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South Kesteven District Council / Internal Audit Progress Report

CONTENTS 1 Introduction ............................................................................................................................................................... 2 2 Reports considered at this Governance and Audit Committee .................................................................................. 3 3 Looking ahead ........................................................................................................................................................... 6 4 Other matters ............................................................................................................................................................ 7 Appendix A: Internal audit assignments completed to date ............................................................................................ 8 For further information contact ....................................................................................................................................... 9

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2.1 Impact of findings to date

Absence Management

Conclusion: Reasonable Assurance

Impact on Annual Opinion: Positive

As a result of testing undertaken three medium and one low priority findings were identified.

Management actions were agreed in respect of the findings.

The medium findings relate to:

• A review of the Absence Report for the period April to December 2016 and sample testing identified that line managers are not consistently recording the reason for the sickness absence by providing the description of the illness.

• Sample testing identified that the Return to Work details are not consistently recorded onto the Manager’s Access System.

• For a sample of 20 staff where levels of absence had caused a trigger to be met, testing identified that actions was not always being undertaken and where it was undertaken the relevant documentation was not provided to the People and Organisational Team to be retained onto the member of staff’s personnel file.

For a sample of 10 long term sickness cases testing identified that any management actions taken were not recorded on the members of staff’s personnel file in four instances.

Income & Bank

Conclusion: Substantial Assurance


As a result of testing undertaken one medium priority and one low priority finding were identified.


The medium finding related to:

• There are currently no procedure notes in place to cover the income and banking functions for Building Control.

Income & Debtors



As a result of testing undertaken one medium and two low priority findings were identified.



• Testing the 10 weeks prior to the date of the audit confirmed that for three weeks the reconciliation between the accounts receivable ledger to the cash book had not been prepared or reviewed in a timely manner, with one instance the reconciliation was prepared 31 days after week end, with review taking place after 32 days.

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Purchase Orders & Creditors



As a result of testing undertaken one medium priority finding was identified.

Management action was agreed in respect of the finding.


• Through testing of a sample of 20 invoices paid in the current year we found that in five instances purchase orders had been raised retrospectively. Further testing on a sample of 15 invoices paid, where purchase orders had not been raised, identified that in five cases a purchase order should have been raised.

2.2 Client Briefings We have issued the following briefing which is appended to the bottom of this report:

- Gender Pay Gap Reporting

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3 LOOKING AHEAD

Assignment area Planned commencement date

Status

Allocations and Lettings 20 February 2017 Draft Report Issued

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4 OTHER MATTERS

4.1 Changes to the audit plan Management have requested the cancellation of the following audits:

Procurement and Contracts - A new procurement system is being introduced and until the system has been embedded a review would not add value.

Geographical Information Systems (GIS) - This review was removed from the plan due to there being a GIS programme of works being undertaken.

Corporate Governance - This has been deferred to next year as the audit was to review the implementation of the new Local Code of Corporate Governance which is in the process of being approved.

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APPENDIX A: INTERNAL AUDIT ASSIGNMENTS COMPLETED TO DATE Reports previously seen by the Governance and Audit Committee and included for information purposes only:

Assignment Status Opinion issued Actions agreed

H M L

Follow Up 1 (1.16/17)

Final REASONABLE PROGRESS 0 4 1

Health and Safety - Asbestos (2.16/17)

Final 0 1 3

Taxi Licensing (3.16/17) Final 0 1 1

Rent Collection (4.16/17) Final 0 1 4

Environmental Health – Pollution Control (5.16/17)

Final 0 1 0

Council Tax Support Scheme (6.16/17)

Final 0 0 1

Financial Regulations (7.16/17) Final 0 1 1

IT Network Resilience and Recovery (8.16/17)

Final 0 3 1

Follow Up 2 (9.16/17)

Final REASONABLE PROGRESS 0 4 0

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FOR FURTHER INFORMATION CONTACT Chris Williams, Head of Internal Audit

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South Kesteven District Council Absence Management 10.16/17

1.1 Background

An audit of Absence Management was undertaken as part of the approved internal audit periodic plan for 2016/17.

