CHARTER

SCOPE/FOCUS:

Centralized Accounting Department Remittance Processing Dept. (RPD) Accounting Foreign Exchange Deals (FED) Reporting

PURPOSE:

To be able to submit FED Report w/in the prescribed deadline by improving the turn-around-time of its preparation.

RESOURCES:

Leader : Asst. Leader : Member : Facilitators:

Manuel P de la Cruz Jr. Jayson S Garcia Taciana P Lumanglas Mgr. Haydee D Canceran SM Abner A Calabano

DELIVERABLES: Process Changes, Documentations, Trainings

DEFINE
FOCUS AREA: PROCESS FREQUENCY / ERROR TIME VOLUME IMPACT CONSUMED 35 % 25 % 40% 35% 20% 40% 20% 10% 15% 15% 20% 10% TOTAL PERCENTAGE 100% 95% 55% 35%

1. FED REPORTING 2. DAILY ENCODING MANUAL ENTRIES 3. RECONCILIATION of ACCOUNTS PAYABLES

CHOSEN FOCUS AREA: FED REPORTING BRIEF DESCRIPTION: Foreign Exchange Deals (FED) report is a BSP reportorial requirement which consists of transactions involving inflows & outflows of foreign currency in the country. FED Reporting, which is one of the major functions of RPD Accounting, is the manual classification & identification of the nature of foreign remittance transactions of RPD. This is submitted to UCAD for consolidation & submission to Central Bank of the Philippines (BSP).

***Frequency/Volume refers to the no. of daily transactions being processed. Error impact refers to the gravity of impact in case an error was encountered on the output of the process. Time Consumed refers to the time spent in the process. Maximum percentage of score to the process depends on the importance of the criteria: 35% for Frequency/Volume, 25% for the Error Impact, 40% for the Time consumed

FED REPORTING
SUPPLIER
RPD OFFICER

INPUT
STAFF,CONTINOUS FORM,RIBBON, PRINTER RPD OPERATIONS SERVER, FED PROGRAM,BALLPEN,RULER, MS EXCEL, TICKETS COMPUTER,FIAS, IRIS, GL ENTRIES

PROCESS
START DOWNLOADS FED RAW FILE FROM CONNECT DIRECT TO LOCAL FOLDER RECEIVES RAW DATA FROM RPD OPERATIONS SERVER

OUTPUT
RAWDATA, SUNDATA, REVIEWED FILE CONTENT SORTED DATA, IDENTIFIED CORRECT CLASSIFICATIONS, SCHED 01-10 UPLOADED & ENCODED DATA

CUSTOMER
RPD ACCOUNTING

MANAGEMENT

UCAD

RPD OPERATION

REVIEWS THE FILE CONTENT; SORTS THE DATA AND FORMATS THE CELLS IN ACCORDANCE WITH THE REQUIRED FORMAT IDENTIFIES THE CORRECT CLASSIFICATIONS OF THE REMITTANCES RUNS THE FOXBASE TO UPLOAD AND ENCODE THE DATA TO FED PROGRAM REVIEWS THE FINAL DATA IF BALANCED; ENCODES THE TIN NUMBER AND PRINT THE FINAL FED REPORT END SUBMITS THE FINAL FED REPORT TO UCAD

ISG

TIN,ICETOOL REPORT, GL REPORTS FOXPRO PROGRAM, LOTUS APPROACH LOTUS NOTES, FED RAW FILE,FINAL FED REPORT,UCAD

ENCODED TIN

PRINTED REPORTS, FEDFILE FED REPORT, FINAL FED REPORT

CHOSEN CUSTOMER: UCAD BRIEF DESCRIPTION: Upon reclassification of various remittances, RPD Accounting forwards the final FED report to UCAD for consolidation & submission to BSP.

VOICE OF THE CUSTOMER The Voice of the Customer (VOC) gives an overview of how the Chosen Customer sees the identified process. Here, VOCs are presented using the Affinity diagram. Total Population of chosen customer Total number and percentage of customers included in the VOC gathering Questions asked in the VOC gathering 3 3 (100%) 1. What are your comments about RPD Accountings submission of FED Report based on the ff. criteria: Completeness, Quality, Adherence on submission date 2. What do you wish RPD Accounting to do w/ regards to submission of FED Reports? 3. What are your suggestions to improve the compliance?

