WIP Recovery

22 Sept

Summary

As part of a three workstream approach, Deecon undertook the task of identifying and reclaiming a significant amount of WIP across Lots 5, 6 and 8 (Aqueducts) from United Utilities.

Situation & Approach

Deecon were tasked by Avove to recover a significant amount of WIP across multiple contracts and paused orders. Lot 5 and Lot 6 consisted of both active and legacy projects for which some had been final accounted and the others were still awaiting final account completion. Lot 8 (Aqueducts) held around 445 projects out of which the majority had been final accounted however WIP was outstanding and to be claimed back across all.

Deecon followed a 4-step approach to reclaiming the outstanding WIP. We started by requesting all documentation and supporting information in order to better understand the current position of Aqueducts. This included requesting all Application for Payments, Remit Data and Finance Data from the Finance team.

The team then created a WIP tracker which consolidated multiple sources of data for 445 projects within Aqueducts. Data inputs were the total applied amounts, revised TCE values (both pulled from the AfPs), the paid to date value (from Finance) and the assumed outstanding amounts (calculated). We then carried out was in identifying the status of each project and created a RAG rating based on claimback risk where:

Green = ‘Low Risk’ i.e. Final account agreed with outstanding WIP

Orange = ‘Medium Risk’ i.e. Final account submitted, on hold or in progress with outstanding WIP

Red = ‘High Risk’ i.e. Final account cancelled or rejected with WIP

The third step in the process was to then substantiate. After the RAG rating was allocated, we worked diligently with the Avove stakeholders to go through all the final accounts and project codes, validate the final account values and update the status of the projects. This helped us to substantiate the outstanding amounts as we were calculating ‘revised outstanding values’ based off the data in the CEMAR system and the validated final account values.

Once we had validated all projects, we were able to summarise our RAG findings into quick wins and slightly more difficult claim backs. 262 projects had been final accounted and marked as ‘low risk’, meaning there was outstanding WIP we could easily claim back. This along with any discrepancies were fed back to the stakeholders and they were able to put all findings into an Application for Payment and get all projects certified by UU.

This process was hereafter repeated for Lot 5 and Lot 6 (which was to a much smaller scale) and easier to duplicate.

Results

Identified over £2.57m in WIP across 445 projects in Aqueducts
£2.52m of the WIP identified was classed as quick wins as all Final Accounts had been agreed