Paper BSO 26/2015

To: / BSO Board
From: / Director of Customer Care & Performance
Subject: / BSO Benchmarking Update
Status: / For Noting
Date of Meeting: / 26February 2015

Introduction

The purpose of this paper is to provide a summary of recent benchmarking results from;Counter Fraud and Probity, Pensions, Finance and Internal Audit.

The paper also provides an update on those actions identified in the February 2014 benchmarking update on Pensions, Counter Fraud, Internal Audit and HR and the August 2014 update on ITS, PaLS and Legal Services.

Process

It was previously recognised that there was a need to monitor and review performance with the aim of achieving improvements in services. A corporate approach was agreed that a number of service areas would participate in a benchmarking “club” that is conducted by the Chartered Institute of Public Finance and Accountancy (CIPFA).Results are compared with other participating organisations, which are typically Great Britain-based and predominately local government.

Whilst each area is responsible for completing its own questionnaire, benchmarking is undertaken using a corporate approach. Customer Relations and Service Improvement holds a central role in the administration and verification of questionnaires and reports. Following completion of a questionnaire, results are collated and summarised in a report to SMT and the Board in conjunction with defined follow on actions.

Update on previous results

Following on from the BSO Benchmarking Update paper in February 2014, a number of actions were identified:

Legal Services

Action / Update
Review the costs of externally sourced work through the appointment of a new Counsel’s Panel. / Costs have been reviewed with the appointment of a new Counsel’s Panel. Savings for Counsel Panel in year 14/15 to month 9 equate to £483,727. In addition, Third Party Fee Savings to Month 9 equate to
£1,112, 962 and Debt Recovery Savings to £698,542.

PaLS

Action / Update
Continue to work with HR on its workforce plan and will incorporate professional qualification into that development plan / Ongoing
Continue to monitor the achievement of savings in procurement and further consider actions will be with the next round of benchmarking. / Ongoing

ITS (April2014)

Action / Update
Development of individual incident surveys will be considered for future implementation. / Ongoing

Internal Audit

Develop a workforce strategy to address inconsistencies in staff qualifications and training / The workforce strategy is in working draft format. Internal Audit will continue to provide input. A number of staff are progressing through professional exams and the training budget has been increased to support 2 new staff through IIA exams and to attend more training events.

Latest results

In line with the benchmarking plan for 2014/15, Counter Fraud and Probity, Pensions, Finance and Internal Audit have completed questionnaires and the results have been compared against other participating organisations across the UK and compiled into reports. A summary of the results in these reports along with identified follow on actions can be found below.

The information set out below is a summary analysis of the data that has been generated. Full reports are available from Customer Care and Performance.

Counter Fraud and Probity (August 2014) results included:

Resourcing

  • Staff cost per FTE is below average at £36.22k compared to £47.72k.
  • Higher than average number of days spent on prevention work but below average number of days spent on Investigation.

Staffing

  • In terms of pay structure, the previous benchmarking exercise (Nov 2012) indicated Counter Fraud had more higher paid staff than average. This situation has now been addressed and Counter Fraud staff bandings are broadly in line with other organisations.

Sources of Investigation

  • Counter Fraud are in line with other organisations in terms of the approach adopted for the management of Fraud Hotlines.
  • Total staff cost per completed case is below average at £2.86 compared to £2.94.

Prevention

  • Counter Fraud are in line with other organisations in terms of prevention activities and processes.

Actions

  • It is anticipated that time spent on investigations is likely to increase with the launch of the new forensic data analytics service which will proactively seek to root out fraud and detect waste, loss and corruption through innovative techniques such as trend analysis, data mining and predictive analytics.

Pensions (August 2014)results included:

Value for Money

  • Total cost per member continues to be well below average at £12.82 compared with £20.75.

Industry Standard Performance Indicators

  • Top 1 per cent of pension providers for achieving industry standard performance indicators despite having low cost.

Reasons for retirement

  • Level of members retiring due to ill health has fallen from 14% in 2012/13 to 7% in 2013/14. This is more in line with the average at 5%.
  • 83% of staff retire for normal reasons compared with 25% on average. 0% of members aged 60 – 65 opted for voluntary retirement compared to the average of 40%.

