Notice to Providers

Changes to the Financial Appraisal and Monitoring (FAM) of Contracted Employment Programmes

08 June 2009

This note sets out the changes that are being made to the Financial Appraisal and Monitoring (FAM) function and a timetable for delivery.

The purpose of the FAM function is to provide an assurance to the Departmental Accounting Officer that payments made to Contracted Employment Programme (CEP) providers are in accordance with DWP requirements, public funds are protected and that value for money has been obtained. The existing function was established around ten years ago and is currently delivered on a regional basis through FAM teams based in Jobcentre Plus Finance Directorate.

Over the last couple of years we have undergone a number of Departmental changes that directly impact this function, eg transfer of accountability for the CEP budget from Jobcentre Plus to me; changes to the way in which our supplier relationships are managed and the resulting impact on contract management activities; and, last but not least, the new funding model which moves payment away from input process and seeks to reward providers for the achievement of job outcomes and sustained job outcomes. These changes, together with provider feedback about FAM and specifically the inconsistencies in approach across regional teams, prompted a fundamental review of the function. This review has been underway since September 2008, managed by the FAM policy team located in Delivery Directorate (Gwen Short and Sarah Owen).

The review has now concluded and a number of high-level changes have been agreed:

• The new CEP assurance function will operate at a national level enabling us to present CEP providers operating across regions with a single view of the effectiveness of their systems – each provider will have a nominated Senior Assurance Manager going forward and therefore a single point of contact within DWP for management of assurance related issues/concerns;
• The scope of the activities will be redefined to provide added assurance of value for money in CEP contracts as opposed to the previous remit which focused more on validation of payment;
• Line management responsibility will move from JCP Finance to the Employment Group’s Delivery Directorate, offering a more direct route for escalation of issues and feedback of assurances to me as budget holder;
• The grading of the people doing the work and training requirements for the job will change – this is in recognition of the change in scope and the technical expertise and level of judgement now needed in the decision making process. All personnel working in the new function will either have or be working towards the Institute of Internal Audit’s Certificate in Internal Auditing qualification.

Next Steps

We have now moved into the implementation stage and this continues to be managed by Gwen’s team in Delivery Directorate.

The ‘new’ function should be operational by 1 October 2009 and we have already commenced a number of activities to ensure that happens, eg recruitment of personnel, redesign of working papers, etc. In order to facilitate a smooth transition and avoid any confusion for providers we have agreed with JCP Finance that they will cease delivery of existing FAM activities on 31 July - if there are any outstanding provider actions at the end of July, these will be followed up by the new function.

During August and September, we will be delivering initial training and induction events to the individuals appointed in the new function, re-planning visits for the remainder of the year using the new approach, putting in place the logistical arrangements that will enable us to manage this as a national function going forward and rewriting guidance. We would hope that the Senior Assurance Managers will also use this period to introduce themselves to some if not all of the providers for which they will have responsibility in the future.

One of the things that we are also keen to do (hopefully sometime during July or early August) is to ‘trial’ our new approach with one provider in the hope that we can take on board any initial thoughts/concerns/feedback in advance of our training events. Gwen Short and Sarah Owen will be attending the Provision Forum on 3 June to talk about the new approach in a little more detail and they will be seeking a provider volunteer at that point.

As further detail is developed this will be shared with you but if you have any queries about the new function in the meantime, please direct them either to Gwen (0114 240 8648) or Sarah (0114 240 8642). Any queries in relation to existing FAM activity should continue to be addressed to your existing JCP contact/s until 31 July.