Agenda item

Report of Assistant Director, SWAP Internal Audit Services

The Principal Auditor (SWAP) introduced the report, which she said offered low-reasonable assurance due to the identification of three limited audits:  grants income, the S106 process, and CIL governance review. 

The Director of Planning was in attendance to answer Members’ questions on these issues, and also on previously-raised concerns about planning enforcement. 

In response to a Member’s question about reconciliation of systems as detailed in the S106 report, she confirmed that this is the root of the issue, with information being held on in slightly different ways on Business World (the corporate finance system), Exacom (the specialist CIL system) and separate spreadsheets.  Whereas there has previously been just one annual reconciliation to inform the Infrastructure Funding Statement that is considered by Cabinet in December, it has now been agreed as part of the improvement plan that there will be several reconciliations across the year, which will be incorporated into the quarterly performance reports in the Budget Management process and also reported to Planning Committee.   Two separate systems will still need to be used but the spreadsheets will fall away.

The Deputy Chief Executive explained the two audit regimes to Members new to the committee, saying that internal audit acts as a management tool, ensuring safe decision-making, policies and processes.  He said that the Director of Planning had recognised the problems with S106 and CIL, and asked SWAP to audit the processes and recommend improvements, which are now being put into action.

A Member asked about monitoring of S106 contributions between the borough and the county, and what could be done to ensure that the contributions are being collected and spent within the spend-by deadline.

The Director of Planning said that in Gloucestershire, the county council negotiates and monitors separate S106 agreements, particularly with regard to highways and education, while CBC monitors its own S106s.  She acknowledged an issue here, with the possibility of contributions falling between the cracks, and said that, on the advice of the Planning Advisory Service, Gloucestershire has embarked on a trial tripartite approach with the county council.  Changes to the monitoring processes will be needed but this is being looked at.

Looking for further clarity about monitoring, the Member said he understood that the borough collects CIL contributions as the local planning authority, and should then be handing this to the county for big ticket items such as highways, yet the county suggests that it is not receiving the funding. He was concerned that contributions could languish in a bank account for many years, rather than being spent on the areas for which they are intended.  

The Director of Planning said that it was agreed last year to establish a CIL Joint Committee between Cheltenham, Gloucester and Tewkesbury, pooling their contributions, and with two main functions:  to allocate funding and to monitor how projects are delivered.  The county council has been very much involved in setting up the joint committee, and will be part of it, though not a voting member.  She explained that there are two elements to this: neighbourhood and strategic.  CBC’s neighbourhood CIL committee has already met and allocated all its funding via a transparent process, and the three councils are due to meet for the first time in the Autumn to discuss strategic allocations, which haven’t yet been spent due to the extremely high cost of  strategic infrastructure and the need to build up a significant pot before actively investing in projects.  When the joint committee was set up, each council took the opportunity to refresh its priorities, and these now form part of the interim collective infrastructure list; when the committee meets, it will make the first allocations, and decide whether to allocate some or all of the funding.  There will be a clear monitoring process going forward, with clear delivery milestones, overseen by the joint committee

The Chair confirmed that both CIL and S106 actions would come back to future meetings as part of the action plan, allowing Members to check on progress. 

A Member asked about the accounts payable report, noting that 58% of the transactions processed were not supported with a purchase order, and questioned what controls and processes are in place to identify potential overspends before they happen.   The Deputy Chief Executive said that CBC operates devolved budgetary management, with a centralised finance team and a dedicated business partner accountant serving different areas of the council’s business.  They go through budgets, forecasts, projections, likely income and expenditure with their service managers on a monthly basis and regularly update the leadership team on finance.  The focus is on big ticket items – over £50k; the budget monitoring report is presented to Cabinet quarterly, and  the formal outturn report is presented to full Council in July.  He would like to implement a ‘no purchase order no pay’ policy but this would be ineffective with a significant number of invoices under £100. 

Returning to the ongoing matter of planning enforcement, a Member asked for confirmation that the review would be considered by Cabinet in September, and that the planned Member consultation would take place over the summer to inform the report.  He said planning enforcement is a matter of importance to Members and the public all across the town. 

The Director of Planning explained that planning had had a resource crisis for many months, with four heads of planning in a short time, and a replacement for the long-serving enforcement officer yet to be found.  However, since securing a new permanent Head of Planning seven months ago, a planning enforcement review has been a priority.  The draft, approved by the previous Cabinet portfolio holder, is now being refreshed with the new Cabinet Member, and will be considered by Overview and Scrutiny who will feed into the Cabinet decision.  Officers are focussing on the task and will hold conversations with Members to inform the report; if this is not possible over the summer months, then the item will slip to the next available Cabinet meeting. 

The Chair noted that apart from the three areas of limited assurance, which are being worked on, everything else seems to be working well.