Value for Money Examination 05; Management of Telephone Facilities in the Civil Service   Summary


The total cost of telecommunication services to Government departments for 1994 was ?22.5m. All public network lines and connections are supplied by Telecom Eireann. In addition, the Government established a private network in 1989 comprising high-capacity circuits leased from Telecom Eireann which link Government departments in Dublin and regional centres. The Government Telecommunications Network (GTN) offered the opportunity to realise economy and efficiency gains through the low unit cost of calls routed via the network and the reduction in the need for switchboard operators.

The examination focused on establishing whether

  • the GTN was cost-effective
  • the potential for economy gains was being realised
  • there was proper monitoring of telephone costs.

Five departments which accounted for 10 per cent of total Civil Service spending on telecommunications in 1994 were chosen for detailed examination.

Cost-Effectiveness of the GTN

Although no independent cost benefit analysis of the GTN had been carried out, we established that for four of the five departments examined the GTN was cost-effective. The other department was excluded from the analysis as it was unrepresentative of GTN usage. Our findings support estimates by the Department of Finance that there is a net annual saving to the Exchequer of ?2m through using the GTN over alternative public network routings.

Service Deficiencies

Major deficiencies were noted in the level of service in two of the departments (Health and Transport, Energy and Communications) which militated against the achievement of realisable savings in those departments.

Utilisation of the GTN

On the basis of our examination we concluded that bigger savings could be achieved through better management of telephone services in departments. Our analysis showed that 40 per cent of all calls could have been routed through the GTN but in practice only 23 per cent were. The estimated annual cost to the five departments of not using the GTN, when it was appropriate to do so, was ?90,000.

Scope for Economy Gains

Taking into account the cost of necessary capacity upgrading, a readily achievable increase of 20 per cent in GTN usage would yield annual savings of ?100,000, while a 30 per cent increase would yield ?300,000 per annum. These savings will not be achieved however, unless management plays its part by setting targets for GTN usage in each department, introduces staff training and provides access by all staff to GTN directories.

Control and Management

The monitoring of telephone costs by the departments examined was poor with the exception of the Department of Defence. This appeared to contribute to the low recovery rate for personal calls by staff in those departments, in contrast to the Department of Defence where significant recoveries were being achieved.

Some departments had invested in a direct dialling inward system to facilitate telephone communication without the need for operator assistance. We estimated that the use of this system, where there was a viable alternative in the GTN, was costing departments an additional ?10,000 a year. Many departments also pay for direct lines which are far costlier to maintain than extensions in a Private Branch Exchange (PBX) system. We found that many of these direct lines were used infrequently leading us to the conclusion that there may well be a case for reducing the number of such lines with consequential savings.

In two of the departments, Health and Transport, Energy and Communications, there were no dialling restrictions on premium rate calls such as weatherlines, speaking clocks and resultlines. Examination of call monitoring reports for those two departments revealed monthly charges of ?450 for such unnecessary services - the equivalent of ?5,400 annually.

On the basis of our findings, it is our opinion, that additional savings in telephone costs can be achieved across the Civil Service by proper call monitoring and barring and, where appropriate, the use of least cost routing.