Finance Skills Development

Finance Skills Development

Knowledge Traits Map (2007)

www.fsdnetwork.com

FSD Knowledge Traits Map (2007) Page: 1

NHS Finance Knowledge Traits The NHS Finance Knowledge Traits have been produced by the national Finance Skills Development Strategy Board (FSDSB) to help with personal and professional development for NHS Finance Staff. The Traits are intended to underpin the CPD requirements for staff within Finance. They seek to describe the knowledge which is required at each of the four main stages of development and are a part of FSD’s ongoing work to enhance career pathways throughout the finance function. The Knowledge Traits are compatible with the Finance Competence Framework, the KSF and the LQF. These frameworks describe what people need to be able to do (i.e. their work outputs), whereas the Knowledge Traits describe the underlying knowledge required to deliver those outputs (i.e. the inputs). In particular the Knowledge Traits will: Describe the knowledge required at each of the four stages of personal and professional development. Be useful as a tool for CPD and for personal development planning as a part of the KSF process. Act as a guide for finance staff as they look at their longer-term development needs.

There are four levels of knowledge defined within the Knowledge Traits which are as follows: Foundation Level (approximately bands 1 - 4)

A working knowledge with a practical understanding of the subject matter which can be applied in straightforward circumstances in own area of finance.

Technician Level (approximately bands 5 - 6) A working knowledge with a good understanding of the subject matter, which can be applied in more complex circumstances in own area of finance.

Professional Level (approximately bands 7 - 8c)

A thorough knowledge with an in-depth understanding of the subject matter including the wider implications, which can be applied in complex and unusual circumstances.

Strategic Level (approximately bands 8d - 9) A detailed, all embracing, “expert” knowledge with a strategic understanding of the organisation, applied in highly complex circumstances.

The Knowledge Trait levels are cumulative so that knowledge required at the Strategic Level assumes knowledge at previous levels is in place.


The knowledge traits are organised into the following categories:

Knowledge Trait Category

Finance areas covered Links to the Finance Competencies

Links to the KSF

Technical Accounting

Financial reporting Financial management Procurement Treasury management Capital Taxation Payroll Budgeting IT – Financial Systems IT – Using IT

Financial Accounting Capital Payroll Management Accounting Financial Systems Using IT

G3 Procurement and Commissioning IK1 Information Processing IK2 Information Collection and Analysis G3 Procurement and Commissioning G4 Financial Management

Commissioning

Commissioning Commissioning IK1 Information Processing IK2 Information Collection and Analysis G3 Procurement and Commissioning

Strategic/Financial Planning

Strategic health planning LDPs

Management Accounting Financial Performance

Management Commissioning

IK1 Information Processing IK2 Information Collection and Analysis G2 Development and Innovation G4 Financial Management G7 Capacity and Capability

Governance (for finance and not for internal audit staff who will require more detailed knowledge)

General knowledge about governance Role of the board Performance management Risk management Audit

Financial Performance Management

Internal Audit All other Finance

Competencies at senior levels

C4 Service Improvement C5 Quality IK1 Information Processing IK2 Information Collection and Analysis G2 Development and Innovation G4 Financial Management G7 Capacity and Capability

Commercialisation

Commercial business development Mergers and acquisitions

All Finance Competencies at senior levels

C4 Service Improvement C5 Quality IK2 Information Collection and Analysis G2 Development and Innovation G8 Public Relations and Marketing

Personal Effectiveness & Leadership

Political influencing Leadership and management Project management Statistics Personal development

Finance Competencies do not cover personal and leadership except in a very general sense.

C1 Communication C2 Personal and People Development C3 Health, Safety and Security C6 Equality and Diversity G5 Services and Project Management G6 People Management


Technical Accounting

Foundation Level Technician Level

Professional Level Strategic Level

Financial reporting 1. Knowledge of standing financial instructions, standing orders and schemes of delegation.

2. Knowledge of correct ledger and month end procedures to ensure accurate financial reporting and standards required for annual accounts.

3. Knowledge of local finance and IT systems and processes so able to record and retrieve information accurately and answer straightforward requests.

1. Knowledge of NHS Manuals For Accounts, HM Treasury Financial Reporting Manual (FreM) and NHS Foundation Trust Financial Reporting Manual (for FTs).

2. Understanding of preparing a bank reconciliation document.

3. Understanding of how to extract a trial balance from ledgers and correct errors.

4. Knowledge of preparing control accounts for ledgers.

5. Knowledge of writing financial procedures to improve accuracy, efficiency, transparency and accountability.

1. Knowledge of information required by external bodies e.g. Monitor, UK GAAP, Accounting Standards Board, Dept of Health, Local Authority Committees.

