financergreport.doc.doc.doc

University College Dublin

Quality Assurance/Quality Improvement

Review Group Report

Finance Office

University College Dublin

July 2004

Table of Contents

Members of the Review Group 4

1. The Finance Office 5

1.1 Location 5

1.2 Staff 5

1.3 Products/Processes 6

2. The Departmental Self-assessment 8

2.1 The Co-ordinating Committee 8

2.2 Methodology adopted 8

2.3 General Comment 8

3. The Site Visit 9

3.1 Timetable 9

3.2 Methodology 10

3.3 Overview of the site visit 11

4. The Review 12

4.1 Methodology 12

4.2 Sources Used 12

4.3 Review Group's View of the Self-assessment Report 13

5. Findings of the Review Group 14

Overall Comments 14

5.1 The Scope of the Quality Assurance Review 15

5.2 Findings of the Review Group 15

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5.3 Customer Perspective 22

5.4 Staff Perspective 23

5.5 Reports 23

5.6 Recommendations of the Review Group 24

6. Response of the Co-ordinating Committee to the Review Group Report 31

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Members of the Review Group

NAME AFFILIATION ROLE

Professor Michael Monaghan Department of Large Animal Clinical Studies, UCD

Chair

Dr Ann Lavan Department of Social Policy & Social Work, UCD

Rapporteur

Dr Colm O’Gorman Department of Business Administration, UCD

Cognate

Mr Pat Dalton Former Bursar, NUI Maynooth Extern

Mr Graham Bailey Senior Financial Accountant, University of Edinburgh

Extern

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1. THE FINANCE OFFICE

1.1 Location of the Finance Office

The Finance Office is situated on the first floor of the Michael Tierney Building.

Financial Planning and Resources

Single office for the Head of Financial Planning and Resources with adjacent office for Senior Administrative IV and one trainee accountant. Single office for Administrative Officer IA.

The physical resources of the department are considered to be adequate

Financial Management

Office accommodation consists of one open plan room for fifteen staff members and another open plan room for five payroll staff. Single office for Head of Financial Management with an adjacent room for the Finance Office secretary. Single offices for the Operations Accountant, Systems Accountant, Project Accountant and Financial Accountant.

The Post-Award Research Unit moved to room 126 in the Science Building at the end of November 2003 next to the Office of Funded Research Pre-Award Research office. Up to then the Post-Award Research Office was in two physical locations, the Michael Tierney Building and the Science Lecture Building (occupying part of the OFRSS office). However the office is now relocated in another part of the Science Lecture Building so that all four members of staff are working together.

1.2 Staff

The Finance Office, which has two reporting divisions is broken down into eight distinct sections. A total of 35 members of staff are employed within these sections, 26 full-time, 6 temporary, 2 part-time permanent and 1 part-time temporary.

The breakdown by section and grade is as follows:

Finance Office - 1 Senior Administrative Officer (SAO) II, 2 SAO IV, 2 95 Administrative Officer (AO) IA and 1 Senior Executive Assistant (SEA).

Post-Award Research Unit - 1 95 AO IA and 2 95 SEAs (one of these positions is currently vacant).

Financial Planning and Resources Unit - 1 SAO II, 1 95 SAO IV and 1 95 AO IA.

Payroll Office - 1 AO IA, 1 95 SEA, 2 SEAs and 1 95 Executive Assistant (EA).

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Payments Section – 1 95 AO I, 2 95 SEAs, 3 95 EAs and 3 EAs.

Accounts Department – 1 95 SEA, 1 95 EA, 4 Trainee Accountants.

Systems Management – 1 AO IA.

Capital Funds, Treasury, Pensions and Trust Funds – 1 95 AO II and 1 95 EA.

1.3 Product/Processes

The Finance Office is divided into two main functional units:

Financial Planning and Resources Unit Financial Management Unit

The Financial Planning and Resources Unit consists of one core unit, while the Financial Management Unit consists of several component departments.

Financial Management Post Award Research OfficePayroll DepartmentPayments DepartmentAccounts DepartmentSystems ManagementCapital, Treasury, Pension & Trust Funds

The Procurement Office, Fees and Grants Office and Management Services Unit are part of the Bursar’s Office and are not included in this review. MSU and Fees and Grants Office have previously undergone a quality assurance review.

The Head of the Financial Planning and Resources Unit and Head of Financial Management report directly to the Bursar.

Financial Planning and Resources Unit

The principal role of this unit is to lead the University’s financial planning and resource allocation functions.

The key functions can be summarized as follows:

Resource AllocationTo lead the overall allocation of the University’s financial resources in accordance with stated policy. The unit is responsible for financial planning for new and existing activities, for the annual budgeting process for the University, Faculties and ancillary activities, and for developing and maintaining models to allocate resources in line with the University’s Strategic Development Framework.

Costing and ReportingTo provide accurate and timely financial estimates, information and reports for a wide range of internal and external users at all levels. The unit is responsible for preparation of the annual Higher Education Authority (HEA) Unit Cost

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Study, for financial reporting to the appropriate funding bodies for Programme for Research in Third Level Institutions (PRTLI) research institutes, for estimation of the cost of pay awards and for a wide variety of internal and external financial reporting.

Management Information To lead the development of management information systems and key performance indicators in the University. The provision of management information is a key responsibility of the Financial Planning unit. The Finance Office recently selected and are currently implementing a new budgeting and planning system, Frango, which will greatly enhance the budget process and has the potential to be used for planning, costing and reporting. This system will shortly be rolled out to the Faculties as a planning tool.

The Finance Office has developed the cost centre hierarchy structure in the Cfacs financial system. The two hierarchies recognize the budgetary/financial responsibility and staff reporting responsibility respectively. The latter is now compatible with structures in the Student and HR systems, so that the ability to provide management information for key users across the three systems has been enhanced. This will enable the generation of key performance indicators to measure activity in terms of student numbers and staff output.

