Annual Bad Debt Write Off
North Lanarkshire Council · 13 September 2022
Back to Education, Children and Families Committee — 13 September 2022 and its agenda
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North Lanarkshire Council Report Education, Children and Families Committee Does this report require to be approved? ☐ Yes ☒ No Ref: DB Date 13/09/22 Annual Bad Debt Write Off Exercise From Derek Brown E-mail BrownD@northlan.gov.uk Telephone 01698302517 Executive Summary This report provides a summary of outstanding debtor accounts relating to previous financial years which are deemed uncollectible following all attempts at recovery or are not economically viable to continue pursuing. In accordance with financial guidelines a provision for expected credit losses has previously been established for the outstanding accounts. The total recommended for write-off for 2022/23 is £49,714.90. Recommendations It is recommended that the Education, Children and Families Committee:- (1) Acknowledges the decision of the Deputy Chief Executive and the Head of Financial Solutions under delegated responsibilities to write-off a total of £37,100.83 for debts under £500; (2) Approves the write-off of £12,614.07 for all items over £500; and (3) Remits this report to Economy, Finance and Resources Committee. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (24) Review and design services around people, communities, and shared resources
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1. Background 1.1 The Education, Children and Families Service provide a range of chargeable activities predominantly in the following areas: • Additional nursery hours • Music tuition • Education Leadership Courses • Active and Creative Communities Facility Charges 1.2 By way of context the Education, Children and Families Service raised 2,023 invoices during 2021/22 which had an aggregate total value of £4.408m. In conjunction with the Corporate Debt Recovery Team every effort is made by the Service to recover any unpaid debt including reminder letters, the use of collection agents and legal action. 1.3 Despite these steps there are a number of debts that are deemed uncollectible or are considered not economically viable to engage further collection activities and costs. This annual process of assessing the likelihood of debt non-recovery conforms to accepted best accounting practice and is a realistic assessment of expected income. 1.4 The value of accounts identified for write-off represents a small proportion (1.13%) of the accounts raised annually by the Education, Children and Families Service. 1.5 Following the approved in sourcing the 2022 Service write off request includes activity previously associated with Active and Creative Communities (CLNL), 2. Report 2.1 Analysis of the outstanding balances has been conducted and £47,714.90 has been identified as uncollectable. 2.2 There are a number of reasons why the outstanding balances are being written off and these are summarised below:- a) Deceased. The debtor is deceased and there have been insufficient funds within the estate to meet the sum due. b) Recovery Exhausted. All available avenues have been pursued and there is no prospect of recovery of funds. d) Small Balances/Uneconomic to Pursue. There are insufficient funds or no realisable assets that are available to meet the debt and it is uneconomic to continue to seek recovery of the sum due. 2.3 The tables below categorise the value of debt recommended for write off by cause and value. Cause Analysis £ Number of Accounts Deceased 27.50 2 Recovery Exhausted 20,513.74 97 Uneconomical to Pursue 29,173.66 895 Total 49,714.90 994
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Value Analysis £ Number of Accounts < £500 37,100.83 981 > £500 12,614.07 13 Total 49,714.90 994 2.4 The Education, Children and Families Service will continue to review the possibility of recovering these outstanding debts, for example, if staff are notified of a change in circumstances relating to a debtor. 3. Measures of success 3.1 There are no additional financial implications linked to this report for the current financial year because a corresponding bad debt provision has been included in previous year’s annual accounts. 4. Supporting documents 4.1 Not applicable. Derek Brown Deputy Chief Executive
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality-and-fairer- scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have been discussed and agreed with Financial Solutions? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? There are no proposed changes to existing post grades. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People and Organisational Development? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? Relevant pro-forma to be submitted to future WSG. 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic Solutions? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact
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Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for technology, has an assessment been carried out (or scheduled) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed?