Report on Managing and Protecting Funds Held in Court
Date: 21 April 2015
Reference: NIA 246/11-16
Mandate Number: Mandate 2011/16 Twenty-Eighth
Download the full report here.
1. The Courts Funds Office (CFO) is a business unit within the Northern Ireland Courts and Tribunals Service (NICTS) which is an agency of the Department of Justice (the Department). The CFO provides a banking and investment service for the civil courts in Northern Ireland, looking after money when a child (minor) has been awarded damages as a result of civil legal action, and managing the financial affairs of people who have become mentally incapacitated (patients).
2. Funds may be invested in a variety of ways with judicial approval. These include being placed in deposit accounts, short-term and long-term investment accounts, and being invested in certain designated securities.
3. Court Funds Office (CFO) provides a service to some of the most vulnerable people in our society, managing their money at the behest of the courts. As such, it should aspire to the highest standards of performance and customer care. However the CFO has been a Cinderella service, stuck in the past and not providing value for money.
4. Modernisation has been delayed for too long. Despite a modernisation programme commencing in 2004 the programme is still not complete and legislative change has been delayed. The CFO appears too content to rely on long established models of investment for clients’ funds. A more modern approach is needed to deliver returns while managing investment risk and reducing the administrative burden.
5. The CFO is operating an archaic service and it has failed to take the necessary steps to implement a client-focused approach. A radical overhaul is required and this should be undertaken by Courts Service as a matter of urgency to ensure that it provides an efficient, effective, open and transparent service to all of its clients.
Summary of Recommendations
The Committee recommends that the NICTS establishes the necessary independent financial expertise within the governance structures of the CFO to ensure that investment decisions taken on behalf of its clients are robustly challenged. A statutory committee should be established at the earliest possible juncture.
It is unacceptable that little or no progress has been made in putting in place the legislative changes required to support modernisation. The Department and the NICTS should pursue these reforms as a matter of urgency to modernise the CFO.
The implementation of modern business processes supported by a new IT system would help to make the service provided by the CFO more efficient and the Committee recommends that it should be implemented as a priority.
While investments should take account of liquidity needs, this should not be at the expense of investment returns. The Committee recommends that the NICTS introduces a new model of investment, utilising pooled investment funds, to maintain returns while managing investment risk effectively and reducing the administrative burden.
The Committee recommends that the CFO establishes fair and equitable arrangements for recovering its costs from clients.
Regular client satisfaction surveys should be a feature of the CFO’s operations.