AFFINITY DIAGRAM
CTQ: QUALITY There are various inquiries received from BSP which required reclassification. CTQ: ADHERENCE ON SUBMISSION DATES Allowable deadline of 2-3 days Failure to submit on time will delay consolidation & submission to BSP. Always late in submission of report UCAD requested RPD to submit the report on time. Timely submission. CTQ: COMPLETENESS This is the responsibility of the reporting unit.

PROBABLE PROBLEMS The probable problems of FED Report preparation: Probable Problem 1 Probable Problem 2 Submitted FED reports which required reclassification Delay submission of FED Report

MEASURE
LIST OF DATA TO PROVE THAT THE PROBLEM EXISTS For each probable problem, the needed data to prove that the problem exists were listed down. Please note that the amount of data and time period were the same for ALL probable problems. Probable Problem 1 Brief Description Submitted FED reports which required reclassification There are specific transactions in FED report that were returned by BSP for further verification. These transactions are often amended to a new classification. SOURCE OF DATA DATA GATHERING PERIOD Inquiries forwarded by UCAD JAN 02-20 2012 TOTAL REPORTS /RECORDS SUBMITTED 15 Reports with 42429 Records Total Report w/out ERRORS Two (2)

TYPE OF DATA Data Historical

Probable Problem 2 Brief Description TYPE OF DATA Data Historical

Delay submission of FED Report Reports were submitted beyond the allowable time DATA GATHERING TOTAL REPORTS PERIOD SUBMITTED W/IN THE DEADLINE Actual submission of FED JAN 02-20 2012 Zero (0) Reports SOURCE OF DATA

RESULTS OF BASELINE DATA GATHERING For each probable problem, we present the data that proves that the problem exists. Sigma levels are indicated. Probable Problem 1 Submitted FED reports which required reclassification Data to prove the 13 out of 15 FED Reports submitted probable problem exists had transactions that required reclassification Compliance Rating 13.33% Sigma Level 0.2 Probable Problem 2 Data to prove the probable problem exists Delay submission of FED Report 1. 15 out of 15 FED Reports were submitted beyond the allowable deadline of three banking days after the transaction date; reports were actually submitted to UCAD on the 5th banking date. 0.00% 0.0

Compliance Rating Sigma Level

OUR PRIORITY PROBLEM This is the summary of the sigma levels of our probable problems. Delay submission of FED report is our priority problem. Sigma Level Problem 1 SUBMITTED FED REPORTS WHICH REQUIRED RECLASSIFICATION 0.2

Problem 2

DELAY SUBMISSION OF FED FREPORT

0.0

PROBLEM STATEMENT

100% of FED Reports from January 02-20 2012 were submitted beyond the prescribed deadline of 3 banking days after the transaction date. Current sigma level is at 0.

ANALYZE
ROOT CAUSES These are the ending causes of the delay submission of FED Report to UCAD. From material and method involve in the process, root causes were broken down using the why-why diagram.

Delay in the availability of FED raw file

IRIS extract of raw file

is scheduled on 3rd banking date

MATERIAL

FED Raw File does not conform with the BSP required format of the values

Mapping of IRIS data to FED raw file was not able to produce the required layout requested Mapping of IRIS data to FED raw file was not able to produce correct Classification Classification or Purpose code is not Included In the source data/payment order

FED raw transaction code Is not properly classified 100% of FED Report from January 02to January 20, 2012 were submitted beyond the prescribed deadline of 3 banking days after the transaction date. Current sigma level is at 0.

