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Ensure records are kept of outsourced functions

What is outsourcing?

Outsourcingis making financial and other arrangements for other organisations to perform ongoing work on an organisation's behalf.

Many NSW public offices outsource common administrative or 'support' activities, such as printing, cleaning, payroll or the storage of semi-current records. Some public offices also outsource core business functions.

QuestionsExample: Different forms of outsourcing
The Roads and Traffic Authority may outsource the building of bridges and roads, or a council may outsource its pest and weed control function. This type of outsourcing is most commonly done by Government in conjunction with private sector organisations.

Another form of outsourcing is to share common administrative functions such as human resources, information technology and finance, by organising sharing arrangements with other agencies, setting up an internal shared services unit within an agency, or using the Central Corporate Services Unit, of the Department of Public Works and Services. This type of outsourcing is usually always done within Government.

Why do DIRKS projects for functions that are to be outsourced?

The Chief Executive of a NSW public office that outsources is still ultimately responsible for ensuring that the records of the outsourced business are created, maintained and disposed of in accordance with the State Records Act (section 10).

Full and accurate records should be kept of all a public office's activities, including those that are outsourced (section 12 (1)) and all public offices must ensure the 'safe custody and proper preservation' and 'due return' of specified records of outsourced business (section 11). State Records' standards and guidance should still be followed in their management.

NSW public sector offices who outsource their services can use DIRKS to identify what recordkeeping requirements should be included in contracts and monitored over time to ensure that the provider of these services meet the obligations of the State Records Act 1998 on their behalf.

Identifying requirements that need to be meet in your outsourcing arrangements

Undertaking Steps A-C of the DIRKS methodology can help you to identify the types of requirements you will need to identify in your contractual arrangements for outsourcing.

Step A: Preliminary investigation

It is important to approach an outsourcing project with a good understanding of the regulatory framework that governs information and records management in NSW. This framework will establish the boundaries for your recordkeeping obligations as a NSW public office.

The main requirements you need to identify are described in Step C: Identification of recordkeeping requirements of the DIRKS methodology. However, you may choose to also conduct parts of the preliminary investigation in Step A so that you can understand the context of the function you are outsourcing; in particular, the risks associated with that function.

Step B: Analysis of business activity

Step B is about analysing your particular business functions, activities and processes, defining how they are performed and creating a business classification framework. This step is unnecessary if you already have an understanding of the function you are outsourcing and its boundaries with other functions and business processes.

Step C: Identification of recordkeeping requirements

Step C is critical to undertake in a project to outsource functions. You should identify all the recordkeeping requirements associated with the function in question and assess the risks of them not being met. You can then compile a list of recordkeeping requirements for the provider of the outsourced services and include it in the contract to ensure they meet their obligations.

Assessing systems for outsourced functions

To ensure your recordkeeping requirements will be adequately met, you may also wish to examine the business systems that will be used by your service provider.

Step D of the DIRKS methodology provide a mechanism by which you can assess these business systems against your recordkeeping requirements. You can use this information to feed further requirements into your contractual arrangements.

Step D: Assessment of existing systems

Undertaking Step D of the DIRKS methodology can enable you to assess the systems intended to support your outsourced activities. In Step D you can examine these systems - their technical infrastructure, procedural support and staff training - as a means to determine whether they are sufficient to support your business requirements. You can then use this step to set criteria or develop a checklist for the systems designed to support outsourced activity.

Alternatively, in Step D you can assess your organisational systems that currently perform the activities that are to be outsourced, and use the knowledge gained from this assessment to develop a checklist for the systems to be used by your service provider to manage your outsourced activity.

In either of these situations, based on an understanding of the recordkeeping requirements pertaining to the outsourced function you could develop a checklist to accompany the outsourcing arrangements that states:

the business systems supporting this function must be recordkeeping systems. Consequently they must:

  • be sustained by policies and procedures that specify which records should be created and managed and how these records should be created and managed
  • be supported by adequate training procedures to ensure staff performing outsourced functions understand their recordkeeping responsibilities
  • implement recordkeeping tools, such as disposal authorities and classification schemes, that are appropriate to the business function
  • support adequate metadata attribution and maintenance
  • adequately manage disposal class attribution and maintenance
  • restrict record access to appropriate users.

Further information

Comprehensive guidance about all other aspects of outsourcing arrangements is provided in State Records' guidelines, Accountable Outsourcing: Recordkeeping Considerations of Outsourcing NSW Government Business.