Business charge card procedures

Report: 15
Date: 22 March 2010
By: Director of Resources on behalf of the Commissioner

Summary

This report is to update members of a completed review of MPS Business Card, process and procedures and the current position in relation to outstanding returns.

A. Recommendation

That members:

1. note a review has been completed of corporate card procedures which incorporates the lessons learned from Department of Professional Standards (DPS) and Directorate of Audit, Risk and Assurance (DARA),
2. note the improved position in the level of timely reconciliations completed by cardholders resulting from these revised procedures,
3. note the further action agreed by Management Board on possible revisions to the scheme.

B. Supporting information

Background

1. A new corporate card to meet the travel and subsistence expenses of cardholders travelling outside the Metropolitan Police area on official business was introduced in June 2008, in the form of Barclaycard.

2. This introduced new policies and procedures that arose as a direct result of the shortcomings identified in the previous AMEX scheme:

• An initial review of all cardholders’ needs to use a charge card, followed by further annual reviews
• An annual card limit spend imposed on cardholders, with 81% of cardholders having the maximum annual limit of £5k.
• A system whereby the responsibility to ensure reconciliation has moved away from a central point of Exchequer Services. Each OCU finance and resource unit has a responsibility to pursue reconciliation, with regular review meetings held between Business Finance Managers and Exchequer Services.
• A reduction from 90 days to 30 days for a cardholder to reconcile their return,
• A second copy statement is received by the local finance unit for greater transparency of spend at a local level
• Officers seconded out of the MPS do not have cards

3. The MPS Business Card processes and procedures are kept under constant review to ensure relevance, applicability and to incorporate ongoing lessons learned.

4. Proposed revisions are reviewed by a monthly meeting of Business Group representatives then scrutinised by the Directorate of Audit, Risk and Assurance (DARA), Department of Professional Standards (DPS) and the Directorate of Legal Services (DLS) before they are approved by Director of Resources and Management Board.

Review process

5. A review of administration of the MPS Business Card has been completed. This review included recommendations made by DPS and DARA resulting from previous investigations of credit card incidents. New emerging developments highlighted by the Business Groups were also included in this review.

Process improvements

6. All expenses claims, including card expenditure returns and payroll claims, are processed through the same local finance unit to eliminate the possibility of duplication of claims.

7. The provision of hospitality procedures and guidelines have been reviewed and reissued to incorporate the need for prior authorisation by a senior officer (of superintending rank). The authorised form must now accompany the relevant Business Card expenditure return.

8. The overseas travel allowance policy has been reviewed and republished to clarify the requirement to provide a detailed account of expenditure incurred. The introduction of this revised policy has seen cash withdrawals on the card reduce to 15% in February 2010 compared with 24% when the new card scheme was introduced in June 2008.

9. Third party expenditure policy has been reviewed in light of forthcoming major events that will entail provision of support by the other forces by officers who will be assisting the MPS for short periods of time under mutual aid arrangements. It is not practical, nor desirable to issue such officers cards and processes have been developed so that MPS officers with cards can meet their colleagues’ expenditure on their cards and account for this expenditure.

10. The review also included how expenditure in respect of relationship to partnership working overseas is accounted for. The administration of this type of expenditure must satisfy both MPA financial regulations and the accounting requirements of the funding body e.g. European Union.

11. The review also clarified how Business Groups account for items of exceptional expenditure incurred due to operational necessity. The SMT of each Business Group has agreed a small number of exemptions where the business card maybe used to support a fast time policing operation:

• The protection of a vulnerable witness.
• Expenses incurred in MPD by protection and surveillance officers
• Firearms officers who are required to stay within the MPD while assigned to siege / hostage operations
• Expenditure incurred on behalf of third parties who are assisting in an operation e.g. Interpreters outside the UK

Any proposed exemption must be authorised by the Director of Resources

Any expenditure incurred on such operation is subject to the same monthly process of reconciliation and management authorisation.

12. The necessity for a credit card and the appropriate level of the cards credit limit are both reviewed twice a year now by Business Group Senior Management Teams.

13. Management action in relation to outstanding returns is now conducted according to locally agreed and documented business plans. Reminder action to the cardholder and their supervisor is undertaken by local support staff before returns fall overdue at 30 days after the statement date. Detailed monthly reports are also considered by the SMT of each Business Group who can authorise the cancellation of individual cards, the deductions from salary, and formal disciplinary action for those cardholders not complying with the agreed timetable for completing reconciliations.

14. Management Board has also agreed to review the practicality of putting in place systems to:

• deduct unreconciled balances from the final salaries of officers/staff leaving the Service
• make transfers/promotions subject to the reconciliation of outstanding accounts

15. The Director of Resources receives a report on a monthly basis analysing the level of overdue returns. Any areas of concern are considered at Management Board.

Table 1 - Aged Outstanding Returns by value as at 19 February 2010

Table 2 - Aged Outstanding Returns by number of accounts as at 19 February 2010

16. All those returns 60 or more days overdue are being dealt with by their respective Business Groups under their business plans. Where necessary disciplinary action, and deduction from salary are being implemented. Those cards currently under investigation are illustrative of how the follow through process has lead to further disciplinary enquiries, cards being blocked and removed from cardholders while some matters were resolved. Occasionally Business Groups have permitted deadlines to be extended to allow those overseas for extended periods of time to account for the expenditure prior to initiating further action.

17. Expenditure through the card for the first three quarters of the 20091/10 financial year was £3.54 million.

C. Race and equality impact

The equality and diversity implications of this investigation continue to be monitored by the Director of Resources and the Directorate of Professional Standards. There are not considered to be any adverse implications.

D. Financial implications

1. All costs for this review and investigation are currently being met from existing budgets.

2. It is standard policy to recover any money owed to the Authority for any reason. Action will be taken to ensure that all funds are recouped where appropriate subject to legal advice.

E. Legal implications

1. In line with statutory requirements liaison is taking place with the CPS and IPCC with regard to criminal and discipline matters.

2. In line with relevant statutory requirements, action will be taken against officers/staff as appropriate through the MPS directorate of legal services to recoup any funds due to the Authority.

F. Background papers

None

G. Contact details

Report author: Paul Daly, Director of Exchequer Services, MPS

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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