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2. THE DEPARTMENTAL SELF-ASSESSMENT

2.1 The Co-ordinating Committee

Mr Donal Doolan Senior Administrative IIMr. John M Kenny Senior Administrative IVMs Eileen McHugh* 95 Senior Administrative IVMs Breda Laragy 95 Administrative Officer IAMs Gillian Cody Administrative Officer IAMrs Niamh Hagan 95 Senior Executive AssistantMs. Emma Acton 95 Executive Assistant

* After Ms Eileen McHugh retired from UCD she was replaced by Ms Helen Miller for the last couple of meetings.

2.2 Methodology Adopted

This Quality Assurance/Quality Improvement (QA/QI) Review Process was conducted in accordance with the legislative requirements of the Universities Act 1997.

A Finance Office Co-ordinating Committee was established in May 2003 following discussions and agreement with the Quality Assurance Office.

The Co-ordinating Committee held eight formal meetings up to the completion of the report. Preparation of the Self-assessment Report (SAR) was split into five section of Accounts Department, Payments Section, Post Award Research Unit, Payroll Office, and Financial Planning and Resources Unit. The Co-ordinating Committee section nominee was responsible for drafting, in consultation with section staff, the report for their section. The report was kept on the M:drive and was password protected to all staff within the department. Ms Breda Laragy had responsibility for compiling the final report and its despatch to the Quality Assurance Office.

2.3 General Comment

The PRG considered that the SAR had been prepared in an appropriate and extremely efficient manner and covered all the salient points. In general it reflected the collective views of the staff of the Finance Office. The SAR was completed within the required deadlines.

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3. THE SITE VISIT

3.1 Timetable

Sunday, 21 March 2004

18.00 RG meet at hotel

20.00 Dinner hosted by Bursar

Monday, 22 March 2004

Venue: Room G213, Faculty of Human Sciences Boardroom

09.00-09.30 RG met

09.30-10.00 RG met Bursar over coffee

10.00-10.45 RG met with Co-ordinating Committee

10.45-11.30 RG met staff not on Co-ordinating Committee

11.30-12.00 RG met Head of Financial Management

12.00-12.30 RG met with Finance Office and Systems Management staff

12.30-13.00 RG met with Capital Funds, Treasury, Pensions and Trust Funds staff

13.00-14.30 Working lunch, RG only

14.30-15.00 RG met with Payroll Office staff

15.00-15.30 RG met with Post-Award Research Unit staff

15.30-16.00 RG met Head of Financial Planning & Resources over coffee

16.00-16.30 RG met with Financial Planning & Resources Unit staff

16.30-17.00 RG met with Payments Section staff

17.00-18.30 RG viewed facilities of the Bursar’s Office

19.30 p.m. RG only, working dinner in hotel

Tuesday, 23 March 2004

Venue: Room G213, Faculty of Human Sciences Boardroom

09.00-9.30 RG met

9.30-10.00 RG met Accounts Department staff

10.00-10.45 RG met with Dean of Science and Dean of Veterinary Medicine over coffee

10.45-11.00 RG only

11.00-11.15 RG met with Faculty Administrator - Faculty of Human Sciences

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11.15-11.30 RG met representative of Governing Authority Finance Committee

11.30-11.45 RG met with Head, Department of Botany

11.45-12.00 RG met with representative of AIB Bank

12.00-12.30 RG met with former Vice-President for Research

12.30-12.45 RG met Head, Department of Mathematics

12.45-13.00 RG only

13.00-14.30 RG met representatives of External Customers over lunch

14.30-14.50 RG met Deputy Librarian

14.50-15.10 RG met representative of Personnel (Pay & Conditions)

15.10-15.30 RG only

15.30-16.00 RG met Head of Management Services Unit

16.00-16.30 RG met Director of Computing Services over coffee

16.30-16.50 RG available for private individual staff meetings

16.50-17.10 RG meets Head, Buildings and Services

17.10-18.30 RG available for private individual staff meetings

19.30 p.m. RG only, working dinner in hotel

Wednesday, 24 March 2004

Venue: Boardrooms 1,2 and 3, Michael Tierney Building

09.30-09.45 RG rescheduled/requested additional visits

09.45-10.00 Private individual staff meeting

10.00-10.15 RG met with Head, Department of Food Science

10.15-10.30 Private individual staff meeting

10.30-11.30 RG rescheduled/requested additional visits

11.30-13.00 RG worked on RG report

13.00-14.30 Working lunch, RG only

14.30-15.30 RG worked on RG report

15.30-16.00 RG met Bursar over coffee

16.00 –17.00 Presentation by RG to all Bursar’s Office staff

17.00 RG and staff of Bursar’s Office coffee reception

3.2 Methodology

Sunday, 21 March 2004. The members of the Review Group met the Director of Quality Assurance at 6p.m. at the Stillorgan Park Hotel for initial introductions

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and briefing, and continued with a period of preliminary discussion before dinner. Dinner was hosted by the Bursar.

Monday, 22 March and Tuesday, 23 March. The team followed the pre-agreed timetable above, except that some interviews ran overtime. In general, the time was regained at the expense of coffee or lunch breaks. During the Tuesday evening tour of the facilities, the RG split up into smaller groups or toured individually and were able to talk informally to some of the staff. The RG requested a meeting with a representative of the Management Services Unit (MSU). In addition, as indicated, Tuesday afternoon provided the opportunity for any member of staff to request an interview.

On Wednesday morning the Chair and one member of the RG met with two members of staff who had requested an individual interview. The RG did not feel it necessary to carry out any further visits or interviews after this and concentrated instead on preparing an exit presentation. This was previewed for the Bursar from 2.30 to 3.30p.m. After this full presentation was made to the assembled staff by Mr Graham Bailey. All members of the RG were present for this presentation, which had a very full staff attendance.

