International public financial management — my new book

My new book, International Public Financial Management: Essentials of Public Sector Accounting to give it its full title, was published at the very end of December.

The book is part of a project with CIPFA who wanted a book to complement their IPFM qualifications. This is partly to be a a resource for students that seeks to capture the essential elements of the modules they study, and reflects good practice as put forward by CIPFA in its examination syllabuses. It is also partly aimed at people who are not CIPFA students but are practitioners in the public sector who want a concise book covering the essentials of public financial management.

If you want a copy of the book this is the official page on the publisher’s website. You can also buy if from Amazon, of course.

Writing about public financial management

For the last six months I’ve been writing a book about managing public money. The title won’t be confirmed until the manuscript is accepted by the publishers but for now it is International Public Financial Management: the Essentials. I’m writing it for CIPFA, based on their international public financial management qualifications. There are four different levels of qualification depending on which of the twelve modules are passed. Here’s a snapshot of the topics covered in the syllabus and if you want to know more about the qualifications just click on the image..

The experience of writing this book is different from writing my first book, Financial Management and Accounting in the Public Sector. In the first book I was free to deviate from my initial outline of the book. I could decide to write more about one topic and less about another if I felt that would be best for the book. Even when it came to the second edition I felt able to go further than a simple updating of the tables and references and could rearrange the chapters or sections within chapters. As a result I think the second edition flows better than the first.
With this new book I am constrained. The modules determine what the chapters are about and the content I am writing has to fit with the syllabus. Having said that, each chapter still has to be a manageable size (8,000 to 10,000 words) so a lot of time is spent deciding what to include and what to leave out. 
I’ve enjoyed the challenge of writing this book. I’m close to the finishing the manuscript. After submitting it there will still be work to do regarding the editing process and checking the proofs but I hope this book will be on the shelves by the autumn. I’ll write some more about the process over the summer.

Will fraud increase because of austerity?

The UK was ranked 17th in the 2012 edition of Transparency International's Corruption Perceptions Index. Having heard Professor Alan Doig at the recent CIPFA Audit Conference I wonder if we may slip down the ranking over the next few years. Prof Doig is undoubtedly an expert in fraud and corruption and has applied his knowledge around the world. His friendly, wryly-humoured delivery belied what I thought was a rather bleak message. In fairly short order he demonstrated how much of the UK's public sector anti-fraud apparatus has been, or soon will be, demolished:

• only 25% of police forces have fraud squads
• only one force (West Midlands) out of 43 has anyone looking at election fraud
• the Audit Commission will be abolished.

These changes come at a time when more and more public money is being moved outside of the traditional accountability structures. So, for example, a local authority's rules apply to its schools and they would be subject, amongst other things, to visits from the internal auditors. We've already seen financial management problems at academies, such as this example in London. What arrangements will apply to free schools which seem to me to be even further outside the traditional accountability arrangements? Another example: our traditional approach to providing personal social care has been for local authorities to assess needs, commission someone to provide care and then pay the bills. Increasingly individuals are being given more control of their care. After their needs are assessed they receive a direct payment from the local authority and they arrange their care and pay for it. I can see the benefits to individuals of this approach but it introduces the potential for the misapplication of the money. Surely taxpayers and the local authority need new accountability mechanisms to cover this element of public spending?

One comment made by Prof Doig has stuck in my mind: on average only 30% of fraudsters are detected. If that is the rate when we've got a lot of anti-fraud work in place what will the detection rate be in the future?

High volume, low value frauds, he said, pose a particular problem. Fraudulent claims of social security benefits have long been an issue in the UK (the Department for Work and Pensions has worked hard to get the rate down to less than 2% but it still amounts to about £2billion a year, and consequently their accounts have been qualified every year for more than two decades).

Perhaps a strategy for public bodies is to carry out a risk assessment and focus the resources on areas where the potential payback is best. When asked about this, Prof Doig identified housing tenancies and direct payments for personal social services as areas to focus on.

It's understandable that public bodies which are under pressure to reduce their expenditure have reduced the level of resources applied to preventing and detecting frauds. But it's just like cutting training. It may be understandable but we all know that in the long run it will cost us more money. To borrow a quotation from Peter Senge, "The easy way out usually leads back in."

I started this post by pondering whether the UK will fall in the CPI. That index is a relative measure so the UK's position depends also on what other countries do. I would be interested to hear if comments about whether other countries are breaking up their anti-fraud infrastructure in the way that the UK is.

UPDATE

Since I wrote this article the National Fraud Authority has published the Annual Fraud Indicator report for 2013. They estimate fraud in the public sector amounts to £20.6billion, which is of the order of 3% of total annual public spending.

CIPFA Audit Conference 2013: Keynote: Meeting the Performance Challenges

I enjoyed being at the CIPFA Audit Conference earlier this week. Here are my presentation slides.

My presentation was the opening one. I’d been a bit nervous about it beforehand, not about the giving of a presentation but about the content. I’m not an audit specialist so I decided to talk about performance challenges from a general, big picture point of view. What I was concerned about, then, was whether what I said would resonate with any of the sessions that followed. I stayed until mid-afternoon and I’d say that all the other sessions I saw had touch-points with what I’d said. That was a relief.

Aside from what I learned by watching other people's presentations, I also made a couple of new contacts which might result in some future projects. So, all in all, it was a good day for me.

Hear me speak at CIPFA's Audit Conference 2013

At rather short notice I have agreed to speak at the upcoming CIPFA Audit Conference in York on 22 May. I'm not a specialist in audit but fortunately my topic is broader than that: the financial and performance challenges facing the public sector. I've some ideas about what I want to say already but the preparation of a 40 minute talk will take me probably ten times that (and I'll do it the Presentation Zen way).

A practitioner's experience

CIPFA_September_2011_for_web.mov Watch on Posterous

It's been ages since I last wrote a post for this blog. The last one I write mentioned I would talking at a couple of events organised by CIPFA.  I was asked to talk about my experience of making budget savings and that meant I spent much of my time pointing out what doesn't work. That said, I think the sessions went well. I certainly received nice feedback.

I've made a small QuickTime movie of the slides I used for those sessions in case anyone wants to see them or even download them.

I will try to get back into the swing of writing on this blog more often since there is plenty happening in terms of public sector finance as organisations face up to reducing their budgets for 2012/13. Perhaps I'll write about that next.