Best in Class Finance Functions For Police Forces

Police funding has risen by £4.8 billion and 77 per cent (39 per cent in real terms) since 1997. However the days where forces have enjoyed such levels of funding are over.

Chief Constables and senior management recognize that the annual cycle of alert efficiencies year-on-year is not sustainable, and will not address the cash shortfall in years to come.

Facing slower funding growth and real cash deficits in their budgets, the Police Service must adopt innovative strategies which generate the productivity and efficiency gains needed to deliver merit policing to the public.

The step-change in performance required to meet this challenge will only be achieved if the police service fully embraces effective resource management and makes efficient and productive use of its technology, partnerships and people.

The finance function has an essential role to play in addressing these challenges and supporting Forces' objectives economically and efficiently.

Challenge

Police Forces tend to nurture a divisional and departmental culture preferably a corporate one, with individual procurement activities that do not exploit economies of scale. This is in part the result of over a decade of devolving functions from the center to the.divisions.

In order to reduce costs, improve efficiency and mitigate against the threat of "top down" mandatory, centrally-driven initiatives, Police Forces need to finance a corporate back office and induce behavioral change. This change must involve compliance with a corporate culture rather a series of silos running through the organization.

Developing a Best in Class Finance Function

Traditionally finance functions within Police Forces have dig transactional processing with only limited support for management information and business decision support. With a renewed dig efficiencies, there is now a pressing need for finance departments to transform in order to add greater value to the force but with minimal costs.

1) Aligning to Force Strategy

As Police Forces need finance to function, it is imperative that finance and operations are closely aligned. This collaboration perchance very powerful and help deliver significant improvements to a Force, but in order to achieve this model, there are many barriers to overcome. Finance Directors must monitor whether their Force is ready for this collaboration, but more importantly, they must consider whether the Force itself can survive without it.

Finance requires a clear vision that centers around its role as a balanced business partner. However to achieve this vision a huge effort is assessed the backward to understand the significant complexity in underlying systems and processes and to devise a way forward that can work notwithstanding particular organization.

The success of any change management program is dependent on its execution. Change is difficult and costly to execute correctly, and often, Police Forces lack the relevant experience to achieve such change. Although finance directors are required to hold appropriate professional qualifications (as adjacent being former police officers as was the case an amount years ago) many have progressed within the Public Sector with limited opportunities for take advantage of and interaction with best in class methodologies. In addition cultural issues around self-preservation can present barriers to change.

Whilst it is relatively easy to get the message of finance transformation across, securing commitment to engage bold change conceivable tough. Business cases often lack the quality required to drive through change and even where they are of exceptional quality senior police officers often lack the commercial awareness to trust them.

2) Supporting Force Decisions

Many Finance Directors are keen to develop their finance functions. The challenge they face is convincing the rest of the Force that the finance function can add value - by devoting more time and effort to financial analysis and providing senior management with the tools to understand the financial implications of major strategic decisions.

Maintaining Financial Controls and Managing Risk

Sarbanes Oxley, International Financial Reporting Standards (IFRS), Basel II and Individual Capital Assessments (ICA) have all put financial controls and reporting under the spotlight in the private sector. This as a choice is increasing the spotlight on financial controls in the public sector.

A 'Best in Class' Police Force finance function will not just have the minimum controls to meet the regulatory requirements but will evaluate how the legislation and regulations that the finance function are required to uphold, perchance leveraged to provide value to the organization. Providing strategic information that will enable the force to meet its objectives is a key task for a leading finance function.

3) Value to the Force

The tackle development over the last decade or so, has moved managerial to the Divisions and has accelerate an increase in costs in the finance function. Through utilizing a number of initiatives in a program of transformation, a Force can leverage qualified 40% of savings on the cost of finance again improving the responsiveness of finance teams and the quality of financial information. These initiatives include:

Centralization

By centralizing the finance function, a Police Force can create centers of excellence where industry best practice credible developed and shared. This will not only re-empower the department, creating greater independence and objectivity in assessing projects and performance, but also cause more consistent management information and a higher degree of control. A Police Force can also develop a business partner group to make strategic liaisons to departments and divisions. The business partners would, such as, advise on how the departmental and divisional commanders can meet the budget in future months contrary to merely advising that the budget has been missed for the previous month.

With the mundane number crunching being performed in a shared service center, finance professionals will find they now have time to constitute business partners to divisions and departments and dig the strategic issues.

The cultural impress the departments and divisional commanders should not be underestimated. Commanders will be concerned that:

o Their budgets will be centralized

o Workloads would increase

o There will be limited access to finance individuals

o There will not be on site support

However, if the centralized shared service center is designed appropriately none of clone should apply. In fact from centralization