The Review Group was based in the Board Room of the Faculty of Human Sciences in the John Henry Newman Building and all formal meetings took place there. The activities being reviewed take place on one floor of the Michael Tierney Building. Major conclusions were unanimous from an early stage. Apart from time spent by the Chair and one member of the RG in interview with some staff members on Wednesday morning the team kept together. The review thus consisted of:

reading the SAR in advance; meeting and interviewing staff; touring the facilities; discussion and reflection; writing sections of the exit presentation individually and joining forces to

edit and combine these sections.

3.3 Overview of the Site Visit

All aspects of the visit went smoothly and we had full co-operation from everyone involved, both in the QA Office and the units being reviewed.

The timetable allowed the RG to make the full set of feedback comments that were felt to be necessary in the exit presentation as all necessary information gathering was complete by Tuesday night and the final morning was available to the RG to formulate some conclusions. Meetings with a comprehensive range of customers and staff had been built into the programme, allowing the RG a complete picture of the internal and external perceptions of the units under review.

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4. THE PEER REVIEW

4.1 Methodology

All members of the RG were involved in addressing all aspects of the review. Sections 1-4 of the Report were completed using information from the SAR and verified during the site visit. While all members of the group were involved in drafting the final report, primary responsibility for each section was as follows:

5.1 Professor Monaghan, 5.2 Dr Lavan5.3 Dr Lavan, Mr Bailey and Mr Dalton5.4 Professor Monaghan, Dr Lavan and Dr O’Gorman5.5 Professor Monaghan, Mr Bailey and Mr Dalton5.6 Dr Lavan and Professor Monaghan

Mr Bailey, based on the agreed views of the RG, gave the exit presentation. All members of the Finance Office were invited to the exit presentation and almost all attended. There were apologies from a small number who could not be there for a variety of reasons.

4.2 Sources Used

The main source was the SAR of the Finance Office. The following sources were also used:

i. Meeting with the Bursar.

ii. Meeting with the Co-ordinating Committee.

iii. Meeting with staff not on Co-ordinating Committee.

iv. Meeting with Head of Financial Management.

v. Meeting with Finance Office and Systems Management staff.

vi. Meeting with Capital Funds, Treasury, Pensions and Trust Funds staff.

vii. Meeting with Post-Award Research Unit staff.

viii. Meeting with Head of Financial Planning and Resources.

ix. Meeting with Financial Planning and Resources staff.

x. Meeting with Payments Section staff.

xi. Meeting with Accounts Department Staff.

xii. Meeting with Dean of Science and Dean of Veterinary Medicine.

xiii. Meeting with Faculty Administrator.

xiv. Meeting with member of Governing Authority Finance Committee.

xv. Meeting with Heads of two Departments.

xvi. Meeting with External Customers: Banks

xvii. Meeting with Deputy Librarian

xviii. Meeting with member of Personnel staff

xix. Meeting with Director of Computing Services.

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xx. Meeting with member of staff from MSU.

xxi. Visit to location of Finance Office.

4.3 Review Group's view of the Self-assessment Report

The Self-assessment Report had been thoroughly researched, honestly presented and covered comprehensively the scope of the work of the Finance Office. It clearly provided staff with the opportunity for reflection on structures, systems, lines of reporting, communication and day-to-day activities. The report was, however, prepared against a background of considerable organisational change within UCD and the imposition of a new external financial reporting regime. The Finance Office will need to plan to respond ever more effectively to the demands of the external environment and the increasing volume and financial workload associated with research support and commercial activities, Foundation and other activities. Increased compliance with the immediate requirement for consolidated accounts made by external agencies, and the need to anticipate the demands of proposed International Accounting Standards (IAS.) and International Financial Reporting Standards (IFRS.), will present major challenges to UCD in the short to medium term future. The complex needs of internal customers will require an examination of new systems and methodologies to provide an effective and transparent environment to meet the academic mission of the University.

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5. FINDINGS OF THE REVIEW GROUP

Overall Comments

The Quality Assurance Process was conducted at a time of change in University College Dublin with the appointment of a new President in January 2004. The Review Group examined the documentation provided, and interviewed a wide range of staff. It was clear that at this time of significant corporate change there was a renewed emphasis on planning in the light of the aim to enhance the standing of UCD as a research intensive university. While the Finance Office had been successfully restructured and new financial systems introduced during the period 1999 – 2004, recent changes will have implications for continuing transformation.

A major stakeholder of the Finance Office is the Higher Education Authority to which accountability and reporting generally flows. In March 2002 the Higher Education Authority (HEA) published a “Report on the Financial Governance of Irish Universities– Balancing Autonomy and Accountability”. This identified the requirement for Governing Authorities to adopt best practice with regard to financial control and reporting in order to safeguard all the institution’s funds, both public and private and to “secure the economical, efficient and effective management” of all the institution’s resources and activities and that the risk to “public and private funds and all other resources received by the university is minimised”. Following on from this recommendation Irish Universities in consultation with the HEA are required to prepare full consolidated “corporate style” annual accounts with effect from the financial year ended September 2003. In the case of UCD, these consolidated accounts will for the first time incorporate a composite statement of all income and expenditure generated by the University covering all activities including subsidiary companies under its aegis and including non-core activities such conferences, residences, catering and other trading activities.

The Review Group was impressed at the committed and talented staff of the Finance Office. It was evident that major re-structuring initiatives by the Bursar during the period 1999-2004 had improved effectiveness. Evidence was identified by the RG that the implementation of appropriate technology had assisted the work of the Finance Office and improved service delivery. The survey conducted for the Self-assessment Report and interviews conducted by the Review Group indicated high levels of satisfaction among customers. It was evident that staff and customers recognise the need for constant change to meet new requirements, both internal and external.

