Agenda Item No 10
The Vale of Glamorgan Council
Audit Committee: 24th February 2015
Report of the Operational Manager - Audit as the Head of Audit
Building Services Update
Purpose of the Report
1. The purpose of this report is to provide the Audit Committee with an update on the progress being made in respect of the Building Services reviews.
THAT Members of the Committee consider the content of this report and note the progress so far to date.
Reason for the Recommendation
To facilitate monitoring of the Council's overall internal control environment.
2. On the 8th July 2013 the Audit Committee received a report from the Managing Director which outlined the significant control weaknesses within Building Services. The Audit Report recommended a number of actions to be undertaken by the Head of Housing and Building Services and these where outlined in the report submitted to the Audit Committee at this meeting.
3. Since the submission of the Internal Audit report to the Audit Committee on the 8th July 2013, a significant number of follow up reviews have been concluded and reports issued to the Head of Housing and Building Services. In addition, the Audit Committee have received three further reports (16th September 2013; 7th July 2014 and 18th November 2014) providing updates on the progress being made in relation to implementing the recommendations made by Internal Audit.
4. As a result of the substantial control weaknesses identified within Building Services - Mobile Working it was necessary to highlight these matters within Section 11 - Significant Governance Issues of the Council's Annual Governance Statement for 2013/14. Internal Audit have therefore, recently concluded a further review to ensure that satisfactory progress has been made to address the weaknesses and therefore avoid any further inclusion within future Annual Governance Statements.
Relevant Issues and Options
5. Since the initial review concluded in July 2013; a "Change Plan" was developed by the Head of Housing and Building Services which was presented to the Cabinet Working Group (the agreed governance board) on the 30 September 2013 which was endorsed by Cabinet and presented to Audit; Corporate Resource and Housing and Public Protection Committees. Subsequent audit reviews have taken place since this time and the findings reported to the Audit Committee in the form of progress reports. The progress reported since July 2013 has detailed improvements as well as potential for further and continuing development.
6. A partial restructure was undertaken by the Head of Housing and Building Services in early 2014 in order to clearly define management roles within the responsive repairs service. A Senior Maintenance Officer for responsive repairs was put in place along with two Planners. In May 2014, a new Operational Manager for Building Services took up the role. These structural changes have been a catalyst for positive transformation within Building Services.
7. In May 2014 a "health check" report was commissioned from Xmbrace by the Head of Housing and Building Services. The previous Xmbrace report dated February 2013 had been extremely negative and reported concerns (illustrated as red traffic lights) in the majority of areas tested. The May 2014 follow-up showed significant improvement. The majority of areas tested this time round were recorded as green "traffic lights". A pleasing and encouraging result for Building Services which also formed the basis of the audit follow up in August 2014.
8. The latest Internal Audit follow up review has just been concluded. The scope of the audit was to ensure that satisfactory controls are in place and operational within the areas of: Mobile Working; Status 10's; Sub-contractors; Call out; Inspections; Ticketed work and Stock (incorporated within Mobile Working, Call out and ticketed areas). The audit testing incorporated data for the period1st April to 31st December 2014.
9. During this nine month period (April to December 2014) 11,735 jobs were raised on ConSol by Building Services to a value of £3,924,271. A further analysis of this data provided the Auditors with a breakdown of the category of work; how many jobs were raised on ConSol for the specific categories and the value of work undertaken by each. From this analysis it showed that the majority of jobs (71%) are undertaken by the mobile workforce.
10. It is therefore pleasing to report that with regards to Mobile working; call outs; ticketed work and stock significant improvement in the overall control environment is evident from the testing undertaken.
11. With regards to Status 10's the Audit Committee received an update on Status 10 jobs in November 2014. This recent audit follow up work has identified that once again significant improvement in the overall control environment has been achieved. From testing; the Auditor established that as at 31st December 2014 there were 1,209 jobs with a total value of £1,552,481. These were then profiled by age and the results showed that 78% (941) were created less than three months ago; 22% (252) between three and nine months and only 1% (16) of the jobs were older than nine months. Of these 16 jobs it was established that 11 (69%) related to WHQs work, which by its nature can take months to complete due to the range of work involved.
12. There remain some issues regarding inspections. The records cannot evidence whether the number of pre inspections are reducing or whether post inspections are effective in ensuring that work is being completed within time to a satisfactory standard and whether the number undertaken is reasonable for the resource available. However the one key area identified from the testing that still needs to improve is the engagement of sub-contractors. The follow up review identified that there is a need for management to ensure that Maintenance Officers fully comply with the Financial Procedure Note regarding the use of Sub-Contractors to ensure that the expenditure is controlled and that value for money can be demonstrated. The Operational Manager has already taken steps to develop an action plan aimed at improving the procurement processes for engaging sub-contractors and obtaining quotes.
13. Therefore having regard to the comprehensive audit testing undertaken in the areas as outlined in paragraph 8; it can be concluded that the Section has work hard to implement the changes necessary to demonstrate that improvements have been made. Based on the outcome of our follow up review we have concluded that reasonable assurance can now be placed on the overall internal control environment. A further follow up on the area of Sub-contractors/Inspections will be included within the 2015/16 annual Audit Plan and scheduled for the first half of the year.
Resource Implications (Financial and Employment)
14. Effective audit planning and monitoring are key contributors in ensuring that the Authority's assets and interests are properly accounted for and safeguarded.
Sustainability and Climate Change Implications
15. None directly.
Legal Implications (to Include Human Rights Implications)
16. 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
17. 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)
18. None as a direct consequence of this report.
19. The work of audit is intended to assist in the achievement of all corporate and service objectives.
Policy Framework and Budget
20. The proposals in this report are in accordance with the policy framework and budget.
Consultation (including Ward Member Consultation)
21. No further consultation is proposed.
Helen Smith - Operational Manager - Audit Tel: 01656 754901
External Audit Manager - Grant Thornton UK LLP
Alan Jenkins - Head of Finance and Section 151 Officer