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The Future of CIPFA- What We all need to Consider about Our Institute



Dear CIPFA President and CIPFA Chief Executive Elect


On the 27th of October 2023 I sent you an email containing 25 questions( detailed below) concerning the very serious issues around the Corporate Governance of our Institute and the role of our current departing Chief Executive.

I expected a response from you to my questions by the 20th of November 2023 but unfortunately no such response was received by me from CIPFA!

I subsequently referred these questions to the Charity Commission which has noted my concerns.


I am now requesting that the CIPFA President and the Chief Executive Elect answer publicly the 25 questions I have raised; to all CIPFA members; on a prescribed date before the next CIPFA AGM.


This would go a long way to helping restore confidence in the Governance of our Institute and its operations.


The concerns about CIPFA's Corporate Governance, the role of the CIPFAChief Executive and potential conflicts of interest are now too great and must be addressed!

In addition to the 25 questions detailed below can the the CIPFA President and CIPFA Chief Executive Elect also answer to all CIPFA members publicly in writing, on a prescribed date before the next CIPFA AGM, the following additional questions, A1 to A9 ;


A1. Can CIPFA give an unequivocal guarantee that the independent report on the 2019, £3.7m CIPFA write down will be finally published for all CIPFA members to see?


A2. There are rumours circulating that the "CIPFA Connect" digital strategy has been unsuccessful. Can CIPFA confirm or deny this and explain what it is going to do about it?


A3. Can the CIPFA Council ensure that the new CIPFA Chief Executive has no external non CIPFA roles which could engender a conflict of interests and detract from his role as the Chief Executive of our Institute?


A4.Can the CIPFA President ensure that any time spent on various external non CIPFA tasks by the new CIPFA Chief Executive is properly recorded and authorised by CIPFA ?


A5. Can CIPFA Council formally authorise all external involvements of the New Chief Executive ensuring that the likelihood of conflicts of interest is negated?

A6. Will the new Chief Executive institute an immediate independent external inquiry on CIPFA's Corporate Governance structure ensuring that previous lax Corporate Governance performance is never repeated with such an inquiry reporting to all CIPFA members publicly by the end of January 2025?

In previous correspondence with CIPFA I have set out the proposed terms of reference for such an independent inquiry which include;

(I) Reviewing CIPFA's governance structure, implementing clear policies addressing possible conflicts of interest, and establishing robust internal controls.

(Ii)Additionally, fostering transparency, opennes,inclusivity, accountability, and ethical conduct within CIPFA as crucial to its future success.

(Iii) Addressing financial practices and ensuring adherence to relevant regulations will be essential to rebuild trust and credibility of the Institute.

Iv) Developing a strong communication strategy to keep all CIPFA stakeholders and members fully informed about the current and future state of the Institute.


A7. Can the new CIPFA Chief Executive confirm or deny rumours that Mansell Street will be wound down and disposed of, that most future CIPFA operations will be delivered from ICAEW HQ and that redundancies of CIPFA staff will ensue?


A8. The current departing Chief Executive has recently undertaken a visit to Australia, Japan and other countries along with colleagues.

This seems highly unusual for a departing Chief Executive to undertake such a mission!

Who went on this trip, how much did it cost, what was the business case for such a trip and were all the participants on this trip bona fide representatives of CIPFA?

Were their travelling and subsistence expenses all paid for by CIPFA ( including all cost reimbursements)?

What did this trip cost CIPFA in total?


A9. Why has CIPFA embarked on a process where it will in essence have 2 Chief Executive's for a period of time and how much will that cost the Institute?

........................................................

In summary:

I am requesting that:


A. CIPFA provide public written responses to all its members, on a prescribed date before the next CIPFA AGM, to the 25 questions identified below which CIPFA has not answered and the additional questions A1 to A9 which have been identified above.


B. In the light of all the questions in A above, will CIPFA instigate an independent inquiry into its future under the terms of reference I have already detailed.

Such an inquiry to start when the new Chief Executive commences working for CIPFA and reporting its conclusions and recommendations to all CIPFA members in writing by the end of January 2025?


It is now up to the CIPFA President and Chief Executive Elect to do the right thing by the membership of the Institute.

Let's hope reason prevails here!

No one can give the excuse that they were ignorant of what appears to have been going on!


This letter will be made public and will also be sent to my CIPFA Council representative so he may act upon it.


My original 25 questions are listed below.

One striking factor is that our departing Chief Executive

appears to be running his own management consultancy whilst still being Chief Executive of CIPFA.


This, amongst other matters,seems cery wholly inappropriate and it is questionable as to whether CIPFA Council should ever have allowed this to happen.

CIPFA has stated to me that it is interested in continuous improvement.