It should be noted that UCD has been at the forefront of the university sector in Ireland in setting a blueprint for consolidated accounts and tributes have been paid to Head of Financial Management who has led the formal process of engagement with external agencies e.g. The Higher Education Authority and the Comptroller and Auditor General.

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5.1 The Scope of the Quality Assurance Review

In the light of the Quality Assurance brief described as a Review of the Bursar’s Office, the first task of the Review Group was to clarify the scope of the review and clearly identify the unit/units under review. The responsibilities of the Bursar’s Office include a wide range of financial activities associated with the following areas: Buildings and Services; Support Services; Legal Affairs; Commercial Activities (which includes ancillary services such as: UCD Property Development and related companies, Catering. Student Accommodation, Procurement Office, O’Reilly Hall, International Summer School, UCD Press). The Fees and Grants Office and the Management Services Unit were the subject of a separate Quality Assurance Review. The focus of this review was on the Finance Office, comprising two main reporting units: the Financial Planning and Resources Unit and the Financial Management Unit. The Review Group examined each of these component units in order to understand the respective activities involved in each area.

5.2 Findings of the Review Group

1. There have clearly been substantial improvements in the delivery of administrative services in recent years, and many contributors to the QA exercise acknowledged this fact. The high levels of satisfaction from external suppliers and the banks are indicative of the recent efforts by the Finance Office and individual Units within the Finance Office to increase levels of efficiency and service. The efforts have been successful. Furthermore the customer service provided on a day-to-day basis by individual staff members is appreciated and acknowledged by external suppliers. Furthermore, we note that this was achieved during a time when individual units experienced a significant increase in the volume of activity. It was noted that the self-assessment questionnaire response rate of 23% was low. However those who did respond gave the Finance Office functions high rates of satisfaction.

2. Senior academic staff interviewed appeared satisfied with the support provided by the Finance Office. In our discussions, however, with some key internal customers we noted a lack of confidence in the accuracy of financial information and budgets provided to Faculties and there were some reservations in terms of the clarity and transparency of some aspects of documentation. Given the importance of financial matters and the impact of resource allocation decisions on Faculties, Departments and Centres, it is not surprising to find that some internal customers have concerns about this process.

3. Sound financial controls at the level of Faculties and Centres will be essential if UCD is to successfully align its activities with new strategic priorities. The Finance Office plays a critical role in this process. However their role is not limited to the development of the Resource Allocation Model, but must extend to ensuring that devolved units (principally Faculties and Centres) have the capacity to analyse, manage and budget

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their own financial resources and that they receive timely and unambiguous financial information. We note that the Finance Office has identified a shortfall in its role as ‘educator and communicator’. In recent years the Finance Office have made significant improvements in their core activities. They are now in a position to devote increased attention to their role as ‘educator and communicator’. Prioritising this activity will be a critical contribution to ensuring that Faculties and Centres can realign activities to support UCD’s emerging strategic priorities.

4. There has been a lack of progress by the Finance Office in rolling out the POP system. This failure may due to a combination of a lack of priority from the Finance Office, a failure to plan and resource the roll-out, inadequacies in the computing infrastructure within the university. The underlying cause of this failure needs to be understood so that the roll-out can continue and so that the roll-out of other on-line systems can proceed with confidence.

5. Annual Accounts and Budgets are provided on a timely basis. The difficulties in establishing final ‘robust’ budgets are essentially due to timing factors outside the University’s control. Persistent requests have been made by University Chief Finance Officers Group/Conference of Heads of Irish Universities to the Higher Education Authority and the Department of Education and Science for multi-annual budgets that would enable the Bursar to announce early budgets in advance of the commencement of the academic year. Many faculties and other units were required to plan on an indicative basis.

6. Recurring issues raised by a number of contributors concerned communications, staff training, and a need for the introduction of job descriptions and performance evaluation within the Finance Office.

We note that in the SAR the Finance Office recognises a number of these issues.

5.2 (a)

Financial Planning and Resources Unit

Findings

1. The Unit has a clear mission, namely “to lead the University’s financial planning and resource allocation functions”. To achieve this the Strategy of the Unit is to “allocate resources based on stated University strategic priorities”.

2. A new role of Director of Strategic Planning has been created as part of the reorganisation of the Senior Management Structure of UCD.

3. Internal communication is perceived to be inadequate by a small number of staff within the Finance Office. This comment was only made at the review stage, however, and was not evidenced in the SAR.

4. The Annual Budgetary Process, based on the new resource allocation model lacks acceptance in certain quarters possibly due to lack of clarity

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about the key elements. It was noted that a new budget modelling system (FRANGO) should enhance the devolution of financial data to customers.

5. The credibility of the annual budgeting process is hampered by late notification of the annual State (HEA) Grant to UCD, which is the major driver of the resource allocation system.

6. The Resource Allocation Model that allocates the HEA recurrent grant is perceived to be highly complex and creates a credibility gap.

7. The existence of Faculty and Departmental reserves could further erode confidence in the budgeting process due to added complexity. Some of these reserves arise through budgetary objectives under-spent or not delivered in prior years. The application of such reserves by the individual Faculties is subject to the usual budgetary approval cycle, but the relationship to UCD’s strategic objectives is less clear.

8. The process of devolving financial autonomy potentially involves a transfer of financial decision-making power and responsibility to the Faculties. Key decisions regarding new activities and capital expenditure will be taken at faculty level. Faculties are described as building up ring-fenced reserves to fund future strategic developments.

9. The policy on financial devolution has provided incentives for Deans to take strategic initiatives for the benefit of their faculties and the University. As a result of the faculty reserves policy, faculties have taken decisions in respect of activities and resource allocation in the knowledge that they may retain budget savings for future development. Example quoted in the SAR include several new teaching facilities partly or fully funded from such reserves and in the Faculty of Medicine, the decision to admit large numbers of overseas students to fund new student education facilities and the introduction of new specialisations.