The Council’s policy is to provide support to enable staff to be healthy and resilient with a good work life balance and recognises that keeping people at work and helping them get back to work as soon as possible can maintain an employee’s health and wellbeing and improve organisational effectiveness. Some absence is inevitable and the Council aims to provide the appropriate support and assistance to those who have genuine reasons for absence, with the aim of facilitating return to work at the earliest opportunity.

Line Managers are responsible for Absence Management of their staff and for ensuring that sickness information is recorded and input onto the Manager’s Access System (MAS). The People and Organisational Development (POD) team is responsible for the monitoring and dissemination of sickness statistics to managers. The Council utilises the services of an Occupational Health advisor, where it considers that an employee’s absence would benefit from an

individual consultation.

For 2016/17 the Projected Annual Days Lost to Sickness per Employee (KPI – CPM 27) is set at 9.11 days. Performance data showed the actual days lost for the YTD to December 2016 is 6.83 days.

1.2 Conclusion

We have identified weaknesses in the current framework and the implementation of the agreed management actions will assist the Council in improving this framework. We have agreed three ‘Medium’ and one ‘Low’ priority

management actions. The ‘Medium’ priority actions are in relation to: the recording of the reason for absences on MAS; undertaking and recording of Return to Work interviews; and undertaking and recording of the relevant actions for long term absences and when the triggers are reached. We acknowledge that there are constraints on recording some information due to system functionality

Internal Audit Opinion: Taking account of the issues identified, the Council can take reasonable assurance that the controls in place to manage this risk are suitably designed and consistently applied. However, we have identified issues that need to be addressed in order to ensure that the control framework is effective in managing the identified risks.

1.3 Key findings

The key findings from this review are as follows:

A People Strategy is in place which incorporates supporting the well-being of employees at the Council. Absence Management aligns closely with this objective. There is an Employees’ Guide to Attendance Management and also a Managers Guide to Attendance Management. This is made available on the Council’s intranet.

Access to MAS is provided by a designated member of the POD Team. Access is only provided to designated business managers and a member of the administrative staff within the business area to enable them to input the information onto MAS. There are currently 49 users with access to MAS. A review of the access list did not identify any issues with access rights.

ABSENCE MANAGEMENT - EXECUTIVE SUMMARY

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Monthly reports are produced by POD for line managers to enable them to monitor the sickness absence levels. Reports of sickness achieving trigger levels and long term sickness are also provided to the line managers each month. Testing identified that for the period April 2016 to December 2016 the Year to Date Sickness Summary and the Monthly Summary was produced and provided to line managers each month by email and a copy was held on file. A Dash Board is also collated quarterly and this is provided to the Executive Managers and is also reported and reviewed by the Council’s Executive.

However, the following weaknesses were identified and as a result we are reporting three ‘Medium’ and one ‘Low’ priority findings:

An Attendance Management Policy and associated Absence Management Procedures are in place. The Policy and Procedures are subject to annual review however we were unable to evidence this review and we noted that the documents were still dated July 2014. It was also noted that the Policy and Procedures have not been updated with the additional guidance on return to work interviews that was communicated to managers in November 2015. The Policy and Procedures are not up to date and may not reflect current practices and as a consequence absences may not be managed effectively. On review of the guidance on return to work interviews communicated to managers in November 2015, managers are required to hold either a formal or informal return to work interview for short term absences

For the period April to December 2016 a review of the Absence Management report identified 52 instances where the absence was categorised as ‘Other’ and a further 17 instances where the category was left blank (not selected). Where the ‘Other’ category is selected, the nature of the illness is required to be manually recorded onto MAS. On testing a sample of 37 (20 instances where the category ‘Other’ had been recorded onto MAS and the 17 instances where the category was left blank), we noted a total of 18 instances where the nature of the illness was not documented onto MAS as required.

For a sample of 30 separate instances of recorded absence from 20 members of staff, testing identified ten instances where the Return to Work details were not recorded onto MAS.

For a sample of 20 staff, where absence levels had resulted in a trigger level being met, testing identified four instances where absence management actions had not been undertaken by the line manager and in one instance where we were advised that actions had been undertaken however no details were found on the member of staff’s personnel file to confirm this. Additionally, for a sample of 10 long term sickness cases, testing identified that in four cases the absence management actions were not found on the member of staff’s personnel file. In the event of the line manager leaving employment with the Council or the line manager being on annual or sickness leave the documentation may not be available to the Council.

