To consider an update on the progress of work by Internal Audit for 2013/14.

The Committee considered a report by the Chief Finance Officer outlining the progress made against the 2013/14 Internal Audit Plan up to the end of February 2014.  The Head of Internal Audit and Risk reminded Members that a presentation on the review of Council procedures relevant to the employment of contractors and consultants would take place at the conclusion of the report.

The Head of Internal Audit and Risk then introduced the following matters from the report for consideration:

·         Fundamental Systems Audits

·         Other Audit Work

·         National Fraud Initiative (NFI)

·         Fraud and Special Investigations

·         Schools

·         Performance Management

Following discussion the Head of Internal Audit and Risk and the Chief Assets Officer then introduced the presentation.  The meeting was aware that the review had arisen out of the debate which had taken place on this issue at the Audit Committee held on 23 September 2013 (minute A/13/66 refers).

A copy of the slide pack is attached at Appendix A to these minutes.

The meeting noted the various issues identified by the review together with the remedial action which had been taken in response.  The Chief Assets Officer stressed that no issue had become apparent regarding the quality of work undertaken by the consultant which had been appointed but it had become apparent that there were weaknesses in the Council’s procurement process.  As a result mechanisms had been put in place to prevent a future reoccurrence; these included the introduction of more project specific tender specifications, a single point of accountability and responsibility for the life of a contract and the requirement for declarations of interest by interim as well as permanent staff. The Head of Internal Audit and Risk added that the review’s findings were of relevance across the Council as a whole, not only for the Technical Consultancy Services Framework contract, and the Procurement Team were currently examining the adoption of a procurement tool to ensure that, in future, the correct procedures were consistently followed throughout the authority.

The Chief Finance Officer advised that the Council had significantly reduced the level of resources employed from the consultant and the value for money risk had therefore been reduced.

However, despite the officers’ assurances a Member was critical of the time taken to undertake the review and expressed concern at its findings.  He then sought clarification on the responsibilities of finance officers, including their role in the monitoring of the contract, and queried why the information relating to the review had not been included within the body of a report but given to the Committee in the form of a separate presentation. 

In response to these comments the Chairman suggested that the time taken in undertaking the review reflected the officers’ thoroughness.  The Chief Finance Officer then reminded the Committee that it had been he who had suggested that the review take place, that it was a review not an audit and that it had been decided to submit the information as a presentation in order to maximise transparency.  He stressed that the review was open about the shortcomings which had been found and no attempt had been made to deny that mistakes had occurred.  Further, action had been taken immediately to address the shortcomings which had been found.  He also advised that the responsibility for the management of individual contracts lay in the relevant Directorate and not with the Head of Internal Audit and Risk.

Nonetheless, the Member made clear that he was dissatisfied with both the extent of the review and its conclusions and, following discussion, indicated that he would raise his issues of concern with the Council’s external auditor, Ernst & Young LLP.

In conclusion the Chief Finance Officer responded further to points raised by the Member.

NOTED

1          the progress made against the 2013/14 Internal Audit Plan;

2          the content of the presentation entitled ‘A review of Council procedures relevant to the employment of contractors and consultants’.