MPS corporate Barclaycard

15/09
17 July 2009
MPA briefing paper 15/2009

Author: Peter Tickner, Director of Internal Audit, MPA

This briefing paper has been prepared to inform members and staff. It is not a committee report and no decisions are required.

Introduction

At the Corporate Governance Committee on 15 June 2009 Caroline Pidgeon asked for further information on the expenditure outstanding on the MPS corporate Barclaycard. Specifically:

1. Out of the £54,420 outstanding on the Barclaycards, how much is due to operational reasons and how much is not, and what action is being taken on the 'not' money?

2. How much has been deducted from salaries?

Response

The MPS Director of Resources has supplied the following information in response to the points raised by Caroline Pidgeon. The term ‘unreconciled’ is used by the MPS to describe Barclaycard accounts where the officer has failed to account for the expenditure.

Barclaycard - Unreconciled accounts at 15 May 2009

A review of the 7,831 Barclaycard account returns processed to June 2009 shows that the average time taken to process returns to completion is 40 days. Against this average, 81% of the returns are completed within 60 days of the statement date, i.e. before the end of the 30 day overdue period.

The reasons for the delay in processing reconciliations to completion include:

• officers outside MPD and unable to submit claims in a timely manner
•  the time taken to approve and process claims, e.g. time in transit, return of forms to cardholders to remedy errors, omissions and/or provide fuller explanations to supervisors

Under the current scheme the risk of fraud has been reduced by applying an annual spend limit on each cardholder. Of the 2,181 active cards, 79% (1,723) cardholders are on the lowest annual spend limit of £5,000.

Each business group has documented follow-up processes to ensure that effective supervision is implemented with details of current spend being passed to supervisors who receive a second copy of the statement. The local action plans incorporate a process of escalation of outstanding returns through the cardholder’s line management to the relevant Management Board member.

A regular monthly meeting of business group representatives monitor these processes and procedures and address the long-standing overdue cases and any ‘off policy’ expenditure.

The information provided to the Corporate Governance Committee in June represented the position recorded on our systems as at 15 May 2009. The position on these accounts can be summarised as follows:

Period Overdue		Position at 15 May 2009	Position updated at 17 June 2009
1 - 30 days	No. of statements unreconciled	85	26
	Value of statements	£26,998	£6,248
31 - 60 days	No. of statements unreconciled	19	6
	Value of statements	£23,107	£10,418
61 - 90 days	No. of statements unreconciled	4	1
	Value of statements	£360	£7
91 days+	No. of statements unreconciled	10	7
	Value of statements	£4,467	£3,373
Total	No. of statements unreconciled	118	40
	Value of statements	£54,932	£20,046

 Management action continues with the 40 statements (£20,046) not cleared by mid-June and the current position on these statements can be summarised as follows:

£	£
4,460	Three statements (three officers) - officers on operations outside Metropolitan Police District
7,251	Two statements (one officer) - referred to Directorate of Professional Standards for investigation
1,214	Three statements (two officers) - card on hold/suspended, local investigation in progress
-2,090	Three statements (three officers) - fraudulent use of card number by third parties, reimbursement by Barclaycard
4,660	20 Statements (19 officers) - queries settled and claims submitted to Directorate of Resources for processing
4,551	Nine statements (eight officers) - queries still being pursued with officers
20,046

It is not possible without a significant manual exercise to identify the reimbursement of costs to the Service by way of cheque or deduction of salary in respect of the unreconciled accounts, as at 15 May 2009, identified in the Corporate Governance Committee report. However, for the three months, April to June 2009, £46,748.48 has been reimbursed for unspent foreign currency/cash advances and some exceptional or unauthorised expenditure. Of this sum, £23,972 was by deduction from salary and £22,776 was by cheque/cash. As far as I am aware no deduction from salary has been made purely in respect of late submission and/or unreconciled accounts.

To date, the new processes have identified one case of misuse which has resulted in the dismissal of a member of staff who was subsequently arrested and is currently on police bail. The level of misuse was £5,697 which has been repaid to the Service by the individual. In addition, Barclaycard have paid the Service £15,000 compensation because payment above the £5k limit was allowed in error. Barclaycard have since reviewed and amended their systems to prevent a recurrence of such a control failure.

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