featured article: closing acccounts
Annual accounts closure can be a major pain for public sector entities. It is a time to ensure working papers are collated, audit trail exists, reconciliations have been performed, miss-postings corrected and accruals made. Much of this work will be performed by people who do not see finance as their day to day priority, yet a poor accounts closing can have a big impact on performance. In this case study we describe how we have helped one local authority to tackle their accounts close.
The year end financial accounts closure process at this council had been identified by both the senior management and external auditors as being in need of improvement with deadlines being missed and material errors picked up during the audit process.
The council asked maltway to develop a programme to raise the knowledge and skills of the staff involved in the year end close process to:
- Improve the quality and efficiency of the accounts closure process
- Make the financial accounts more accurate
- Develop communications between the central and departmental finance teams.
We responded quickly to develop a programme that had a clear focus on improving the outcome of the process as well as helping the council meet its statutory responsibilities. The clear priority was to ensure that all staff involved in the process knew what their roles and responsibilities were and were able to produce quality information and evidence on a timely basis.
This was achieved through a combination of a one-day training event supported by improved communication and planning between the Corporate Finance team and the departments. The training covered not only the accounts closure process within the council and but also included sessions aimed at improving the participants' skills, particularly in relation to working papers and evidence to support accruals and reconciliations (which had been highlighted by the auditors as a particular weakness).
In the second year of our involvement the training audience was split into 2 groups. Those new to either the council or the process received foundation level training to ensure they were equipped with the essential knowledge and skills, whilst for more experienced staff the emphasis was on further improving the quality and efficiency of the process, for example through better review and resource management.
The training received exceptional feedback and the results were transformational. In the first year of our involvement a significant improvement in the quality of working papers was noted by the auditors and by the end of our second year, far from being an area noted for improvement the quality of supporting information was seen as a positive strength. For the first time no material errors or adjustments were made by the auditors.