Compliance by the numbers (part 1)

Generally, I prefer to frighten myself, rather than make it a public affair; less embarrassment, less hassle and less likelihood of personal injury. But on this occasion, I really think I ought to share.

It started with wanting to prepare a template for my first visit reports, next month – how can I make them easy to read, succinct and informative? In particular, I have become a fan of the report that starts with a summary of the findings, but I worry that such summaries can leave the priorities unclear. And then, I had this great idea – why not set it out in a grid – with all the case types across the top and all the areas of interest down the left hand side?

“What a good idea”, I thought.

I have just counted it all up and, after discounting the areas that don’t apply (e.g. SIP 2 in IVAs) and Petitioner’s costs in MVLs (actually, I did see that once, but I won’t bore you) – 270 areas. Plus another eleven practice-wide areas, like PII and WIP controls. And that’s just the areas – it’s not the individual questions in each area – that’s a lot of stuff.

Of course, the old JIMU style inspectors had to do just that, reviewing every active case-type in a practice, plus additional reviews, focused on specific areas of interest. No wonder visits could take around a week to complete, even at a smaller firm. Thankfully, the current approach at ICAEW allows you to plan a rolling programme over a number of years, but it does show the importance of a) planning your compliance programme ahead and b) sticking to it. Incidentally,  it’s also important not to leave it to your reviewer to decide for you. Advise and recommend – yes; decide – no.

So, while I continue working on my ideas for the report template, here are the four principles I would apply to designing a satisfactory rolling programme.

  • Make sure you are visiting your main case types frequently enough to make sure that familiarity does not breed carelessness.
  • Visit the rarer appointments regularly to make sure they are also being done properly.
  • Give a regular focus to key areas of control; remuneration protocols, clients account controls and case progression, etc.
  • Include some kind of follow-up on steps you have taken to correct issues in previous years.

For example, for a two partner, single-office firm that majored in CVLs and MVLs, did a couple of ADMs a year, had a small stream of BKYs and WUCs, and one or two C/IVAs, I might suggest the following cycle[1]

Year Main case types Rare case types Systems / other
1 CVL CVA Fees, SIP 9, follow-up on previous period.
2 MVL ADM Follow up year 1, cashiering and clients monies[2], SIP 16
3 BKY WUC Case reviews, follow-up year 2, creditor reporting, SIP 2, SIP 8
4 CVL IVA Follow-up year 3, time and WIP, claim and distribution protocols.
5 MVL Progression, test continuity from years 1 and 2, cashiering and client monies.
6 BKY ADM Follow-up from year 4, pre-appointment work.

But all this would depend very much on the IP and their priorities, as well as the work done by previous reviewers and the demands of RPBs. Nonetheless, carefully managed, I would like to think that a programme like this should keep review time on site to two days or less.

In part 2 of this series, I will report on my efforts to find a more user-friendly and proportionate way of approaching issues that do get raised, from how they might be graded to the kind of remedial work that should be considered, and why some things seem to draw much more fire from RPBs than you might expect.


[1] Please treat this as what it is – an illustration – a full programme would carry more detail, but also more flex.

[2] Some general systems’ features like clients’ monies, PII and bonding should actually be checked every year, but I recommend a more in-depth examination of these money handling systems at least once every three years.

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