Longer verification of the nature of manual entries

Details of entries are incomplete

Complete details Could not be indicated In The GL entries

Limited space to indicate the details

GL Walker accepts limited characters

METHOD Reformatting of FED raw file FED Raw File does not conform with the BSP required format of the values Mapping of IRIS data to FED raw file was not able to produce the required layout requested

Manual reclassification of remittances

FED raw transaction code Is not properly classified

Mapping of IRIS data to FED raw file was not able to produce the correct classification

Classification or Purpose code is not Included In the source data/payment order

DATA TO VALIDATE THE ROOD CAUSES This is to validate the existence of ALL the identified root causes against the Data to prove that the problem exists (in the Measure Phase). Data IRIS extract of raw Mapping of IRIS Purpose code is not file is data to FED Raw Included In the source scheduled on 3rd File was not able data/payment order banking date to produce the required layout requested I l l I l l I l l I l l I l l I l l I l l I l l I l l I l l I l l I l l I l l I l l i l l GL WALKER accepts limited characters

01/02/2012 01/03/2012 01/04/2012 01/05/2012 01/06/2012 01/09/2012 01/10/2012 01/11/2012 01/12/2012 01/13/2012 01/16/2012 01/17/2012 01/18/2012 01/19/2012 01/20/2012

I I I I I I I I I I I I I I I

IDENTIFY THE ROOTCAUSES From the validation of the root causes, true root causes were chosen that the group would want to find a solution to. True Root Cause 1: IRIS extract of raw file is scheduled on 3rd banking date True Root Cause 2: Mapping of IRIS data to FED Raw File was not able to produce the required layout requested True Root Cause 3: Classification or purpose code is not included in the source data/payment order

IMPROVE
SMART OBJECTIVE To be able to submit FED report w/in the prescribed deadline by improving the turnaround time of the preparation in Centralized Accounting Dept. RPD Accounting Foreign Exchange Deals (FED) reporting from zero percent to fifty percent compliance level by September 15. LIST OF SOLUTIONS Potential solutions that would eliminate the root causes of our problem were identified. Solution 1: Create Connect Direct access to RPD Accounting & Require ISG to generate FED Raw file on Day2 or earlier Solution 2: Create a command/program to automate cleanup & reformatting Solution 3: Create a command/program to lessen manual encoding Solution 4: Create a database to minimize the manual reclassification BEST SOLUTION Using the Grid Analysis technique, the best solution was identified. All solutions were considered though emphasis was given to the database which contains previous FED report already submitted to UCAD. FACTORS Accuracy SOLUTIONS Create Connect Direct access to RPD Accounting & Require ISG to generate FED Raw file on Day2 or earlier Create a command/program to automate cleanup & reformatting Create a command/program to lessen manual encoding Create a database to minimize the manual reclassification 5 Saved time 2 Positive Impact to FED processor / Management 5 Swiftness of preparation 5 TOTAL 17

18

18

20

***Accuracy refers to the ability to produce report free from error Saved Time refers to the consume time that can be saved Positive Impact to FED processor/Mgt refers to the level of impact to the processor/mgt Swiftness of preparation refers to the effect on the speed of preparing the final report: Maximum score of 5 can be given for each criteria

CONSULTATIONS DONE TO VERIFY THE VALIDITY OF THE SOLUTIONS The project proponents consulted Mam Rowena Calimag of ISG & Mam Cyril Garcia of Remittance Business Division regarding the availability of FED Raw file on the 2 nd banking date & the possibility of including the beneficiary account no/s in the extract of raw file.

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CONSULTATIONS DONE TO VERIFY THE VALIDITY OF THE SOLUTIONS

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GANNT CHART The Gantt Chart was used to show the steps to be taken for solution implementation. It shows: Specific actions required to be taken to implement the solution Persons responsible for each action Target dates and actual dates of implementation Next day Person WK1 Availability of Responsible FED Raw File Coordinate with Manny July 11 ISG July 13 Create eSR Manny request Deployment in ISG Team Prod WK2 WK3 WK4 WK5

July 20 July 25 July 27 Aug17

Self-Access Person in Connect Responsible Direct in Exporting FED Raw File Coordinate Manny / Mam w/ ISG Haydee Create eSR Manny request ID Definiion ISG & Access c/o ISG Deployment ISG Team in Prod Extraction Honey / of Sample Manny Raw Files

WK1

WK2

WK3

WK4

WK5

WK6

May 30 May 30 June 27 June 27 July 13 July 13 July 16 July 16 July 16 July 16

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GANNT CHART Automation of Person Reformatting Responsible Train the FED Tazie processor in using the MAC File Program Monitor the Tazie FED Processor for one week WK1 Aug21 Aug22 Aug28 Aug29 WK2 WK3 WK4 WK5

