Developing local capacity to manage local government finance training and accreditation

1
Developing local capacity to manage local
government finance training and accreditation

• Noel Hepworth
• Chartered Institute of Public Finance and
  Accountancy (UK)
• June 2004

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Agenda

• The financial team of a local authority
• Developing a skilled staff
• Role of the local authority association
• Linking training with accountancy profession
• A model scheme

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The financial team of a local authority

• A local authority should have a strong finance
  team, i.e.
• A well qualified expert as chief financial
  officer
• A technically competent finance staff.
• The local authority should also ensure that
• Financial information is available to support the
  local authority management team
• Financial management skills are available as well
  as financial accounting skills.

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How do you develop such a skilled expert and
supporting staff?

• There are various possible solutions
• Arrange or encourage use of short courses
• Seek support for one-off aid funded training
  programmes
• Arrange for academic training by universities
• Encourage authorities to use skilled private
  sector staff
• Develop a long run training scheme linked to the
  international accountancy profession

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A role for local authority associations!

• Training is the common feature to achieve this
  objective. The outcome of training is to
• Promote better local government
• Through better financial management
• How can associations achieve this?

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Link training with accountancy profession training

• The accountancy profession is about more than
  audit. It is about financial management and the
  role that accounting and financial information
  can contribute to the improved performance of
  organisations in both the private and public
  sectors. It has extensive experience and as the
  public sector moves to adopt international public
  sector accounting standards, professional skills
  become essential.
• This is the current trend!

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Developing long run training linked to the
accountancy profession

• Advantages
• Focus on practicalities with substantial
  technical information
• Links international to local experience
• Opportunity for long run capacity building,
  including building of local professional and
  academic expertise
• Properly developed there is the opportunity for a
  financially self sustaining training programme.

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Developing long run training linked to the
accountancy profession

• Disadvantages
• Long run commitment from the association and the
  local authorities
• Considerable organisational requirements
• More expensive than some other arrangements

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Developing long run training linked to the
accountancy profession

• These are the conditions an association should
  look for
• That the training is relevant to public sector
  needs
• The accountancy body partner has knowledge and
  experience that it is willing to transfer
• That a feature of the scheme is local institution
  building
• Long run support will be provided.

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Developing long run training linked to the
accountancy profession scheme aim

• To create a cadre of professional local
  government finance
• officers able to relate to the accountancy
  profession and
• who would, over time, want to
• Ensure continuity of the scheme
• Encourage new trainees to join
• Encourage continuing professional development and
  the establishment of a professional discipline
  scheme
• Work to maintain scheme relevance and encourage
  technical research and advice

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Scheme aim - summary

• To professionalise financial management in local
• government (and elsewhere in the public sector,
  including
• in public sector audit) and through this to
  ensure that there
• is a clear linkage with developments that are
  occurring
• elsewhere in your public sector and also
  internationally.
• Your local governments problems are not unique!

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How to develop a scheme? The association needs to

• Find a professional accountancy body sponsor with
  a suitable training scheme (may be foreign)
• Review the scheme and adapt to local
  circumstances
• Translate the training material
• Find a local academic partner able to support
  training
• Obtain cooperation of local authorities
• Find the finance

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Is there a model scheme?

• The Chartered Institute of Public Finance and
  Accountancy
• has developed such a scheme at request of World
  Bank
• and other aid organisations.
• The aim is to support local institutions and the
  training
• programme will be handed over to them when
  capacity
• exists.
• Financial sustainability is key to this.

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The CIPFA model the syllabus covers

• Financial reporting
• Accounting for decision making (costing)
• Financial management including business planning
• Information management systems
• Audit (2 papers)
• Management
• Local law and taxation
• Plus a requirement for a scheme of practical
  experiences

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The CIPFA model requirements

• All learning materials are provided on CD.
• The learning materials cover all subjects apart
  from local law and tax these are written
  locally
• The learning materials are comprehensive but
  could be supported by local short courses
• The learning materials need to be edited to meet
  local requirements and terminology.

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The CIPFA model Local partners

• Two local partners needed
• A committed local partner able to mobilise the
  training market such as an association and if
  needed find finance.
• An academic partner able to
• Prepare the local law and tax module
• Localise the other learning material
• Provide complementary courses as necessary
• Participate in the assessment process with CIPFA.
• CIPFA and academic partner assess students jointly

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The CIPFA modelentry level

• The entry level to the scheme is either
• Degree
• Or
• Practical experience in a relevant post

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The CIPFA model on success!

• To achieve success the student would need to
• Pass 4 subjects to receive a Certificate
• Pass 8 subjects to receive a Diploma
• Obtaining a Diploma would entitle the successful
  student
• to become an affiliate member of CIPFA.

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Example of Slovakia (1)

• The local partners are
• Municipal Finance Officers Association
• The University of Banska Bystrica
• Funding provided by
• Department for International Development
• The Open Society Institute
• US Aid

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Other examples

• Slovenia, Croatia, Albania
• Institution building with a professional public
  sector accountancy qualification in Sri Lanka
• Support for new public sector professional
  accountancy body in South Africa

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Ultimate future of all schemes

• Once established the scheme needs to become self
• funded and to be taken over by the home country.
• That provides the key element, which is local
• institution building!
• CIPFA support would then switch to the local body
  from
• the student.

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Costs of a scheme

• Adapting learning materials to local
  circumstances
• Developing a local law and tax module
• Translating the learning material from English
• Initial set up costs
• Finance of assessment cost (CIPFA quality
  control)
• Annual revision of training materials
• Some or all of these costs can be
  international costs, rest local

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Role of CIPFA

• To provide the qualification and learning
  materials
• To provide education and technical support as
  needed, including a help line
• To ensure quality control and provide the
  accreditation
• To assist in maintaining learning after
  qualification
• To maintain learning materials so that they
  remain topical
• CIPFA involvement provides status and recognition.

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Summary

• Financial management is fundamental to effective
  local government
• Effective training becomes essential
• The best form of training is a scheme that
  develops long run professionalism of the finance
  department staff
• And which
• Leads to local institution building

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Contact Details

• Noel Hepworth, Chairman CIPFA International,
• NLA Tower, Croydon CR0 0XT
• United Kingdom
• Tel. [phone]
• Fax [phone]
• E mail Noel.hepworth_at_ipf.co.uk
• Web site www.cipfa.org.uk