2. Knowledge of production and sign off of annual accounts, financial statements and annual report.

3. Knowledge of the production of: year end close down process and procedures, trial balance, reconciling control accounts, clearing suspense accounts, producing income and expenditure journals, cash flow forecasts, statements and balance sheets, agreements of balances between organisations.

1. Knowledge of what constitutes a True and Fair View for approval of the Annual Accounts.

2. Knowledge of finance systems and processes which enable a True and Fair View to be produced.

Financial management

1. Knowledge of basic accounting concepts and principles as applied to double entry bookkeeping.

2. Knowledge of the nature of journals, audit trails, working papers and adjusting entries.

3. Understanding of working routines and documentation for month end.

1. Knowledge of the processes for approving and authorising expenditure.

2. Knowledge of variance analysis.

3. Knowledge of the production of the financial management timetable.

4. Knowledge of the design of coding structures.

5. Knowledge of NHS funding including allocations and income flow.

1. Understanding of appraisal of early payment discount schemes.

2. Understanding of reserves and their allocation where appropriate.

3. Knowledge of restrictions of transferring money from revenue to capital and vice versa.

4. Knowledge of the process by which donations are received, including the impact of gift aid and the regulations associated with it.

1. Knowledge of benefits of shared services/contracting out transaction processing.




4. Knowledge of the general principles, systems and processes underlying the accurate treatment of transactions.

5. Knowledge of sources of income and how to record and monitor income.

6. Understanding of aged-debtor reports and follow-up actions required.

7. Knowledge of cash collection and reconciliation processes.

8. Knowledge of the guidance and legislation relating to charitable funds (including VAT).

9. Knowledge of coding structures.

6. Knowledge of how allocations are approved and controls that exist over allocations in respect of revenue and capital resources and cash limits.

7. Knowledge of the different types of income.

8. Knowledge of the Better Payment Practice Code.

5. Knowledge of the policies around investment and charges in respect of charitable funds.

6. Knowledge of benchmarking techniques and key performance indicators to improve performance in this area.

7. Knowledge of developing world-class financial policy, systems and processes.

8. Understanding of financial statements to establish key factors underpinning financial performance.




Procurement (may not be relevant to all finance depts)

1. Knowledge of NHS Standard Terms and Conditions and NHS Guidance/Contract for Acute Hospital Services.

2. Knowledge of policies and processes to ensure appropriate purchasing from request through to payment.

3. Understanding of the need for legal contracts in the use of suppliers.

1. Knowledge of internal controls and checks and other requirements for the procurement of services including European Union requirements and thresholds for open tenders.

2. Knowledge of how to evaluate tender responses for value for money, affordability, financial risk and quality.

3. Understanding of the importance of gaining critical mass in procurement and supply chain activities.

4. Knowledge of the advantages and disadvantages of leasing rather than purchasing.

5. Knowledge of finance and operating leases and of sale and lease back agreements.

6. Understanding of the nature of PFI and PPP in raising finance.

7. Understanding of the competitive tendering process including the preparation of specifications and the evaluation of tenders.

8. Knowledge of the formulation of contracts.

1. Understanding of development of procurement strategy driven by value for money.

2. Knowledge of world-class procurement policy and systems development and development of contract monitoring systems.


Treasury Management

1. Knowledge of the role of the Treasury Function.

2. Knowledge of the ethical and regulatory framework surrounding treasury management and of the professional body Codes of Practice.

3. Knowledge of application of Treasury systems and processes.

4. Knowledge of the importance of working capital.

1. Knowledge of treasury policy, performance management, control framework, systems, outsourcing, bank services and relationships, and credit ratings.

2. Knowledge of cash forecasting and management techniques, managing cash flow, working capital, managing liquidity and payment systems.

3. Knowledge of risks associated with the treasury function including interest rate and foreign exchange rate management.

4. Understanding of Public Dividend Capital (PDC), External Financial Limit (EFL) or Financial Plan (FTs), Capital resource Limit (CRL) and the relationship between them.

1. Knowledge of how to develop a treasury management strategy and system which manages working balances effectively and maximises investment return.

2. Understanding of short and long term investment strategies, including money markets, capital markets, equities and related investments, gilt-edged and related securities.

3. Knowledge and understanding of dealing with financial institutions.


Capital

1. Basic knowledge of the NHS capital regime.

2. Understanding of the difference between capital and revenue.

3. Knowledge of requirements of the Capital Accounting Manual (PCTs, Trusts, SHAs).

4. Knowledge of the correct procedures for recording procurement of assets and for accounting for the disposal of assets.

1. Understanding of the principles of capital charges including the application of depreciation and the rate of return.

2. Knowledge of how to use a range of techniques for calculating the cost of capital including weighted average cost of capital, capital assets pricing model, risk adjusted discount rates.

3. Knowledge of how to evaluate the age and value of assets.

4. Knowledge of how to maintain the asset register accurately.

5. Knowledge of how to ensure that the balance sheet accurately reflects acquisitions and disposals, depreciation and indexation and reconciles to the asset register.

6. Knowledge of how to calculate the revenue consequences of capital schemes.

1. Understanding of the principles underpinning the allocation of capital funds and links to the business plan.

2. Understanding of prudential borrowing limits (FTs).

3. Understanding of the link between capital and revenue resources.

4. Understanding of the requirements of business cases for major capital investment and how to test and assess capital business cases.

5. Knowledge of use of Private Finance Initiatives (PFI) and Procure 21 in the NHS capital regime.

6. Understanding of pooling funds arrangements.

7. Understanding of the issues regarding the impairment of assets and the impact on income and expenditure, accelerated depreciation and losses on disposal.

8. Knowledge of how to deal with capital assets acquired from charitable donations and government grants.

9. Knowledge of how to develop a forecast capital programme.

10. Understanding of the analysis required for investment decisions/business justification (e.g. cost-benefit and risk analysis, affordability, feasibility,

1. Knowledge of developing the organisation’s Capital Plans and of how to monitor and report progress against these.

2. Knowledge of the principles of Good Public Design and Value for money when evaluating and approving capital projects.

3. Knowledge of PFI and the legal framework surrounding it and when plans are suitable for it.

4. Knowledge of how to manage the working capital balances to best effect.

5. Knowledge of how to test and evaluate strategic options and investment decisions.


option appraisal, sources of funding, business cases, benefit realisation planning, contingency planning, cash flows, funding, cost of capital etc, risk analysis).

11. Knowledge of sensitivity analysis tools, net present value, internal rate of return, DCF methods, payback and accounting rate of return, capital rationing, whole life costs, discounted cash flows, value for money.

12. Understanding of how to interpret results of investment, taking non-financial factors into consideration.

Taxation 1. Knowledge of VAT and where recoverable/where to add.

2. Knowledge of how to calculate income tax for an employee and how to identify personal allowances.

3. Knowledge of VAT coverage within the NHS, including standard rate supplies, reduced-rate supplies, zero rate supplies and exempt supplies.

4. Knowledge of the Construction Industry Scheme and the relevant returns and checks required.

1. Understanding of the principles of taxation, which underlie the system of taxation in the UK.

2. Knowledge of the difference between employee and self-employed for tax purposes.

3. Knowledge of the classes of income, which fall within each schedule of income tax.

4. Understanding of the accounting treatment of VAT in the ledgers and returns to HM Revenue and Customs (including HM Revenue and Customs Guidelines).

5. Knowledge of the VAT Control accounts and monthly VAT returns and the reconciliation of them.

1. Knowledge of tax legislation in order to advise others on when Vat should be charged/recovered.

2. Understanding of Corporation Tax and tax efficient strategies for it.

3. Understanding of special VAT rules, which apply to NHS bodies and state penalties, which may be imposed for a breach of VAT regulations.

1. Knowledge of how to conduct tax planning in order to minimise tax liability and maximise tax recovery within the law.


Payroll 1. Knowledge of the processes and functions of payroll.

2. Basic knowledge of the law in relation to payroll.

3. Knowledge of calculating and processing tax, NI, superannuation and other statutory requirements.

4. Knowledge of how to make non-statutory pay deductions e.g. charities, TU etc.

5. Knowledge of the payroll processes required for starters and leavers.

6. Knowledge of safety and security procedures for handling cash, cheques and BACS.

1. Knowledge of national and local regulations and agreements regarding remuneration.

2. Understanding of control accounts in respect of pay.

3. Knowledge of the law in relation to payroll (e.g. Data Protection, Employment Rights Act etc).

4. Knowledge of complex, non-routine calculations in respect to pay.

1. Knowledge of pension legislation and payments.

2. Knowledge of appropriate performance measures for monitoring payroll effectiveness.

3. Understanding of how payroll processes integrate with other systems and processes.

4. Knowledge of preparation of payroll and reconciliation of it on an annual basis.

5. Understanding of payroll processes to ensure they are as efficient and effective as possible.

1. Understands the legal and policy implications of changes to NHS pay and pensions and to pay and pension legislation.


Budgeting 1. Knowledge of the budgeting cycle and timetable.

