Presentation is loading. Please wait.

Presentation is loading. Please wait.

A Model for High Performing Finance

Similar presentations


Presentation on theme: "A Model for High Performing Finance"— Presentation transcript:

1 A Model for High Performing Finance
National Association of State Auditors, Comptrollers, and Treasurers August 2010 Copyright © 2010 Accenture All Rights Reserved.

2 Speakers Bill Kilmartin, Accenture Director State and Local Government Finance and Administration Marty Benison, Massachusetts State Comptroller Clark Partridge, Arizona State Comptroller Copyright © 2010 Accenture All Rights Reserved.

3 Agenda Description of the High Performance Finance Model
Why is it useful? How could it be applied? Reactions and comments by two State Comptrollers Reactions and comments from the audience Copyright © 2010 Accenture All Rights Reserved.

4 Developing A High Performance Finance Model for Government
Operating Models provide the big picture of what an organization does. examine the functions and defines the people, process, organizational structure and technology to fulfil its strategy. Governments operate in constantly evolving environments.  In order to continue to shape citizen-centric and efficient services, public sector organizations need to regularly reassess the suitability of their operating models. Accenture understands that there is no ‘one size fits all’ approach for shaping operating models.  Based on a wealth of client experience, we are sharing a model to support governments in assessing, developing or fine tuning their operating model for the Finance function. Copyright © 2010 Accenture All Rights Reserved.

5 High Performance Finance Model: Three Components
“Public Finance on a page” Capability Assessment Matrix Process Catalogue The model is built in excel, with tabs and links for scoring and summarizing. Copyright © 2010 Accenture All Rights Reserved.

6 Public Finance on a Page
Customer Interactions General Citizens Business Partners Employees Core Operations Planning and Budgeting Accounting Treasury Political and Strategic Planning General Ledger Investment and Debt Outcome Planning Revenue Cash Budget Development Expenses Budget Execution Asset Control Grants Management Fixed Assets, Facilities, and Land Compliance and Trust Intergovernmental Non-Fixed Assets and Inventory Internal Controls Payroll Capital Assets and Innovative Funding Audit Cost Accounting External Reporting Closing Operations Pension Fraud and Abuse Public Enterprises Continuous Improvement Performance Management Productivity and Efficiency Performance and Analytics Enabling Operations External Partner Interactions Governance Organization Change Management Financial Institutions Finance Organization Process Transformation Accounting Professionals Cross-Agency Initiatives People and Talent Technology and Consultants Risk Management IT Management Copyright © 2010 Accenture All Rights Reserved.

7 Description of the Model: Drilldown on Accounting
Customer Interactions General Citizens Business Partners Employees Core Operations Planning and Budgeting Accounting Treasury Political and Strategic Planning General Ledger Investment and Debt Outcome Planning Revenue Cash Budget Development Expenses Budget Execution Asset Control Grants Management Fixed Assets, Facilities, and Land Compliance and Trust Intergovernmental Non-Fixed Assets and Inventory Internal Controls Payroll Capital Assets and Innovative Funding Audit Cost Accounting External Reporting Closing Operations Pension Fraud and Abuse Public Enterprises Continuous Improvement Performance Management Productivity and Efficiency Performance and Analytics Enabling Operations External Partner Interactions Governance Organization Change Management Financial Institutions Finance Organization Process Transformation Accounting Professionals Cross-Agency Initiatives People and Talent Technology and Consultants Risk Management IT Management Copyright © 2010 Accenture All Rights Reserved.

8 Description of the Model: Drilldown on General Ledger
Process Hierarchy General Ledger Home Topics Basic (1) Intermediate (3) Advanced (5) Score Weight Basis of Accounting Cash-based accounting only Partial accrual-based accounting and partial cash-based accounting areused. Accrual-based and cash-based accounting are not always reconciled. Full accrual-based accounting, cash-based accounting can also be used. accrual-based and cash-based accounting must easily be reconciled. 2 10% GAAP None Other comprehensive basis of accounting Full GAAP 30% Automation Manual accounting entries. Some data may need to be entered several times in different systems. Accounting entries are largely automated, almost no data needs to be entered several times in different systems Accounting entries are as automated as possible, no data have to be entered several times in different systems 3 20% Accuracy Many errors requiring correction in accounting entries due to non-automated processes. Fewer number of errors requiring correction in accounting entries due to largely automated processes. No error requiring correction in accounting entries due to fully automated processes. Master Data Accounting master data (ie chart of accounts, code block, journal entry templates, etc) are not harmonized accross the Organization Accounting master data (chart of accounts, code block, journal entry templates, etc) are partially harmonized across the Organization Accounting master data (chart of accounts, code block, journal entry templates, etc) are fully harmonized across the Organization 4 Fixed Assets Fixed asset accounting activities fragmented across businesses and/or geographies. Selected use of shared services for fixed asset processes, journey to shared services underway. Maximum leverage of shared services. Weighted Average Score 2.7 100% Copyright © 2010 Accenture All Rights Reserved.

9 Description of the Model: Drilldown on Compliance and Trust
Customer Interactions General Citizens Business Partners Employees Core Operations Planning and Budgeting Accounting Treasury Political and Strategic Planning General Ledger Investment and Debt Outcome Planning Revenue Cash Budget Development Expenses Budget Execution Asset Control Grants Management Fixed Assets, Facilities, and Land Compliance and Trust Intergovernmental Non-Fixed Assets and Inventory Internal Controls Payroll Capital Assets and Innovative Funding Audit Cost Accounting External Reporting Closing Operations Pension Fraud and Abuse Public Enterprises Continuous Improvement Performance Management Productivity and Efficiency Performance and Analytics Enabling Operations External Partner Interactions Governance Organization Change Management Financial Institutions Finance Organization Process Transformation Accounting Professionals Cross-Agency Initiatives People and Talent Technology and Consultants Risk Management IT Management Copyright © 2010 Accenture All Rights Reserved.

