This article discusses how [email protected] can be used for the management of public representatives’ expenses, whether members of parliament, councils, or other representative bodies.
The UK’s MPs’ expenses scandal erupted in 2008. The media reported that Members of Parliament were habitually claiming expenses unconnected with their Parliamentary duties, and often for substantial personal gain. Since then there has been worldwide focus on how the expenses of public representatives should be managed, in particular on the level at which these should be fixed (for example, allowing first class or second class travel, allowing second homes, allowing family travel expenses, etc.), the extent to which representatives must justify and prove their claims, and the extent to which allowed and refused expenses should be published.
Whilst no worldwide standards have emerged, the tendency in most stable and relatively incorruptible democracies has been towards greater openness, and a requirement that public representatives should live by the standards and conventions for justification and documentation that apply in the private sector.
For more information on IPSA see https://www.theipsa.org.uk/
Expense Management and Public Representation
What are the characteristics of expense management for public representatives?
- The need for full transparency and accountability for the spending of public money, including, when appropriate, the publication of expense details for public access, including details of refused expenses.
- The setting of budgets or allowances sensitive to representatives’ personal, family or geographic circumstances.
- The setting of caps on specific expenses (hotel accommodation, meals, tickets for travel, etc.).
- The provision of a means of data registration and expense entry by representatives and their staff that is easily and widely deployable (thus preferably browser based) and which can be understood without excessive training.
- The provision of a credit card for the purchase of a limited set of goods and services.
- A mechanism for appeal against the administrative body’s refusal to pay.
- Confidentiality of personal details, such as addresses, vehicle registrations, dependants’ names, staff names, etc. and on certain types of expenses (such as expenses related to disability).
- Specific, and limited, provisions for new representatives (start-up costs) and terminated representatives (winding-up costs).
- Compliance with taxable benefit legislation.
- Services levels to representatives (typically time to pay) that can be clearly defined and monitored.
- Policies defined for the management of payments either against invoices or payments. Where payments are made against invoices [email protected] provides a mechanism for the reconciliation of subsequent cash receipts against original invoices, with a means of requesting repayment or further payment where they differ.
- Provision for direct payment to suppliers of certain types of expense (such as rent to landlords).
- Provision for the handling of VAT and other taxes where appropriate (though VAT is not usually reclaimable from tax authorities).
Where expenses are provided on an allowance basis, with no public scrutiny of spending, and no requirement for justification by individual claim, a sophisticated expense management system such as [email protected] may not be required.
Representation expenses will usually fall into a number of categories (usually classified in this or a similar way so that budgets can be set for each category):
Expenses for travel
- Travel by a representative between a representative’s home or local office and the assembly where the body of representatives meets and carries out duties related to public representation.
- Travel by a representative’s staff members.
- Travel by a representative’s family members when representation requires long absence from a representative’s main home and the maintenance of a second home.
- Travel to other locations by a representative or his staff in connection with the duties of representation.
Travel expenses typically include:
- Use of public transport, including season tickets.
- Use of a representative’s own car, motorbike or bicycle.
- Car Hire.
- Food and drink.
- Hotel accommodation.
Expenses for Accommodation:
- When representation requires long absences from a representative’s main home a representative will often be allowed, at public expense, to obtain accommodation (a second home or hotel accommodation) either close to the assembly or in the region the representative represents.
- The scope of these expenses may be determined by a representative’s location, number of dependants (children and other dependants), and other factors.
Accommodation expenses typically include:
- Rent or hotel costs.
- Utility costs (gas, electricity, water, etc.).
- Local property related taxes.
- Contents Insurance.
- Telephone, internet, television related costs.
Expenses for staff
Public representatives will often employ a small number of staff at public expense and these staff members (who may on occasion be interns or apprentices) may also incur expenses which may be legitimately reimbursed from public funds.
Apart from travel expenses included above, staff expenses may include such items as:
- Staff payroll costs including taxes and insurance.
- Staff bonuses.
- Staff training.
- External staff costs (research costs, etc.).
- Staff costs associated with assisting disabled representatives.
Public representatives will usually incur expenses both at the assembly and in
the area they represent. These expenses include such items as:
- Office rent.
- One-off rental of premises for meetings.
- Hire, purchase and running costs of office and telecommunications equipment (including television, phones, mobile phones, computers, printers, scanners, shredders, internet, ink, etc.).
- Cleaning costs.
- Insurance costs.
- Property taxes.
- Utility costs (electricity, gas, water, etc.).
- Stationery, including business cards.
- Other expenses may include specific provisions for disability, disaster recovery, etc.
