Agenda Item No 6
The Vale of Glamorgan Council
Audit Committee: 8th July 2013
Report of the Managing Director
Building Services - Mobile Working Review
Purpose of the Report
1. The purpose of this report is to provide the Committee with an overview of the Internal Audit findings, recommendations and conclusions following a detailed review of mobile working within Building Services.
1. THAT Members of the Audit Committee consider the content of this report and that the report, including the recommendations detailed at paragraphs 17 to 22 be endorsed and referred to Cabinet for approval.
2. Further reports on progress in implementing the actions necessary to address the issues raised in the audit review are brought before Audit Committee by the Director of Visible Services & Housing.
Reasons for the Recommendations
1 & 2. To keep the Audit Committee informed and to report on the findings of the Mobile Working Internal Audit Review within Building Services and to ensure that appropriate action is taken to address the issues raised.
2. On the 15th March 2013 potentially serious operational issues within Building Services were brought to the attention of the Head of Accountancy & Resource Management. Consequently, these matters which included a series of specific allegations were passed to Internal Audit for further investigation by the Managing Director. It should be noted that the newly appointed Head of Housing & Building Services had, within a short space of time of joining the Council in March 2013, also raised her concerns in relation to a number of operational issues within the Service. The Director of Visible Services & Housing has confirmed that, prior to this, no concerns were ever raised with him regarding the issues detailed within this report.
3. The Internal Audit review formed two parts. The first part, to examine the specific allegations and establish whether there are grounds to commence investigations into the issues raised; the second to review the controls surrounding the allocation, collation, monitoring and charging of Building Services jobs specifically relating to Mobile Working Responsive Repairs.
4. On initial investigation it has been identified that further testing and evidence collection is required to prove or disprove the allegations raised. These are currently under investigation and will be the subject of separate audit reports. This initial report has been produced with a view to highlighting to the Audit Committee, as those charged with Governance, the significant control weaknesses identified so far.
Relevant Issues and Options
5. In September 2009, Building Services adopted a mobile working system which was implemented in two phases. The first phase was a mobile solution providing real time messaging and job transfer to staff (e-ConSol) and the second phase was the job scheduling system known as Opti-Time. The purpose of the Opti-Time system is to automatically provide the optimum job schedule thus allowing work to be carried out in the most cost-effective way, maximising resources and jobs per day, reducing operational costs, increasing profitability and improving customer service.
6. In September 2011, two years after implementation, a Business Improvement Initiative (BII) Report was produced following an independent review of the mobile working system (this formed part of the contractual agreement that the Council has in place with the suppliers of the Opti-Time system). The report revealed that significant benefits had already been achieved, customer satisfaction and internal control had improved and efficiency savings made (although no specific examples were documented in the report).
7. A second independent BII report was produced in February 2013. This was referred to the Auditors by the Head of Housing and Building Services and incorporated into the audit brief. By contrast, this report highlighted a number of serious concerns in relation to mobile working planning and operations. The report states that "serious changes are needed as there appears to be little focus on delivering a quality customer service efficiency". Specific observations contained in the BII report of particular concern to Internal Audit were:
- Too many operatives,
- Operatives are working at half the capacity of industry standards;
- Travel time is not efficient. Operatives visit the Depot without need or are
plainly not where they are supposed to be;
- Entire repairs team need to be evaluated and sweeping changes are to be
made to address the current lack of delivery.
8. In order to substantiate the comments made in the February report, and as part of the audit investigation into the allegations made, Internal Audit gained access to the mobile working systems, interviewed all relevant staff involved in the process and commenced detailed testing and evidence gathering. This first initial review has concluded that the effectiveness of the internal control environment is unsound and therefore no assurance can be given at this time. Internal Audit's main conclusions were as follows:
9. Building Services adopted an electronic mobile working system, at significant expense, which went live in September 2009. It is clear that, although the system initially seemed to improve performance, as indicated by the first BII Report, over the last 18 months the whole mobile working process has been allowed to deteriorate. This resulted in the second BII Report in February 2013 highlighting serious concerns. These, together with the allegations raised with the Head of Accountancy & Resource Management, resulted in the audit review being commissioned.
10. From the audit work undertaken to date, the electronic mobile system appears to be a good system, which based on the findings of the first BII Report in September 2011, has a proven track record of working. It has been identified that hardware and software has been purchased with a view to rolling out the mobile system across the whole service, although this has not happened to date. Audit testing has revealed that, over the last 18 months, the electronic mobile system has not been used correctly or to its full potential. It should be noted that the additional equipment procured is still sitting idle. In total, £768,000 has been spent on the complete system (e-ConSol and Opti-Time) and annual maintenance since 2008. This can only be justified if the efficiencies generated by its implementation are greater than the cost.
11. Based upon the testing undertaken, the Auditors have found that the operatives are no longer using the Personal Digital Assistants (PDA's) correctly (these are hand-held devices through which they receive their daily schedule of jobs to be undertaken). Operatives are stating they are "on way" when clearly they are elsewhere and that they arrive "on site", in some cases, several hours later. This unaccounted time is charged to the client. Whilst some of these issues may be as a result of a lack of training, there is not a high turnover of operatives and, based upon the first BII report, the system appears to have been operated correctly for the first two years.
