Agenda Item No 6

 

The Vale of Glamorgan Council

 

Corporate Performance and Resources Scrutiny Committee: 19th July 2018

 

Report of the Managing Director

 

Proposal to extend the Shared Service for Internal Audit to include Rhondda Cynon Taf County Borough Council and Merthyr Tydfil County Borough Council

Purpose of the Report

  1. The purpose of this report is to brief this committee on the proposal to extend the Partnership Agreement for the Shared Internal Audit Service to include Rhondda Cynon Taf and Merthyr Tydfil County Borough Councils.

Recommendation

  1. That the proposal to extend the current Internal Audit Shared Service to include Rhondda Cynon Taf and Merthyr Tydfil County Borough Councils be noted.

Reason for the Recommendation

  1. To update committee with regards to the internal audit service

Background

  1. On 22nd March 2018 this Committee considered the service plan for the Finance and ICT Service for 2018/2019. As a result of the debate, Committee requested a report to a future meeting on progress of an expanded Joint Internal Audit Service
  2. The Bridgend and Vale of Glamorgan Internal Audit Shared Service has been fully operational under a formal partnership agreement since February 2013. The agreement has been extended to 31st January 2020 as both Authorities have experienced the advantages of the shared service.  Since its inception the Shared Service has delivered consistently against the approved annual risk based plans and achieved the necessary coverage in order to issue a robust, evidence based audit opinion at the end of each year as well as fully complying with its statutory requirements under the Public Sector Internal Audit Standards (PSIAS).  In addition, significant benefits have been realised by bringing the sections together, some of which included; effective use of the total audit resource, knowledge sharing and harmonising working practices and systems.
  3. As such the IASS has and is achieving the following objectives:
  • The service is affordable and represents value for money, delivering efficiencies and economies of scale;
  • The service enhances the professionalism and quality of audit services provided to both Councils through shared knowledge and best practice;
  • The service is flexible and can respond to changing service requirements and priorities; and
  • The service can extend access to specialist audit services and other related disciplines to both Councils;
  • The service complies with the Public Sector Internal Audit Standards

Relevant Issues and Options

  1. Despite the positive impact that the service has had on the provision of the internal audit service, the service has faced some challenges over the past 18 months in terms of recruitment, although this has presented the opportunity for a more proactive and focused approach being taken in respect of workforce planning and growing the service to ensure its continued success. 
  2. As a consequence of this, Section 151 Officers of all four Councils have been considering whether there would be any benefits in extending the current partnership arrangement to include the two additional Authorities.
  3. On 18th June 2018 Cabinet considered and approved a proposal to formally extend the remit of the current service to include Rhondda Cynon Taf and Merthyr Tydfil County Borough Councils. The report proposed that the Vale of Glamorgan should continue to host the function on behalf of the revised partnership. The proposal was considered and endorsed and a copy is provided at Appendix A of this report.
  4. Since the 18th June 2018, the report has been considered and endorsed by the Cabinets in the other three Councils.  .

Resource Implications (Financial and Employment)

  1. The proposal will improve resilience, enhance career development opportunities for staff, develop wider skills such as computer and contract audit and will ensure all officers roles are secure and not at any financial disadvantage.
  2. The business case has costed a possible structure for the service and identified overall efficiency savings, £35,000 of which would accrue to the Vale of Glamorgan Council.
  3. Legal and Human Resources support is being received in order to ensure that the appropriate governance arrangements are put in place for a joint service.  If agreed, consultation will have to commence on the staff transfer arrangements to the employing Authority and be worked through with those staff affected and their respective union in each Authority area. Further consultation will then take place with all staff on the new RIASS organisational structure after transfer arrangements have been agreed.
  4. The RIASS will employ agile working practices including hot-desking, home and site working together with the innovative use of ICT in order to minimise travel costs and their associated impact upon the environment

Sustainability and Climate Change Implications

  1. The extension of the Partnership Agreement will ensure the ongoing viability of this service.

Legal Implications (to Include Human Rights Implications)

  1. Provision of an adequate and effective Internal Audit function is a legal requirement under the Accounts and Audit (Wales) Regulations 2018.
  2. The RIASS will be underpinned by a legally binding Partnership Agreement in accordance with Section 101 / 102 of the Local Government Act 1972.

Crime and Disorder Implications

  1. 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)

  1. The initial RIASS structure will be ring-fenced to existing internal audit staff and the process of matching and competition for posts will be part of the consultation process with staff and Trades Unions.

Corporate/Service Objectives

  1. The work of internal audit is intended to assist in the achievement of all corporate and service objectives.

Policy Framework and Budget

  1. The proposals in this report are in accordance with the policy framework and budget and a matter for Executive decision by Cabinet.

Consultation (including Ward Member Consultation)

  1. The consultation requirements for staff are outlined earlier in this report
  2. The report will be considered by the Vale of Glamorgan Audit Committee on 25th July 2018

Relevant Scrutiny Committee

  1. Corporate Performance and Resources

Background Papers

None

Contact Officer

Carys Lord - Head of Finance and Section 151 Officer

Officers Consulted

Responsible Officer:

Rob Thomas

Managing Director