Write offs

Reference code: 
DMPCD 2016 20
Date signed: 
01 March 2016
Authorisation name: 
Stephen Greenhalgh (past staff), Deputy Mayor for Policing and Crime

Executive summary

This paper sets out the detail of irrecoverable debts for the period from 1 April 2013.  It asks DMPC to approve the write off of debts valued at £110,529.32, and to note the actions to reduce future incidents of write offs.   

Recommendation

The DMPC is asked to approve the write-off of the irrecoverable debts as set out below.

Non-confidential facts and advice to the Deputy Mayor for Policing and Crime (DMPC)

1.    Introduction and background

1.1.    The Deputy Mayor for Policing and Crime has the delegated power to write off all debts considered irrecoverable.  This report provides the detail and recommended debts for the period from 1 April 2013 to be written off.

1.2.    Further reports on write-offs will be submitted on an annual basis.

2.    Issues for consideration

2.1.    Only after all possible actions have been taken will MPS propose the write off of debts.  Examples of where debts are not recoverable and proposed for write off include instances of bankruptcy/ insolvency/administration, the debtor is untraceable, and where a County Court Judgement has been issued but the court is unable to pursue the debt.  

2.2.    In order to minimise future write offs the MPS will implement the following:

•    Payroll and HR will communicate more and work together with managers to ensure that changes in working hours/arrangements and leavers are notified in a timely manner;
•    Improved procedures to better capture changes in rostering are being made
•    Improved controls in respect of credit checks on potential trade customers 

2.3.    The summary analysis of the recommended write-offs is set out below. The cost of the write-offs is £110,529.32

Summary

Write-Off

Value (£)

Bankruptcy / Insolvency / Administration Order

24,181.02

Low value cash discrepancy

1.67

Payroll related overpayments

83,980.81

Uneconomical to pursue

1,780.15

Untraceable debtor

585.67

Total

110,529.32

2.4.    Trade Bankruptcy/Insolvency/Administration Order

2.4.1.    This relates to one major debt for £24,181.02 (22% of total recommended for write off) and is recommended for write-off as a result of the company entering administration.

2.4.2.    Policing services were provided for a boxing event in June 2012 at a value of £53,175.  An invoice was submitted and when payment was not forthcoming a payment plan of 5 payments of £10,635 was agreed and 2 payments made.  Subsequent cheques were late and bounced.  Legal action took place and judgement was awarded for £32,345 and a further payment of £8,164 was received. In August 2013 MPS was notified that the company had gone into administration with large debts and few if any assets.

2.5.    Payroll related overpayments, £83,980.81 (76% of total recommended for write off)

2.5.1.    There are a 69 payroll and pension related overpayments. The total value of proposed payroll and pension related overpayments to be written off is £83,980.81 accumulated over a number of years, against an annual payroll budget of £2.5bn. The analysis of these write offs is as follows:

•    Approximately seven per cent relates to items which are deemed uneconomical to pursue via the Small Claims Court.  
•    Fifteen per cent of the value relates to payroll overpayments where MPS are deemed to be in part responsible, and as a result 50% of the debt is being written off.  
•    Untraceable debtors account for twenty four per cent of the payroll overpayments,
•    Twenty three per cent of the payroll overpayments have been subject to County Court Judgements (CCJ’s) and no further action is available to the MPS. 
•    Not in the interest of MPS to pursue accounts for seventeen per cent of the overpayments, 
•    Pension related overpayments which all relate to overpayments arising from late notification of the death of a pensioner and inability to recover the cost cover ten per cent, and 
•    Former officers subsequently declared bankrupt and overpayments not able to be recovered relates to four per cent

2.6.    The remaining two per cent relates to items uneconomical or unable to pursue.

2.7.    Further detail can be found in Appendix 1

3.    Financial Comments

3.1.    The cost of writing off these irrecoverable debts is £110,529.32.  This will be funded from within MPS resources.

4.    Legal Comments

4.1.    The MOPAC scheme of consent and delegation at clause 4.8 provides authority to approve the write off of all debts considered irrecoverable. The DMPC may therefore approve the recommendations set out in this report. 

5.    Equality Comments

5.1.    There are no equality implications

6.    Background/supporting papers

6.1.    MPS Report Appendix 1