Sunday, 24 June 2018

Business World far from ideal


Self-generating errors and malfunctions following the installation of a new financial system at Scottish Borders Council have resulted in staff being deployed to sort defects while there was a heightened risk of a control failure over the past year, it has been revealed.

Not Just Sheep & Rugby recently reported on the issues and challenges associated with Business World, an integrated Enterprise Resource Planning (ERP) system. It appears the transition from legacy payroll, general ledger and procurement systems to Business World has been far from smooth.

More details about the problems facing SBC staff as a result of the ERP not working properly are included in the council's so-called Annual Governance Statement which forms part of the annual accounts for 2017/18.

A governance review concluded that in 2017/18 the Council continued to demonstrate that the governance arrangements and framework within which it operates are sound and effective, and are consistent with the principles and recommendations of the ‘Framework’.

But Chief Financial Officer David Robertson highlighted one exception in his assurance statement, namely "the ongoing rectification plan to address deficiencies in the Business World ERP system"

He drew attention to "the delayed delivery of outstanding functionality, specified in Solution Design Documents, and intended to deliver significant business benefits which remain outstanding, have impacted upon the full effectiveness of the control environment and heightened risk of a control failure during the year.

"To mitigate this risk, as far as is possible, staff resources have consequently been deployed to sorting defects, performing manual reconciliation processes to address areas where system functionality has not been operating effectively for much of the year e.g. bank reconciliation, and resolving system generated errors. This has required significant manual effort, a series of workarounds, and the procurement of additional consulting time."

Other 'highlights' from the draft accounts nclude:

*Remuneration - SBC chief executive Tracey Logan received total remuneration of 134,726 pounds (previous year 131,099). The payment in 2017/18 included fees as returning officer at elections. Two other members of staff were paid between 105,000 and 109,000 pounds.

A total of 125 members of staff earned 50,000 pounds or more comprising 20 chief officers, 74 teachers and 31 other staff. The overall total was the same as in the previous financial year.

*Exit packages - Five employees took advantage of SBC's early retirement packages at a total cost of 153,699. The largest individual package amounted to 73,233. In the previous year 24 exit packages cost 477,562.

*Payments for loans + Public Private Partnership (PPP) Schools - The council made loan fund repayments of 10.578 million (10.202 million in 2016/17); So far as PPP schools are concerned the amount payable in 2018/19 is given as 8.044 million (liability and service charge) plus 2.766 million (interest) making a total of 10.810 million.

Overall SBC faces total repayments for PPP contracts of 236.25 million plus interest of 47.663 million for a grand total of 283.913 million.

*Management Statement - Conclusion - The operating environment for the Council continues to be very challenging with financial and economic influences such as increasing demands on services, reducing Scottish Government funding, low interest rates and cost pressures from pay and price inflation all affecting the Council’s finances.

The Council, despite these challenges, remains financially sound and well placed to serve the people of the Scottish Borders in the future. As already noted 2017/18 has been a year of significant change within the Council with huge challenges posed by implementation of ERP. The work of staff across the Council in implementing the new system is gratefully acknowledged. 

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