centre on the need to improve the skill set of finance staff to enable them to better meet the demands of their new roles post shared services. The actions link to development needs that have also been identified in the Career Development Project PID.
7. Areas noted for improvement are: · Training for finance staff on SAP to enable them to address more complex issues rather than current basic training; · Need to improve the level of challenge given by management accountants; · Need to improve business knowledge of some accountants.
Improved Communication
8. Actions to improve the communication of financial policies and procedures are centred around further update and streamlining of financial procedures on the intranet. Further actions are planned to clarify guidance and monitor compliance at operational level in areas such as financial delegation and e-procurement.
Integration of Finance and Performance information
9. The Council had already identified the need for improved benchmarking and unit cost information prior to the issue of the report so the actions build on this. Improved, more consistent and embedded use of performance monitoring information will also help us to meet the requirements of the Comprehensive Area Assessment.
10. The Performance team are already working on developing Service and Resource Planning by:
· Work with business plan owners to improve the unit costing information included in business plans; · Ensure future unit costing information for consideration in future business plans is activity based and outcome; · Work with Directorate Leadership teams to ensure benchmarking is being used and is evident in their business plans. This work will be delivered through the Benchmarking Forum; · Deliver training to business plan owners to help and encourage the use of benchmarking within their service. This will be supported by the Corporate Performance lead; · Challenge services to explain how they actively use benchmarking to drive service delivery and business improvement.
User friendliness of SAP
11. The report recommends that managers are consulted to identify what improvements could be made to SAP to make it more user-friendly. These suggestions should be reviewed in the context of the overall SAP Development Plan to identify what improvements are feasible.
Arrangements for Monitoring
12. The Chief Finance Officer will be monitoring progress with the Financial Management Action Plan on a quarterly basis as at end of April, July, October and February using Annex 1 as a basis.
RECOMMENDATION
13. The Committee is RECOMMENDED to note the progress to date and give any feedback on the quarterly monitoring report to the Chief Finance Officer so that it can be incorporated in the work undertaken by the Financial Management Action Plan (FMAP).
SUE SCANE Assistant Chief Executive & Chief Finance officer
Background papers;
Contact Officer: Georgina Paton, Principal Finance Manager (Corporate & Professional Standards)Tel: (01865) 816357
January 2009
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