1. IBC Update Governor Update 4 December 2014

2. Invoicing: 20 Octdedicated team of 12 FTE commenced to clear backlog 21 Octpayment released for all invoice received (17,698) up to the 20 Oct (if invoices not received by the IBC then not paid) 22 Octletter issued to each supplier where payment made outlining the reason for payment and including a list of the invoices that payment made against 22 Oct >contact made with admin officer to gain approval that payment made: was correct and if so posted to school budget line (held on HCC budget line until confirmed as correct) if incorrect to resolve with supplier 28 Novall invoices paid 84.2% cleared to budget line out of original 17,698 15.8% held on HCC contract account until approval gained 1,377 (7.7%) awaiting goods receipting and being chased Summary of actions

3. IBC business as usual team focusses on all new invoices from 21 st Oct (and any invoices not previously received from before 21 st Oct sent in as a result of current piece of work) Summary of current aged analysis of invoices that are unpaid to suppliers Therefore we currently have 4,456 invoices that are overdue for payment 1,445 are the complex cases from the original advance payment work 3,011 linked to: invoices in dispute invoices that have been sent in by suppliers following the advance payment work that are already overdue and now being worked through a number of specific suppliers where invoices are very complex (i.e. Grundon, SITA) The IBC receives between 1,200 and 1,500 per day (c. 250,000 to 300,000 per annum) and so the current unpaid invoices represents the equivalent of 3.5 days of invoices

4. IBC continues to receive in invoices that are overdue that have not previously been received or correctly received which are due to: PO’s not being on invoices and so under the No PO No Pay Policy they will have been returned Invoices that are pre IBC (e.g. one supplier of supply teachers recently sent in over 60 invoices that all relate to pre IBC and would have been paid by the school directly. These now come into the IBC for payment are already overdue) Invoices sent to the wrong location (i.e. line managers / admin officers) and not forwarded on Continued customer engagement, including: Hart and Rushmoor District Head Teachers Conference Special Head Teacher Conference IBC Admin Officer Network Group

5. Communications 3 x fortnightly communications issues and well received by Admin Officers Developing an enhancement plan following feedback with a focus on buying and invoicing: enhancement plan developed approach presented to IBC Admin Officer Network Group: seen as very positive and would significantly resolve the current issues on buying & invoicing gained agreement that PO required prior to placing order overall feedback that although current situation has been very challenging that it has also re-set many AO governance frameworks that have ‘loosened’ over time

6. ChangeProcess solution Quick shop for Schools Easy to use purchase order entry screen with minimum fields and defaults for Schools order creation. This will replace the Can’t find method for items that can’t be found in a catalogue Goods receipting not required for Schools No goods receipting (2-way match) Invoices matched to purchase orders which will be value based only MIRO portal entry for Schools invoices Invoices will be sent directly to Schools by suppliers for local entry POs are still mandatory Schools PO forms to contain the billing address of the School instead of the IBC Invoices without order numbers will be returned If the IBC receive Schools invoices they will scan them and workflow them for local entry at the School Summary of proposed enhancements for School Customers – Option 1

7. Summary of proposed enhancements for School Customers – Option 2 ChangeProcess solution Invoicing plans Regular recurring and fixed payments with contracted Suppliers (e.g. bins) Achieve form to be submitted to IBC team to create an invoicing plan PO Service orders Purchase of services (i.e. supply teachers) No goods receipts Invoices matched to purchase orders which will be value based only Complex orders / invoicing controlled locally Current process for all invoicing with the ability for complex orders to be routed to the business for payment (via MIRO entry form) Largely similar model to current approach with the enhancement as follows:

8. IBC 4 –Layer Operating Model Schools currently operating here Schools will operate here

9. Value for money assessment regarding purchasing decisions – Not New PO must be raised prior to placing order – Not New Invoices that are sent centrally to IBC will be scanned and sent via Universal Work List to approver Invoices sent centrally with no PO will be returned to the supplier without payment (under the no PO no payment policy) Missing invoices will be the responsibility of the individual school to chase If suppliers put a school ‘on block’ then IBC will be unable to support as unaware of invoices outstanding and where they sit (unless non payment sat with HCC / HC / HFRS) Business change required in enhanced model

10. Financial Controls Scheme of Financial Controls – Financial regulations, Standing Orders, Best Practice Guide for Procurement, School’s Finance Manual Schools Financial Value Standard the role of Governors (self assessment) and the role of the Section 151 Officer (assurance) Value for money assurance on Procurement Financial control frameworks: it has been identified that some Admin Officer do not have segregation of duties for key financial tasks: Purchasing – AO accesses the AO IT access (to purchase) and HT IT access (to approve) P-Card – buyer, approver, posting to budget line Discussion / decision on the role of Governors and the Section 151 Officer

11. Next Steps Dec Communicate proposed enhancements to all Governors / Head Teachers / Admin Officers and associated timescales Dec >Maintain focus and current resource levels to clear remaining backlog of invoices and maintain stability moving forward JanEngage with school customers around preferred model for implementation in April March Testing (system and customer) of enhancements Training to support enhancements and financial reporting (dates endorsed by IBC AO Network Meeting) – dependent on system availability April Proposed enhancements delivered for start of new financial year

12. Supplementary information Summary of enhancements for schools

13. Enhanced purchasing and invoicing model 1

15. Appendix 2 – Enhanced purchasing and invoicing model 2

17. Business change – a real example 1. AO creates order on system 2. Order sent electronically (incl PO) to supplier 3. Goods delivered and AO goods receipted on system 4. Invoice sent centrally to IBC by supplier and scanned into system 5a. If PO, GR and Invoice match then invoice automatically paid by the system 5b. If mis-match between PO, GR and invoice then blocked on price or quantity and routed to appropriate person for approval 1. Order created off system by AO (telephone or email) 2. No PO raised or provided to supplier 3. Goods delivered 4. Invoice sent by supplier locally to AO 5. AO creates PO on system 7. PO written on invoice or PO provided to supplier and request to return invoice with PO back to AO 6. AO goods receipt on system 8. Invoice sent by AO to IBC and scanned into system 9a. If PO, GR and Invoice match then invoice automatically paid by the system 9b. If mis-match between PO, GR and invoice then blocked on price or quantity and routed to appropriate person for approval