Review of financial management in the MPS

Report: 9
Date: 20 July 2006
By: Commissioner

Summary

This report provides an update of progress on the implementation of the Review of Financial Management undertaken by a joint team of MPS staff and Capgemini management consultants.

A. Recommendations

That Members note the progress being made in the implementation of the recommendations arising from the review of the wider finance function within the MPS.

B. Supporting information

Background

1. A report was submitted to the last meeting of the Finance Committee to brief members on a review of the finance function in the MPS undertaken by MPS staff supported by Capgemini.

2. Overall the findings of the review were very positive, with the finance function of the MPS comparing favourably with best practice. The review identified some key strengths in the way financial management is delivered that included:

• A highly professional finance centre
• The centralisation of transactional processes in the Exchequer Services part of the department
• Effective reporting to MPS Management Board and the MPA
• Local financial management support, which is highly valued by budget holders.

3. However, the review also identified some areas where improvements could be made, including:

• Process and system improvements to ensure these are operating optimally
• The need to further professionalise the provision of financial advice and support across the MPS by utilising dedicated finance staff rather than staff who have a dual responsibility for managing finance and other resources
• The opportunity to group and rationalise how financial support is provided locally to ensure that support is provided in the most cost effective way
• The opportunity to align finance activity to ensure it is undertaken in the most appropriate place, in particular the need to continue the move to centralising finance transactional activity.

4. The major benefits involve structural changes that will impact on the organisation of the finance function at local and central level these changes require further detailed analysis and will inevitably need to be implemented over the longer term. This strand will also impact on the organisation of the resources management functions at local level and further work is being commissioned to review this area of activity.

Current activity

5. Consideration is initially being given to the topic areas identified by the review as Quick Wins and Process and Systems improvements. Most of these areas were already reflected in the Finance Services Business Plan and will not require additional resources to take these forward.

6. It is clearly important to ensure that activity arising from both the Business Plan and the Review is focussed in the same way and further consultation is now being undertaken within the Finance Service involving staff concerned with the relevant topic areas, so that clear objectives are established before action is taken. This work will be progressed over the next few weeks.

7. Where there are gaps in the current Business Plan in respect of areas identified in the review, consideration will need to be given to how these are progressed. It is envisaged, however, that this work will be contained within existing Finance Services resources.

8. Specific areas being progressed include the following:

Accounts payable

9. One of the more major areas is that of the Accounts Payable processes where there is a system development under way to streamline our invoice payment processing by implementing central document scanning. This will avoid the need for documents to be physically passed between offices within the MPS to complete the payment certification processes. This development will address a number of the points raised in relation to the Accounts Payable process, particularly the timeliness of payments to suppliers.

Budget forecasting and reporting

10. Work has commenced to identify any further opportunities to improve the quality and timeliness of the budget forecasting and reporting processes. This will review the way forecasts produced at local level support the needs of local management as well as the corporate overview reported to the MPA.

Chart of accounts

11. The review identified the need to rationalise the Chart of Accounts. In particular, work will be undertaken to consider how the General Ledger codes can be streamlined to reduce the number in use and the complexity of the accounting structure.

Fixed assets

10. A working group has been set up to review operation of Fixed Asset accounting including the links with various inventory arrangements currently operating within the MPS. This will also examine the interfaces with other systems for Property and Vehicles management.

C. Race and equality impact

There are no equality or diversity issues arising from this report.

D. Financial implications

There are no direct financial implications at this stage.

E. Background papers

None

F. Contact details

Report author: Sharon Burd, Director of Finance Services, MPS

For more information contact:

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

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