Harringay, Haringey - So Good they Spelt it Twice!
£30,000,000 invoice payment backlog at Haringey Council … and cascading ‘learning points’
LAST week I attended a meeting of the Council Corporate Committee.
Near the end, the Committee considered the Annual Audit letter [a PDF]
It contains the following:
In December 2014 the Council implemented a vendor invoice managing system on ONE SAP. The implementation had some teething issues caused by insufficient training of all staff, the email system to inform managers to approve purchase orders was not set up properly and outdated hardcopy invoices were scanned onto the system all of which did not require payment. These factors contributed to a backlog of approximately £30m worth of invoices that need paying.
Comment
This sum may or may not include the effect of double payments.
The significance of double payments is supported by the Auditor's anodyne remark ("… all of which did not require payment") and anecdotal evidence of which I was aware of months ago.
The Auditor's letter is dated 'October' and I note that the £30,000,000 of invoices are said to 'need' paying (present tense). This is worrying.
I fear that many small, local, businesses have been affected by this huge backlog. For some, this is likely to have caused worry, financial hardship or worse.
Cascading learning points
The Council management response will be, to produce "A lessons learnt document" (p.6).
"The learning points will be cascaded to all relevant system owners".
Is anyone responsible?
This raises questions about management and oversight.
Few of the questions I put on this matter were answered at the meeting. I have submitted a formal Member's Enquiry to try to get more information.
CDC
Councillor
Liberal Democrat Party
Tags for Forum Posts: ONE SAP, backlog, bungling, disaster, invoice, payment, £30,000,000
Replies to This Discussion
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Permalink Reply by Clive Carter on
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THE maximum figure for the payments backlog was reached on the 5th of August last year and was:
£47,819,158.65
There appears to be a declining trend; on the 8th of December last, the figure had fallen to:
£12,847,016.80
CDC
Councillor,
Highgate Ward
Liberal Democrat Party
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THE Corporate Committee meets tonight:
Here is a further (anodyne) update that does not hint at the financial pain this will have caused.
I note:
4.9. Following resolution of the issues a lessons learnt exercise was initiated at the request of the Chief Executive and reported to the Council‟s Senior Leadership Team (SLT) in June 2015.
And yet the maximum figure for the backlog (almost £48 million) was not reached until August, two months later.
- Attachments:
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ONESAP lessons learnt.pdf, 176 KB
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Permalink Reply by Alan Stanton on
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Well done, Clive, for spotting this scandal and helping to give it greater public prominence!
It seems to me that for many small and medium enterprises, being owed money by the Council could be highly damaging and perhaps devastating. The pattern of late payments on the scale suggested by the figure of £47 million total unpaid invoices - even reducing to £30 million - is shocking. How very convenient that it was "explained" by software and training failures. So it seems that no politician or senior manager need take any responsibility?
I wonder if you or anyone else you're in touch with has any information about additional costs to Haringey of action taken by unpaid suppliers and contractors? For example: Court action; Statutory Demands; and the hidden costs of the time and work taken in dealing with contractors and suppliers who are "chasing" invoices.
I wonder too, whether you know of any small businesses incurring significant losses by having to borrow in order to provide cash flow; or themselves being taken to court by creditors awaiting payment for their invoices?
Of course, there's nothing glamorous about getting business basics right, and paying invoices on time. It's not like a selfie or a photo-op in a hipster business; nor a fashion technology academy.
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Alan, following the answers above (the figures of £48 million and £13 million), on January 29 I made a further Member's Enquiry about the invoice payment backlog, covering some of the ground you mention above.
To paraphrase the quote attributed to Stalin (one death is a tragedy; a million deaths is a statistic):
One invoice paid six months late could bankrupt a sole trader: while £47,819,158.65 is an accounting total being an answer to a Councillor's formal enquiry.
Collectively, these bald bookkeeping figures are likely to represent great financial hardship throughout the Borough to small and medium-sized businesses.
It could be equivalent to a waged or salaried person not being paid for months, possibly many months. How much difficulty with that cause?
I particularly note your last para, and it's a theme I recognise: the Council is so enamoured of vanity projects, branding, regeneration and the bright, shiny and new … that they neglect the basics.
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Permalink Reply by Antoinette on
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No.1 on the "lessons leant" list should have been "don't use SAP".... it's the most user un-friendly system I have ever encountered... most tasks are totally counter-intuitive
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INFORMATION just in:
The current size of invoice backlog (as of last Thursday, 09/02/2016) is a little under £10 million:
£9,808,423.30
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