Insolvency Service: Director Conduct Reporting Service - Rules Engine
An algorithm using predetermined logic to score the answers to questions in the Director Conduct Reporting Service (DCRS) to determine if there are potential conduct issues that need to be explored further.
Tier 1 Information
1 - Name
Director Conduct Reporting Service - Rules Engine
2 - Description
All office holders in insolvency proceedings have a statutory duty to submit a report to the Secretary of State on the conduct of the directors of the company. This is done via the Director Conduct Reporting Service (DCRS). The DCRS Rules Engine is an algorithm using predetermined logic to score the answers to questions in the DCRS to determine if there are potential conduct issues that need to be explored further. The tool is used due to the volume of forms submitted each year, which is in the region of 25,000 to quickly determine those cases that need to be considered further.
3 - Website URL
N/A
4 - Contact email
Tier 2 - Owner and Responsibility
1.1 - Organisation or department
The Insolvency Service
1.2 - Team
Compliance and Targeting
1.3 - Senior responsible owner
Investigation and Enforcement Services Director
1.4 - External supplier involvement
Yes
1.4.1 - External supplier
Nomensa Limited King William House 13 Queen Square Bristol BS1 4NT
NetCompany 12 Greek Street Leeds LS1 5RU
1.4.2 - Companies House Number
Nomensa - 04214477 NetCompany - 08568559
1.4.3 - External supplier role
Nomensa - software development and quality assurance resources
NetCompany - infrastructure and firewall security
There was no contractual relationship between the two companies. All changes and releases were managed through the Insolvency Service SIAM and existing assurance and governance forums.
1.4.4 - Procurement procedure type
Nomensa - Call off from G-Cloud 10 NetCompany - Call off from G-Cloud
1.4.5 - Data access terms
No access to Government data was granted. The data source originates from the liquidator/ administrator.
Tier 2 - Description and Rationale
2.1 - Detailed description
Insolvency Practitioners and Official Receivers staff have to complete a 14 section conduct report (12 sections for Official Receiver staff). The form provides general information about the company and its directors and information about potential misconduct matters. The form also contains an overview page, the ability to view and print the completed form.
The first 4 sections each have a series of questions that must be completed. An Insolvency Practitioner completes all of these sections, but the Official Receiver only completes Section 3 onwards because the information in the first two sections is contained on the Insolvency Service case management system.
The Office holder and type of insolvency proceedings Details of the company Director details Details of the company insolvency
The following 10 sections are all related to conduct matters. They have a parent question. A “positive” answer to this question will enter the subsequent questions about that matter. Where there is a “negative” answer, the form will progress to the next section when clicking “Continue”.
Answers to some questions within each conduct matter subset may open further questions.
The answer to most questions will either be a choice of a single option from set responses or an option to select multiple responses. The exceptions to this are specific information boxes (i.e. names, addresses etc)
Once the form is completed and submitted, the responses progress through an algorithmic “rules engine”, which is programmed to identify specific questions and their answers and assess these against logic criteria and decide whether this logic is met and the case needs to be considered further. In cases where further consideration is required, a “sift in” email is generated. Where the case does not need to be looked at, a “sift out” email is generated. These emails are sent to the Insolvency Service showing the answers to all questions and the rationale for the outcome. The Office holder also receives an outcome confirmation email.
2.2 - Scope
The purpose of the rules engine is to do an initial assessment of whether there is director misconduct in an insolvent company and flag the cases where there are and aren’t any conduct matters to consider.
It is designed to be used in conjunction with the answers provided on the Director Conduct Reporting Service.
2.3 - Benefit
The tool will identify cases where a further human review is required, without the need for manual intervention. Reports on around 25,000 insolvent companies are currently passed through the rules engine each year and this identifies approximately 8,500 to 9,000 cases for initial investigation.
Without the rules engine, significant resource would be required to look at the content of each completed report to assess if there were potential conduct issues.
2.4 - Previous process
Insolvency Practitioner office holders were required to submit a paper based conduct report, where they would make the decision if they believed there were any conduct matters that needed to be considered.
Changing to an electronic report means that the Insolvency Service now has that control over making any assessment.
Official Receivers were not required to submit the paper report as they had a different process.
The Director Conduct Report went live on 6 April 2016.
2.5 - Alternatives considered
Not aware that other alternatives were considered.
Tier 2 - Decision making Process
3.1 - Process integration
The answers to the Director Conduct Reporting Service online conduct form are processed through the rules engine. This applies to every report.
The rules engine contains logic relating to elements the Insolvency Service would look for in the various conduct matters. If the logic that suggests there may be conduct issues in the case is met, then the rules engine will produce a “sift in” email report. Where that logic is not met, a “sift out” email report is produced.
Where there are conduct matters that need to be considered, each will be given a score of 10, up to a maximum score of 130 for the whole form (13 conduct areas in total).
Each sift in report will contain the rationale for the decision and all of the answers within the completed form, to allow a human to them make further enquiries and make a decision on whether a full investigation is required.
3.2 - Provided information
The report from the rules engine gives details of the total score, the rationale for the sift in report (i.e. the conduct matters of concern) and a copy of all of the questions within the form along with the answer provided.
The report is in the form of an email to the Insolvency Service.
The Office Holder receives an email just containing the overall outcome of either “sift in” or “sift out”.
3.3 - Frequency and scale of usage
Around 25,000 reports a year pass through the rules engine based on the current volumes of insolvencies.
Reports can be submitted each day, but main use is Monday to Friday.
