The Head of Environmental Services provided a report in relation to the HRA Internal Controls Section 151with an updated position following the Internal Audit reports which identified failings in the internal controls present in the Council’s Housing Service. The report provided assurance to Members that the matters identified within those reports and subsequent investigations into the Housing Service had been addressed appropriately and improvements had been made to the internal controls.
The report also sought to address the matters identified by the Council’s External Auditors on 30th July, 2018.
As a result of Internal Audit reports in 2016/17 in relation to Housing Capital and post contract appraisal functions a significant number of failures in contract compliance, contract management and procurement processes were identified.
The wholesale range of failures required an immediate and exceptional programme to address and rectify the position. Actions were taken to address the issues which included:
· Review of all contracts;
· Procurement Officer relocated within Legal;
· Appointed Specialist Officers;
· Review of delegations;
· Comprehensive mandatory training;
· A stock condition survey was to be undertaken;
· Review of financial arrangements.
It was recognised that Officers had worked throughout with internal audit seeking their support and assurance and external audit had been advised on a regular basis. Indeed, the Grant Thornton Audit Findings report 2017/18 had stated that Grant Thornton had considered how the Council had responded to this issue, both with respect to its investigation and ensuring that appropriate arrangements were being put in place to strengthen procurement and contract management. It was concluded that the Council’s response to investigating the issue was appropriate and proportionate. Improvements had been made to procurement and contract management.
The Council’s internal audit team had carried out two audit investigations into the operation of the Council’s Housing Services. These were finalised in March 2017. As a result of these audit investigations certain recommendations were made to the Head of Housing Services in respect of the financial controls within the Housing Service and the extent to which the identified issues were exposing the authority to risk.
It was also important to note that the investigations and audit reports, to date, found no evidence of fraudulent activity.
The process for managing the investigations was carried out by an independent third party and the Council’s External Auditors had been advised and informed throughout this process to ensure that the overall value for money assurance could be considered in this context.
As an initial action, in response to the audit findings, the Council had engaged the services of an external contract manager and this officer had and continued to be instrumental in the identification of and remedial action in respect of the contracts within the Housing Capital Team and the HRA generally.
Details all of the actions either implemented or with a clear timeline
of delivery for the Capital Programme Audit were outlined within the report. It was recommended that all staff engaged in the procurement process should be adequately trained and this had been acted on.
There was one
outstanding recommendation in relation to record
retention/disposal. This was an issue
that the whole Council needed to address.
A number of compliance issues that had beenidentified as part of the investigation process and Members were advised thatthese had been resolved. It was important the ‘follow ups’ were made in order to mitigate any further issues.
It was reported that the stock condition survey would collect a minimum of 20% data on the housing stock. This would provide a more accurate and meaningful picture of the housing stock and would reflect the changes that had already occurred.
Reviews were being
conducted on previous projects that had been
undertaken to ensure that work had been completed to a satisfactory standard and that all necessary documentation was in place. Subsequently, the data would be uploaded into the new Asset Management system.
The Head of Environmental Services stated that staff briefings were undertaken to ensure that everyone understood the expectations of contract and procurement procedures. He further advised that sickness management were being monitored and addressed appropriately. However, he accepted that cultural changes within the services may take longer to embed. It was further reported that the restructure of the services would be reviewed in the future.
Members stated that previously there was a Tenants Panel that worked well with the Council and it was important to ensure that tenants were still engaged with any housing project.
Members acknowledged that substantial improvements had been made and that more work still needed to be done nonetheless. It was prudent that a clear plan was in place to understand the issues.
The Chair requested a clear format was required on the recommendations with the follow ups including the projected completion date. The Chair concluded by thanking all officers and the Committee for their dedication.
1) Members consider the actions in place to provide assurance in relation to the weaknesses identified; and
2) a 6 monthly update report be presented to the Committee on the implementation of actions contained within the reports.