Account NI: Review of a Public Sector Financial Shared Service

Mr Kieran Donnelly, Comptroller and Auditor General issued his report to the Assembly on the performance of the Account NI Shared Service Centre.

Mr Donnelly said: “Account NI has successfully delivered a common accounting service for the Northern Ireland Civil Service.  My review shows that customers are generally satisfied with the service provided and that it performs to a very high standard on quality and timeliness of invoice processing.  However Account NI has not sufficiently focused on the cost of the services it provides and it has not routinely measured its performance against comparable organisations.”

Background

  • Account NI provides a financial processing service for Northern Ireland government departments and 18 other public bodies. Account NI processes over 1 million transactions a year (paragraphs 1.2 and 2.6).
  • While Account NI’s 215 staff are all civil servants, the technology supporting its operation is provided under a £54 million, 12 year contract with BT (paragraph 1.3).  

Main Findings

  • The key objective in establishing Account NI was to rationalise and simplify financial processes and provide a common accounting system across the Northern Ireland Civil Service.  However, it is generally accepted that the primary purpose of a shared service centre is to drive down service costs.  The Audit Office found that Account NI’s performance measurement is primarily focused on the number of days taken to process payments and not on the cost (paragraphs 1.1, 2.5 and 3.9).
  • Account NI has not formally benchmarked its services against comparable organisations, in order to determine if the service is cost effective and to identify areas for improvement (paragraphs 3.14 to 3.16).  
  • The Audit Office commissioned its own benchmarking exercise which found that Account NI performed to a very high standard on quality and timeliness.  Account NI processes payments in 7 days, compared to 17 days taken by the top performer in an international database used by the Audit Office. Account NI also performed significantly better on timeliness than public bodies in the health, education and local government sectors which were reviewed by the Audit Office in a November 2012 report (Figure 6 and paragraphs 3.13 and 3.17).
  • In the Audit Office’s international comparison, Account NI performed significantly less well on cost.  It costs Account NI £9.73 to process and pay each invoice: the cost to the median international performer is £5.22 (Figure 6 and paragraph 3.17).  
  • The Audit Office also compared Account NI’s performance on cost against four other public sector bodies in Northern Ireland. Account NI had the highest cost per transaction. It costs NI Water just £3.91 to process and pay each invoice; the cost to the Northern Ireland Housing Executive is only £2.94 (Figure 7).   
  • The planned financial benefit of setting up Account NI was a 25% reduction in the number of staff processing transactions with a potential saving of £43.1 million.  The staff efficiencies required to provide that level of saving have not been achieved because of an increased work load following the introduction of new clients and change in policy that requires invoices to be paid within 10 days (paragraphs 2.22 to 2.24 and paragraph 3.2).  
  • Account NI does not have sufficient evidence to demonstrate that the planned non-financial benefits of the project have been achieved.  The Audit Office considers that the planned project benefits were not well considered and that monitoring of their delivery has been poor (Figure 8, paragraphs 3.19 to 3.25).
  • Account NI customers have reported increasing levels of satisfaction with the overall service provided. In 2008 42% of users considered the service to be good or very good, rising to 55% in 2012 (Figure 10 and paragraph 3.29).
  • In the procurement and implementation stages of the Account NI project, the Audit Office found that appropriate governance and accountability arrangements had been in put in place in order to monitor performance (paragraph 4.4).
  • A 2011 review concluded that departments were unnecessarily duplicating work undertaken by Account NI and this is likely to have increased costs (paragraphs 4.16 to 4.18).

NOTES

Account NI became fully operational in July 2009. The services provided to its client bodies include: checking and paying supplier invoices, making grant payments, reconciling bank accounts, maintaining accounting records and reimbursing staff travel and expenses claims. Account NI is one of six shared services provided by Enterprise Shared Services (ESS), part of the Department of Finance and Personnel.