5.2. (b)

Financial Management Unit

Post Award Research Unit

The Finance Office, through the Post-Award Research (PAR) Unit now takes complete responsibility for the financial aspects of each funded research activity from the point at which the award is accepted by UCD.

Findings

1. Accounting for funded research is totally integrated with the income and expenditure accounting related to teaching and other activities of the Faculties and constituent academic departments. The financial records relating to research awards sit alongside those for the core activities of each Faculty and Department on the Cfacs ledger and an integrated suite of research and departmental account status Business Objects reports is thus available to all Heads of Departments. This integration is achieved despite funded research introducing the complexities of project accounting

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over multi-year timespans and the application of overhead recovery charges.

2. The PAR Unit staff resource is, however, perceived to be less integrated with the other constituent departments of the Financial Management Unit. Although the Unit was split from the Office of Funded Research Support Services (OFRSS) in 2002, it is still located in the Science building with the OFRSS.

3. The support of the Finance Office in monitoring the financial impact of the development of UCD as a research-intensive institution is of key importance. This role may have been under-emphasised in the SAR, as was brought to the attention of the Review Group by senior finance management and section staff.

4. Preparation of research contract claims and billings from research sponsors is, in some cases, still done by researchers or the administrative support of their department or research centre.

5. Most reporting, e.g. the quarterly funded-research report for the Finance Committee, focuses on headline research grant award values or levels of gross income received.

Payroll

Findings

1. Integrated Personnel and Payroll systems (COREPAY) which deliver high quality customer service are in operation. The service levels have improved in recent years through the consolidation of all six payrolls onto a single interactive software package.

2. Section works closely with the Pay & Conditions Office of the Personnel Department, but better communication with Personnel is perceived as desirable by “customer” base.

3. Post Management documentation is only put on COREPAY at the final stage. On-line access to documentation during the full post management cycle is not available leading to unnecessary query levels relating to the status of recruitments, replacements and re-appointments.

4. After recruitment, all new employees are registered through the Pay & Conditions Office.

5. All 6 payrolls are driven by Pay & Conditions Office.

6. Policy on staff electronic access to payslips via Core Electronic Staff Service requires clarification.

7. The University pays its employees and pensioners on a weekly and

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monthly basis, depending on staff category. All academic and support staff (approximately 3500) are paid on a monthly basis and University services, canteen, grounds and some pensioners (approximately 500) are paid on a weekly basis. Weekly paid staff are paid each Thursday and monthly staff and pensioners are paid on the last working day of each month.

8. The key step in the payroll process is the hand-over of the file of employee adjustments from the Pay & Conditions Office to the Payroll Department. This file details payment instructions for new employees, changes to existing employees such as overtime, additional allowances, resignations, terminations, changes in working hours.

9. Project work is initiated by an informal MSU/Personnel/Salaries Administration working group. (e.g. COREPAY - Management reports) detailed payroll report, listing all budgeted posts per cost on line to Faculty Offices to allow Faculty Administrators to review all posts charged to their faculties as a basis for the staff budgeting, and to enable memorandum notes to serve as reminders for planned departures, resignations or secondments and to ensure that Faculties are aware at all times of the posts within their budget remit.

10.The Payroll Department is currently working on developing a suite of management information reports which will provide summary financial information on payroll costs to the Finance Office and Personnel Office.

Payments Department

Findings

1. Historically, there had been delays in the payment process, an unacceptable error rate and occasional cases of documentation being lost. It is the finding of the review group that the Section has been turned around and performance and customer satisfaction is now high.

2. POP roll out has major implications for the Financial Control environment of UCD, although the issue is largely absent from the Payments Section of the Self-Assessment Report. POP helps push departments to follow ordering disciplines, thus increasing supplier payment cycle efficiency.

3. Good practice is being followed in supplier reconciliations, and this should be emphasised.

Accounts Department

Findings

1. The Accounts Department Section, partly through its general title and lack of discrete unit identity even on the organisation chart, lacks clarity.

2. The Accounts Department Section combines such critical financial control support tasks as management accounting, financial accounting and the

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maintenance of meaningful income and expenditure records in accordance with UCD accounting policies (general ledger review).

3. The team are the key Finance Office point of contact for the Financial Control “customers”. They are the main focus for interaction between College staff and the Finance Office. This customer base consists of the wider devolved University financial managers and administrators in Faculties, Departments, Institutes, Ancillary Units and Academic and Support Services.

4. Accounting procedures are obscure to lay users. Such issues as year-end expense accruals by supplier invoice date or from receipted POP orders, and the requirement to accrue income due or prepay income received in advance need to be explained to departments by the staff of this section. Such factors have a key impact on actual out-turn—the most important measure in the financial reporting system.

5. There is a stated policy of devolution of financial management to Faculties, but in reality this is not fully operational in UCD. The transfer of real decision-making power is only partial. There is evidence that acceptance of accountability by Deans is not uniform nor complete.

6. On-line financial systems have not been rolled out to all Faculties to enable them to have instant access to all finance systems.

7. The problems associated with the late State grant announcement impact on Accounts Department. Temporary Budget loading and removal/replacement with actual grant announcement-based budgets is frustrating to staff. (A review of the budget process and recommendations is covered in the Financial Planning & Resources Unit section of the Review Group report.)

8. Departmental Reserves/ Unspent budget roll-forward at year ends; accrued and non-accrued unspent fee and state-grant-based budgets; application of departmental Reserves/unspent budget roll-forwards through subsequent budgeting cycle process; and the requirement to balance Income & Expenditure on the HEA Funding Statement in the subsequent year of spend—these are all highly complex issues which interrelate with the HEA Funding Statement and the demands of GAAP (Generally Accepted Accounting Principles).

