What is a COFA and why does every law firm need one?

Every SRA-regulated law firm needs to appoint a Compliance Officer for Finance and Administration, better known as the COFA.

The job title suggests spreadsheets, calculators and perhaps a deep emotional attachment to reconciliation reports, but there’s a lot more to it than that.

A COFA is responsible for making sure the firm handles money properly. Client money, office money, accounting systems, financial controls, you get the picture.

If funds move through the firm, the COFA needs to know about it.

The SRA takes the handling of client money very seriously. A mistake with a filing deadline might earn a warning, but mishandling client funds attracts far more attention.

So what does a COFA actually do?

A COFA oversees the firm’s compliance with the SRA Accounts Rules and the financial aspects of the SRA Standards and Regulations.

Here’s a quick overview of what the role typically involves:

• Ensure the organisation complies with financial laws and regulations.
• Develop and update internal compliance policies and procedures.
• Monitor financial and administrative activities to ensure they follow regulations.
• Conduct internal compliance checks and audits.
• Identify and assess compliance risks within financial processes.
• Provide compliance training and guidance to staff.
• Prepare and maintain compliance reports and documentation.
• Investigate and resolve compliance issues or policy violations.

You could think of the COFA as the person keeping a close eye on the firm’s “financial plumbing”.

When things run smoothly, the COFA can feel slightly invisible. When something goes wrong, everyone suddenly becomes very interested in their opinion on what went wrong.

Does the COFA have to be from the finance team?

Many firms appoint a finance team member as the COFA, but this isn’t required.

Some appoint a partner or senior manager. The main attributes the person who takes on the role needs are authority, oversight and the ability to understand the firm’s financial systems.

Someone who can ask awkward questions like:

• “Where is the ledger entry for this transfer?”
  “Who authorised that transfer?”
  “Why has nobody noticed this until now?”

Every firm needs someone comfortable asking those questions.

The SRA expects the COFA to have a clear view of how client money is handled and whether the firm’s controls are strong enough.

Thinking of becoming a COFA? Try our course!

If you have been nominated for the role, congratulations. Someone clearly trusts you with the firm’s financial compliance.

First things first though, you will need a clear understanding of what sits within your responsibility.

Our Introduction to the COFA Role course gives you a rundown of everything you need to know to help you be successful in your role.

By the end of the course, you will be able to:

• Define the role of a COFA
• Understand the key responsibilities that come with the position
• Identify the parts of the SRA Codes of Conduct and Accounts Rules that fall within the COFA’s remit
• Know the practical steps required to carry out the role properly

It’s a short course specifically designed for busy professionals responsible (or about to be responsible) for the firm’s financial compliance.

Because if you are the person responsible for safeguarding client money, it helps to know exactly what that involves.

Book a demo to explore our compliance courses today.