Economy and Infrastructure

11.03.19

SARS II: Recovery made easy

Source: PSE Feb/March 2019

Paul Bentley, of the Crown Commercial Service (CCS), introduces us to the Spend Analysis Recovery Framework: a no win no fee means of carrying out audits and recovery for the public sector.

You probably don’t think of yourself as a hero. Those who spend taxpayers’ money have a duty to look for new and innovative ways of getting best value for the public purse, but it’s not that exciting.

Ideally it would be. Ideally, we would swashbuckle through spreadsheets, mercilessly review spending, and selflessly quest for a better deal. Each of us in central government and the wider public sector would be in a state of constant vigilance as we query every single penny.

But this isn’t the movies. Resources are tight and there are other, more routine tasks to perform. Where can you find the time and staff to sift through your books and find out if your spending could be smarter?

Back in 2012, all central government departments and arms-length bodies with budgets over £10m were directed to carry out audits. The aim was to ensure payments to suppliers were in order and then recover any overspend.

CCS helps organisations across the entire public sector save time and money on buying everyday goods and services. Our customers have achieved commercial benefits worth over £600m (compared to current market comparators) via some 1,260 procurements. We developed an agreement to facilitate these recoveries, and that framework is now in its second iteration.

Spend Analysis and Recovery Services II (SARS II) offers audit and recovery at no extra cost to the customer under a ‘no win no fee’ principle.

Honest mistakes happen when handling large transactions. They occur in both the public and private sectors but, until recently, the private sector has been more proactive in recovering overspend. Examples of unforced errors include duplicate payments, over payments, incorrect rates, missed discounts, incorrect VAT, or contractual oversights.

That’s why CCS is encouraging government departments and the wider public sector to look carefully at SARS II – part of the suite of financial service frameworks available to central government and the wider public sector through CCS. Under SARS II, all the customer needs do is provide the data, readily available in any ‘accounts payable’ or enterprise resource planning system. A SARS II supplier then analyses the books, identifies any errors, and reports them for customer authorisation to recover from suppliers in a professional and courteous manner, ensuring relationships are maintained.

Only when the cash is back in your organisation’s account will the SARS II supplier invoice for their fees – which amounts to a small percentage of the recovery. If no recovery is identified, there’s no fee at all and, if a recovery is identified but the customer chooses not to take it any further, there’s also no fee to pay.

Spend recovery has been so successful in the private sector that many larger organisations now have dedicated departments carrying out deep dive audits annually. So, how might a public sector organisation go about this? CCS customers have two routes to market: either a direct award or a further competition.

The direct award route enables customers to quickly access the market. Select a supplier which is able to supply the service requirement and, if the price offered on the framework is acceptable and they have the needed expertise, the award can be made. Alternatively, if a customer feels their opportunity is significant or offers a larger than usual scope, they may attempt additional savings via a further competition.

CCS can provide guidance on both options. Our role is to help colleagues across the public and third sector serve taxpayers even better than they already do. There’s nothing heroic about it.

For further information on SARS II please visit the agreement page on the CCS website.

 

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