If so, then an independent inquiry into CIPFA'S future is necessary to ensure it is the right place to meet its future challenges.

My original 25 questions are detailed below. Some of them have been overtaken by events but nevertheless they represent serious concerns which must be properly addressed.

I urge All CIPFA members to read them along with my nine additional questions.


I think that an independent inquiry into CIPFA'S future, reporting to all CIPFA members by the end of January 2025, is absolutely crucial given the questions that need answering.


Let's hope CIPFAs commitment to continuous improvement is sinncere.

My original 25 questions are detailed bekow;

.......................................................

Dear CIPFA General Secretary

PRIVATE AND CONFIDENTIAL

- FAO - Cipfa President and Council only

( sent on the 27th of October 2023 to CIPFA by Roman Haluszczak, a reply to these questions is still awaited!)

I have concluded my investigations into the non CIPFA roles of our CIPFA Chief Executive and I have identified several very worrying trends which require the immediate action of CIPFA Council , its Trustees, Ned's and the CIPFA president.

Frankly, I am embarrassed by the situation that CIPFA now finds itself in both in terms of the Chief Executive's position and the apparent lack of CIPFA governance control that has allowed this situation to occur!

I will detail these points as follows:

At the recent July 2023 CIPFA AGM, I asked a written question about our Chief Executive's involvement as Chair of a Health Trust.

I received a written response from CIPFA that some of the time he takes to involve himself in his non executive health duties is taken as unpaid leave from CIPFA. I emphasise the word "some".

It has become clear to me that there is little or no knowledge within CIPFA of whether and how much unpaid leave our current Chief Executive takes to fulfil all his additional external roles.

I then submitted an FOI request to that NHS trust ( response available on request) and I received a reply stating that although the Trust does not keep detailed records it expects an input of circa 2 to 3 days a week from the Chair of the Trust who also happens to be our CIPFA Chief Executive.

I understand that our Chief Executive is paid circa £40k -£45k per annum for this external Health Trust Chair role as per page 54 of the 2022-23 Trust accounts and that he commenced his post on the 1st of July 2022.

Most of this information is in the public domain.

(1) If this information is correct, between CIPFA and the Health Trust, the combined working time of the CIPFA Chief Executive will be in the region of 7 days a week. Is that the position?

(2) Does the CIPFA Council consider the clash of CIPFA and Health Trust roles of our Chief Executive as contributing to Chief Executive Overstretch ?

Examples of Chief Executive Overstretch include:

Decision fatigue, reduced effectiveness in strategic thinking, and potential burnout due to the overwhelming workload.

This is especially true when unpaid leave is taken to perform additional roles and the free time of a Chief Executive is compressed.

Balancing responsibilities between competing work demands becomes crucial for sustainable leadership as well as prioritising which roles need to be undertaken and by when.

This causes real time pressures and a high risk of conflicts of interest between the competing roles for a Chief Executive performing additional external roles in his own time.

A recent Economist article talks in detail about how such a position can be be very harmful to an organisation and should be avoided at all costs.

I unequivocally share this view and feel our Chief Execitive is paid by CIPFA and should be wholeheartedly devoted to advancing its cause and should not be distracted by other matters!

In addition to his NHS role I have discovered the CIPFA Chief Executive is also involved in the following private sector organisations:

According to Companies House:

a.Residential Care income PLC. He was paid £50K for the period 1/10/21 to 30/9/22

b.Lilliput Advisory Ltd - Sole Director and shareholder- A management consultancy service - The turnover for this company  totalled £34,356 from May 22 to March 23. Operational profits were £18,091 and reserves totalled £16,101.

c. BD Group - A private sector property and facilities services group - Appointed as Non Executive Chair on the 5th of October 2023- No details have yet been found concerning any remuneration he may receive for that post.

(3) According to records in the public domain is it fair to conclude that our Chief Execitive earns circa £100k per annum from his non CIPFA external roles?

(4) Can CIPFA Council confirm the veracity of my disclosures regarding the CIPFA Chief Executive's non CIPFA roles and remunerations?

(5) Why has CIPFA Council appeared to allow our Chief Executive to become the sole director of a private sector management consultancy ( Lilliput Advisory Ltd) whilst still being the CIPFA Chief Executive?

(6) Which Clients does Lilliput Advisory Ltd serve and what advice does it give those clients?

(7) Does the CIPFA Chief Executive perform all and/or some of his non CIPFA roles on unpaid leave from CIPFA?

(8) Alternatively, if the Chief Executive Officer is not taking unpaid leave to undertake all or some of his external roles can the CIPFA remunerations committee ensure his CIPFA salary be adjusted to take account of the fact that he does not devote all of his time to his primary CIPFA role?