2. Understanding of how budgets are prepared.

3. Knowledge of calculating and analysing budget statements and variances.

4. Understanding of the use of virement and transfers between budget headings.

5. Knowledge of coding structures.

6. Knowledge of budget systems and processes to enable straightforward activity to be completed.

1. Knowledge of forecasting financial positions.

2. Knowledge of different costing methods e.g. job costing, service costing, reference costs, contract costing, absorption costing, marginal costing, activity based costing.

3. Understanding of the National Schedule of Reference Costs.

4. Understanding of the link between Reference Costs and the National Tariff.

5. Knowledge of how to cost redundancy, re-deployment, TUPE and early retirements.

6. Knowledge of different types of budgeting e.g. zero based, rolling, activity based, PPBS budgeting and of the different types of budgeting models e.g. centralised vs. decentralised.

7. Understanding of overhead costs and allocating/apportioning them.

8. Knowledge of methods of cost allocation, apportionment and absorption.

1. Knowledge of using budgets for forecasting and control and of the nature of control systems.

2. Knowledge of the reasons for measuring costs in relation to purpose, valuation, profit, measurement, decision-making and control.

3. Understanding of the impact of non-financial factors on costing.

4. Knowledge of costing skill-mix changes, and organisational restructures.

5. Understanding of the importance of and the method for conducting patient level costing (PLC).

6. Knowledge of how to calculate reference costs and complete Reference Cost Returns.

7. Knowledge of developing world-class budgeting systems and processes to ensure accuracy, timeliness, relevance and performance improvement.

8. Understanding of Payment by results and the impact of this on the income received.

9. Understanding of Service Line Reporting and the impact of the findings.

1. Knowledge of the organisation’s financial status and performance.

2. Understanding of the budgets across the organisation in order to advise on validity, affordability and financial risk.

3. Knowledge of the importance of providing the board with clear financial forecasts and information to inform strategic decision-making (including the use of visual presentation techniques).

4. Knowledge of the behavioural impact of budgetary systems and of the importance of gaining commitment and ownership amongst non-finance budget holders – and how to do this.


IT – Financial Systems (may not be relevant to all finance depts)

1. Knowledge of the Chart of Accounts.

2. Knowledge of types of hardware and software in use in the organisation.

3. Knowledge of networks (e.g. local area, wide area, the Internet).

4. Knowledge of the links between finance systems i.e. the feeder systems to the general ledger.

5. Knowledge of the links between PCT, Trust, SHA and DH finance systems.

1. Understanding of how IT can enhance productivity, decision making, control and communications within finance.

2. Knowledge of the legal framework within which IT is used (e.g. data protection, Freedom of Information Act, Regulatory of Investigatory Powers Act, Computer Misuse Act, Copyright Design and Patents Act, Electronic Communications Act).

3. Knowledge of how to project manage the introduction of new finance systems.

4. Knowledge of developing finance software applications for others to use (e.g. spreadsheets and databases).

1. Knowledge of the strategic benefits of the use of IT and information in an organisation.

2. Knowledge of the development of an IT strategy, which supports internal control and strategic/ management reporting requirements.

3. Understanding of data security issues across the organisation.

4. Knowledge of how to evaluate requirements and develop user specifications for new IT systems.

5. Knowledge of how to set up disaster recovery processes and procedures.


IT – Using IT 1. Understanding of IT systems and software used in own area.

2. Knowledge of the use of Office for straightforward word processing, spreadsheet and database work (e.g. where using existing formats).

3. Knowledge of hardware relating to basic function, care and health and safety issues.

4. Knowledge of how to use the internet/access data and send emails.

1. Knowledge of a variety of software and suitable applications for different tasks.

2. Knowledge of Office for producing new formats e.g. designing spreadsheets, documents, databases etc.

3. Knowledge of how to obtain non-routine information from financial and management information systems.

1. Knowledge of how to integrate information from several software packages/systems.

2. Knowledge of how to programme software to produce information e.g. complex formulae and structures of linked spreadsheets, databases etc.


Commissioning

Foundation Level

Technician Level


Commissioning

1. Knowledge of the principles of Practice Based Commissioning, Payment by Results and Patient’s Choice.

2. Knowledge of the nature of commissioning budgets and reporting requirements against them.

3. Knowledge of the management, monitoring and reporting of service agreements.

4. Understanding of monthly service agreement payments and reconciliation to the register.

1. Knowledge of Dept of Health Guidance on Financial Flows and the implications of commissioning services under the financial flows regime.

2. Knowledge of the requirements for the 18 Week Pathway.

3. Knowledge of modelling the financial implications of Practice Based Commissioning, Payment by Results and Patient’s Choice.

