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ITEM AU9

AUDIT COMMITTEE - 26 JULY 2006

FINANCIAL MANAGEMENT IMPLEMENTATION PLAN 2 – QUARTERLY MONITORING REPORT

Report by Head of Finance & Procurement

1. The initial Financial Management Implementation Plan was a set of actions designed to improve financial management within Oxfordshire County Council. The Council requested Robson Rhodes to complete a follow up review eighteen months later. We have used the recommendations made by Robson Rhodes in this follow up review as a basis for the second Financial Management Implementation Plan. The revised plan identifies actions in nine priority areas and one best practice area.

1. Reliable financial information on SAP
2. Integrate finance, performance and risk
3. Remove control weaknesses
4. Policies and procedures
5. Internal audit arrangements
6. Performance management of cost centre managers and budget holders
7. Improve budget management and financial reporting
8. Financial training
9. Appropriate structures
10. Schemes of delegation (Robson Rhodes identified further improvements only required for best practice. However the advent of e-procurement has necessitated a more comprehensive revision than that envisaged by Robson Rhodes.)

2. The status summary will be updated every quarter and progress in achievement of key priority actions reported to the Strategic Finance Group and the Audit Working Group as well as this Committee.
3. The table at annex 1 (download as .doc file) summarises the current position on key actions and provides an assessment of whether they are on schedule for achieving their objectives. Some actions already have established projects and reporting channels whilst other actions are being developed as a result of the follow up review.

Overview

4. Project Link is scheduled to be completed in July 2007. Some concerns have been raised that this date may not be realistic for a number of reasons:

• The new project manager will not be in post full time until 21 August and the project officer role is still unfilled;
• The Social and Community Services Directorate has a large number of ongoing projects competing for staff time and attention. Although it has identified pressure points for staff resulting from major directorate projects there is not yet a plan to resolve the issues it has identified.

5. The project manager for the integration of non-SAP systems with SAP has drawn up a high level plan for the project but this is already slipping and has not yet been revised to reflect a realistic timetable. The plan for the completion of all integration projects is expected to take about two years. £500,000 is budgeted for non SAP systems integration during 2006/07 and further spend is anticipated for the following year. The project team attribute the delay to bottlenecks caused by reliance on key staff members in directorates who are involved in requests for information from more than one corporate project in addition to normal business activities. The delay in integration of non SAP systems is of concern because, not only does it delay availability of timely and accurate information on SAP, but also because it may impact on other council initiatives such as Shared Services and Financial Management for Budget Holders.
6. The e-procurement project is scheduled to go live in November 2006 in conjunction with the accounts payable element of the Shared Services plan. The project team have some concerns about the capacity of Directorates to provide them with information and responses on a timely basis particularly in view of demands from other projects. Delays in implementing the Procure to Pay project may adversely affect the achievement of cost savings envisaged by the business case for Shared Services.
7. The project to update policies and procedures has been delayed due to a delay in recruitment of a Policies and Procedures Manager, although the appointment has now been made. It is proposed to delay the completion of the briefings until January 2007.
8. Key achievements since the last quarterly report in April include:
   
   

1. An external provider for project management training has been selected. All directorates are due to report on their projects to the Corporate Change Manager by 31 July. Those failing to do so will have to provide explanations to the Audit Committee.
2. The Statement on Internal Control and the process for producing it have been approved.
3. Manager appraisals using the new Management competencies have been undertaken throughout the Council.
4. 122 budget holders have completed the Financial Management Competencies training from its beginning to 27 June 2006. 63% of budget holders trained have since accessed SAP. The analysis of SAP usage will be used to target support to budget holders. Further staff, for example, finance managers, have also attended the training and a Head of Service Budget Summary report has been developed.
   
   
9. The next quarter’s work will focus on:
   
   

1. Actions to address delays in the integration of non SAP systems and the Link project.
2. Progress on Integration of Financial Management and Risk
3. The extent to which Financial Management Competencies have become embedded in the population of staff trained.
   
   
10. Established projects will continue to work through the project plan and report progress via established corporate governance arrangements.

RECOMMENDATION:

11. The Committee is RECOMMENDED to note progress to date and give any feedback on the quarterly monitoring report to the Head of Finance & Procurement so that this can be incorporated in the work being undertaken on the Financial Management Implementation Plan 2.

SUE SCANE
Head of Finance & Procurement

Background papers:

Contact Officers: Georgina Paton, Corporate and Professional Standards Manager, Resources Directorate Tel. 01865 816357

July 2006

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