SRA Update
Compliance officer for finance and administration: Responsibilities under OFR
SRA Update Issue 22 – December 2011
A new feature on our website lists some case studies and FAQs to clarify how your compliance officer for finance and administration (COFA) might adopt an outcomes-focused approach in performing their responsibilities.
This is just one example which you may find useful.
You are the COFA for a small, three-partner firm. You are an employee and not a manager of the firm. In accordance with reporting procedures that you have established, the cashier explains to you that they have been unable to pay the firm's invoices because the firm has exceeded its overdraft. Further investigation reveals that the overdraft facility has been extended on a number of occasions, but the bank is now refusing to extend it further.
You approach the managing partner to discuss the matter, since you are concerned that the firm is in serious financial difficulties. The managing partner tells you this is a temporary cash-flow problem and there is no necessity to report the matter to the SRA.
An outcomes-focused approach to this issue
As the COFA, you have specific reporting responsibilities. When deciding whether the matter is reportable, points to consider are as follows:
- How prolonged is this issue?
- How severe is the problem?
- Are clients' interests at risk?
- Is there a risk to client money?
- Can you still say that you are being open with the SRA if you keep this information to yourself?
- Is the firm trying to prevent you from reporting, or is this a difference of opinion that can be resolved?
For more, see Outcomes-focused regulation at a glance: Your quick guide to getting started with OFR and the new Handbook.