4. Understanding of the techniques involved in unbundling the tariff and how to use this in service agreements and negotiations.

5. Knowledge of local needs assessment/monitoring of demand.

6. Knowledge of negotiation of service agreements, evaluation of bids and contract performance management including the use of benchmarking where relevant.

7. Knowledge of analysis of money spent by area/specialty and the costing of care pathways.

8. Knowledge of the difference in commissioning within and outside the NHS.

1. Knowledge of world-class commissioning techniques.

2. Understanding of how to develop strategic commissioning policy and systems which ensure that local health needs are met and that value for money is achieved.

3. Knowledge of strategic commissioning, developing and managing legally binding, performance focussed contracts.

4. Knowledge of strategic and commercial skills to support Practice Based Commissioning and Payment by Results.

5. Knowledge of how to provide a framework for managing the risks associated with Payment by Results.

6. Understanding of the key elements in making Payment by Results effective (e.g. clinical engagement, senior commitment to culture change, appropriate skills, capabilities, infrastructure, systems and processes in place).

7. Knowledge of good demand management (e.g. proactively monitoring demand to detect variances, managing demand, identifying alternatives to hospitals).

8. Understanding of the need to redesign services around local demands and priorities.

9. Understanding of how to drive increased value for patients from the same resources.


Strategic/Financial Planning



Strategic health planning

1. Knowledge of the organisation’s business planning process and business plans.

2. Understanding of the organisation’s business and resource planning processes and how they link into national and local priorities.

3. Understanding of the processes required to produce data for financial planning processes.

4. Knowledge of how activity-coding impacts on flows of money.

1. Understanding of the impact of the National Tariff Rate and Financial Flows on long-term financial planning.

2. Understanding of how value for money is achieved.

3. Understanding of how Cost Improvement Plans (CIPs) and Financial Recovery Planning requirements impact on organisational financial performance.

4. Understanding of how the three-year Health Delivery Plan processes can contribute to the strategic financial planning cycle.

5. Knowledge of the impact of Payment by Results as it affects an organisation’s financial regimes and risk management strategies.

6. Knowledge of how Risk Share Agreements can minimise destabilising effects of changes in activity volumes.

7. Knowledge and understanding of activity and waiting list modelling information.

8. Knowledge of how capacity modelling links to the LDP and to financial forecasts.

9. Understanding of the planning process of in-year development opportunities, funding sources and their implications.

10. Knowledge of resource planning in the form of health needs assessment.

1. Knowledge of the economics of health care.

2. Understanding of international comparisons of health care systems and global trends in health and health care expenditure.

3. Knowledge of UK demographics and health trends.

4. Knowledge of the wider economic and political context for NHS decision-making.

5. Knowledge of managing the primary-secondary care interface and of keeping people out of hospital.

6. Knowledge of developing financial strategy and systems, including funding strategies to ensure sustainable financial viability.

7. Understanding of strategic financial planning, which reflects long-term health care needs and demands, patient pathways of the future and changing technology and legislation.

8. Knowledge of robust long-term planning and modelling techniques, which focus on the best use of total resources (not simply year on year) and value for money.




11. Knowledge of modelling resources, option appraisal, cost benefit analysis, patient pathway costing and risk assessment.

12. Knowledge of the role of prevention in the health economy.

9. Knowledge of the DH reform agenda and how it impacts on strategic planning.

LDPs

1. Knowledge of LDP process, stakeholders, funding streams and timescales.

2. Knowledge of information and analysis required for input to the LDP.

1. Understanding of LDP negotiations and how the LDP links into local and national priorities and is linked to the budget setting process.

2. Knowledge of how the LDP translates into commissioning plans.

3. Knowledge of producing and monitoring the LDP.

4. Understanding different types of SLAs and how they link to the LDP.

5. Knowledge of the performance management of SLAs.

1. Understanding of how to create the LDP to ensure that long-term financial viability and stability is secured and that the health needs/demands of the local population are met.


Governance



General knowledge about governance

1. Knowledge of the differences between types of NHS organisation.

2. Knowledge of the structure and roles of own organisation.

3. Knowledge of the professional codes of ethics including the duty of disclosure.

1. Knowledge of the general nature and scope of corporate governance.

2. Understanding of the ethical responsibilities within the governance process.

3. Knowledge of the general principles of accountability, transparency, integrity and the public good.

4. Knowledge of the Assurance Frameworks.

5. Knowledge of Schemes of Delegation.

6. Knowledge of the structure and workings of government in the UK and in the NHS.

7. Knowledge of the environment within which public policy making takes place.

1. Knowledge of the statutory governance requirements of own organisation, of the regulatory framework, voluntary codes, auditing and statutory requirements and financial reporting requirements.

