BT Openreach engaged TSS to undertake a full audit and final account reconciliation exercise of all expenditure across the telecom service diversionary works carried out as part of the Phase 3A and 3B Manchester Metrolink tram network expansion project. In total TSS compiled, presented and facilitated the agreement of 96 individual final account packs, totalling in the region of £13 million between BT Openreach and Transport for Greater Manchester (TfGM). The final account packs summarised the extensive information in a concise format facilitating agreement between BT Openreach and TfGM.
Over an 18-month period, between December 2013 and May 2015, TSS worked alongside the BTO Repayment Planning Department to review the site records and build a fully substantiated and reconciled final account pack for submission to TfGM on a scheme by scheme basis. In order to fully verify the records that were presented, TSS undertook a thorough audit and review of the BT Openreach systems and processes, focusing on key areas such as; the issuance of work instructions, cost allocation, overhead allocation, integrity of data storage and collection of completed work records (such as timesheet records, overtime claims and plant allocation etc.), and the management of change on site. The broad categories of records that were included within the non-conformance rectification process were as follows:
- Booking of direct labour recourse time to a project and the tasks that were included and carried out, this involved interrogation of the performance management systems that BT Openreach operated.
- Booking of project management and supervision time to projects including the pre-construction planning and design elements of the schemes.
- Quantities of materials booked from the BT Openreach stores compared with the quantities of materials that were installed according to “as-built” records.
- Claims for payment/certified payments to the supply chain, along with a full review of the supporting information provided to substantiate such claims, including “as built” records that were produced by the contractor. Verification of supply chain contracts which changed due
Through the non-conformance rectification process, all of the above items were compared back to the original scope for compliance to the contract planned works. This identified changes in scope or measurement increases through the re-measurable arrangements that were in place according to the NRSWA (New Roads and Street Works Act) agreements. Calculations around the necessary discounts, such as deferment of renewal, that are specified under NRSWA were included within the scope of the TSS reconciliation audit.
TSS completed a full audit which allowed a very comprehensive evidence base to be prepared ready for presentation and discussion with TfGM. In doing this significant challenges were faced due to the age of some of the accounts, meaning that the typical records had been archived or lost; this was compounded by BTO having suffered a large turnover of staff thus losing large portions of tacit project knowledge and history.
One of the strengths that TSS brings to its approach is a willing to look for solutions and if necessary we will create bespoke techniques to review the vast amount of data in order to reconcile materials used across multiple work orders, sections and date ranges utilised our in-house IT modelling skill set to clearly identify records and thus produce a robust outcome.
Other challenges faced during the auditing process centred on the management of the interface between onsite delivery staff and the back-office finance staff. Here, problems around the use of different terminologies caused some issues to be compounded by the varying degrees of technical and contractual understanding between both departments.
As part of the final account process, TSS facilitated regular meetings between TfGM and BTO to reach agreements on final accounts as they were produced. Our evidence base, and our clearly laid out approach to this work which established our credibility and objectivity was a key element in BTO and TfGM resolving the range of outstanding issues. This led to a greater cooperation between all parties, improved the communication and accelerated the overall process.
We identified large areas of risk to BTO regarding the non-conformance of records and how this risk could apply to BTO’s work on further Metrolink and other repayment schemes. The level of diligence required when working with the disbursement of public funds can and does come under the highest scrutiny. As a result of this project, TSS compiled, presented and facilitated the agreement of 96 No. individual final account packs, totalling approximately £13m. The final account packs summarised the extensive information in a concise format facilitating agreement between BTO and TfGM.
TSS recognises that the most effective approach to resolving such issues is that we remain objective, thorough and always provide a strong evidence base to support our conclusions and recommendations.
“TfGM have been delighted with the performance of T. Sumner Smith with regards to their valuable contribution to the Metrolink extension programme; their work has been of the highest quality which has significantly improved the process for reaching final accounts. As a public body, this has made the diligence, assurance and scrutiny far easier than most” – Transport for Greater Manchester