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1.4 Additional information to support our conclusion

Risk Control

design*

Compliance

with

controls*

Agreed actions

Low Medium High

Sickness data is not being correctly captured at the point of recording, especially the reasons for absence, since the Council has moved to direct inputting of sickness by services through the Managers Access System.

0 (7) 3 (7) 1 2 0

Potential ‘problem areas’ are not identified and

action taken. 0 (7) 1 (7) 0 1 0

High levels of sickness absence in areas may impact on the ability to deliver services.

0 (3) 0 (3) 0 0 0

Total 1 3 0 * Shows the number of controls not adequately designed or not complied with. The number in brackets represents the total number of controls

reviewed in this area.

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2 ACTION PLAN

Categorisation of internal audit findings

Priority Definition

Low There is scope for enhancing control or improving efficiency and quality.

Medium Timely management attention is necessary. This is an internal control risk management issue that could lead to: Financial losses which could affect the effective function of a department, loss of controls or process being audited or possible reputational damage, negative publicity in local or regional media.

High Immediate management attention is necessary. This is a serious internal control or risk management issue that may, with a high degree of certainty, lead to: Substantial losses, violation of corporate strategies, policies or values, reputational damage, negative publicity in national or international media or adverse regulatory impact, such as loss of operating licences or material fines.

The table below sets out the actions agreed by management to address the findings:

Ref Findings summary Priority Actions for management Implementation

date

Responsible

owner

Risk: Sickness data is not being correctly captured at the point of recording, especially the reasons for absence, since the Council has moved to direct inputting of sickness by services through the Managers Access System.

1 The Business Manager People and Organisational Development advised that the Attendance Management Policy and the associated Absence Management Procedures are reviewed annually; however the Policy and Procedures published on the intranet are dated July 2014. Additional guidance was provided to managers in November 2015; however we noted that the Policy and Procedures have not been updated to reflect this guidance.

Low A version control table will be added to the Attendance Management Policy and the Absence Management Procedures.

31 March 2017 Business Manager People and Organisational Development

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date

Responsible

owner

2 A review of the Absence Report for the period April to December 2016 and sample testing identified that line managers are not consistently recording the reason for the sickness absence by providing the description of the illness.

There is a risk that effective monitoring of absences to identify trends may not be undertaken in the absence of clear and sufficient information being recorded on sickness absences.

Medium a) Managers will be reminded to ensure that the reason code is recorded onto the Manager’s Access System.

b) Where the ‘Other’ reason code is used on Manager’s Access System, in all instances the reason for the absence will be documented in the description box onto the Manager’s Access System.

31 March 2017

Business Manager People and Organisational Development

3 Return to Work

Sample testing identified that the Return to Work details are not consistently recorded onto the Manager’s Access System.

Without information being recorded and the relevant documentation not being held on the member of staff’s personnel file there is a risk that effective monitoring cannot be undertaken and potential problems not be identified.

Medium a) Managers will ensure that Return to Work interviews are held with the relevant staff in accordance to Attendance Management Policy and Procedures and that this is then recorded onto the Manager’s Access System.

31 March 2017


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date

Responsible

owner

Risk: Potential ‘problem areas’ are not identified and action taken.

4 Triggers Levels

For a sample of 20 staff where levels of absence had caused a trigger to be met testing identified that actions was not always being undertaken and where it was undertaken the relevant documentation was not provided to the People and Organisational Team to be retained onto the member of staff’s personnel file.

Long Term Absences

For a sample of 10 long term sickness cases testing identified that any management actions taken were not recorded on the members of staff’s personnel file in four instances.

There is a risk that effective absence management may not be undertaken resulting in a financial loss the Council.

Medium All line managers will be reminded to ensure:

a) That Absence Management action is instigated when any of the trigger levels occur.

b) Details of the visits made to members of staff on long term sickness leave are recorded and are provided to the People and Organisational Team to be retained on the member of staff’s personnel file.

31 March 2017


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South Kesteven District Council Income and Bank 11.16/17

1.1 Background

An audit of Income and Bank was undertaken as part of the approved internal audit periodic plan for 2016/17.

This review covered the income collection and banking processes for Exchequer Services, Area Offices, Guildhall and Stamford Arts Centres, South Kesteven Community Point, Development Management & Implementation and Building Control. The income received during September, October and November 2016 was tested across these areas.

Each area has separate processes in operation to record and bank the income which were considered for adequacy and compliance during the audit fieldwork.

1.2 Conclusion

Our review identified that the systems and controls in place for the income handling and banking functions are adequate. However, we have identified two areas for improvement which require management attention, resulting in one 'medium' and one ‘low’ priority management actions raised. The one ‘medium’ priority finding relates to there are currently no income and banking procedure notes in place for Building Control.

Internal Audit Opinion: Taking account of the issues identified, the Council can take substantial assurance that the controls upon which the organisation relies to manage the identified risk are suitably designed, consistently applied and operating effectively.

1.3 Key findings


The Council has Financial Regulations in place which define roles and responsibilities for income and expenditure. The Financial Regulations are supported by the Financial Regulations Guidance Notes that provide detailed information around the Council's underlying processes for the implementation of the Regulations.

Procedure notes are in place for use by Exchequer Services, the Area Offices, South Kesteven Community Point, Development Management & Implementation and the Arts Centre staff when compiling and cashing up income received across the Council, ready for banking.

On a daily basis, the safe is balanced at Exchequer Services and the Area Offices. Any discrepancies identified are investigated and resolved.

A security company have been contracted to collect monies from the Council for banking.

On a daily basis, income reconciliations take place between the income received at Exchequer Services and all other Council business areas.

Monthly bank reconciliations are carried out to ensure that the bank account agrees to the General Ledger.

INCOME AND BANK - EXECUTIVE SUMMARY

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However, we noted the following weakness in the control framework which has led to one ‘medium’ priority

management action:

There are no procedure notes in place in relation to the income received through to banking for Building Control. Without appropriate procedure notes in place there is a risk that staff will follow incorrect working practices.


Risk Control

design*

Compliance

with

controls*

Agreed actions

Low Medium High

Misappropriation of funds due to monies not being recorded accurately upon receipt.

0(10) 2 (10) 1 1 0

Monies not being securely held prior to banking or when transferring to the bank

0 (6) 0 (6) 0 0 0

Banking not being completed in a timely manner 0 (3) 0 (3) 0 0 0



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2 ACTION PLAN


Priority Definition


Medium Timely management attention is necessary. This is an internal control risk management issue that could lead to: Financial losses which could affect the effective function of a business area, loss of controls or process being audited or possible reputational damage, negative publicity in local or regional media.




date

Responsible

owner

Risk: Misappropriation of funds due to monies not being recorded accurately upon receipt.

1 There are currently no procedure notes in place to cover the income handling and banking functions for Building Control.

Medium Procedure notes will be compiled to cover the income handling and banking functions for Building Control.

March 2017

Business Manager Building Control

2 We tested a sample of five cash payments received at the South Kesteven Community Point and found that cash payments were not always banked in a timely manner (for example, in two instances the income was not collected until a month later).

Low Any cash payments received at the South Kesteven Community Point will be collected promptly and brought back to the Council to be banked.

January 2017 Customer Services Team Leader

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South Kesteven District Council / Income and Debtors 12.16/17

1.1 Background

An audit of Income & Debtors was undertaken as part of the approved internal audit periodic plan for 2016/17.

The Council uses the eFinancial system for its accounts receivable transactions. The debtors function is partially decentralised with some business areas being able to raise their own invoices while others use an ‘Authority to Raise’ (ATR) form to request an invoice to be raised by Revenues.

Procedures for chasing debt are defined in the Council’s Debt Management Policy. When invoices remain unpaid reminder letters are sent to debtors following documented procedures.

A Service Level Agreement between the Council and a debt collection agency is in place; the debt collection agency is used for debts which remain unrecovered after the Council’s procedures have been exhausted and the value of the debt is considered large enough to warrant the expenditure incurred for using the debt collection agency.