2. Understanding of the nature of corporate social responsibility and of social and environmental issues within corporate governance.

3. Knowledge of a variety of models and theories of corporate governance.

4. Knowledge of how to develop an Assurance Framework (AF) to underpin the Statements of Internal Control.

5. Knowledge of board requirements for information relating to corporate governance.

1. Knowledge of the legal implications for boards e.g. liability of directors and board members, criminal liability, civil liability etc.

2. Knowledge of the eight main principles of corporate governance: i) resources, ii) efficient, economical, effective, efficacious systems and service delivery, iii) legal compliance, iv) compliance with Standards for Better Health, v) duty of quality, vi) duty of partnership, vii) duty of patient and public involvement, viii) ongoing development of the board.

3. Knowledge of the implications for non-executive directors identified by the Higgs Review.

4. Knowledge of developing assurance processes and systems to ensure internal control, accountability, integrity, probity and transparency.

5. Knowledge of the importance of developing financial strategy to ensure long-term sustainable financial viability.

6. Understanding of the need to promote a strong financial management culture within the board and throughout the organisation.

7. Understanding of the need to plan to develop finance skills throughout the organisation (i.e. not just in finance).




Role of the board

1. Knowledge of who the board members are for own organisation, including non executive directors and committees.

1. Knowledge of the purpose, remit and responsibilities of the Board.

1. Understanding of the role of the board in leadership, promoting the values and culture of the organisation and in stakeholder management.

1. Understanding of the concept of integrated governance.

2. Knowledge of developing a board purpose, strategy and structure, which ensure integrated governance.

3. Understanding of how to appraise the overall performance of the board and of individual members’.

4. Knowledge of nomination, appointment and remuneration issues relating to the board.

5. Understanding of the importance of developing the board on an ongoing basis.

Performance management

1. Knowledge of preparing financial performance management measures and reports.

2. Understanding of the regulatory framework for performance measurement and the various bodies involved.

1. Knowledge of methods and techniques for strategic performance measurement e.g. CSFs, KPIs, benchmarking, balanced scorecard, EFQM, value for money, performance plans, public service agreements and Best Value.

2. Understanding of techniques for service line reporting and programme budgeting.

3. Knowledge of preparing complex financial performance management measures/reports.

4. Knowledge of preparing financial performance improvement plans.

5. Understanding of weaknesses in performance measurement systems and processes.

1. Understanding of the process involved in analysing the organisation’s capability and competence (culture, stakeholder, ethical, environmental, structural, capability, governance, suppliers, market place etc).

2. Knowledge of a range of strategic, world-class financial performance management systems and processes.

3. Knowledge of how to evaluate the effectiveness of performance management strategies and systems.

4. Knowledge of how to embed service line reporting and programme budgeting into routine performance information.

5. Knowledge of how to ensure the integrity of funding flows to the Board and other managers.




Risk management

1. Understanding of the nature of risk and the risk concepts of exposure/volatility, severity and probability.

2. Understanding of the benefits of risk management.

1. Knowledge of the regulatory framework for risk management and of the role of audit.

2. Understanding of how a risk management process works e.g. risk measurement and assessment, risk response and control and risk monitoring and reporting.

3. Knowledge of the nature of financial risk and the main techniques involved in managing it (portfolio analysis, scenario analysis, stress testing etc).

4. Knowledge of the nature of operational risk (people, processes, systems, events, business).

1. Understanding of the strategic risks facing the organisation.

2. Knowledge of the need to assess risk constantly and for risk management strategies to be in line with the strategy of the organisation, Standards for Better Health, National Targets and financial planning and monitoring.

3. Understanding of how to develop risk policy and systems and develop a corporate approach/culture regarding risk.

4. Knowledge of development of early warning systems to manage strategic risks (e.g. changing referral patterns, development in medical technology etc).

Audit

1. Knowledge of the nature of audit and the types of audit.

2. Knowledge of the ethical principles relating to audit.

3. Knowledge of the different roles of internal and external audit as defined by statutory and regulatory authorities.

4. Knowledge of the organisation’s Audit Manuals, Standard Operating

1. Knowledge of NHS Internal Audit Standards/Mandatory Audit Standards.

2. Knowledge of statutory and regulatory constraints on internal audit work.

3. Knowledge of ALE Framework where relevant (i.e. how well the organisation manages and uses its financial resources – financial reporting, financial management, financial standing, internal control and value for money) and what to do to raise scores in each area.

1. Knowledge of the development of audit strategy.

2. Knowledge of the process of external audit and how to gain maximum benefit.

3. Knowledge of how internal audit needs to be driven by a proper process of risk assessment – and of how to gain maximum value from the process.