9. There is no active involvement of Financial Planning & Resources Unit in these issues from the perspective of the Section staff.

10.The critical task of out-turns forecasting, in liaison with all operating units, is under-emphasised in the Self-assessment Report.

11.A perceived lack of communication between the section and the Financial Planning & Resources Unit is a big concern for the staff in this section.

12.Most of the University’s commercial activities are managed by wholly-

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owned subsidiary companies which require annual audits, regular interim reporting and compliance with company law in relation to statutory records and proper books of account. These entities do not add to financial control and may in fact complicate or even obscure the financial position of the University.

13.Lodgements to the University bank accounts and posting to Cost Centres Catering etc. do not follow best practice in respect of debtors (sales invoice accounting and collection routines). Cfacs Accounts Receivable (AR) is not in use. Similarly, the absence of AR will reduce VAT output accounting effectiveness.

14.The system of recruiting Trainee Accountants appears to have been singularly successful.

Systems Management

Findings

1. The priorities of the section are changing as the University’s administrative functions migrate to new software packages, utilise additional modules and functionality and upgrade to new versions.

2. The Systems Management Section accountant had retained some responsibility for transaction-related work and report development, in particular Business Objects.

3. The challenge of completing some projects such as Cfacs debtors implementation remained significant.

4. The planned upgrade (June 2004) to a new web based version of the Ceder financial software has a significant impact on remaining roll out of purchase order processing (POP) and other Cfacs online accounting to UCD departments. All university administrative staff have access to Banner student information and the Business Object reporting tools.

5. Interviews conducted during the site visit yielded the observation that there really is no formal programme of training on financial systems and procedures, particularly Ceder Financials. While some attempts have been made to tailor in-service training to faculty needs, this has been largely on an ad hoc basis.

6. A formal Finance system project programme is maintained in conjunction with the Management Services Unit. This links with priorities identified in the ASPIRE programme. The programme addresses key areas such as automation of interfaces, the linking of information from other administrative systems and the completion of the Cfacs roll out.

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Capital Funds, Asset Register, Treasury, Pensions and Trust Funds

Findings

1. The administration of all capital projects are recorded and managed centrally.

2. An asset register exists for purpose of recording all items purchased with an individual value in excess of €1,270.

3. Treasury Management includes daily monitoring of current account bank balances.

4. The College Pension Fund is controlled directly by the University.

5. Assets of individual trust funds are pooled and recorded in the Cfacs system. The details of the individual trusts are currently maintained on spreadsheets.

5.3 Customer Perspective

Internal customers

Internal customers include the Governing Authority and its Finance Committee, Deans and Faculty Staff, Heads of Departments and Department Staff, Researchers, Centre managers, College Officers, and all individual staff members.

Findings

1. Overall, internal customers are moderately satisfied with aspects of the service provided by the units of the Finance Office.

2. Those internal customers who have personal dealings with the Finance Office were very satisfied and complimentary of the level of personal customer service provided.

3. There is some dissatisfaction among staff within Faculties about their ability to understand the financial information provided by the Finance Office.

External customers

Key external customers include suppliers to the University and the banks which the Finance Office uses to conduct its business.

Findings

1. The findings of the Review Group and the QA self-assessment survey suggest that both suppliers and the banks are very satisfied with the efficiency and the levels of customer service provided by the Finance Office.

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2. Furthermore the suppliers we talked to, and the evidence presented in the SAR such as the amount of interest charges for late payments, suggest that there has been an improvement in levels of efficiency and service.

3. The suppliers met with were universally complimentary of the helpfulness of individual named staff members with whom they deal. However, for some suppliers there is confusion about which member of staff should be contacted when a query arises. The suppliers we met were large suppliers to the University, all of whom had ongoing contracts.

4. The bank highlighted the slowness of moving towards an increased use of EFT (electronic banking) by the Finance Office, a problem they acknowledged was due to the technical compatibility of their ‘365’ system with the UCD network. Furthermore the banks suggested it might be helpful to “conduct a general review of service”.

5.4 Staff Perspective

Findings

1. Staff within the Finance Office are generally satisfied with their working environment.

2. Staff were positive about the QA process, reflecting that they have benefited from the process and that they were optimistic about how the process could improve their working environment.

3. Some staff expressed concerns about the following:

a. Communications within the Finance Office.

b. The feedback staff receive in respect to their performance.

c. The lack of clear job descriptions.

4. The physical work environment has some deficiencies.

5.5 Reports

A major role of the Finance Office is to provide decision makers and budget holders with useful and timely reports, in addition to meeting the statutory reporting obligations of the University. Section 5 of the SAR is explicit on the various reports issuing from the Finance Office and the roles which these reports serve. Section 2.10 details the views expressed by customers on the reports produced by the Office.

Findings

1. All standard internal financial reports (Business Objects (BO)- based) are distributed from the Accounts Department by internal post, in hard-copy format. The roll-out of financial devolution to faculties has not yet reached the stage where there is full confidence that BO electronic retrieval of

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reports by Departments would definitely lead to the review of exceptions and overspends in the department.

2. Reports are sent out to all Deans, Department Heads and Project and Fund Managers and it generally takes one to two days to print the reports and two/three days to send them all out. Label listings for the reports are stored on Access databases and are updated when Heads of Department change.

3. The PRG recognises the enormous task the office faces in the production of such a wide range of reports and in particular acknowledges the often unseen work which goes into the production of reports for external agencies which are often required at very short notice.

4. It is clear that the production of consolidated reports according to GAAP principles will place significant additional demands on the Office.

5. There is variability in the level of understanding of reports among the internal customers in the University, as reflected in the comments included in Section 2.10 of the SAR and interview data.

