To receive Report No. 28/2016 from the Assistant Director for Finance.

Report No. 28/2016 was received from the Audit Manager

During discussion the following points were noted:

      i.        Internal Audit has made good progress in delivery and is on track to achieve the target of at least 90% of the Internal Audit Plans for 2015/16 completed by the end of March 2016. By the end of January 2016, it is estimated that 71% of the audit plan will be completed to draft report stage.

    ii.        The Committee thanked Internal Audit for their work within the 2015/16 year.

   iii.        Limited Assurance Opinions have been given to the following areas:

·         IT Systems Administration (Appendix B of the report)

·         External Placements (Appendix C of the report)

·         Oakham Enterprise Park (Appendix D of the report)

   iv.        IT Systems Administration  - The following points were raised:

·         Concern was raised with the overall controls within the IT department.

·         Mrs Mogg assured the Committee that now the new, permanent Head of IT was in post improvements had been made and there is evidence to demonstrate new controls are in place and that all the recommendations had been implemented.

    v.        External Placements - The following points were raised:

·         Concerns were raised by the Committee in relation to the limited assurance highlighted on page 62 of the report.

·         The Committee expressed their disappointment that there was no representation from the People Directorate at the meeting to answer questions. The Committee requested that the Head of Commissioning attend the next Audit and Risk Committee meeting so they could address their concerns directly.

·         Mrs Mogg and Mr Phillipson confirmed that the Head of Commissioning is located within the People Directorate, however, maintains a corporate role.

·         Mrs Mogg suggested that the Head of Commissioning works with Internal Audit regarding the limited assurances and whether alternative tools were available to be used (pg. 64).

·         Mrs Mogg reminded the Committee that the council is part of Welland Procurement which offers advice on procurement to the council.

·         Mrs Mogg assured the Committee that she would feedback their comments to Dr O Neil - Director for People, but to also consider the changes in staffing experienced in the past year within the People Directorate, this includes a completely new Senior Management Team.

·         Miss Waller highlighted that the People Directorate is the highest spending section of the council and we are not seeing the results that are required, which raises concerns regarding value for money.

·         Mr Walters expressed concerns regarding any additional resources being added to this area. He suggested that a review of performance took place before any decisions were made.

   vi.        Oakham Enterprise Park (OEP) - The following points were raised:

·         The Committee acknowledged the success that had been achieved since the start of the OEP project, between over 95% occupancy of units on the site was an excellent result.

·         Mr Baines expressed his disappointment that the basic commercial principles had not been followed and that insufficient training had been given to officers in the relevant areas.

·         The Committee made it clear that this was not a reflection on individual officers, but a reflection on the systems in place.

·         Mr Phillipson thanked Internal Audit for their hard work in the completion of this audit.

·         Mr Phillipson informed the Committee that the Business Manager - Oakham Enterprise Park had done a fantastic job at OEP. The speed and rapid approach may have caused some of the issues.  Mr Frieland now had the support of fellow officers that have specialist knowledge which will enable Mr Frieland to concentrate on the job that he is good at.

·         Mr Phillipson advised the Committee that since joining the council he had brought in staff that have provided further rigor and experience to this area, for example, the Property Manager.

·         The Business Manager - Oakham Enterprise Park informed the Committee that the issues regarding lease agreements were caused in part by agency Solicitors being used via the Legal shared service with Peterborough City Council (PCC). This has now been resolved, a new permanent Solicitor was carrying out this work and a full review of current leases was being undertaken. A redrafted version of the template lease for the self-store units was now in use.

·         Mrs Mogg confirmed to the Committee that the annual cost of the whole legal contract with PCC was £320,000. The service was continually being reviewed where issues were raised. PCC have had a number of staff changes, a new Head of Legal was now in post and improvements were now being seen. The next review point was in May 2016, this would be brought to Resources Scrutiny Panel in April 2016.

·         Mr Phillipson confirmed that there had been ongoing commentary with legal at PCC regarding the issues throughout.

·         The Business Manager - Oakham Enterprise Park confirmed that in light of Internal Audits findings cash was no longer taken for rent payments. 

·         Mr Phillipson confirmed that cash payments had been taken previously for items that had been sold from the site (this includes selling items using eBay).

·         The Business Manager - Oakham Enterprise Park confirmed that when the OEP project commenced he was working alone, often working 70 hours per week to get the project up and running and leases in place.

·         Mr Phillipson and Mrs Mogg assured the Committee that lessons had been learnt in the transition from project to business set up. Monitoring, staff management/ training and use of the Project Board would be different in future projects on this nature.

RESOLVED

The committee NOTED the Internal Audit update report (Appendix A) including the proposed timing for follow up reporting on “limited” assurance audit reports finalised since the last Committee meeting.