4. Knowledge of writing the Statement of Internal Control, ensuring consistency with the Head of Internal Audit opinion.

5. Understanding of how to ensure that internal audit processes comply with the law, NHS standards, local quality systems and provide value for money for the organisations concerned.




Procedures (SOPs) and Quality Guidelines

5. Understanding of the documentation of audit information.

6. Knowledge of how to conduct a straightforward audit including designing tests and drawing conclusions.

4. Knowledge of the role of audit committees and how they contribute to corporate governance including knowledge of the Audit Committee Handbook.

5. Knowledge of the audit process including setting audit objectives, planning audits and testing strategies, collecting and collating evidence.

6. Knowledge of the Year-End Audit Opinion and signing off Annual Accounts.

7. Understanding of the role of IT in audit and the role auditors’ play in systems development.

8. General understanding of the stages involved in a fraud investigation and the legal issues, which arise.


Commercialisation



Commercial business development

1. Knowledge of key stakeholders to the finance department and the organisation.

1. Knowledge of business cases and the key elements within them.

2. Knowledge of business management issues to improve financial awareness, performance and cost effectiveness.

1. Knowledge of putting together a business plan or business case/justification.

2. Understanding of how to present complex financial information in a way which facilitates business focussed, strategic decision making by the board and other non-finance executives.

3. Understanding of service/business improvement techniques e.g. business process re-engineering, Total Quality Management, JIT, Lean Systems, Business excellence.

4. Knowledge of revenue generation strategies and techniques to maximise the use of assets.

5. Understanding of the use of various analysis models e.g. PEST, SWOT, Stakeholder Mapping etc.

6. Knowledge of market place and supplier analysis techniques.

7. Understanding of value for money in the use of resources to maximise quality and benefits for patients.

8. Knowledge of how stakeholder groups work and affect the organisation.

1. Understanding of the role of finance as a strategic business partner and adviser.

2. Knowledge of how to develop a clear finance strategy and how to communicate it with the rest of the organisation.

3. Knowledge of strategic business development, service expansion, cost saving/control strategies, improvement and re-design issues in order to create growth, increased quality and sustainable value.

4. Knowledge of the importance of developing a continuous improvement culture and of CI methods and techniques.

5. Understanding of issues involved in working beyond traditional boundaries e.g. independent and private sectors and health partners.

6. Knowledge of commercial business practice and how to bring this culture to budget holders.

7. Understanding of the need for speedy month end reporting and of the development of activity focussed, commercial reports to inform the board’s decision making.

8. Knowledge of the process of setting up joint ventures and of maximising their benefits.

9. Knowledge of the benefits of outsourcing as an efficiency tool.

10. Knowledge of the concept and role of marketing and public relations and of related strategies and techniques.

11. Understanding of the importance of representing the organisation in a credible and professional manner and with honesty and integrity.




Mergers and acquisitions

1. Knowledge of difference between mergers and acquisitions, the motives for them and the impact of these on financial performance.

1. Knowledge of areas of investigation when considering mergers or takeovers and the principles of evaluation.

2. Understanding of the relevance of accounting information to share valuation.

3. Knowledge of share valuation methods based on net assets, income flows and cash flows, dividends, price earnings ration and the limitations of valuation methods.

4. Knowledge of practical influences on share price. 5. Understanding of the nature and reasons for

divestments.


Personal Effectiveness and Leadership



Political influencing

1. Knowledge of the organisation’s structure and the key personnel.

1. Knowledge of the key influencers and stakeholders in and outside the organisation.

1. Knowledge of health strategy and policy at a national and local level.

2. Knowledge of the broad strategic direction of health and social care.

3. Knowledge of the relevant interest groups, networks and groupings.

4. Knowledge of the wider health and social care environments.

1. Understands the underlying, social, political and historical factors shaping local and national realities of health services.

2. Understands the “politics” – with both a small and a large “p” – of the health and social care context.

3. Knows who the key influencers are and how to go about involving them to shape and deliver change across the wider health and social care system.

Leadership and management

1. Knowledge of the finance values: professionalism, integrity, partnership, innovation, commitment, excellence and flexibility.

2. Knowledge of the different styles of management and the benefits of each.

3. Knowledge of the organisation’s strategy, policy and objectives.

4. Knowledge of stress and stress management and work-life balance issues.

5. Understanding of people management processes including recruitment, performance

1. Knowledge of the role of the FD.

2. Knowledge of management theory: organisation behaviour, psychological contract, types of management and leadership, team working and team building, behaviour and motivation.

