CIPFA consultation to explore CFO conflicts of interest
0The Chartered Institute of Public Finance and Accountancy is consulting on whether chief finance officers face conflicts of interests if they serve on arms-length bodies and joint venture vehicles established by their council.
The question is included in a consultation on potential revisions to CIPFA’s statement on the role of the CFO in local government.
The consultation is aimed at gauging opinion on how to define the responsibilities of CFOs with the growing number of new delivery mechanisms delivering services on behalf of local authorities.
CIPFA said: “Those organisations are changing…with an ever increasing number of services being provided in partnership with other public bodies and the third sector or being outsourced entirely, the majority now having portfolios that are wider than just finance and an increasing number becoming involved in setting up independent trusts, partnerships and commercial joint ventures.
“These wider roles both present an opportunity and a risk to the CFO in developing and maintaining their key roles as guardians of public money.”
Speaking in the coming issue of Room151 Quarterly magazine, Lancashire County Council’s Trevor Casteldine said: “With the correct governance framework in place, there should be no problem with CFOs playing roles on the boards of other entities, but I think that the need for strong independent chairmen and non-exec members of those boards has perhaps sometimes been overlooked.”
The CIPFA survey asks whether the statement should be updated to deal more explicitly with the CFO’s responsibilities in relation to external service delivery vehicles and partnerships.
Respondents are being asked to define what the CFO’s responsibilities should be in relation to these arrangements.
The questionnaire also asks if the statement should be extended to cover the role of deputy CFO “given the specific status of a deputy section 151 officer in local government?”
It is also asking how the statement could be improved more generally, and whether additional guidance would be helpful.
