Agenda item

To receive a report by Angie Hooper, Principal Auditor for SWAP.

The Principal Auditor for SWAP introduced the report. The update report only concerned the findings of the contract and expenditure compliance with Council constitution and scheme of delegation audit which had been given a limited assurance and was identified as a significant risk. The audit was agreed with the Monitoring Officer following the initial findings of the investigation that SWAPs counter fraud team had been conducting and the scope was to ascertain if there were sufficient controls in place to ensure compliance with the scheme of delegation in relation to expenditure and the award of contracts for specialist professional services.

SWAP was unable to provide assurance that all expenditure had been approved in line with the Council’s constitution and scheme of delegation. Over a 2-year period 99% of work for specialist professional services or statement of works projects had been directly awarded to a supplier and it was unclear whether any form of mini competition had taken place which made it difficult to demonstrate value for money. Following the conclusion of SWAPs work, a further issue around agreement of terms and conditions alongside the overarching contract had been identified. The approval processes for statement of works projects had not been consistently followed with the required sign off by finance and commercial and procurement colleagues. Budgets for statement of works projects had increased potentially multiple times, and it was unclear whether these obtained the required approvals. SAP which is the Council’s finance system did not have functionality to place budgetary commitments which could make it difficult to accurately project spend against budgets. Actions had been agreed by officers and would be followed up and reported back to the Committee in August.

Cllr Suttle commented that there had been a significant failure of internal systems and as a committee would like to ask a number of questions that we are not able to at this time due to not having the health and safety report in front of us but would come at a later date and there would be a more frank discussion in the future. He also explained that there was no member oversight and requested that some members be added to the officer working group in order to oversee how the work was going.

The Head of Legal Services informed that since the first draft had been received from internal auditors, the Council formed a small working group of officers to start looking at the recommendations which had tight timescales. The working group of officers consisted of Head of Legal Services, Corporate Director for Finance and Commercial, Senior Contract Lawyer from the Legal Team, Head of Financial Strategy, Head of Procurement Team and a Senior Finance Officer. The Group had looked at the recommendations and findings and was starting to act on them. The first finding referred to the financial part of the scheme of delegations and a recommendation to look at aligning some of the financial thresholds in SAP. There had been a detailed piece reviewing the scheme of delegation’s financial thresholds and reported some recommendations to the Senior Leadership Team (SLT). If SLT supported these recommendations they would be brought back to the Committee on the 30^{th of} June, with a view of taking the recommendations to Full Council.

Cllr Suttle agreed that a small working group of four members of the Committee and the Portfolio Holder for Finance would be set up so that members had direct assurance that the internal auditor’s recommendations were being acted upon sufficiently.

Noted.