There are approximately 4,500 Insolvency Practitioners or their staff who have accounts and can complete/submit reports. The form is also used internally by Official Receivers staff.
3.4 - Human decisions and review
A human will review the content of all sift in decisions.
Sift out decisions are not checked, unless other information comes to light to suggest the new or additional evidence that may change the outcome.
3.5 - Required training
The form is intuitive and does not require training to use.
No specialist training is required for internal staff who deal with the form and rules engine.
3.6 - Appeals and review
If an office holder does not agree with an outcome or has new evidence, they can ask for a review, which will be carried out by a human.
A review may also be carried out if we receive information for any other source that suggests a review may be required.
Tier 2 - Tool Specification
4.1.1 - System architecture
DCRS data is collected via a WebApplication hosted as an AppService on Microsoft Azure. Data Input via the WebApplication is validated and then passed to a series of Data Service APIs that persist the data in a PostgresDB.
The DCRS rules engine is triggered via a serverless Azure Function timer job that checks for submitted reports via the Data Service APIs. Data for any submitted reports are retrieved and run through the the logical statements detailed in the rules engine. The output of a sift-in or sift-out result is persisted via the Data Services and PostgresDB which in turn uses Amazon Simple Mail Service (SES) to send the sift result to the originating Insolvency Practitioner and an internal Insolvency team.
Summary: Web Application - Azure AppService Data Services - Azure Functions (http triggers) Data Storage - Azure PostgresDB Rules Engine - Azure Function (timer trigger) Email - Amazon SES.
4.1.2 - Phase
Beta/Pilot
4.1.3 - Maintenance
DCRS and its rules engine are maintained by an internal delivery team and monitored by an internal devOps and support teams.
The application is monitored via a combination of manual daily checks and automated monitoring and alerting infrastructure in Azure.
Each application is checked for security vulnerabilities and framework upgrades using github dependabot. Application maintenance for software updates are added to a delivery roadmap to ensure the application stays within support.
Functional or policy changes are reviewed by business governance forums with approved work added to a backlog for delivery by the internal delivery team via an Agile delivery model. Changes go through a robust quality assurance process before being promoted to the production environment via CI/CD pipelines.
4.1.4 - Models
There are no models. It is a configurable calculation based on data.
Tier 2 - Model Specification
4.2.1 - Model name
There is no AI or statistical model being used.
4.2.2 - Model version
The last update to the rules engine was November 2023.
4.2.3 - Model task
The rules engine makes logical decisions based on data supplied by the Insolvency Practitioner/ Official Receiver which will sift a case ‘in’ or ‘out’ for investigation.
4.2.4 - Model input
The Insolvency Practitioner/ Official Receiver answers questions about the director’s conduct. (see 2.2.1)
4.2.5 - Model output
The output is a score which will result in a sift in for investigation or sift out which means the case will not be investigated.
4.2.6 - Model architecture
There is no AI or statistical model being used. The decision is based on predetermined logic which has gone through validation at an earlier stage.
4.2.7 - Model performance
Standard measures of AI or statistical model performance are not applicable. We have automated tests which check each permutation of question answer to ensure the sift in/out decision is correct as based on the predetermined logic.
4.2.8 - Datasets
No datasets have been used to develop the model.
4.2.9 - Dataset purposes
No datasets have been used to develop the model.
Tier 2 - Data Specification
4.3.1 - Source data name
No data set has been used to develop the model. The rules engine provides a score based on the answers provided in the DCRS.
4.3.2 - Data modality
Other
4.3.3 - Data description
No data set has been used to develop the model. See 2.2.1. Questions relate to matters as the total of monies owed to creditors, whether accounting records have been delivered etc.
4.3.4 - Data quantities
No data set has been used to develop the model. Approximately 25,000 reports are submitted each year through the DCRS.
4.3.5 - Sensitive attributes
No data set has been used to develop the model. There is no personally identificable data for the rules engine.
4.3.6 - Data completeness and representativeness
No data set has been used to develop the model. All parent questions are mandatory in the DCRS feeding into the rules engine.
4.3.7 - Source data URL
No data set has been used to develop the model.
4.3.8 - Data collection
The data that is given to make a decision is from the Insolvency Practitioner / Offical Receiver and is as complete as they can make it. If any other information is needed the Insolvency Service will make further enquiries.
4.3.9 - Data cleaning
We have not trained a AI or statistical model with data, so therefore no cleaning was necessary.
4.3.10 - Data sharing agreements
There are no data sharing agreements for the rules engine.
4.3.11 - Data access and storage
The information submitted by the Insolvency Practitioner office holder is held in their submitted case folder in the Director Conduct Reporting Service. Only the Insolvency Practitioner and any staff allocated to the case are able to view this.
The Insolvency Service holds this data on our internal case management storage system. This will be deleted 7 years after the last action on the case in line with retention policies. Access is limited to those users across the Insolvency Service that may have a legitimate need to access the data, in line with our information access policies and role based access.
Tier 2 - Risks, Mitigations and Impact Assessments
5.1 - Impact assessment
No impact assessment is available due to the passage of time. No personal data is processed in the rules engine.
5.2 - Risks and mitigations
Where the Director Conduct Reporting Service is unavailable for 7 working days or more, there is a paper based PDF version of the current form that can be used. Any assessment would be made by humans. No impact assessment is available due to the passage of time. No impact assessment is available due to the passage of time. Everything sifted in is checked by a person. For sifted out cases we use automation testing to ensure that the predetermined logic only sifts out cases we will not progress.