12. The findings of this review have revealed that the operatives have a large proportion of idle / non verified time. The whole ethos of mobile working is based on the fact that operatives can start work from home and go straight to site, making the service more efficient. However, the Auditors have found that many operatives tend to come to the Alps at the start and end of the working day, and this time is also charged to the client. If the Supervisors were monitoring the operatives' day properly, however, many of these issues should have been picked up.
13. These findings imply that there are too many operatives or not enough work. Building Services has taken on eleven agency workers since September 2012 to undertake WHQS (Welsh Housing Quality Standard) work. The need for this level of agency staff is, therefore, questionable and management should be reviewing the work levels and skills of permanent staff to ensure that they are fully utilised in the first instance and that any outstanding jobs are allocated in a timely fashion.
14. It is apparent from the findings that the existing staff structure is not fit for purpose. There are unclear lines of management and little accountability at any level from management to operatives. Roles and responsibilities are not clearly defined and key tasks are often being completed by an officer at an inappropriate level. There also appears to be a lack of ownership or overview at the appropriate management and supervisory level. This has resulted in a failure to react to the warning signs such as unoccupied operatives at the Alps, large gaps in the planning schedules and many alerts being received when operatives were not on site. This lack of supervision and management and the failure to challenge operatives if they are not productive or not at site when they should be has allowed the effectiveness of mobile working to deteriorate significantly over the last 18 months.
15. There also appears to be a general lack of appreciation of the financial implications of these actions at operational management and supervisory level. Finances are administered separately within the Service and there has been little appreciation on either side of the effects that the deterioration of the service has had on the client. The issues that have been identified, if corrected, would increase the efficiency within Building Services and ensure that all clients receive value for money.
16. As a result of the Internal Audit findings and conclusions, a number of recommendations have been made in order to address the significant control weaknesses identified. These include:
17. The Director of Visible Services & Housing and the Head of Housing & Building Services consider the findings of the audit report together with the issues raised in the second BII Report so that appropriate systems, working practices and controls are put in place. This should be with a view to continue to roll out the electronic mobile working system, as appropriate, to the entire Building Services workforce including WHQS and public buildings work.
18. The Head of Housing & Building Services should review both the financial and operational elements of the service and must ensure that there are adequate resources and appropriate skills devoted to the project as outlined above. Consideration should be given to using the Business Process Re-engineering (BPR) Team or other suitable resource to assist in this work.
19. The Director of Visible Services & Housing should have regard to the implications for staff resulting from the content of this and subsequent reports. This should include, but not be restricted to, a review of all roles and responsibilities and a restructure to ensure that there are clear management lines and accountability and the correct duties are being undertaken at the correct level.
20. The Head of Housing & Building Services formulate a project plan to set out how the issues identified above are going to be addressed. This must be approved by the Managing Director, the Director of Visible Services and Housing, the Leader and the relevant Cabinet Member.
21. The Head of Housing & Building Services should ensure that all relevant staff should undertake refresher training as soon as possible on the correct use of the PDAs and the whole Opti-Time / e-ConSol system.
22. Internal Audit continues to investigate the specific allegations and any other issues arising from the Audit, the outcomes of which will be reported separately.
Resource Implications (Financial and Employment)
23. It is envisaged that the audit resources required to complete the investigation will exceed those allocated on the approved Operational Audit Plan for 2013/14. Any amendments required to the approved Plan will be reported to a further meeting of the Audit Committee.
Sustainability and Climate Change Implications
24. None directly from this report
Legal Implications (to Include Human Rights Implications)
25. Provision of an adequate and effective Internal Audit function is a legal requirement under the Accounts and Audit (Wales) Regulations 2005 as amended.
Crime and Disorder Implications
26. Pursuing initiatives to prevent, detect and deter crime is encompassed within the terms of reference under which the audit function operates.
Equal Opportunities Implications (to include Welsh Language issues)
27. None as a direct consequence of this report.
28. The work of audit is intended to assist in the achievement of all corporate and service objectives.
Policy Framework and Budget
29. The proposals in this report are in accordance with the policy framework and budget.
Consultation (including Ward Member Consultation)
30. The Managing Director, Section 151 Officer, Monitoring Officer, Director of Visible Services & Housing, Head of Housing & Building Services and the Head of Human Resources have all been consulted during the audit review. In addition, the Council's External Auditor has been briefed.
Relevant Scrutiny Committee
31. Corporate Resources.
Alan Jenkins - Head of Accountancy & Resource Management Tel: 01446 709254
Director of Visible Services & Housing;
Head of Housing & Building Services;
Head of Financial Services - Section 151 Officer,
Head of Legal Services - Monitoring Officer;
Head of Human Resources;
External Audit Manager - Grant Thornton UK LLP
Sian Davies - Managing Director