Thurrock Council Redesign and Implementation of Chart of Accounts

Thurrock Council Redesign and Implementation of Chart of Accounts

Thurrock Council – Redesign and Implementation of Chart of Accounts

Details of the project

Thurrock Council is the local authority for the borough of Thurrock in Essex, England. Since 1997, Thurrock has been a unitary authority, combining the functions of a non-metropolitan county with that of a non-metropolitan district.

The Council had made improvements in financial management in recent years, particularly around budgeting. However, the Council’s external auditors had raised concerns about the lack of integrity of the Council’s chart of accounts (COA) and the impact this is having on a number of areas, in particular final accounts and budget monitoring.

With the impending upgrade to the Council’s Oracle system from 1 April 2012, the Council commissioned CIPFA to develop and produce a revised COA which is fit for purpose that will provide accurate accounting records, budgeting and budgetary control throughout the Council. In view of the knowledge of the redesigned COA, the Council further commissioned CIPFA to support Vertex and Oracle (the Council’s partners) with the implementation of the Chart of Accounts.

All of our CIPFA finance advisors have significant experience of working in senior public sector finance/accounting roles and keep practical skills up-to-date with consultancy and advisory projects. This is important as it means that we could ensure that the Chart of Accounts work was not an academic style approach which provided a standard ‘off the shelf solution’. Instead we ensured that the redesigned COA will readily meet the individual and unique current and future needs of Council. This was one of the main reasons why CIPFA was chosen by the Council to undertake this important piece of work.

We have chosen to include the redesign and implementation of the COA as one of our example because it demonstrates:

  • CIPFA’s expertise and experience of scoping, design and delivery of bespoke consultancy;
  • Our ability to work successfully with the client (and partners) to deliver the objectives of the work that meets the client’s expectations and meets tight deadlines; and
  • CIPFA’s focus on developing staff in the client organisation to ensure that there is as much knowledge transfer as possible in order that the client develops sufficient additional capacity to move forward with reduced external help.

Design methodology

Redesign of Chart of Accounts (COA)

  • To understand and have regard to the integral part the redesigned COA had on the entire Oracle System upgrade;
  • Develop a comprehensive COA project plan that dovetailed with the overall Oracle system upgrade project plan, ensuring there was no conflict in key milestone tasks and deadlines;
  • Recognition of the importance of regular communication with the Council and its key partners, Vertex and Oracle;
  • Develop a comprehensive understanding of the weaknesses in the current COA and capabilities/ structure of the new Oracle system upgrade – this included meetings with staff and the external auditors;
  • Identify all feeder systems i.e. payroll, accounts payable/ receivable, cashbook, rent allowances, rent rebates, council tax etc;
  • Identify and understood the accounts and sub-accounts used and required to be used by the Council and the related external and internal reporting requirements i.e.
  • Final Accounts: Movement in Reserves Statement (MiRS), balance sheet, Comprehensive Income and Expenditure Statement (CIES), cash flow, Housing Revenue Account Statement, collection fund, direct front line services, support services, control accounts, holding accounts;
  • Financial Management/ Budgetary Control: aligned to Council portfolios and internal reporting requirements, which can be mapped to the Council’s statutory external reporting requirements;
  • Mapping to Government returns – RA & RO;

Account will be taken of the requirements of Service Reporting Code of Practice (SeRCOP) in relation to the mandatory and discretionary Service Expenditure Analysis (SEA), total cost principle and the recommended standard subjective analysis.

  • Investigate the best possible standard model for the COA from another Local Authority source;
  • Draw up draft COA (including mapping of old codes to new codes); and
  • Consult with key staff on the draft COA and make amendments where appropriate.

The overriding principle that we adopted was the trade-off between simplicity of the coding structure and the need to provide robust and comprehensive records to meet the internal and external reporting requirements of the Council.

Implementation of the redesign of Chart of Accounts (COA)

  • Provision of training to finance staff – ‘understanding the designed chart of accounts’;
  • Provision of ‘user acceptance training’ throughout the Council;
  • Develop and write a comprehensive report detailing the COA ‘protocols’ and ‘rules’, that can be used by the Council’s staff to ensure they have a reference point to use the new COA for the present and future;
  • To work with Oracle to review and develop the logistics of the format and information required for the COA data load sheets to be input into the new upgraded Oracle system;
  • Assist Vertex/ Oracle in the resolution of issues arising during testing of the COA (i.e. control accounts).