3. Knowledge of organisation structures, culture, ethics and values.

4. Knowledge of the process of management, job design, team working, objective setting, delegation, training and development,

5. Understanding of change management as a process.

1. Knowledge of different models of strategic management (planned, emergent, cultural etc), and of levels of strategy (corporate, business, operational).

2. Knowledge of change management, OD and related issues e.g. different models of change management, barriers to change and overcoming resistance, stages in the change process, planning change, communicating and involvement of stakeholders, behaviour and motivation issues, changing organisational culture.

3. Knowledge of what a Learning Organisation is and of how to promote this culture and practice within own finance team and within the board.




management, capability, discipline and grievance.

6. Knowledge of legal issues relating to the employment of people fairly and safely.

6. Knowledge of the legal requirements to ensure that people are working in a healthy, safe and secure working environment.

7. Knowledge of the need to promote equality and diversity throughout own sphere of influence.

8. Knowledge of the principles and practices of coaching.

4. Understanding of the need to identify knowledge and skill deficiencies within own team and to plan to develop and/or recruit new skills.

5. Knowledge of the strategic issues relating to the employment of people in a healthy, safe and secure environment.

6. Knowledge of the need to develop a culture of equality and diversity throughout the finance function and the organisation.

7. Knowledge of the principles and practices of mentoring.

Project management

1. Knowledge of the broad principles of project management.

2. Understanding of how to plan and manage a simple project.

1. Knowledge of more complex project management techniques e.g. Gantt Charts, critical path analysis, resource planning, scenario planning, project risk management.

2. Knowledge of the process of managing a project and of the importance of effective communication with all stakeholders.

3. Knowledge of how to produce a project plan for a complex project.

1. Knowledge of strategic project and programme management techniques.

2. Understanding of project scoping and planning linked to delivering the strategy of the organisation.


Statistics

1. Knowledge of using a wide variety of statistical techniques and concepts e.g. ratios and percentages, using formulae in spreadsheets, assessing sources and methods of data collection, mode, median, means, dispersal, standard deviation, inter-quartile range, probability and sample reliability, standard errors and confidence intervals.

1. Knowledge of using forecasting techniques and concepts e.g. time series analysis, linear regression and correlation, discounting etc.

1. Understanding of statistical data and knowledge of how to draw broad conclusions from it.

Personal development

1. Knowledge of the KSF, the Finance Competence Framework, the Personal Portfolio and of own PDP.

2. Understanding of the need for continuing professional development and of the methods and processes for this, including use of the Personal Portfolio.

3. Understanding of own strengths and weaknesses and of the vital importance of flexibility and learning agility.

4. Knowledge of the resources available to assist continuing personal and professional development, including the FSD website, FSD Leads and Coordinators, HFMA and local development programmes.

1. Understanding of the Leadership Qualities Framework as it applies to an FD and to a Chief Executive and of own progress towards fulfilling its requirements through own PDP.


Documents used as a part of the research: CIMA website/syllabus. CIPFA website/syllabus. ACCA website/syllabus. FSD - The Role of the Finance Director in a Patient-Led NHS. Audit Commission - Review of the NHS Financial Management and Accounting Regime – July 2006. GTS - Financial Specialism: Competencies. FSD (Miranda Newboult) - CPD for Qualified NHS Finance Professionals (October 2005) FSD - Finance Technical Competencies. FSD - Healthy Options. FSD - Shaping the Future…From Numbers to Knowledge (The Role of Finance Directors within the NHS) DH - Commissioning a Patient-Led NHS DH - Integrated Governance Handbook (February 2006) NHS Institute for Innovation and Improvement and Monitor joint initiative – Strategic Financial Leadership Programme. KPMG - Being the Best: The NHS Finance Function (2007) CIMA - In-year Financial Forecasting in the NHS DH - The Knowledge and Skills Framework (KSF) DH – Professionalisation of Government – Finance Knowledge Traits NHS Institute for Innovation and Improvement - The Leadership Qualities Framework (LQF)

Direct Contributors: Pam Dyson, National Head of FSD. Andrew Bond, Assistant Director of Finance, NHS East Midlands. Saroj Patel Hall, Finance Development Manager, South Central SHA. Deborah Pardoe, Finance Development Manager, NHS West Midlands. David Ellcock, FSD Manager, North West. Sotiris Kyriacou, FSD Manager, London Julie Winkley, Area Head of Finance, North West Ambulance Service NHS Trust. Sue Taylor, Divisional Accountant (Women's & Children's Services) The Pennine Acute Hospitals NHS Trust. Stuart Wayment, Public Sector Specialist, CIMA.

Finance Skills Development

Documents

Transcript of Finance Skills Development