Processing invoices for Ukrainian accommodation providers is costing the Department of Children millions every year.
By Conor O’Carroll.
A new report from consultancy firm Auxilion has found that processing invoices for Ukrainian accommodation providers is costing the Department of Children millions of Euro each year.
The report, which was obtained by Village, states that “based on assessed processes and current assumptions, the current cost per invoice processed is approximately €902”.
With the Department processing a minimum of 700 invoices per month, the cost quickly spirals. Based on 8,400 invoices processed over the course of a year, the projected cost rises to €7.5 million.
By comparison, the worst-case performers across industry are able to operate at €9 per invoice, substantially less than the Department, while “best in class organisations process at a cost of less than €1.80 per invoice”, the report says, over 500 times better than the Department.
Some of the reasons for the extraordinary cost relate to the number of staff involved. Close to 70 people in the Department are involved across the entire payment cycle, from contracts and procurement to the payments team.
A proposed headcount increase of 70 people would significantly worsen the cost associated with processing invoices according to the report, bringing the cost per invoice to €1,817
Other challenges noted in the report include a shared Excel document containing information the entire system relies on that can only be accessed by one person at a time. “This is creating a significant bottleneck in the process”, the report notes.
Most of the accommodation suppliers are procured without proper contracts, with the limited number of beds available and uncertainty surrounding the number of arrivals forcing the procurement team to constantly add new suppliers.
According to the most recent update from the United Nations Refugee agency, UNHCR, Ireland has taken in over 100,000 Ukrainians fleeing the war.
In September, an extra €1 billion in funding was provided to the Department to aid in accommodating Ukrainians and others seeking international protection.
A significant backlog in processing invoices is also created with each payment form from suppliers requiring approximately 25 minutes to check and ensure the information is correct. Up to 90 of these forms are processed every week, falling far short of the numbers required to clear the number of invoices received.
There is also a substantial amount of checking and re-checking of the same data according to the report, with the manual nature of the work contributing to the time-intensive task.
Other challenges noted in the report include that the Excel document containing information the entire system relies on is shared and can only be accessed by one person at a time
The report makes clear that staff at the Department “recognise the need to improve, but have not been able to take a step back and reflect due to the ongoing challenges”.
However, a proposed headcount increase of 70 people would significantly worsen the cost associated with processing invoices according to the report, bringing the cost per invoice to €1,817.
Based on current figures, that would result in an annual cost to the Department of over €15 million, the report states.
Instead, the report recommends that the process be re-designed and technology be introduced to automate some of the processes and reduce the demands placed on staff.
The Department of Children has been contacted for comment.