1.2 Conclusion

Our overall opinion was formed by undertaking interviews with key staff and sample testing on the Council’s processes

in place to ensure that all income due to the Council is recorded in the accounting system and that controls are in place to monitor and reduce the levels of outstanding debt. Our audit work has confirmed that the control framework in place is robust; however we agreed one ‘medium’ and two ‘low’ priority management actions. The ‘medium’ priority

finding relates to the accounts receivable ledger reconciliations to the cash book not being prepared and reviewed in a timely manner.

Internal Audit Opinion: Taking account of the issues identified, the Council can take substantial assurance that the controls upon which the organisation relies to manage the identified risks are suitably designed, consistently applied and operating effectively.

1.3 Key findings


The Council’s Financial Regulations detail debt management and credit control responsibilities. The Regulations are available to all staff on the Council’s intranet and were approved prior to implementation in April 2016.

There is supporting evidence in place for all sales invoices raised.

The accounts receivable ledger is reconciled to the general ledger on a monthly basis. The reconciliation is completed by the Accounting Technician, before being checked and signed off by the Financial Accountant Team Leader. All discrepancies are investigated and resolved.

Income received in the bank account is monitored on a daily basis and allocated to debtor accounts to ensure that debtor reports are accurate. The daily cash checklist is completed to evidence all actions have been undertaken to update the ledger with the cash postings and that the cash receipting, sundry debt and general ledger feed has been successful.

Credit control letters are issued to all debtors with outstanding debt in line with the Council’s debt management policy. Where applicable, if debtors fail to settle their account having passed through the cycle of chasing letters, the debt is chased through other means and passed to the bailiff or issued to Legal Services to pursue.

INCOME AND DEBTORS - EXECUTIVE SUMMARY

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A formal process is in place for writing off bad debts. Bad debts are only written off once finance staff are certain that all efforts have been made to achieve payment from the debtor. Prior to processing, all write offs require authorisation by the Corporate Finance Manager.

We have agreed one medium and two low priority management actions pertaining to the adequacy of control design, and the application and compliance with control framework. The medium priority finding relates to:

Through testing the weekly reconciliation between the Accounts Receivable ledger and the Cash Book for the 10 weeks prior to the date of the audit, it was confirmed that the reconciliation had not been prepared or reviewed in a timely manner for three weeks. In one instance, the reconciliation was prepared 31 days after the week end, with review taking place after 32 days. Without preparing or reviewing reconciliations in a timely manner there is a risk that any errors may not be identified and resolved resulting in misstated financial information.


Risk Control

design*

Compliance

with

controls*

Agreed actions

Low Medium High

Financial loss to the Council due to the lack of identification of monies due.

0 (6) 1 (6) 0 1 0

Income is not received as expected, resulting in loss of funds to the Council.

1 (7) 1 (7) 2 0 0

Bad debts are written off where there is a chance of recovery of funds, resulting in a loss of income.

0 (3) 0 (3) 0 0 0



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2 ACTION PLAN


Priority Definition






date

Responsible

owner

Risk: Financial loss to the Council due to the lack of identification of monies due.

1 Testing the 10 weeks prior to the date of the audit confirmed that for three weeks the reconciliation between the accounts receivable ledger to the cash book had not been prepared or reviewed in a timely manner, with one instance the reconciliation was prepared 31 days after week end, with review taking place after 32 days. Without preparing or reviewing reconciliations in a timely manner there is a risk that any errors may not be identified and resolved, resulting in misstated financial information. Furthermore, this could lead to debtors potentially being chased for debts that have already been paid.

Medium As a matter of good practice reconciliation is usually carried out in a timely manner. However for the sample period there was a high level of staff absence which temporarily impacted on resources. This has now been resolved and the accounts receivable ledger reconciliations to cash book are being prepared and reviewed on a weekly basis.

January 2017

Income Team Co-ordinator

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date

Responsible

owner

Risk: Income is not received as expected, resulting in loss of funds to the Council.

2 The Council do not have any performance indicators in place in relation to debtors. Without these debt levels may not be closely monitored increasing the risk that debt levels rise resulting in financial loss to the Council. There is also a risk that long standing unpaid invoices remain unpaid, ultimately affecting cash flow.

Low Whilst recovery performance is monitored by the service, it is agreed that a corporate measure will be introduced to provide wider visibility of recovery action.