(9) If he performs all these non CIPFA roles on unpaid leave from CIPFA does this compound the crucial issue of Chief Executive Overstretch which has been previously described above?

(10) Are there any other non CIPFA external roles that the Chief Executive is currently involved with that he has not disclosed or declared which could distract him from his primary responsibility to CIPFA and can the CIPFACouncil fully disclose and reveal all his current external roles in CIPFA Governance documents and more widely?

(11) Has the CIPFA Council formally approved all the external non CIPFA roles the Chief Executive is currently involved with and will it approve any such potential future roles, in its CIPFA Council decisions and minutes?

(12) Has the CIPFA Council examined in detail, the effects of the CIPFA Chief Executive's involvement in non CIPFA bodies , on the performance of CIPFA as an institute?

(13) Does the involvement of the CIPFA Chief Executive in his external non CIPFA roles, align in any way with CIPFA's mission, aims and objectives?

(14) Given that his private sector involvements appear to cover property, management consultancy and facilities management which CIPFA also has an interest in, what conflicts of interest are likely to occur with his primary CIPFA role and how does CIPFA mitigate those conflicts of interest?

(15) How frequently are the CIPFA Board and CIPFA Council informed about the Chief Executive's external engagements,roles and commitments?

(16) Are all the CIPFA Chief Executive's external interests fully declared with CIPFA and what measures have the CIPFA Council taken to ensure the Chief Executive recuses himself from decisions where a conflict of interest may arise due to his various external roles?

(17) How does CIPFA evaluate and record the time and energy the Chief Executive allocates to his external commitments as against the time and energy he allocates to his primary CIPFA role?

(18) Can CIPFA disclose the time he spends on his primary CIPFA role compared to his other roles and whether his time spent on Non CIPFA roles is taken as unpaid leave, discounted primaryCIPFA time or a combination of the two?

(19) How does the role of CIPFA's Chief Executive differ from that of CIPFA's Chief Operating Officer (COO) and how was the CIPFA COO appointed?

(20) Does the CIPFA Chief Executive delegate some or all of his role to the CIPFA COO so as to enable the CIPFA Chief Executive to fulfill his non CIPFA external roles?

(21) As the Chief Executive is now on a notice period, it would be wholly inappropriate for the CIPFA Chief Executive to extend his non CIPFA employment portfolio whilst being in a notice period!

Can the CIPFA Board and Council take immediate steps to prevent the current Chief Executive from negotiating and/or entering into, any new arrangements with any external bodies prior to his departure from CIPFA?

It is understood that the current CIPFA Chief Executive aims to stay until June 2024, This is far too long and will serve no useful purpose and will not be in the long term interests of CIPFA.

(22) Can CIPFA negotiate a shorter departure period for the existing Chief Executive (end of January 2024?) and install an independent and broadly supported interim Chief Executive completely unconnected to the current CIPFA structure,to oversee an orderly and sensible transition to a new structure for CIPFA?

(23) Can the CIPFA Board and Council take immediate steps to ensure that the departing Chief Executive takes no actions in administrative and/or policy terms which will hamper and/or restrict the policies and actions of any new incoming CIPFA Chief Executive?

(24) Can CIPFA ensure that the appointment of a new Chief Executive is an open and competitive process ensuring that the new Chief Executive is appointed from a strong list of excellent candidates including candidates external to CIPFA and ensure his appointment will be based purely on the merit of candidates involved in the process?

(25) Finally, Can the new Chief Executive instigate an immediate independent external review of CIPFA's corporate governance process so that such an unacceptable position with the Chief Executive does not recur and that other CIPFA corporate governance weaknesses are addressed.

All CIPFA Trustees and Non Executive Directors must be in a position to effectively challenge the decisions of the CIPFA Executive ensuring that greater transparency, openness and inclusivity are restored to our Institute?

This is a very serious matter and I would appreciate a full, frank and accurate response to each of my 25 questions in sequence.

The CIPFA Council cannot let the post of Chief Executive become a Gateway to a portfolio non executive career!

I know of no Chief Executive Officer of any major organisation who can justify undertaking at least four non executive external roles as well as his own primary responsibility.

The prime responsibility of being the CIPFA Chief Executive is to serve CIPFA not other external bodies!

All CIPFA members deserve nothing less than to know what is really happening in our Institute.

I look forward to an appropriate response by 5p.m on Monday the 20th of November 2023.

If no response is received or any response does not adequately address my concerns and the concerns of other CIPFA members, I feel it would then be time to share my full concerns with the Charity Commission who will take on these issues on my behalf.

Yours Sincerely

Roman Haluszczak


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