6. The Deans feel that more clarity is required in the budget stages, particularly in relation to indirect costs.

7. Irritation was expressed by some users at mistakes (double charging, incorrect charging etc.) and difficulty in finding explanations; however, the majority of users find the email enquiry system effective.

8. The PRG endorses the intention to move towards more electronic reporting and an accompanying reduction in the production of paper reports.

9. The happiest customers were those who had direct contact with people in the Finance Office, who were known to them and with whom they could work to resolve difficulties.

5.6 Recommendations of the PRG

The Quality Assurance exercise was perceived by staff as an opportunity for change. It is clear that a range of actions are required on the recommendations in the Self-Assessment Report and the Review Group urges the Finance Office to proceed to implement these actions to deal with the following key issues:

1. A deeper understanding of customer needs is required, in order to meet higher expectations/demands and new working relationships with Deans and Institute Directors.

2. Improved communication, both internally and externally is necessary.

3. Increasing reliance on technology will require prioritisation of the issues to be addressed in improving the IT environment.

4. The interaction between the role of the Head of Financial Planning and the

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new role of Director of Strategic Planning should be formalised.

5. The Finance Office needs to recognise the importance of forward planning and the need to strengthen the culture of planning.

6. Review of structures within the Office is required to meet increased workload and policy changes.

7. Human Resources policies within the office require review and development.

8. The Financial Planning and Resources Unit should reflect the long-term strategic aims of the University in the operation of the medium term financial planning and resource allocation model.

9. Clarity is required on the respective roles of the Financial Planning and Resources Unit and the Capital/Treasury/Pension/Trusts department with regard to major capital project reporting and control.

10. In view of the late timing of the notification of the annual State grant, a senior management review of the risks and benefits of providing firm budgets, ideally fifteen months in advance, should be considered. Pressure should be maintained on the appropriate external authorities to review the State grant schedules.

11.Clear explanations of the mechanisms employed in the Resource Allocation Model could be made more readily available to internal customers through the Finance Office website.

12.Support should be sought from Faculties, Registrar’s Office, MSU and other stakeholders to promote the objectives of making fee income attribution more transparent, robust and integrated with student data.

Post Award Research Unit

Recommendations.

1. The Review Group endorses the view that a re-location will help to create, and promote a recognisable and prominent identity for the Unit as a Department of the Finance Office. This closer association of the PAR Unit with mainstream Finance Sections may also facilitate the other Quality Improvement objectives of the Unit, such as reducing the number of posting errors and miscoding of income and expenditure.

2. In planning any re-location of the PAR Unit, the aims of the Finance Office senior management and the Unit staff should be given the full support of all stakeholders, especially the OFRRS. Measures such as maintaining PAR Unit access to the OFRSS research contracts database, perhaps via a network or common server, may need to be carefully reviewed.

3. There is presently a formal transfer of responsibility for administration to the Finance Office at the point of acceptance of a research award. There may,

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however, still be some integration of the relevant data with that of OFRSS. The OFRSS pre-award log-of-grant claims and their due dates are an example. A procedure could be examined whereby the relevant data could be extracted and the appropriate back-up file created to facilitate the transfer of each “case” to Finance Post Award from the OFRSS pre-award team. This may assist in providing continuity of award administration in the event that the PAR Unit is located separately.

4. Enhancing the transfer process and raising the profile of the department may formalise the handover to the PAR Unit of ultimate accountability for all research administrative, financial and compliance matters. Consideration is being given to complete all cost statements on behalf of researchers and to the submission of all claims via the PAR Unit of the Finance Office. Many compliance and all VAT issues are a Finance Office responsibility. The Review Group endorse this aim, subject to the resource implications to achieve this within the two-year time-frame.

5. It is suggested that the Unit should consider the development of research financial information and control systems to include a sales invoicing system that is fully integrated with Cfacs, in association with a wider review of income collection and VAT output accounting systems.

6. A Review is required to enhance research-related financial reporting to increase the profile of overhead recovery levels, as well as absolute research turnover or monetary award success levels. This will ensure that the success of the PAR Unit in monitoring of cost overruns, debtors and the cash flow benefits of prompt invoicing and funding advance collection is recognised in the reporting systems.

7. The PAR unit may require additional staff to respond to increasing research activity.

Payroll

Recommendation

1. The use of cheques should be eliminated as there are efficiencies and cost saving arising from automated payments (EFT). It is strongly recommended that there is streamlining of payments to all categories of staff and pensioners.

2. The ASPIRE project on recruitment should be fully supported by the Finance Office. This would provide on-line access to the documentation and status of all recruitments, replacements, and re-appointments of new staff. The project would benefit all parties involved in the process, in particular the Payroll Office and the Financial Planning and Resources Unit with regard to appointment clearance and budget approval.

3. Consideration should be given to the possibility of automation of claim forms in respect of occasional lecturers, tutors and demonstrators at the level of the claimant department.

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Payments Department

Recommendations

1. Payment section staff involvement should be considered in selling the wider benefits of POP and the related training and development. (See Systems Accounts/ Training recommendations below.) The data is not useful unless related speed of processing/error rates are reported.

2. There is a need for continuing quality monitoring and management of payments process.

3. Error levels could be recorded and monitored as an aid to guide QA/QI processes.

4. The statutory interest penalty scheme should not replace internal management quality controls on the section. Appraisal and other HR polices mentioned elsewhere in this Review Group report will help formalise management role and leadership.

Accounts Department

Recommendations

1. The roles and responsibilities within the Department require to be clarified, both for the benefit of the staff and for the benefit of effectively directing internal customers to the appropriate staff member in respect of: Account queries from staff Journal entries/corrections Ancillary reporting Reporting issues

2. The roll-out of devolution (out-turn forecasts, actuals and accountability) and many budget transparency aspects such as the building up by faculties of ring-fenced reserves to fund future strategic developments will complicate budgetary perspective further. This whole area needs to be addressed at senior management level.

