Agenda Item No. 7
The Vale of Glamorgan Council
Audit Committee: 16th September 2013
Report from the Head of Accountancy & Resource Management.
Leisure and Tourism - Leisure Centres Contract
Purpose of the Report
1. To advise Members of the findings of the reviews undertaken in relation to the monitoring arrangements in place for the management of the Council's Leisure Centres by the external Contractor.
1. THAT the Committee notes the content of this report
2. That the Committee receives an update from the Council's External Auditors following conclusion of their independent review.
Reasons for the Recommendations
1 & 2. To keep the Audit Committee informed.
2. As and from 1st August 2012, the Council formally handed over the management of its Leisure Centres to an external contractor for an initial contract period of ten years. This is the first time that the Council has entered into a partnership arrangement of this magnitude.
3. At the request of the Managing Director and in accordance with the Internal Audit Annual Risk Assessment process, an audit review of the adequacy and effectiveness of the financial and quality monitoring arrangements surrounding the contractual partnership arrangements between the Council and the Leisure Centres service provider was included as part of the 2012-13 annual Internal Audit Plan.
Relevant Issues and Options
4. This review was undertaken in September 2012 and the findings identified an across the board general lack of controls, culminating in an overall audit opinion of no assurance. A follow up audit was undertaken in March 2013, with a further follow up in June 2013; which concluded that, despite being nearly a year into the contract and having undertaken three audit reviews little progress had been achieved in the formulation and approval of a clear monitoring methodology for this Contract. It is essential to the Council’s interests and to mitigate risk that robust arrangements are in place.
5. The Auditors have been subsequently informed that discussions with representatives from the Service Provider have been made with regard to introducing monitoring arrangements and that the proposals are in draft format awaiting approval. Verbal assurances have been given by the Operational Manager Leisure and Tourism that all the agreed monitoring arrangements will be in place by the end of August 2013.
6. The issues identified as a result of the Internal Audit Reviews undertaken were considered so significant that this matter has been included within the Council's Annual Governance Statement 2012/13 and the Managing Director has requested and commissioned the Council's External Auditors - Grant Thornton UK LLP to undertake an independent review of these arrangements
Resource Implications (Financial and Employment)
7. None as a direct consequence of this report.
Sustainability and Climate Change Implications
8. None directly from this report
Legal Implications (to Include Human Rights Implications)
9. 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
10. 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)
11. None as a direct consequence of this report.
12. The work of audit is intended to assist in the achievement of all corporate and service objectives.
Policy Framework and Budget
13. The proposals in this report are in accordance with the policy framework and budget.
Consultation (including Ward Member Consultation)
14. No further consultation is proposed.
Relevant Scrutiny Committee
15. Corporate Resources.
Helen Smith - Operational Manager - Audit Tel: 01656 754901
External Audit Manager - Grant Thornton UK LLP
Head of Accountancy & Resource Management