ASC 081209 09 Use of Cash Payments in CYP by sdfsb346f

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									Report No.                    London Borough of Bromley                        Agenda
DCYP09173
DR09137                               PART 1 - PUBLIC
                                                                               Item No.      9

Decision Maker:        Children and Young People Portfolio Holder
Date:                  For Pre-Decision Scrutiny by the Children and Young People PDS
                       Committee on 2 December 2009
Decision Maker:        Audit Sub-Committee

Date:                  8 December 2009

Decision Type:         Non-Urgent              Executive                  Non-Key

TITLE:                 USE OF CASH PAYMENTS COUNCIL WIDE AND
                       SPECIFICALLY IN THE CHILDREN AND YOUNG PEOPLE
                       DEPARTMENT
Contact Officer:       Rob Carling, Head of Children and Young People Finance
                       Tel: 020 8313 4807 E-mail: rob.carling@bromley.gov.uk
Chief Officer:         Gillian Pearson, Director of Children and Young People Services

Ward:                  Boroughwide


1.      Reason for report

1.1     Following discussion at the meeting of the Audit Sub-Committee in September 2009; this
        report provides information on the Council-wide use of cash payments and focuses on these
        payments in the Children and Young People Department.

________________________________________________________________________________

2.      RECOMMENDATION(S)

2.1     Members to note contents of report and proposals to reduce petty cash expenditure by
        50%.




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Corporate Policy

1.      Policy Status:             N/A

2.      BBB Priority:              Excellent Council

________________________________________________________________________________

Financial

1.      Cost of proposal:          N/A

2.      Ongoing costs:             N/A

3.      Budget head/performance centre:                    Various budget heads

4.      Total current budget for this head:                £443,830

5.      Source of funding:         Council Tax

________________________________________________________________________________

Staff

1.      Number of staff (current and additional) – Not known

2.      If from existing staff resources, number of staff hours – Not known

________________________________________________________________________________

Legal

1.      Legal Requirement:         No statutory requirement or Government guidance

2.      Call in:                   Call-in is applicable

________________________________________________________________________________

Customer Impact

1.   Estimated number of users/beneficiaries (current and projected) - Not known
________________________________________________________________________________

Ward Councillor Views

1.      Have Ward Councillors been asked for comments?           N/A

2.      Summary of Ward Councillors comments:




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3.    COMMENTARY

3.1   Included in the Internal Audit progress report to the Audit Sub-Committee in September 2009
      was information on Children and Young People area office cash payments for the period
      4 April 2009 to 9 June 2009.

3.2   The Audit Sub-Committee resolved that:
             the report of the Director of Children and Young People to the Children and Young
              People PDS Committee on the alternatives to the future use of Petty Cash in her
              Department be also submitted to this Sub-Committee;
             a report be submitted to the next meeting of this Sub-Committee on the use of cash in
              notes and coins across the Council and proposals for achieving at least 50% reduction
              in such cash usage Council-wide over the next year.

      Council Wide Use of Cash Payments

3.3   Members of the Audit Sub-Committee requested a statement on the amount of petty cash
      payments made in the last financial year, and recommended that there is a reduction in petty
      cash expenditure of 50% within the next year.

3.4   Whilst it is not possible to place an exact figure on the amount of cash payment due to the
      fragmented way in which petty cash is handled at Bromley, it can be stated that the figure is no
      more than £443,800.

3.5   A proportion of the above figure will not be petty cash, but will be cheque payments it is not
      possible to identify what percentage that might be without devoting a substantial resource to
      narrowing down the figure down further.

3.6   The Head of Finance Children and Young People has identified that £317,200 of the above
      relates to Area Offices specifically Children and Young People expenditure, leaving care,
      direct financial support and emergency payments, and has provided a detailed analysis of how
      this is made up and measures in place to reduce this below.

3.7   Initiatives ongoing within Bromley that are likely to reduce/eliminate the need for petty cash are
      as follows:

      (i)     HR Self Service
      (ii)    Procurement Cards
      (iii)   Pre-Payment Cards

3.8   Only one of these processes quantified the likely reduction in petty cash expenditure that will
      result, as this was not the justification for the change of process involved for (i) and (iii).
      However, each will inevitably divert petty cash expenditure through these more efficient routes.

3.9   HR Self Service is to be expanded to require online submission of expenses and mileage
      claims that would then be released as part of the monthly pay run. It will be accessible to all
      staff with internet access, not just those with access to the OneBromley Intranet.



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3.10   The rollout of the Self Service system has however been delayed due to Single Status
       priorities. The expected date for rollout of online mileage claims is July 2010, with online
       expense claim reimbursement coming in as part of Phase 2 in 2010/11.

3.11   Procurement cards are intended to replace low level cheque expenditure as well as petty
       cash. These are being trialled at present and will be further assessed in January 2010.

3.12   Combining these initiatives should ensure that the Member requirement of a 50% reduction in
       petty cash expenditure is met.

