Agenda Item No.
THE VALE OF GLAMORGAN COUNCIL
SCRUTINY COMMITTEE (HOUSING AND PUBLIC PROTECTION): 11TH MARCH, 2015
REFERENCE FROM AUDIT COMMITTEE: 24TH FEBRUARY, 2015
' BUILDING SERVICES UPDATE (OMA) -
The Committee received a report to provide it with an update on the progress made in respect of the Building Services reviews.
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.
Since the submission of the Internal Audit report to the Audit Committee on the 8th July 2013, a significant number of follow up reviews had been concluded and reports issued to the Head of Housing and Building Services. In addition, the Audit Committee had 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.
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 had therefore, recently concluded a further review to ensure that satisfactory progress had been made to address the weaknesses and therefore avoid any further inclusion within future Annual Governance Statements.
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 Resources and Housing and Public Protection Scrutiny Committees. Subsequent audit reviews had 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 detailed improvements as well as potential for further and continued development.
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 had been a catalyst for positive transformation within Building Services.
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.
The latest Internal Audit follow up review had just been concluded. The scope of the audit was to ensure that satisfactory controls were 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 period 1st April to 31st December 2014.
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%) were undertaken by the mobile workforce. It was therefore pleasing to report that with regards to Mobile working; call outs; ticketed work and stock; significant improvement in the overall control environment was evident from the testing undertaken.
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 identified that once again significant improvement in the overall control environment had 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 could take months to complete due to the range of work involved.
There remained some issues regarding inspections. The records could not evidence whether the number of pre inspections were reducing or whether post inspections were effective in ensuring that work was being completed within time to a satisfactory standard and whether the number undertaken was reasonable for the resource available. The one key area identified from the testing that still needed to improve was the engagement of sub-contractors. The follow up review identified that there was a need for management to ensure that Maintenance Officers fully complied with the Financial Procedure Note regarding the use of Sub-Contractors to ensure that the expenditure was controlled and that value for money could be demonstrated. The Operational Manager had already taken steps to develop an action plan aimed at improving the procurement processes for engaging sub-contractors and obtaining quotes.
Therefore having regard to the comprehensive audit testing undertaken in the areas as outlined in paragraph 8; it could be concluded that the Section had worked hard to implement the changes necessary to demonstrate that improvements had been made. Based on the outcome of Internal Audit’s follow up review they concluded that reasonable assurance could now be placed on the overall internal control environment. A further follow up on the area of Sub-contractors/Inspections would be included within the 2015/16 annual Audit Plan and scheduled for the first half of the year.
Queries were raised by Members in regard to the value of the jobs which were sub-contracted out and whether the Building Services used the same contractors on a regular basis. In response, the Operational Manager advised that they would ascertain this information and feedback to the Committee accordingly.
Concerns were raised by Members in relation to the current Financial Procedure Rules, particularly in relation to their use and effectiveness for obtaining quotes for sub-contracted jobs and expressed the view that these rules should be reviewed.
Further concerns were expressed with regard to the issues raised within the report in relation to pre-inspections, in response to which, the Operational Manager advised they would look into this issue and report back to the next Committee meeting.
Following presentation of the report, the Operational Manager for Audit informed the Committee that there was a possibility that the OHMS system could be utilised to input post inspection information in order to manage this work area and improve the effectiveness of the process. A recommendation had been made to look at efficiency savings in this area.
(1) T H A T progress made in respect of the Building Services review be noted.
(2) T H A T the report be referred to the Scrutiny Committee (Housing and Public Protection) for consideration and information.
(3) T H A T the Financial Procedure Rules be reviewed and a report be brought back to the next meeting of the Audit Committee.
Reasons for decisions
(1) To facilitate the monitoring of the Council’s overall internal control environment.
(2) To apprise the Scrutiny Committee (Housing and Public Protection) of the progress made in respect of the Building Services review.
(3) To assess whether the current Financial Procedure Rules were effective, in order to ensure that expenditure was controlled and value for money could be demonstrated.â€
Attached as Appendix - Report to Audit Committee: 24th February, 2015