Technology as a major driver forimproving public administration

Hans D’Hondt

Federal Public Service FINANCES

2

Operations Support

Tax Department

Recovery

Special Tax Inspection

Real Estate Documentation

Customs and Excises

Treasury

HR and Organisation

Budget and Management Control & Logistic Services

Expertise and support

ICT

Others

2

ValuesIntegrity

Correctness

Drive, motivation

Service

3225630703

28860

26862

2381322237

21121

2902227913

2614024276

2150220151

19257

0

5000

10000

15000

20000

25000

30000

35000

2002 2005 2008 2011 2014 2017

Persons FTE

208 196 190

124 109 95 90

574

456

389

232205

184 173

0

100

200

300

400

500

600

700

2004 2010 2012 2015 2016 2017 2018

Cities Sites

Context– Evolution 2002-2019

-35% PERSONS-34% FTE

-70% SITES-57% CITIES

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Technology

• It is not the first time that new technology leads to drastic changes of oureconomy

• Major difference : the speed of changes has never been so high

• Immediate communication - more people involved.

• For public administrations technology is an opportunity and a challenge

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Technology as a driver for reforms• REORGANISATION

Organizational structure

Focusing on target groups

Redesigning work processes

• PROFESSIONALISATIONImplementing management instruments

Enhancing performance management: do more with less

Values & integrity policy

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Technology to do things differentlyQuarterly Business Reviews: Monitoring what is happening

Strategic projects: monitoring & portfolio management

Day to day: management control

Process & risk management

Using data in systems for reporting: reducing response burden

From administrative follow-up to a flexible result-orientedorganisation: culture of accountability

6

Culture of Accountability

Flexibility

> 30 days telework

70%: no recording of working time

Managing absenteeism

Trust

Leadership training

2686225898

2514123813

22786 22237 2191221121

0 231 796

89039650

10757

13674 13984

0

5000

10000

15000

20000

25000

30000

2011 2012 2013 2014 2015 2016 2017 2018

Employees Telecommuting

5,34%5,43%

5,62%

5,80%

5,60% 5,59% 5,55% 5,60%

5,78% 5,83%

4,86%

5,28%

5,60% 5,57%5,45%

5,54%

6,15%

6,36%6,46%

6,80%

4,50%

5,00%

5,50%

6,00%

6,50%

7,00%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

FPS Fin Federal (without Fin)

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Monitor Better : Business Review

PROCESS ORIENTED

Modelling processes (BPM)

Ownership of processes

Performance and Risk management based andmodeled on business processes

INNOVATION

Project management

Portfolio management

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Organizational Impact

EFFICIENCY

Digitalisation & simplification

Collaboration with clients & partners

Monitoring

EFFECTIVENESS

Active process management

Workload measurement

Lean management

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CRM

Digital: MyMinfin

Simplified tax declaration

Debt Relationship Management

Collaboration with stakeholders AGILITY & INNOVATION

Data driven

Nudging

Datamining

Internet research (Cybersquad & BISC)

Hackathons

Technology is a gamechanger - examples• Better risk assessment: Predictive analysis allows better targeted

control initiatives. Reduction number of staff members vs/ technologyfor better risk assessment

• Exchange of information: internal, external, international

• Compliance control and payment risks: Advanced data analytics topredict debt non payment risks

• Cooperative compliance

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Predictive risk analysis / exchange of information / cooperative compliance• Predictive analysis allows better targeted control initiatives.

• Reduction number of staff members vs/ technology for better risk assessment

• Exchange of information: internal, external, international.• Internal between administrations of the FPS Finance

• External: with other Belgian partners i.e. Social Security Agency

• TNA-initiative: transactional network analysis. European (27 countries) initiative to share information to combat international VAT-fraud (carroussel)

• Cooperative compliance

• Compliance control and payment risks: Advanced data analytics topredict debt non payment risks

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Advanced analytics for compliance control : Data analytics to predict non-payment risks

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6 Predictive models

DELPHI: Predicts insolvency risk (3 models – companies, self-employed, individuals). 5 categories of “solvency risk: very high, high, medium, low, very low)HERMES: Predicts payment behaviour for Delphi red scoringIRIS: Predicts payment behaviour from callsPEGASUS: Future payment resulting from sending a debtor to the bailiffARANEO: Social network analysis (drawing a network between companies and administratorscreating debts putting companies in insolvency)PEITHO: Predicting instalment payment duration

Advantages and results of the models (1)

e.g. Delphi results: % of companies bankrupt after 1 or 2 years and their initial ‘DELPHI’ scoring. 61,19% of the companies that got the highest scoring, eventually go bankrupt after 2 years. By knowing this in advance, we increase the amount of recovered debt substantially.

Advantages and results of the models (2)Predictive models increase the efficiency by better determining thepriorities -> Decrease in staff but increased recovered debts!

Efficiency = Intervening in the right way (depending on the profile of thedebtor) with the right means (what will do the trick?) at the right moment (before bankruptcy) will increase the amount of payed debt while avoidingextra costs (e.g. bailiff).

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Advantages and results of the models (3)e.g. IRIS (predicting which taxpayer will pay after a phone call): increase in efficiency by targetting those that will actually respond: Result: 51% pays their debts completely (only 26% for those whodidn’t get the phone call).

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Cooperative Tax Compliance Programme

• System based approach: tax control framework

• Agreement between tax authority and company based on transparency and trust.

• Providing or giving access to information, managing fiscal risks,

• Corporate governance and internal control

• Partnership between authorities and legitimate economic operators

• Advantages: reduced cost of control (tax administration) versus predictability – possibility of exchange of information system tosystem

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Cooperative Tax Compliance Programme (2)• Inspired by a.o. AEO-system for customs (measure administrative burden)

• Big companies: individual agreements

• SME’s: sectoral agreements

• No ruling: it is about the system and practice. Not about theinterpretation of law.

• Cooperative vs/ conflict model

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COVID 19 - Stay in business • 2019: 1/5 days in telework (average). Telework by 70% of staff

• System allows to work at home: 15.000 VPN-lines for applications

• “non-applications-linked”: access to files/data,… via Cloud

• Control activities (company visits, …) impacted due to lockdown

• Comparison between performance for activities not requiring externalcontacts via management control system: no loss in performance.

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Risks and barriers to adopt technology more quickly• Transforming the administration and convincing the non-believers

Sceptics: “We have been doing this the same way since …”• Privacy issues

GDPR• Resources

Recruit special profiles (data analysts, …)• Time necessary for development, historical data is needed, unique

identifier for the debtor in all databases to link data between different sources

• A lot of research and development necessary…

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The road ahead

• Management contract 2019-2021: Digitalization and Citizen RelationshipManagement (“op maat, samenwerken, slim, performant”).

• It is not about digitalizing back-office but about interfacing with a digital society

• A matter of competitiveness

• Challenge : make sure that our co-workers are ready - Training and Coaching

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• Updating the current models (it’s an ongoing business) • Update existing applications (legacy)• New developments integrating new technology in existing

workflows in order to improve effectiveness and to make them more user-friendly

• Reduce gradually the old paper-based workflows • Scanning system to include all paper documents into the digital

workflows• Target: mandatory use of digital workflow (i.e. VAT) without

paper or scanned documents

The road ahead (2)

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Thank You