3. The change in role of the Accounts Department from essentially an operational accounting role to that of review and financial control must now focus on giving added value to its customers. This has implications for service to its customers in order to be in a better position to identify weaknesses in procedures.

4. The expertise required for key staff roles needs to be re- examined.

5. The roll-out of on-line systems to individual departments and the roll-out of Purchase Order Processing, and on-line access to departmental and research accounts has to be completed.

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6. Communication with and briefing of section staff on the consolidated accounts and emerging accounting requirements is required.

7. Addressing concerns about the detailed build-up of out-turn forecasts should be given a higher priority, e.g. fee income/Banner data, detailed data system interaction, extension of coding quality/integrity in ledger, transparency in support service costs allocations.

8. The workload stemming from the University’s wholly-owned subsidiary companies should be reviewed, along with the impact on section staff resources available for University financial control work.

9. The Finance Office’s plans to roll out Cfacs Accounts Receivable should be given higher priority. This could be piloted in certain areas.

10.Eradicating cash accounting and paper/letter style invoices should be given a higher profile and use of automated systems be adopted.

11.The practice of engaging Trainee Accountants should be continued.

Systems Management

Recommendations

1. The responsibilities of this section should be kept under review to ensure that wherever possible new tasks and responsibilities pass to other Finance Office sections and user administrative departments as quickly as possible following the project implementation phase.

2. The Finance project and related ASPIRE programmes should be carefully prioritised as part of Systems Management QA/QI plan in order to direct the scare resources of the section.

3. A formalisation of the role of the Systems Accountant in training and the Cfacs training programme should be considered as part of the QA/QI plan. A computer training room facility for use of MSU, Finance Office and others responsible for training university administrative staff in Cfacs, Business Objects or other key administrative systems should be considered.

4. The limitations to Cfacs access arising from the any network short-comings should be kept under review to ensure that the best use of alternative Business Object access to financial data is considered.

5. The cFinancial upgrade system provides an opportunity to build on significant achievements of the Finance Office in implementing state of the art financial systems in UCD. Consideration should be given to involving all Finance Office sections in testing their respective areas for the application of cFinancials package and any future upgrades. Rolled out testing could assist FO users in familiarisation with the new package and provide valuable feedback to the Systems Accountant.

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Capital Funds, Treasury, Pensions and Trust Funds

Recommendations

1. The merits of establishing a joint employer/employee Pension Trusteeship might be considered by the senior administration, in the interests of transparency and accountability to members.

2. The functions of the Treasury Section should be examined to ensure that there is no duplication of work by staff members.

Internal Customers

Recommendations

1. The Finance Office needs to recognise and prioritise its role as a service provider to devolved Faculties and Centres within the University.

2. The Finance Office needs to provide leadership in developing budgeting and financial management systems within Faculties and Centres.

3. The Finance Office needs to work more closely with staff that have assumed increased financial responsibility in Faculties and Centres and provide assistance and training in financial management, budgeting, and the use of the Finance Office systems.

4. The University needs to provide financial training for non-professional managers, senior managers (Deans and Directors of Institutes) and associated staff.

5. The Finance Office needs to continue to prioritise, plan and resource the roll-out of on-line systems, including the POP system.

6. The Finance Office needs to develop for individual units measurable service levels and support the units in developing systems and procedures for achieving these levels of service.

External customers

Recommendations

1. Ensure external suppliers can identify and contact the relevant staff member to deal with queries. How this is done should be decided in conjunction with staff in the relevant Units of the Financial Management Unit.

2. Make increased use of electronic banking.

3. Meet with banks for a general review of service.

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Staff Perspectives

Recommendations

1. Managers of units and departments need to involve staff in sharing ideas about improving service delivery, avoiding duplication, and increasing efficiency.

2. Management in the Finance Office needs to identify ways to improve the work environment within departments through measures such as job rotation, development of user manuals and improved feedback on performance.

3. Management in the Finance Office needs to provide staff with performance appraisal and with clear job definitions.

4. Management in the Finance Office needs to ensure that a staff retention policy is in operation to maintain continuity and conserve expertise.

5. Management in the Finance Office needs to identify how the physical work environment can be improved.

6. A programme for induction and in-service training should be implemented in close collaboration with the Personnel Department.

7. Regular staff meetings between cognate groupings should be strongly encouraged.

8. Maximise the use of technology and electronic reporting to eliminate repetitive manual tasks and free personnel for more useful work.

9. Additional effort needs to be invested with staff to improve their perception of transparency in the budgeting process, and particularly their understanding of indirect costs.

10.Additional effort on quality control at all stages of the accounting/reporting process will yield further dividends in terms of customer satisfaction.

11.While it will be impossible to develop personal relationships with all customers, it would be helpful to make the names and responsibilities of individual staff members known to customers, either through the Office’s website, or in reports.

12.The questionnaire results and comments of customers should be carefully analysed by the Finance Office. Consideration should be given to running occasional focus group discussions with users (including effective users and others who may be ineffective or unhappy users) to identify ways in which reports could be made more meaningful).

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6. RESPONSE OF THE CO-ORDINATING COMMITTEE TO THE REVIEW GROUP REPORT

The Co-ordinating Committee found the Review Group Report to be well presented and generally accurate.

The staff of the Finance Office are very appreciative of the time and effort taken by the Review Group in compiling its comprehensive report.

It is the view of the Co-ordinating Committee that the report could have been enhanced by cross-referencing the positive findings of the Review Group in the executive summary on pages 14 to 16 to the findings for each of the units within the Finance Office. Each section of the report should be read in conjunction with the overall comments made by the Review Group to ensure the reader obtains a balanced perspective of the performance of the Finance Office.

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