Agenda Item No. 6
The Vale of Glamorgan Council
Audit Committee: 16th September 2013
Report of the Managing Director
Building Services - Update Report
Purpose of the Report
1. The purpose of this report is to provide the Committee with an update on the progress being made in respect of the Building Services reviews.
1. THAT Members of the Audit Committee consider the content of this report and note the progress so to date.
2. Further reports on progress in implementing the actions necessary to address the issues raised in the audit reviews 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 progress being made in respect of the Building Services reviews and to ensure that appropriate action is taken to address the issues raised.
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 Internal Audit review undertaken formed two parts. The first part was to review the controls surrounding the allocation, collation, monitoring and charging of Building Services jobs specifically relating to Mobile Working Responsive Repairs and the second was to examine specific allegations and establish whether there were grounds to commence investigations into issues raised (aspects of this work is still on-going). With regard to the first part, six areas of concern were identified and reported to the Committee.
3. This report has been produced with a view to providing Members of the Audit Committee with an update on audit progress to date and includes those issues which have been investigated and concluded in order that those charged with Governance are kept fully informed.
Relevant Issues and Options
4. 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 on the 8th July.
5. In a response to the above and as a result of the work that had been carried out by the Head of Housing and Building Services and her team, a report was submitted to Cabinet on 29th July 2013 outlining the proposed actions to be taken which would be included within a time bound change plan. A copy of the relevant Cabinet Minute No. C1444 is attached at Appendix A. The list of actions proposed is not considered exhaustive and is expected to develop further as the results of on-going audit and investigatory work are reported over the coming months.
6. In addition and included within the Cabinet Report were the proposals for a Plan for Change Governance Structure; this change process will be overseen by a Cabinet Working Group supported by the Managing Director, the Director of Visible Services and Housing and the Head of Housing and Building Service. It is envisaged that these proposals will provide the necessary assurances to Members, Corporate Management Team, External and Internal Audit that the significant weaknesses identified are being properly addressed.
7. Since the submission of the Internal Audit report to the Audit Committee on the 8th July, a further three audit reviews have been concluded and reports issued to the Head of Housing and Building Services. The reviews undertaken covered the areas of Call Out, Pre and Post Inspections and Sub-Contractor payments. All three reports have identified issues that need to be included within the time bound change plan. The reports have all been positively responded to by Management and assurances given that the recommendations made will be included in the change plan.
8. Listed below is a summary of the more significant areas of concern identified within the three audit reports issued. These include:-
· The complete process for call out recording and timesheet completion appears antiquated and in need of change. It is bureaucratic with some duplication of effort and the paper based system is extremely time-consuming. Utilising the mobile working solution in this area would allow operatives to update the system remotely using their Personal Digital Assistants (PDA's) and would reduce the amount of paperwork completed which in turn would drive up efficiencies.
· Overtime is being accrued for some work that could be completed within the normal working day, provided there is the appropriate cover in the back office and on the front line. In addition, timesheets are being signed off "blind" with no evidence of reconciliation to call out sheets.
· The process for pre-inspections is disjointed and in need of reform. There is no reporting mechanism for easily identifying the number of pre-inspections that take place on a monthly basis and the process is made up of manual and electronic elements. Through testing there appears to be a breakdown in the process which means that tenants are waiting longer than necessary for repairs pending pre-inspection. In addition, there are no arrangements for post-inspections. Post-inspections are a useful tool for assessing quality and for getting feedback from tenants.
· It was identified that no due diligence is applied to the appointment of sub-contractors by Building Services. Furthermore, there are no clear processes and procedures in place in regard to responsive maintenance work and the use of sub-contractors. Arrangements for quotations and the raising of orders, together with the subsequent post inspection checks prior to invoice payment are haphazard and in need of urgent review.
9. In addition to the above, Internal Audit has been examining a number of specific allegations to ascertain whether there were grounds to commence investigations into issues raised. A total of 10 allegations were received, in relation to four of the investigations, the work is on-going with the remaining six having been concluded. Of the six concluded investigations four related to internal control issues and recommendations have been made to address these. No evidence could be found to substantiate the remaining two. The Audit Committee will be informed of the outcome of the four on-going investigations in due course.
10. As expected, work within Building Services is continuing and the Head of Housing and Building Services is faced with a significant challenge ahead to ensure that all the issues identified and being identified are addressed. Internal Audit is continuing their work within the division and is in the process of reviewing Welsh Housing Quality Standards (WHQS), Stock controls, ticketed work, fleet and fuel usage and the outstanding specific allegations together with any other issues that might arise as a result of these on-going reviews.
Resource Implications (Financial and Employment)
11. 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
12. None directly from this report
Legal Implications (to Include Human Rights Implications)
13. 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
14. 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)
15. None as a direct consequence of this report.
16. The work of audit is intended to assist in the achievement of all corporate and service objectives.
Policy Framework and Budget
17. The proposals in this report are in accordance with the policy framework and budget.
Consultation (including Ward Member Consultation)
18. 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
19. 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