VFM for treasury — the auditor's lens
About this course
Apply the 2020 VFM regime's three pillars (Financial Sustainability / Governance / 3 Es) to treasury. With a strategic deal sign-off template that operationalises the lens.
What you'll learn
- The 2020 regime
- Pillar 1: Sustainability
- Pillar 2: Governance
- Pillar 3: 3 Es
- Self-test + sign-off template
Part of these pathways
Related courses
- The statutory framework
- The CIPFA Prudential Code
- The CIPFA Treasury Management Code
- The 12 TMPs in detail
- Prudential Indicators in detail
- Investments for service & commercial purposes
Common questions
What is 2020 VFM regime?
The Code of Audit Practice published 2020 (effective 2020/21 onwards) replaced the previous binary VFM conclusion with a commentary-based approach across three pillars. External auditors report substantively under each pillar, with the option of recommendations or statutory recommendations where arrangements are inadequate.
What is Auditor's annual report?
Public report from the external auditor each year covering both financial accounts opinion and the three-pillar VFM commentary. The report goes to Council and is published. Treasury matters are routinely covered.
What is Economy, Efficiency, Effectiveness?
Economy = acquiring resources at lowest cost (e.g. competitive borrowing rates). Efficiency = output per unit of input (e.g. yield per unit of risk taken). Effectiveness = outputs achieving outcomes (e.g. capital programme delivering strategic objectives). Each pillar of the 3 Es applies to treasury in different ways.
What is Financial sustainability pillar?
The first VFM pillar. Tests whether arrangements ensure the council can deliver services in the medium term (typically 5 years) given resources and pressures. For treasury: FC ratio trajectory, reserves resilience, gross-debt-vs-CFR test, commercial / service investment proportionality.
What is Governance pillar?
The second VFM pillar. Tests whether arrangements for decision-making, risk management, ethical practice and transparency are robust. For treasury: TMSS approval timing, Audit Committee scrutiny substantive, K&S substantive, TMP4 alignment with operations, adviser engagement under TMP11.
What is Key recommendation?
Most serious form of auditor recommendation under the 2020 VFM regime. Issued where arrangements are inadequate. Reported in the auditor's annual report; can become public; sometimes triggers government engagement.