April 2017

Corporate Finance Manager

3 From testing a sample of 20 credit notes we found that in one instance, there was no supporting documentation retained showing the request for a credit note to be raised. There is a risk that credit notes may be applied to accounts in error, thus resulting in financial loss for the Council. Furthermore, there is an increased risk of fraudulent credit notes being raised in the absence of an adequate audit trail being retained.

Low All supporting documentation will be retained prior to the processing of credit notes.

January 2017

Income Team Co-ordinator

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South Kesteven District Council / Purchase Orders and Creditors 13.16/17

1.1 Background

An audit of Purchase Orders and Creditors was undertaken as part of the approved internal audit periodic plan for

2016/17.

The Council have in place an eProcurement system that is a module of the Finance system, eFinancials. The system allows orders to be requested and approved electronically by authorised staff throughout the Council. Orders are raised and approved in line with the established scheme of delegated authority.

Invoices are processed within Exchequer Services on a daily basis and are matched to the corresponding purchase order. Invoices matched through the eProcurement system are authorised for payment. Non-purchase order invoices, such as utilities, are batched and authorised for payment within the relevant Business Area. Since April 2016, Exchequer Services have processed 13,345 invoices, totalling £27,093,903.11.

The Council monitor performance against a number of KPIs including the number of invoices paid within 30 days, the number of local suppliers paid within 10 days and the number of creditors paid via BACS. At December 2016, the Council was exceeding annual targets in each of these respective areas.

1.2 Conclusion

Our overall opinion was formed by undertaking interviews with key staff and sample testing on the Council’s processes

in place to ensure that all creditor payments are valid, accurate, timely and are only in respect of goods and services ordered and received by the Council. Our audit work has confirmed that the control framework in place is robust; however we agreed one ‘medium’ priority management action. The ‘medium’ priority finding relates to the fact that the Council are raising retrospective purchase orders and non-purchase order invoices are being processed regularly.

Internal Audit Opinion: Taking account of the issues identified, the Council can take substantial assurance that the controls upon which the organisation relies to manage the identified risk are suitably designed, consistently applied and operating effectively.

1.3 Key findings


The Financial Regulations detail purchasing and creditor responsibilities. The Regulations are available to all staff involved in the credit management process. The Financial Regulations were approved by Council and implemented in April 2016.

Procedural documentation is in place covering the purchasing and creditor payment functions. These include purchase order processed invoices, Creditor Payment Run and processing non-purchase order processed invoices. Procedure notes were last subject to review in December 2016.

PURCHASE ORDERS AND CREDITORS - EXECUTIVE SUMMARY

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Commitment accounting is used for electronic orders which ensures that budget checks are undertaken at the time that expenditure is committed. This allows for a more accurate method of budget monitoring and also allows levels of expenditure to be controlled within the set budget limits.

Controls are in place around the setting up of new suppliers within the system, with supplier accounts being set up by staff within the Exchequer Services.

The creditors control account is reconciled to the general ledger on a monthly basis. The reconciliation is prepared by the Accounting Technician before being checked and signed off by the Financial Accountant Team Leader. All discrepancies are investigated and resolved.

Goods/services received are immediately recorded as having been received on the eProcurement system. Purchase invoices received are matched to the purchase order and goods received note prior to payment.

Invoices are only paid if the goods/services have been recorded as being received, and the value is within a defined 5% or £100 of the order value. If not, additional approval in line with limits set out in the Financial Regulations is required.

The Council has in place Performance Indicators which are monitored in line with cash flow on a regular basis by Finance. These Performance Indicators are reported to the Corporate Finance Manager on a monthly basis.

However, we have agreed one ‘medium’ priority action pertaining to the application and compliance with control framework. The ‘medium’ priority finding relates to:

Testing confirmed that the Council raises a number of retrospective purchase orders, and process a high amount of non-purchase order invoices. Finance have implemented a number of processes to reduce the risks associated with raising retrospective purchase orders and processing non-purchase order invoices, however the problem is still prominent throughout a number of services within the Council.


Risk Control

design*

Compliance

with

controls*

Agreed actions

Low Medium High

Financial loss to the Council through unnecessary and inappropriate invoices being paid.