Expense types within each category are made available to representatives according to their circumstances. [email protected] uses the concept of a ‘distribution mask’ to match the applicability of an expense type to the circumstances of a representative. Ineligible use of expense types is largely avoided.
Expense Budgets, Caps on Claims and Other Rules
[email protected] enables budgets to be established for a financial year or part of a financial year for each of the categories listed above, or for subdivisions of each category (for example, there may be an overall budget for accommodation, and a separate lower limit on rent). Budgets are typically sensitive to the individual circumstances of and likely costs associated with a representative.
Relevant circumstances may be:
- Typical rental costs in the area represented or close to the assembly.
- Number of dependants, if the distance of the area represented to the assembly justifies the costs of a second home.
- Typical staffing costs in the area represented.
- Travel costs to and from the area represented and the assembly.
Some of these circumstances require that a representative register information in the system, and [email protected] provides registration forms for this purpose:
- Registering children (as well as when they will cease to become dependent children).
- Registering other dependants (and reasons for dependancy).
- Registering the need for a second home in the represented area or close to the
assembly (different rental values may apply).
- Alternatively, registering the intention to use hotel accommodation.
Budget checking is carried out by [email protected] during expense submission, preventing representatives from exceeding budgets (unless an override permits this) and warning representatives when they come close to exceeding them.
[email protected] contains scripts for the automatic calculation of budgets, updating future periods as circumstances change.
Some items of expenditure may be capped for an individual transaction:
- Limits on hotel accommodation per night (may differ by location).
- Limits on meals.
- Limits on taxi journeys.
- Limits on train fares (often limited to the cost of an open single or return standard class fare).
- Limits on the number of journeys by dependants or staff.
- Limits on the number of purchases of individual items (such as televisions, computers, etc.).
- It is usual to disallow claims older than a specified number of days (for example, 90 days).
Expense Recording and Workflow
How are expenses recorded in [email protected]?
So that reporting and publication are consistent, and budget checking complete, all representatives’ expenses must be held in a single expenses database. However, expenses of various types may reach the [email protected] database in a number of ways:
- Through a representative’s submission (using browser-based expense forms in [email protected]) of expenses incurred ‘out of pocket’.
- Through the use of a credit card (via an electronic statement from a credit card provider). This is handled using [email protected] tool for credit card statement import.
- From other systems (if the administrative body makes some payments directly on behalf of representatives (such as rental payments), and often in the case of payroll for MP Staff if this is handled by the administrative body). This is handled using [email protected] integration tools.
- Public representatives are usually responsible for recording their own expenses.
- However, in most circumstances a staff member (nominated as a proxy) will enter expenses and forward to a representative for confirmation.
- Forms created from credit card statements are presented to proxies or to representatives for the addition of justifying data and categorization by expense type. Representatives have the option to mark individual items as not claimed by them, and to split items across different expense types.
- And in some circumstances a bureau may be created for the entry of expenses submitted in paper form by representatives.
- Scanned images may be attached to forms by representatives, or may be submitted for central scanning (see below).
- Registration data will also be submitted by representatives (such as intentions with regard to accommodation, dependants, etc.).
Where validation of compliance is not automatic, and to ensure that expenses are justified in terms of the duties of representation, expense forms will be validated by the administrative body. Typically a team of validators will carry out this task. The end result of validation is the marking of claims as permitted or not.
- Forms are distributed randomly and anonymously to members of the validation team so that no ‘relationship’ can develop between a validator and a representative, and so that consistent standards and methods of validation can be exercised across all representatives.
- Validators have access to supporting documentation and data, as well as expense history.
- Validators have access to scanned images supporting claims.
- Validators may return forms to representatives for clarification of claims.
- Validators may forward forms for secondary validation when there are uncertainties, or in all cases, as required.
- Validators may split claims so that part may be permitted and part not.
- Forms may be switched from one validator to another if workload exceeds capacity for a validator.
- Forms may be prioritised.
- Full workflow reporting enables service level data to be monitored.
- Full workflow audit reports enable the administrative body to determine who made validation decisions.
- Forms may be recalled from a later to an earlier stage of processing if required.
If a validator marks a claim or part of a claim as not permitted, [email protected] will immediately inform the representative by email.
It is usual in such cases that the representative is, until a defined number of days have passed, allowed to appeal against the decision, supplying, if necessary, additional supporting evidence.
Usually a separate group of validators will then review the claim against existing and new evidence and decide the case. Sometimes a claim will be split to allow part and refuse part of it.
A full history of the initial refusal, and subsequent review process is indefinitely available.
