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Improving our Efficiency

The Treasury has a leadership role in lifting the performance of the State sector. Our objective is to be recognised by our peers and through independent review as an example of how a well-managed organisation operates. We are committed to making improvements to our systems and processes that will ensure our resources are directed to go to our outcomes.

During 2013/14 we continued to focus on a programme of continuous improvement and rolling reviews to improve efficiency and effectiveness across our functions, and ensure our organisation is financially sustainable. We remain committed to CASS and to monitoring our improvements through the BASS programme.

Continuous improvement

The Continuous Improvement Programme undertakes Lean Six Sigma process reviews on various aspects of our business processes. This year we completed process reviews in tax and economic forecasting, fiscal forecasting and simplifying and increasing compliance with maintaining our Gift and Hospitality policies and procedures. In addition to the specific review programme, by year-end we had trained 200 of our staff in the use of introductory Lean Six Sigma techniques, and the use of visual management boards as a way of tracking progress had become a feature of team management tools which are an effective and efficient way for teams to track progress quickly and identify issues before they become problems.

Central Agency Shared Services

We established CASS in March 2012. During the first year, the primary focus was on improving our core systems, including migrating to a single payroll system and monthly financial forecasting and acquiring the skills required to deliver within the new service model. In 2013/14 we have continued to build on to and strengthen that platform.

This year focused on four primary objectives. In particular:

  • increasing our efficiency to absorb cost increases; by stabilising our workforce and upskilling staff, automating processes such as recruitment and finance workflow and using Lean Six Sigma continuous improvement project on staff On-Boarding
  • managing the smooth expansion in the scope of our services to include MCDEM; which transitioned from DIA to DPMC
  • building stronger customer relationships through the adoption of a business partner approach, which included hot desking within the agencies, leadership engagement and developing service promises, and
  • developing a plan of our future vision for CASS as a small agency shared service hub, drafted an Information Services Strategic Plan and are in the process of reviewing the makeup of the HR team to be able to cater for the future needs of the Central Agencies.

During 2013/14, OAG conducted a performance audit of CASS. The audit assessed how well CASS was set up, how effectively and efficiently it was performing and whether it had proved to be a good model for others to follow. While noting that improvements have been made and it was too early to conclude whether CASS provided a good model for others to follow, the report raised concerns about how CASS was set up. OAG's findings, which were presented to the House of Representatives in June 2014, are available on the OAG website: http://www.oag.govt.nz/2014/cass. The report findings and recommendations have been considered by the three Central Agencies. While acknowledging the historical concerns on the set up of CASS, the agencies are confident that the strategies in place now will address OAG's recommendations.

Administration and Support Corporate Services Performance 

The emergency management functions transferred into DPMC in April 2014 which increased the CASS running cost budget from $10.5 million in 2013/14 to $11.9 million for 2014/15. Once the additional DPMC support is excluded, the running cost budget is equivalent to 2013/14 as CASS continues to realise service efficiencies whilst absorbing remuneration and inflationary cost pressures.

CASS has endeavoured to comply with the pre-determined metrics during a period of ongoing legacy consolidation and the introduction of new services and processes.  Stakeholder satisfaction validates that pre-determined levels are being met and further refinement of our Service Level Agreements (SLAs) and associated KPIs will be a focus as part of continuous improvement in the upcoming year. 

Benchmarking Administrative and Support Services measurement

Overall, the cost of Treasury administrative and support services increased in nominal terms by $365,000 between 2011/12 and 2012/13 (the latest data available at the time of publishing).  The Treasury performed better than its peer group in Finance, ICT and Procurement, with the cost of HR recruitment being the only outlier.

The percentage of administrative and support services cost to total running costs has reduced from 11.76% to 9.89% by end of 2012/13.  This places the Treasury in the top three of its cohort.[7]

In 2012/13, the latest data available, the Treasury performed above the median for its cohort in Finance and Legal functions, but was below the cohort median for Human Resources and Procurement.  This measure is expected to improve in the 2013/14 results.

Notes

  • [7]Readers should note that the 2012/13 BASS figures did not include the Property Management function, and the 2011/12 figures have been adjusted accordingly.
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