10 Description of the Model: Drilldown on Internal Controls
Process Hierarchy General Ledger Home Topics Basic (1) Intermediate (3) Advanced (5) Score Weight Mission The focus is limited to compliance with procedures and availability of financial information. No risk-based approach. Controls over non financial information rarely made. Internal controls system covers compliance and availability of financial and non-financial information. Risk assessments on ad hoc basis. Internal controls system encompasses: compliance, availability of financial and non financial information, and effectiveness and efficiency with a risk based approach. 2 10% Culture Internal controls seen as a set of procedures. The outcomes and benefits are not known, understood, or communicated. Top management is aware of the necessity for an IC system, but the system is limited to finance and finance people rather than wider data/information systems. Top management sponsors the internal control system and promotes an internal control culture, which includes communication, training, and target setting. Staff are aware of their roles and responsibilities. 3 Policy Internal controls focus only on accounting processes. Documentation exists, but no defined process for reviewing. Formulation and documentation of a comprehensive set of internal control policies is underway. Comprehensive internal control policies in place. The IC policies are clearly defined and rely on accepted (COSO) standards. Policies (i.e., data protection requirements, security controls, etc) are available and reviewed on an on-going basis. 20% Organization Interal control activities are decentralized, stand-alone, and sometimes redundant. An entity is in charge of coordinating the IC initiatives across the organization. This entity formulates and documents the IC system and ensures the control environment is effective without being too burdensom / bureacratic. The conception, maintenance and monitoring of the IC system is done by a single entity (reports to CFO), relying on liaisons in each department. The IC system involves all levels of personnel. There is a good understanding of the need for the IC system and individual roles and responsibilities are known and understood. Copyright © 2010 Accenture All Rights Reserved.

11 Description of the Model: Drilldown on Internal Controls (continued)
Topics Basic (1) Intermediate (3) Advanced (5) Score Weight Risk Based No risk criticality is defined. Some control activities are known to be disproportionate relative to the respective organisational risks. Risk criticality is not clearly defined. Nevertheless, the level and intensity of control procedures is regularly questionned to ensure they are effective and proportionate relative to the organisational risks and business challenges. Definition of individual process risk criticality enables the organisation to assess the effectiveness of controls and whether they are proportionate to the associated risks and criticality of a given process. 4 20% Process The scope of internal controls is limited to accounting procedures and reconciliation of accounts. No specific process is in place for detecting defiencies. Consideration of the effectiveness of controls is limited, resulting in multiple controls and inefficient processes or gaps in the control environment. Internal controls expanded to include management information. Deficiencies are reported on an ad hoc basis. Processes are occasionally reviewed to improve efficiency and relative effectiveness, but on an ad hoc basis. Internal controls address accounting and management information. Processes are in place to detect weaknesses and report in a culture of transparency. Processes are reviewed periodically by internal audit, External Audit, Management, or due to changes of circumstances. Part of this process includes assessment of which controls add value. Use of tools (i.e., Lean Six Sigma) are used. 3 10% Reporting Limited reports on accounting activities are produced, but only distributed to accounting managers. IC reporting is in place, content is mainly financial information and relates mainly to financial processes. Ad hoc information is produced to support decision-making processes. Clear reporting and communication is in place. Specific reports that reflect goals and material risks inherent in the business are produced. Routine reporting to top management for decision making purposes. Reports and key findings are submitted to the Audit Committee to ensure appropriate action is being taken. 2 Tools Limited or no specialized tools Individual spreadsheets are used. Different versions of internal control processes exist accross the entity. No central repository for tools to track document versions. Standard process mapping tools ensure a single standard format so that all documents are consistent. Documents are managed by the central entity using an on-line repository and all users who need access to the documentation can do so. 1 Weighted Average Score 2.7 100% Copyright © 2010 Accenture All Rights Reserved.

12 Why is it Useful? Stimulate strategic thinking
Promote cross functional and/or cross boundary awareness and cooperation Reveal insights for prioritization, setting the stage for action Provide context for educational and transitional processes Provide a common language (“lingua franca”) for the Finance community to exchange ideas around leading practices Copyright © 2010 Accenture All Rights Reserved.

13 How Can it be Applied? Scope Process
The entire domain of finance…takes a full day Carve out a subset of the domain, i.e. a grouping of business processes…takes a few hours Engage the participants appropriate to the scope, i.e. Comptroller, Treasurer, Auditor, Budget Director, Secretary Administration and Finance, Governor Chief of Staff Process In a face to face workshop In a series of workshops Copyright © 2010 Accenture All Rights Reserved.

14 How Can it be Applied? (continued)
Cost for a copy of the model…provided by Accenture at no charge Cost for Accenture on site assistance and facilitation for a workshop…provided by Accenture at no charge Cost for Accenture off-site assistance and facilitation…provided by Accenture at no charge Cost for state participation…State contributes the time for state employees and space to hold the workshop Copyright © 2010 Accenture All Rights Reserved.

15 Reactions Marty Benison, Massachusetts State Comptroller
Clark Partridge, Arizona State Comptroller The Audience Copyright © 2010 Accenture All Rights Reserved.

16 Contact Information Bill Kilmartin accenture.com Pallavi Verma accenture.com Dave Andrews accenture.com Matt Cole accenture.com Scot Armstrong accenture.com David Wilson accenture.com Mark Howard accenture.com Copyright © 2010 Accenture All Rights Reserved.

17 Contact Information Bill: Pallavi: Dave: Mark: Matt: Scot: David: Copyright © 2010 Accenture All Rights Reserved.


Download ppt "A Model for High Performing Finance"

Similar presentations


Ads by Google