0 (14) 1 (14) 0 1 0



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2 ACTION PLAN


Priority Definition






date

Responsible

owner

Risk: Financial loss to the Council through unnecessary and inappropriate invoices being paid.

1 Through testing of a sample of 20 invoices paid in the current year we found that in five instances purchase orders had been raised retrospectively. Further testing on a sample of 15 invoices paid, where purchase orders had not been raised, identified that in five cases a purchase order should have been raised. Where invoices are processed without a purchase order there is a risk that inappropriate goods may be purchased resulting in a financial loss to the Council.

Medium Procedural guidance has been reviewed, updated and communicated with relevant Business Managers detailing the correct approach to the treatment of retrospective purchase orders and non-purchase order processed invoices. Performance Indicators will be introduced in relation to retrospective invoices raised and non-purchase order processing, which will be corporately reported.

February 2017 April 2017

Management Accountant Team Leader Management Accountant Team Leader and Corporate Finance Manager

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The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 will apply to private and voluntary sector organisations. The Equality Act (Specific Duties and Public Authorities) Regulations 2017 are planned to be effective from 31 March 2017 and will apply to English public authority employers. The public sector reporting model is very similar to the private sector one.

What is the gender pay gap in the UK workforce?Men’s average pay is greater than that for women. The Office for National Statistics says that over the last 20 years the median gender pay gap has narrowed from 27.5 per cent to 9.4 per cent for full-time employees.

What are employers affected required to do? To publish annually for employees in scope a report on:

• overall gender pay gap figures calculated using both the mean and median average hourly pay between genders;

• the numbers of male and female employees in each of four pay bands (quartiles), based on the employer’s overall pay range; and

• for a 12 month period, both the difference between male and female’s mean and median bonus pay and the proportion of relevant male and female employees who received a bonus.

An explanatory narrative, although not required, is strongly encouraged as is a statement of the actions planned to narrow the gaps.

The annual cycle of gender pay gap reporting

GENDER PAY GAP REPORTING

Start: Identification of relevant data

Formulation of communication plan both internal and external

Publish signed statement on website and government-sponsored website

Collection of data under key metrics

Analysis of data

Comparison against benchmarks and own policy and practice

Identification of potential risk through dry runs of data and creation of

action plan

New regulations planned to be effective by 6 April 2017 will require employers with 250 or more relevant employees in an individual entity on a snapshot date each year to publish within 12 months details of their employees’ gender pay and bonus differentials.

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What are the timescales?A snapshot of employees’ pay for private and voluntary sector organisations must be taken on 5 April 2017 and on 5 April in each subsequent year and for public sector bodies on 31 March 2017 and on 31 March in each following year.

The first gender pay private and voluntary sector reports must be published both on the employer’s own website and uploaded to a government website no later than 4 April 2018, to include hourly pay rates at 5 April 2017 and bonus payments between 6 April 2016 and 5 April 2017. The data must remain on the employer’s website for three years.

Dry runs of data should be prepared now to ensure that any gaps are identified prior to the snapshot date/reporting period closing.

How can RSM help?RSM has experts in payroll, HR consultancy and legal employment advice to support you in meeting both the requirements and the business opportunities of gender pay gap reporting.

Our services include:

We can analyse your data to determine relevance and to identify and assist in resolving any areas of uncertainty. This can include:

• status and relevance of employees including those working overseas;

• consideration of whether and what data is readily available; and

• analysis of the reportable elements of remuneration packages.

Calculations and narrative

RSM will work with you to collate your data on the required snapshot date to:

• prepare and process all reportable calculations;

• provide the calculations to you in a template statement which can be approved and published;

• guide on the voluntary narrative to support your results and to demonstrate accuracy of data; and

• make initial recommendations on publication dates and ensure that you receive an annual reminder.

Consultancy

RSM can review and analyse your results to create supporting action plans which may include:

• a review of current pay practices and audit of bonus schemes across your organisation;

• identification of skills shortages – recruitment process review;

• facilitation of analysis discussion identifying areas of risk and exposure; and

• formulation of communications plan and benchmarking data (industry/geographic/function) to provide context.

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Progress Report March 2017 SKDC - South Kesteven District...

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