Agenda item

Section 151 Officer (see recommendations)

This item was taken after agenda item 11 (Work Programme). 

Lucy Cater, Audit Cotswolds, was excused from the meeting. 

The Section 151 Officer introduced his report on the future provision of Internal Audit services, which members would recall having received a briefing note on the same issue at the last meeting.  Given that SWAP was an existing local authority owned (Teckal) company, it was possible for the council to request to join SWAP as a member and the service change without the requirement for a formal procurement process.  Given the various connections within the Finance Officer Group, Grant Thornton were commissioned to support the evaluation process, both by helping with the criteria for the evaluation and by providing an independent view on the quality of the two suppliers.  The proposals were evaluated using a price/quality score of 40%/60% and each person scored the proposals independently, but ultimately, SWAP scored highest in the evaluation, unanimously.  He talked through some of the reasons for this, but also highlighted the resilience that SWAP would offer given that it had a larger pool of resources to call upon.  Although not a direct issue for this Council (Audit Cotswold staff are currently employed by Cotswold District Council) Members were given assurance that all the staff would have their existing rights protected under TUPE.

The Section 151 Officer gave assurance to Members that SWAP has a strong governance model in place, which was set out in detail at paragraph 3 of the report.  The Members’ Board meet at least twice a year and make all decisions relating to strategy, policy, and the admission of new partners.  Each partner council nominates a councillor to represent them on this Board. It was being proposed that the representative for this council would be the Chair of the Audit Committee and the Chief Financial Officer would represent the council on the Board of Directors.

.  The Committee noted that the proposed fee to SWAP represented a base budget saving of £32,680 and that this fee was fixed, regardless of staff pay increases, until a time when all members decided that it needed to be increased. 

The following responses were given to member questions:

·         Despite having to deal with long term sickness, individuals within the existing Internal Audit service had done a fantastic job and whilst it was accepted that staff were feeling nervous about the future, they were not only assured a job, but potentially better opportunities going forward as part of SWAP. 

·         This report had been fast tracked to this meeting of the committee, as it was not scheduled to meet again until January 2017.  It was not scheduled for consideration by Cabinet until November 2016, as One Legal needed to consider all the relevant Articles, etc.  It was also noted that the other Council’s needed to consider the issue. 

·         365 audit days needed to be honoured due to TUPE and whilst this could be reviewed in the future, it may result in redundancies. 

·         The aim was to resolve this issue as soon as possible, in order to remove any uncertainty for those officers that would be affected and staff, were being kept informed of progress. 

Members acknowledged the good work that the current Internal Audit service had undertaken and expressed hope that this issue be resolved as swiftly as possible.  

Upon a vote it was unanimously

RESOLVED that:

The report be noted and the proposal for South West Audit Partnership (SWAP) to provide the council’s internal audit service from the 1^st April 2017 be endorsed.

The proposal to appoint the chairman of the Audit Committee to the Members’ Board and the Section 151 Officer to the Board of Directors be endorsed.

It be recommended to the 2020 Vision Joint Committee that the current arrangement with the Joint Committee be terminated on the 31^st March 2017, so that responsibility for the internal audit service provision may return to Cheltenham Borough Council prior to the council entering into the new arrangement with SWAP

It be recommended to Cabinet that it be agreed that the South West Audit Partnership (SWAP).