Creating a Person Database to responsible Reduce Manual Reclassification Train the FED Tazie processor in using the newly designed tool Monitor the FED Tazie Processor for one week

WK1

WK2

WK3

WK4

WK5

Aug21 Aug22 Aug28 Aug29

POST-IMPLEMENTATION DATA 13

Baseline data were compared with the results of our solution test implementation. Comparison was like apples to apples. Meaning, since submission dates was used as the data to prove that he problem exists, the same time frame was used in the data of the solution test implementation. Sigma levels and compliance level were indicated. Sixty percent (60%) compliance level is above the proponents target of fifty percent (50%). In the first week of the test implementation, the processor had a hard time adapting the new process the reason behind the forty percent (40%) noncompliance. Though the compliance level reached in the test implementation was below the benchmark of the bank, one hundred percent (100%) was obtained during the actual implementation since the processor has fully adjusted on the new process.

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CONTROL
DOCUMENTATION OF THE NEW PROCESS OR SOLUTIONS These are the comparative summary of the changes in the RPD Accountings procedure in preparing the BSP FED report for submission to UCAD.

OLD PROCESS
1 FED raw File Availability on the 3rd banking date 2 RPD Operation downloads FED Raw File 3 Manually reformatting of raw file 4 Manual reclassification of the remittances 5 Manual encoding of other scheds 6 Manual encoding of TIN No

NEW PROCESS
1 FED Raw File Availability on the 2nd banking date 2 RPD Accounting downloads the raw file 3 Reformatting raw file using MS Excel Mac command & FoxBASE program 4 Classification by linking to the historical database 5 Exporting of other scheds instead of encoding 6 Update of TIN by linking to the database

THE NEW PROCESS OF FED REPORT PREPARATION 15

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APPROVAL TO IMPLEMENT The requested updates in the FED report raw file was approved for implementation by the ISG Division Head via eSR.

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APPROVAL TO IMPLEMENT

APPROVAL TO IMPLEMENT 18

APPROVAL TO IMPLEMENT 19

The new process was approved for implementation by the Centralized Accounting Department Head via EAS.

APPROVAL TO IMPLEMENT 20

EAS request was forwarded to RPD Accounting for the implementation of the new process.

APPROVAL TO IMPLEMENT 21

Test implementation already received a positive testimonial from UCAD - the main customer of the project. The department head of UCAD Regulatory Reporting Unit stressed the benefit of the project to the bank.

BENEFITS OF THE IMPROVEMENT 22

Here are the impacts and benefits of our project: The Customers - UCAD Regulatory Reporting Unit can consolidate BSP FED Reports in better time frame, avoiding the delay in submission to BSP. Now, their personnel need not to work beyond their normal working hours. Earlier than the usual time of consolidation will mean much time to check & verify the Final Consolidated report for submission. Also, timely submission of RPDs BSP FED Report on remittances, is a factor in UCADs objective of maintaining BPIs positive image to BSP with regards to the timely adherence to its reportorial requirements. The Team The Quality team had significant improvement in the technical skills (advanced) in Microsoft Excel, Lotus Approach and FoxBASE application the main tools in improving the process. The proponents are also embarking now on the concept of Think Out of the Box the main focus of the process improvement. Everything is possible by having determination and hard work. The group also appreciates the concept of Quality Improvement Process which we can apply in any work, field or function that well be assigned to. The team further learned the importance of teamwork which is vital in any organization. The team was also able to develop their leadership and decision-making skills. The Department/Unit/Bank In terms of Process, the group were able to reduce the manual classification of remittances in the BSP Report preparation. In terms of Inventory, BSP FED Raw file can readily be processed and prepared for a timely submission. In terms of waiting, RPD Accounting can readily submit BSP FED Report within the time prescribed by UCAD which means earlier consolidation of FED Reports. RPD Accounting also improved its productivity and efficiency. A single BSP FED Report preparation has been reduced from 9-11 hours to 4-5 hours processing time. A significant decrease of six hours turns around time. Possible overtime which could be rendered for voluminous transactions can also be avoided.

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