Committee criticises high cost of Account NI
Date: Wednesday, 14 May 2014
Reference: PAC 08/13/14
The Assembly's Public Accounts Committee has today reported on the performance of Account NI, which makes payments on behalf of all local Government departments as well as 18 other public bodies.
The Committee found that it costs Account NI £9.73 to make a payment to a supplier. In the Committee's view, this cost is extraordinarily high.
Speaking about the report, Committee Chairperson, Michaela Boyle, MLA, said: "It is clear to the Committee that the Department does not accept the extent to which Account NI is a very high cost operation, but we welcome the Department's acknowledgement that more needs to be done in this area. The Audit Office has estimated that if Account NI reduced its costs to comparable international performers, it could save £3.4 million a year."
The Committee was particularly critical of the lack of clear evidence that Account NI has delivered value for money, given that it has had £213 million investment since the project started in 2000. It was not clear if Account NI had made the projected savings of £43 million of public funds which were featured in its business case.
Chairperson Boyle continued: "It is not acceptable that the public purse is committed to spending millions more on this project without clear evidence that it has delivered, or will in future deliver, value for money."
The Committee found that the picture emerging from its Evidence Session is not wholly discouraging. On average, Account NI pays government suppliers in just seven days. Given that the Executive's target is to pay companies supplying the public sector within ten days, this is a notable achievement.
The Chairperson concluded: "Account NI's performance against the prompt payment target is world class. But it has much more to do to ensure it represents the best and most cost effective option for potential new customers and that it maximises the benefits from the public's considerable financial investment in the project."
The report can be read in full here
Notes to Editors:
1. Account NI processes more than one million transactions a year worth over £10 billion for 12 government departments and 18 other public bodies. There are a further 45 public bodies who could use Account NI services but have chosen not to do so. The services provided to Account NI customers include: checking and paying supplier invoices; making grant payments; reconciling bank accounts; and maintaining accounting records.
2. Account NI is one of six shared services provided by Enterprise Shared Services, part of the Department of Finance and Personnel. Account NI’s 207 staff are all civil servants, but the technology supporting its operation is provided under a £54 million, 12 year contract with BT.
3. The primary purpose of a shared service centre is to generate efficiency savings by reducing duplication, automating and standardising processes, and introducing economies of scale. Increasing the number of customers for a shared service centre provides greater potential for economies of scale and for cost reduction.