The IP Banking User Group Meeting

At 10.30am on Thursday 4^th October 2001, 3^rd Floor Conference room,

Insolvency Service Headquarters, Ladywood House, 45/46 Stephenson Street, Birmingham

In attendance: Representing:

Eddie Doherty welcomed everybody to the meeting and introduced Christine Collins who is a new member from PricewaterhouseCoopers.  He also explained that Pauline Bird from JIMU and Ian Cockerill from the Law Society had moved from their positions within the originations and as yet replacements have not been decided upon.  

  Apologies received 

Tony Mitchell – BDO Stoy Hayward

Ian Cockerill – The Law Society

Gary McDonnell - CAU       

  2.      Matters arising from the previous meeting

 a)      Consolidation Orders 

Eddie confirmed that there had been a problem with consolidation orders being dealt with by CAU.  This was due to the fact that as a security measure within the BANCS system no cases can be created directly onto the systems by CAU and therefore must be done by the computer team but due to staff absences a backlog was created.  This has now been cleared.

3.      On-line access to BANCS 

Eddie advised the meeting that the on-line access facility had again met with delays.  The system has been tested by CAU and corrections made but the current host for the Insolvency Service website will cease to provide a service at the end of March 2002.   Letters to all licensed IP’s have already been issued but as this was done before CAU was informed of the change in timing a further letter will be issued to all IPs who responded explaining the delay.    Eddie was confident that the facility would be available by the beginning of the financial year 2002/2003

4.      Performance 

Ron Heppenstall advised the meeting that the key volume figures could be found in their folders. He outlined the continued rise in intake with the exception of the expected reduction in investment transactions, which is linked to the low interest rate.  Due to system unavailability in August there was a slight reduction in the number of payments made in target but CAU are still on target to meet 98% overall at the year end. 

5.      BACS

Ron advised the meting that during August 2001 payments by BACS were 5.82% of requisitions processed with a year to date achievement of 5.33%. 

A meeting had recently been held between Ron, Eddie and representative from the Inland Revenue.  From 9 July 2001 payments to the Inland Revenue and National Insurance Contributions have been centralised on a new computer system at Long Benton, Newcastle-upon-Tyne. Insolvency claims for the Inland Revenue will also be centralised from 3 December 2001 and made by the centralised Insolvency Claim Handling Unit (ICH). As part of the centralisation process they wish to receive dividend payments by BACS instead of cheques. For claims made by any other office within the Revenue they ask that payment is still made by cheque. These latter claims represent the relic of the pre-centralisation of the Revenue’s claim work and will gradually disappear with time.  

CAU will actively encourage the BACS method of payment and will wish to pay such dividends direct to the Revenue with advice notices issued by fax. Each request for a BACS payment must include a unique case reference issued by ICH. This will be shown on the BACS transaction and accompanying fax notification, a separate BACS transfer being made for each dividend. A copy of the faxed advice will be sent to the IP by post to confirm that payment has been made. Any request for payment not including a reference will be referred back to the IP for the information to be provided. 

The Revenue will advise IPs and/or their representative bodies (primarily R3) of the new procedures. 

The outstanding fault regarding the payee reference not appearing on the bank statements has now been corrected.  As the majority of payments are still for IPs fees Eddie enquired if any additional regular payments could be made via BACS rather than cheque.  

6.      Security

Ron advised the meeting that included in their packs were photocopies of ISA cheques that had been fraudulently altered. He advised that CAU’s policy on fraudulently altered cheques is if the cheque was received by the IP and forwarded on it is the responsibility of the IP to investigate.  None of these cheques were cashed as they were spotted by the Bank of England or the presenting bank and the Insolvency Service has never lost any funds due to a fraudulently altered cheque.

7.      Quinquennial review

Jim reminded the meeting that one of the recommendations of the quinquennial review was to review The Insolvency Service's financial regime. In the briefing pack was a summary of the main proposals of the review team. These included a simplified fee structure, removal of the obligation upon voluntary liquidations to deposit estate funds in the ISA and a higher rate of interest on estate deposits in the ISA: surplus interest on the ISIA would be added to the current rate of 3.5% and interest would be paid on all funds, not just those in excess of £2,000. Returns of around 7% p.a. had been achieved by the ISIA in recent years. 

Jim mentioned that as IPs currently avail themselves of CAU's cheque production service in voluntary cases (where there is no compulsion), the attractive rates of interest in prospect under the new regime might well mean a better deal for creditors than would be available in the private banking sector. Dawn Palmer and Alyson Williams asked whether CAU would introduce signature panels for banking instructions as do the clearing banks. Eddie agreed to investigate the possibility in reviewing present arrangements.

8.        Internet (CAU) 

Eddie informed the meeting that the CAU page has now been updated on the Insolvency Service website and included a new users guide to CAU, a copy of the CAU customer survey, a contact list and the facility to request both statements and forms.    CAU may introduce a notice board, which will be updated with the latest developments.  In additional a page showing the daily Treasury bill rate was also available.  An article was included in the latest Dear IP which included the website address and an example of how to compare a Treasury bill with interest bearing.  

9.        Any other business 

a)   Nigel Mallett advised that they had being experiencing problems with cases where they had been re-appointed.   Alison advised that a new procedure had been implemented in CAU that will allow the cases to be re-opened without delay but if any were still outstanding a list could be forwarded to Customer Services.

b)      Nigel also mentioned that funds being deposited in respect of treasury solicitor bona vacantia are being posted to the estate account, which result in account statements being issued to the insolvency practitioner.  Alison advised that the bank giro credit slip should be marked as either “Treasury Solicitor” of “bona vacantia” which should then reduce the possibility of the funds being posted to the estate account.

c)      Eddie informed the meeting that a letter was received from Mr Souster who is an IP with Baker Tilly proposing an amendment regarding uncashed dividend cheques.  He has made two suggestions being:

i)     When an IP reconciles the case balance towards the end of the administration of a case, he/she can request a list from CAU of any uncashed cheques so that at least the major creditors could be advised.

ii)     When making a dividend distribution, the standard letter of IPs should mention that if cheques are not cashed within 6 months, the funds will be automatically transferred to the unclaimed dividends account at The Insolvency Service and the subsequent recovery of funds by the creditor will incur additional costs.

Eddie advised the group that while CAU has the technology to produce such lists the current process is too time-consuming to permit a list to be issued on every case closure; even as a request facility the demand may be too high.  If the user group endorses the idea CAU will need to develop a custom-built report function that can be produced quickly for any case selected.

Eddie asked the group for any opinion, Sheila Bowles commented that the information was already on the cheque advising whom to contact if uncashed.  Dawn Palmer mentioned that they issued the letter advising them of their dividend which was sent with the cheque, if they did not receive the letter they would not receive the cheque.  PricewaterhouseCoopers confirmed that they had procedures in place to do a search internally on any cheque over £100.00 that was returned to them. 

d)       Eddie advised the meeting that he had obtained some figures for cheques issued by CAU for less than £1.00 in the year 2000/2001, 6300 cheques were issued and all except 1264 were cashed but he had contacted Policy Section for clarification as the Official Receiver does not issue cheques for amount less than £1.00.

e)      Eddie advised the meeting that the calculation program for the crediting of interest for the 1^st October 2001 will commence on Friday 5^th October.  This will be the first time bankruptcy cases will be included and it was originally hoped that the new system would have been introduced but as this had not happened there may be a slight delay in the issuing of interest notices.

Eddie thanked everybody for their input and it was agreed that the next meeting would take place at 10.30am on Thursday 11^th April 2002 @ The Insolvency Headquarters in Birmingham