3.13   A summary of the information relating to cash payments within the Children and Young People
       department is provided below:

               PREVENTION AND SAFEGUARDING TOTAL CASH PAYMENTS £317,200
        Summary of main areas of expenditure                                            £

        Staff travelling expenses                                                     25,500

        Payments relating to support for parents

        Travel/assistance for Clients and Families                                    17,600
        Section 17 Emergency Preventative Payments                                    48,900
        Other payments                                                                10,100

        Payment relating to care leavers
        Leaving Care Grants                                                           35,400
        Direct Financial Support to 16-17 year olds                                   92,500
        Leaving Care costs, including travel and clothing                             40,200
        Other payments                                                                 7,000

        Other payments                                                                40,000

        Total Cash Payments                                                          317,200

3.14   Employee Expenses

       It is common practice for staff to be reimbursed with cash for travel expenses incurred;
       however as described in 3.9, there will be scope to make such payments through the payroll
       system or by cheque.

3.15   Payments Relating to Support for Parents

       The majority of the payments under this heading relate to emergency payments made under
       the requirements of Section 17 of the Children's Act 1989 and by their nature are usually made
       as cash. However, many travel expenses relate to children who are placed all over the
       country. This is particularly acute with pre-adoptive placements and placements of children in
       secure settings. As many of these placements are in rural locations staff are often required to
       use taxis services from and to train stations to ensure that the visits and other statutory
       requirements are completed, where possible, within a working day. In these circumstances
       staff may incur out of pocket expenses of anything up to £80. For lower paid employees this
       will require them having re-imbursement within a short time frame i.e. 3 to 5 days, if hardship
       is not to be experienced in some cases.


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3.16   Payments Relating to Care Leavers

       The payments summarised above relate to Care Leavers for whom Bromley has responsibility
       as Corporate Parents. The use of cash can be reviewed once regular payments start being
       made and payments could be made directly in to the young person's bank account by BACS.

       One of the benefits of continuing to make some of the payments in cash is to maintain the
       relationship with the young person and to be available to give support and guidance as
       needed. This report provides information on the scope to use the new Pre-Pay cards that are
       currently being considered as an alternative to issuing cash. The cards, if found suitable,
       could replace the majority of cash payments to Care Leavers. While efforts are made to
       provide support either in the form of direct purchase of goods or food vouchers sometimes this
       is not possible, e.g. for specific types of food that is not sold in main stream supermarkets, and
       short term cash payments are made to prevent a child being accommodated.
3.17   The Director of Children and Young People Services in currently considering the use of
       prepaid cards as an alternative to cash. A prepaid card is a bank card that is charged with
       funds for use by the holder, but can never go overdrawn. Prepaid cards have no credit line
       and are not linked to a bank account.
3.18   Prepaid cards can be used at all card enabled suppliers and, if desired, at cash machines.
       Funds can be transferred onto the card at any time. The cards can be restricted according to
       the type of outlet being used. Cards can also be cancelled, just like any other payment card.
3.19   Initial discussions have identified the following as the potential benefits of using pre-paid
       cards:
       (i)     Young people issued with prepaid cards are likely to experience a range of benefits
               depending on their circumstances;
       (ii)    Personal safety - cards eliminate the need to carry cash. Lost or stolen cards can be
               cancelled without losing funds;
       (iii)   Choice - young people can make online payments, telephone payments and point of
               sale payments, as well as being used at ATMs;
       (iv)    Financial awareness - young people gain a better understanding of how to manage
               their money;
       (v)     Social inclusion - young people who are ineligible for bank accounts can still use
               prepaid cards, making them part of the electronic economy;
       (vi)    Easier, quicker disbursement - young people can receive funds without being present or
               having to queue;
       (vii)   No need to travel - young people who receive payments in cash or cheque do not have
               to travel to collect funds.

3.20   There are also some potential advantages to the Council on the use of these cards through:

              efficiency through reduced administrative and management costs - these are not
               qualified at this stage;

              reduction in risk and better cash management with the reduced need to store and move
               cash and unspent funds can be easier to recoup;

              better management information on the activities (if appropriate depending on the client).



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3.21   Setting up a prepaid programme requires the Director of Children and Young People Services
       to establish a new set of procedures for issuing, loading and stopping cards, as well as
       monitoring the card programme. Young people will need to be educated on how to use the
       cards, and staff will need to understand the limits of the cards and how to use them.

3.22   Card issuing processes will need to ensure that Council funds are protected from potential
       fraud and, with advice from Internal Audit, steps will be taken to ensure that there is an
       appropriate separation of duties when distributing funds to cards.

