What do your regulatory returns say about your data?

Around this time of year, it feels like housing association finance departments take a collective deep breath and, the ink on the budget perhaps still drying, steel themselves for the long haul of the year-end audit and statutory accounts process ahead.

Meanwhile the regulatory calendar rolls ever on: the mid-April quarterly return, May’s SDR, June’s FFR, and before you know it, it’s the mid-July quarterly return. The Regulator has been paying increasing attention to the quality of submitted returns, so it’s important not to lose focus when other deadlines are pressing.

There are simple steps you can take to improve the quality of your returns – whether at a process level, such as ensuring that senior staff take ownership of the process and check the return before submission, or at the stage of completing the return itself, such as providing explanatory comments to anticipate the Regulator’s questions and checking figures are consistent across submissions. We are always surprised how often we see that the number of units of different tenures in the SDR doesn’t quite tally with the analysis in the statutory accounts, and the numbers in the FFR are different again…

Good processes can mitigate the risk of submitting incorrect returns, but if producing these returns always seems to be an ordeal then perhaps you need to look at the reasons why this is. Why is it hard to get accurate data? Why is the data inconsistent between returns, or even between different departments?

When you prepare your returns over the coming months, it is worth stepping back and looking at the process of data-gathering to see if you can identify where the root causes of the problem lie. Here are three thoughts to hold in mind until the fabled ‘quiet period over the summer’ when you can address the problem, not the symptoms.

Firstly, the Board that makes decisions based on the performance information it receives: what assurance does the Board have this information is accurate? If the data was wrong when you prepared your return, and you had to correct it in the return, then logically it has been wrong throughout the period leading up to the return, and other reporting of that data has also been wrong. Note that some errors can be carried forward for years because they don’t ‘look’ wrong, and are consistently wrong from year to year….  Does your internal audit plan include data validation?

Secondly, the SDR process in particular is an opportunity to identify property data that needs cleansing. But that need wouldn’t arise if the data was correct in the first place. Do you need to rethink how staff are trained in data recording? Is ownership of the data clearly defined? Do staff not only know how to record data, but also understand how it is used by colleagues elsewhere in the association, and what are the consequences if the data is wrong or missing? Controls over data entry are important, but informal training by colleagues may just lead to new staff perpetuating existing data errors.

Finally, the data for the returns should be a by-product of your monthly and annual processes, rather than something you have to generate especially. Much of this is information you will be reporting internally anyway – cashflow forecasts, treasury portfolios, sales pipelines, completions and handovers, data on unsold units… How much of this data just falls out as you crank the monthly reporting handle? Or is it an ordeal to prepare this internal reporting information too?  This is a time to look at how to make your systems more joined-up. Duplicate data on multiple unconnected systems, used by different people who need it for different things; time lags between data updates across different systems (e.g. between finance and development); and the ultimate red flag, staff who maintain their own data on spreadsheets because they don’t trust the data on the main system…

More joined-up, accurate and consistent reporting brings benefits throughout the organisation in terms of more reliable information for decision making and freeing up staff time to focus on value-added activities. So, any time spent resolving root causes rather than firefighting symptoms will be time well invested.