Quotations provided

  • Significantly higher number of quotations were provided for normal retirements than average at 43 per thousand active members compared to the average of 22.

Appeals

  • We continue to have the highest number of appeals at 1.4 per thousand members compared to the average of 0.12.

Staff

  • Low rate of sickness absence at 1.5 days per FTE compared to average of 5.3
  • High number of staff with 1-5 years’ experience whereas the majority of staff in comparator organisations have more than 15 years’ experience.

Actions

  • Review and expand Pension Communication Strategy to account for the Pension Reforms in accordance with the Public Service Pension Act (NI) 2014 with a view to reduce appeals and generate income.

Finance

Given the recent changes to the Finance Department following the migration of a significant number of staff to Shared Services, the Finance Department has completed an Accountancy benchmarking exercise as opposed to the previous Finance benchmarking exercises which included the more transactional work. Results included:

Value for money

  • Finance total cost per £’k Gross Revenue Turnover (GRT) is marginally higher than average at £4.74 compared to £4.39. Results from all organisations ranged from £2.41 to £9.38.Staff costs represent 86% of this figure compared with the average of 78%.
  • Costs by type of service were higher than average on advice and budget and accounts but lower on other services (such as technical research and projects, systems support and treasury management).

Staff

  • Finance has a higher than average number of staff in pay bands over 40k and above at 38% compared to the average of 28%. Finance also has a higher percentage of staff in pay bands under £20k, at 21.2% compared to the average of 8.9%. Total number of staff in Finance is 15.6FTE.
  • 58% of staff are either qualified or part qualified, compared to the average of 70%.
  • Sickness absence is higher than average at 9 days compared to the average of 4.48 days per FTE.

Audit dates

  • Finance performance was significantly better than comparator organisations in the number of days between due and return dates for statement of accounts and external audit signoff. On average, over 3 years, audit return dates were 49.4 days ahead of the due date as opposed to the average of 4.8 days.

Actions

BSO Finance has recently tendered for and won two pieces of client accounting work which will allow the function to lower its operational cost base further.

Since the Benchmarking exercise was completed one member of staff has returned from long term sickness absence – this has brought about a significant improvement in the Finance department’s performance in this regard.

The Finance department has recently participated in Team Effectiveness trainingrun by the HSC Leadership Centre. A key output from this training is the production of an action plan which will be used by the Finance department to optimise the way in which it manages its human capital.

Internal Audit

Key results have been reported to the Governance and Audit committee, including:

Value for Money

  • The cost per auditor result continues to be well below average at £41,950 compared to the average of £52,851.
  • BSO IA Unit has a higher than average number of chargeable days per in-house auditor at 185 compared to 179.
  • Training days in BSO IA continue to be lower than comparator organisations at 5 days per FTE compared to the average of 8.9 days.

Audit Coverage

  • IA is broadly in line with other authorities in terms of the split of audit coverage.
  • In 2013/14, IA spent 3 days on debtors compared with 20 days on Information Governance. The nature of audits commissioned is determined by customer organisations.
  • IA had a higher than average % of bought-in days at 26% compared with 7.3% in 2013/14. The plan for bought-in days for 2014/15 is 4.0%.

Staffing

  • The majority of Internal Audit staff members are in pay band between £25-30k (32%).
  • 37% of BSO IA Unit’s staff is CCAB / MIIA qualified as compared to the comparator group average of 35%. This is an increase from 35% last year.
  • IA has a higher than average sickness days at 21.4 days per FTE compared to the average of 6.0
  • In 2013/14, BSO IA had approximately half the average staff turnover rate, despite having a turnover rate of approx. 6%.

Follow on actions

BSO IA is currently pursuing benchmark opportunities with providers of internal audit in the health sector to augment this CIPFA exercise. The IA Unit have been working with HR to develop Workforce Planning.

Recommendations

It is recommended that the Board notes:

  • the progress against actions previously identified;
  • the latest key results and actions planned.

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