3.23   The use of the payment cards will enhance a number of young people’s sense of
       independence. It will also assist them in developing life skills around using electronic card
       facilities such as ATM machines, paying bills online and as such will be a great convenience to
       them. The card also offers other potential benefits such as young people with no bank
       account can have the money credited to their card without having to attend the office. This will
       save an amount of social worker and cashier time (as yet unqualified) and will reduce the
       amount of time and reduce to money that this cohort of young people need spend on travelling
       and from to the office to collect a cash payment. Conversely for young people who the leaving
       care team need to see on a regular basis due to their heightened vulnerability they can ensure
       attendance at the office by insisting this needs to happen before the card is charged with the
       weekly allowance. Other benefits from the card include providing the social worker with the
       ability to monitor what they spend their money on (for budgeting purposes) and to some extent
       restrict the purchase of certain items such as alcohol (if this is deemed illegal or problematic).
       It will also reduce the risk of young people being robbed or losing their money as the young
       person will have less money on them at anyone time, and if the card is lost or stolen the
       unspent money can be recovered.

3.24   There is currently a Corporate Project Team, lead by officers within Resources and which
       includes representative from both Children and Young People and Adult and Community
       Service, which is looking at the use of "loaded" cards and their appropriate use and application
       with different client groups across the Council.

3.25   A Project Group for Children and Young People Services has been set up and are already
       undertaking a number of scoping and pilot activities, which are likely to result in the roll out of a
       pre-paid card facility over the next 12 months.

3.26   The draft Implementation Timetable is attached in Appendix 1.

4.     FINANCIAL IMPLICATIONS

4.1    These are combined in the body of this report.


                                       Policy Implications.
       Non-Applicable Sections:        Legal Implications.
                                       Personnel Implications.
       Background Documents:           [Title of document and date]
       (Access via Contact Officer)




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                                                                                       APPENDIX 1


                          DRAFT IMPLEMENTATION TIMETABLE


Month    Task                                         Lead Officers
Nov 09   Establish key Stakeholder Group -            Head of Corporate Procurement
         Procurement, Adult and Community             Manager, Supporting Independence in
         Service, Children and Young People.          Bromley
                                                      Head of Children and Young People Finance
         Adult and Community Service                  Manager, Supporting Independence in
         Supporting Personal Budgets Project          Bromley
         proposal Workshop - Nov 30
         (arranged)
Dec 09   Gather Children and Young People             Head of Children and Young People Finance
         Young People data and key current            Acting Head of Care and Resources
         process elements/costings.
         Visit to Lewisham re their Children's        Head of Children and Young People Finance
         Implementation/Business Case                 Acting Head of Care and Resources
         Arrange for presentation on                  Business Solutions and ICT Project Manger
         services/features by one of the Office       Senior Project Manager
         Government Commerce Banks
         Initial resource requirements and            Head of Corporate Procurement
         funding established                          Manager, Supporting Independence in
                                                      Bromley
                                                      Head of Children and Young People Finance
         Adult and Community Service Pilots           Manager, Supporting Independence in
         Project Proposal                             Bromley
         (inc Business case)
         Project Proposal - Seek Approval to          Manager, Supporting Independence in
         proceed – Adult and Community                Bromley
         Service
         Children and Young People Pilots             Assistant Director
         Project Proposal                             (Safeguarding and Social Care)
         (inc Business case)                          Acting Head of Care and Resources
         Project Proposal - Seek Approval to          Head of Children and Young People Finance
         proceed - Children and Young People          Acting Head of Care and Resources
Jan 10   Develop requirements for supplier -          Joint Adult and Community Service/Children
         request for information                      and Young People/Proc
         Compile and issue request for                Business Solutions and ICT Project Manger
         information to Office Government             Senior Project Manager
         Commerce Pre-Paid suppliers


                                                  7
Month    Task                                        Lead Officers
Feb 10   Supplier Responses and Assessment           Joint Proc, Adult and Community Service,
                                                     Children and Young People
         Supplier selection and engagement           Joint Proc, Adult and Community Service,
                                                     Children and Young People
Mar 10   Establish Project Governance                Head of Children and Young People Finance
                                                     Acting Head of Care and Resources
         Establish Project Mgr/Team                  Head of Children and Young People Finance
                                                     Acting Head of Care and Resources
         Initiate Project with Supplier              Head of Children and Young People Finance
                                                     Acting Head of Care and Resources
         Confirm scope and details of Pilots –       Manager, Supporting Independence in
         Adult and Community Service                 Bromley
         Confirm scope and details of Pilots -       Head of Children and Young People Finance
         Children and Young People                   Acting Head of Care and Resources
Apr 10   System Implementation - 8 wks
         Adult and Community Service -               Manager, Supporting Independence in
         Process change                              Bromley
         Children and Young People - Process         Head of Children and Young People Finance
         change (could be started earlier)           Acting Head of Care and Resources
May 10   System Implementation - 8 wks
         Adult and Community Service -               Manager, Supporting Independence in
         Process change                              Bromley
         (could be started earlier)
         Children and Young People - Process         Head of Children and Young People Finance
         change                                      Acting Head of Care and Resources




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