Treasury Management Practices (TMPs) are the cornerstone for effective treasury and investment management. It is a practical working document, the ‘principles’ and accompanying ‘schedules’ outlining how your Authority seeks to achieve your treasury policies and objectives, how treasury activities are undertaken and how risk is identified and controlled. The document also includes the responsibilities of officers entrusted with treasury decision making and activity.
Yet, time and resource being precious, this document tends to get sidelined in the regular cycle of review updates. Unlike the requirement to put forward treasury and capital strategies for member approval each year, it isn't necessary to do likewise with the TMPs (whether or not the TMPs are received by your members is a matter for local decision). And so that good intention you no doubt have to review this document at a quieter time in your crowded work calendar remains just that, and the opportunity doesn’t quite materialise.
There were some changes in the 2021 edition of CIPFA’s Treasury Management Code of Practice. The schedules to your Authority’s TMPs should reflect these changes as well as those arising from any change in your Authority’s particular circumstance.
As we’ve stated before, treasury management is not static; descriptions within the TMPs and day to day activity sometimes diverge, initially imperceptibly, so it is worth checking if the two are still synchronised. This in-house working document is also a reference point for new members of your treasury team and for those who might undertake this activity infrequently.
Often a quick look at your TMP 5 (Organisation, Clarity and Segregation of Responsibilities and Dealing Arrangements), which relates to the execution of treasury management activity, could tell you if your document needs a refresh. Does this section adequately represent any recent re-allocation of resources and officer responsibilities within your organisation?
Does the decision-making process in TMP 3 require updating or enhancing? Have the implications of the strategic decisions in your recent treasury strategy document, for example borrowing/investment instruments and sources, also been captured within TMP 4? Have the reporting arrangements in TMP 6 been updated? Monitoring of the treasury management indicators is to now be reported quarterly along with other prudential indicators as part of general revenue and capital monitoring.
We understand our clients’ time and resource constraints; they can access our TMP templates for adaption to their individual circumstance and we are happy to run a sense-check over draft documents.
Please get in touch at info@arlingclose.com if you’d like to hear more about our services on compliance with regulatory codes and adopting best treasury practice.
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