Changes of Decision
If for other reasons an initial decision is reversed [email protected] provides tools for recording such changes and provides audit reports on who made such changes, when and why.
Representatives and their proxies are informed by email (as well as via screens in the system) of the processing of claim forms, of refusals and review determinations. Representatives have an up to date view of the status of their forms and individual claims.
Most administrative bodies will want to inspect and retain all original receipts and invoices associated with representatives’ claims.
However, for the sake of efficiency, validation and review of claims will typically be carried out against scanned images of invoices and receipts. Documentation supporting registration of a representative’s circumstances (such as dependent children’s birth certificates, or rental lease documents) will also usually be held as scanned images in [email protected] for ease of access.
Images may be scanned into the system in two ways:
- By representatives themselves.
- By the administrative body.
Having representatives do their own scanning has the advantage of reducing workload at the administrative body, since the appropriate receipt will be placed against the relevant claim, but may be error prone, and requires that every representative possess a scanner for the purpose.
Enforcement of the requirement to submit original documentation is difficult, and a reconciliation of these with images scanned onto forms would also be necessary.
By the Administrative Body
If scanning is to be done in bulk at the administrative body then [email protected] provides an automatic means of associating scanned images with specific forms:
- Form printouts contain a barcode based on the form number.
- The form printout is sent to the administrative body along with all original receipts and invoices.
- This printout is then used as a leading document in a batch of receipts and invoices put through a bulk scanner.
- The form number is read by the scanner and is used as part of the file name of each scanned image.
- [email protected] then associates these images with the form.
- Validators subsequently nominate the form row to which significant images relate and thereby attach an image to a row.
Scanned images are available for viewing in reports and for publication, if required.
[email protected] provides these reports and more:
- Allowed expenses.
- Refusals available for review.
- Refusals under review.
- Determinations of reviewed refusals.
- Summary and detail on all allowed and refused expense claims.
- Summary and detail on all allowed and refused expense claims for staff.
- Summary and detail on all allowed and refused expense claims for dependants.
- Summary of all allowed expenses against budgets.
- Details of registrations (of dependants, vehicles, etc.).
- Financial statement showing expenses incurred, expenses in workflow, expenses reimbursed, expenses reclaimed.
Administrative Body: Validators and Reviewers
- Expenses by expense type by representative.
- Journeys by representatives’ staff.
- Journeys by representatives’ dependants.
- Unreconciled Expenses against Invoices.
Administrative Body: Operations Managers
- All Expense Forms Status.
- Expense Form.
- Unreconciled Expenses against Invoices.
- Unactioned Credit Card statements.
- Representatives’ accounting balances.
- Workflow statistics against service level.
- Accounting Reconciliation reports.
Expense publication to a public website involves:
- The exclusion of certain expense types (typically expense types related to disability, etc.).
- The redaction of text fields to remove confidential data such as addresses, credit card numbers, vehicle numbers, etc.
- The redaction of scanned images, if these are published, to remove confidential data.
The style of publication may differ from one instance to another, but it is usual to consider each row of an expense form when submitted by a representative (including credit card statements) as constituting a unique claim, regardless of how many times the claim may be split (to allow part and refuse part of it) and regardless of how many times a decision as to its status (allowed, refused or not claimed) may change.
[email protected] captures this unique identifier and thus enables publication software to publish data as follows, if required.
A single claim for a hotel bill submitted by a representative is split into three separate claim rows in [email protected]:
Publication software is generally designed to show very clearly the status of a single claim, so this would be shown in this way:
Furthermore, as the status of parts of this claim change, perhaps due to retrospective reviews of expense claims, a claim may be republished from time to time. To take this example, the claim may later be published in this way, if a further part is refused:
In this case [email protected] would hold the data as follows:
In [email protected] an audit trail would reveal when splits and modifications occurred and who carried them out.
In this sense, publication is a moving target, with expense claims subject to review and republication at any time.
Typical systems architecture involves the following types of software:
- Expense submission.
- Expense validation.
- Expense refusal review.
- Expense budget management.
- Expense rules management.
- Expense reports and statistics.
- Expense adjustments.
- Accounting for the administrative body.
- Payments to representatives.
- Recording of expenses paid directly on behalf of representatives.
- Payroll management for representatives and their staff.
- Redaction of confidential data from expense data for publication.
- Publication website management.
Data flows can be represented between systems as below. There is, in fact, nothing unconventional in this, except for the inclusion of a system for redaction and publication.
‘Internal’ systems are shaded.
[email protected] provides a secure framework for expense reporting and submission:
- Definable password complexity.
- Immunity to SQL and script injection, session variable theft, etc.
- Advanced database access protection.