Agenda item

The Committee considered the results of the internal audit on the use of consultants.

In the ensuing debate, the following principal points were raised:

·         Was the Internal Auditor satisfied that good control mechanisms with appropriate checks and balances were in place as a result of the findings of this audit report? Garry Rollason commented that good mechanisms were in place. The C1A form was designed to document appropriate details, including the rationale for engaging consultants and that appropriate approval was given. Compliance was an issue but positive management responses had been received and processes would be tightened to ensure  that when the C1A form had not been completed then approval would not be granted and payment would not be made

·         The conclusions of the report were disappointing with very few of the actions from the previous audit report being effectively addressed. An explanation of why these actions had not been completed had not been forthcoming and no-one appeared to be held to account for their actions. The Head of Commercial acknowledged that following the previous audit report, the management action did not go far enough. However this report had tightened the governance arrangements surrounding the use of consultants 

·         It was important that the Committee received a further audit report on the use of consultants in six months time. Garry Rollason responded that it was recommended that an audit report be brought back to this Committee during the 2016/17 financial year. He could not commit to a particular meeting date until the proposed actions had become embedded and consultants had been engaged under the new regime

·         There remained ambiguity in the terminology of what was meant by the term consultant. The report indicated that action was not taken on occasion because managers did not realise that they were dealing with consultants. The Head of Commercial commented that the definition of the term consultant was being examined to ensure that there was a clear understanding of what was meant by the term. The definition would be broken down into a number of sub-categories to provide managers with a clearer understanding of what constituted an internal piece of work or a bespoke piece of traditional consultancy work

·         What was the annual cost for the use of consultants and how many days of consultancy work had been engaged? The Head of Commercial stated that she was not in a position to confirm the number of days but the number of exemptions had dropped by 33%. The net expenditure on consultants was £650k in 2013/14, £400k in 2014/15 and was less than £200k this year

·         Council's attention should be drawn to Committee's surprise and disappointment at the outcome of the audit report

·         A request was made that this audit report be published alongside other completed audit reports

·         It was requested that the Overview Scrutiny and Performance Board be asked to consider including the use of consultants in its work programme

·         The report indicated that there was no record of consultancy engagement being approved at the required level. Was it fair to say that management were employing consultants in any way they liked? Had the actions of managers been sanctioned at the appropriate level and would consultants have been engaged in any case? The Head of Commercial explained that the request to use an consultant would have been made on each occasion, it was just a question of whether managers had completed the form and then the consultant formally engaged   

·         How was the use of a consultant permitted when the form had not been completed? Was there a matching process and how was the invoice approved? The representative of the Chief Financial Officer explained that there were existing mechanisms to match purchase orders to invoices. One of the requirements of the new system was that before an order was authorised, a C1A form needed to be completed. If an invoice was received and then a purchase order was received, the system would pick up that it was the wrong way round. It did not always happen in the past but it should. Garry Rollason added that a payment could not be made unless an order was received.    

RESOLVED that:

a)    the results of the internal audit on the use of consultants attached as an Appendix be noted;

b)    a further audit be undertaken during 2016/17;

c)    Council's attention be drawn to Committee's surprise and disappointment at the outcome of the audit report; and

d)    The OSPB be asked to consider including the use of consultants in its work programme.