Customer and Support Services Scrutiny Committee

23rd June, 2008

Finance Division

Performance Report 2007/08

Content

• About the Division• Key Performance Benchmarking Data• Achievements• External Recognition• Opportunities and Threats

About the Finance Division (1)

Nos of Gross Staff Budget

(FTEs) (£000s)Management 5 424Accountancy 107 3,894Audit & Risk Management 43 1,949Creditors 9 341

Debtors 11 353E-Trading 6 273Payroll 28 851SAP 13 1,370Total 222 9,455

About the Finance Division (2)Some Key Statistics

Accountancy £670m revenue & £115m capital exp managed

Internal Audit 258 audits, 16 external computer audit clients

Creditors 129,000 invoices paid, value £510m

Debtors 44,000 invoices raised, value £125m

E-Trading 31,000 orders processed, value £97m

Payroll 135,000 payslips processed, total pay £207m

Key Performance Benchmarking Data (1)- BVPIs/LPIs

BVPIs

8 – invoices paid within 30 days

target 98%actual 99.2%

LPIs

25 – sundry debt outstanding over 60 days

target - 10% on previous year

actual – headline + 4.3% - without land charges - 11.3%

Key Performance Benchmarking Data (2)- Accountancy

• CIPFA Benchmarking 2007 (2006/07 performance)

- Cost per £000 gross revenue exp £4.56 = 17% below average

- Qualified staff = 17% vs 30% average

- CCAB trainees = 2% vs 9% average

- AAT trainees = 13% vs 6% average

- CPA use of resources score = 3 vs 2.9 average

Key Performance Benchmarking Data (2)- Accountancy

Analysis of days to complete final accounts

0

50

100

150

200

250

2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07

Financial Year

Num

ber

of d

ays

Key Performance Benchmarking Data (3)- Creditors

• CIPFA Benchmarking 2007 (2006/07 performance) - Cost per invoice £1.69 = 21% below average

- Invoices paid on time = 99% vs 91% average

- Best practice score 94% vs 85% average

• BVPI 8 Benchmarking 2006/07- Best performing metropolitan district- 8th best performing in the country

• GM Benchmarking 2007/08- Best performing authority

Key Performance Benchmarking Data (3)- Creditors

Salford City Council Prompt Payment performance 2002/3 - 2007/8

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

2002/3 2003/4 2004/5 2005/6 2006/7 2007/8

Key Performance Benchmarking Data (4)- Debtors

• CIPFA Benchmarking 2008 (2007/08 performance) - Cost per invoice £5.67 = 28% below average- % debts paid = 99.7% vs 91% average- Average debtor days = 46 days vs 70 days average- Write-offs = 0.1% vs 0.4% average- Best practice score 90% vs 74% average

• GM Benchmarking 2007/08

- Best performing authority

Key Performance Benchmarking Data (4)- Debtors

-

1

2

3

4

5

6

£m

2002 2003 2004 2005 2006 2007 2008

Debt outstanding over 60 days

Key Performance Benchmarking Data (5)- Audit and Risk Management

• CIPFA Benchmarking 2007 (2006/07 performance)- cost per £m gross turnover £695 = 41% below average

- annual chargeable days per auditor 164 days = 6% below avge

- audit days per £m gross turnover = 3.54 vs 4.32 average

Key Performance Benchmarking Data (6)- Payroll

• CIPFA Benchmarking 2007 (2006/07 performance) - net cost per payslip - £4.43 vs £4.04 average

- cost per employee - £49.70 vs £54.52 average

- pre-input verification = 15% vs 7% average

- days from cut-off to pay day = 6 days vs 9 days average

- payment errors = 0.08% vs 0.21% average

- staff turnover = 10% vs 5.7% average

- staff sickness = 14.5 days vs 8.8% average

- best practice score = 94% vs 84% average

Achievements (1)- Service Improvements

• Cross-Divisional- Achieved IIP accreditation

- Reduced sickness absence from 4.3% to 2.8% (target 3%)

- delivered efficiency savings of £616k

• Accountancy

- Completion of 2006/07 accounts by 30th June

- Lowest negotiated tax settlement on equal pay claims in GM

- “Finance for Members” intranet site launched

Achievements (2)- Service Improvements

• Audit & Risk Management

- Property insurance premium savings of £350k

- LPSA2 target for energy reduction achieved - £100k reward grant

- £250k income from audits for other authorities

• Creditors- reduced paper based invoices by 20% in 12 months and 40% over 2 years

• Debtors- new processes for allotment rents, landlord licensing and direct debit payments by schools

Achievements (3)- Service Improvements

• E-Trading- 635 purchase cards in use, 260 implemented during 2007/08

• Payroll- implemented new pension scheme changes

• SAP- new financial systems for Salix, HCP, URC

- implemented major software upgrade

- implemented new modules – manager self-service, e-recruitment, better reporting facilities, information exchange, HR facilities (JE, multiple employment, work scheduling)

Achievements (4)- Getting the Fundamentals Right

• Accountancy- financial advice

- high profile, eg BSF, mediacity, housing stock options, waste PFI, LIFT, equal pay

- routine, eg outstationed day-to-day advice, 500+ school visits

- final accounts – timely & accurate closure

- budget monitoring & preparation – regular reporting

- bank/cash reconciliations – monthly, 100% within 3 weeks

- VAT claims – monthly, 100% within 2 weeks

- grant claims/statistical returns – within due dates

Achievements (5)- Getting the Fundamentals Right

• Audit & Risk Management- delivering the audit plan – Salford, GMPA, NPHL, Salix

- risk management

- energy efficiencies

- processing insurance claims and renewing policies

• Creditors- processing payments promptly & accurately

- prompt online access to scanned invoices for directorates ref

- maximising electronic payment methods (80%)

Achievements (6)- Getting the Fundamentals Right

• Debtors- issuing 100% of invoices within 2 days of request

- pursuing late payers

• E-Trading- processing orders promptly

- facilitating greater automation of financial processes

• Payroll- accurate pay to 12,000 staff every month

- prompt/accurate accounting for deductions/statutory returns/docs

- telephone help desk to troubleshoot employee problems/queries

• SAP- system support, maintenance and availability

External Recognition• District Audit

- CPA use of resources – strengthened 3 star rating- triennial review of Internal Audit – meets CIPFA standards ; effective contribution to control environment ; can rely on their managed audit work; no recommendations needed- annual audit memo – financial statements comply with good practice and good understanding of technical accounting issues

• HM Revenues & Customs- VAT low risk rating – no requirement for inspection 2008

• External awards – Inst of Credit Mgt – best debt performance improvement award- Credit Today – best payment culture

Opportunities and Threats

Opportunities• Further efficiencies utilising

SAP• Widen external client base• AGMA shared/collaborative

services agenda

Threats• Housing stock transfer• Loss of external clients• Retention of specialist staff,

eg SAP, computer auditors

Any Questions ?