Agenda Item No. 11


The Vale of Glamorgan Council


Audit Committee 25th July 2018


Report from the Operational Manager as the Head of Audit.


Audit Committee - Compliance with Contract Procedure Rules


Purpose of the Report

  1. To provide members with an update on the progress made on Contract Management arrangements and its compliance with the Council's Contract Procedure Rules.


That Members note the report and in particular the improvements to the Council's Contract Management Arrangements.

Reason for the Recommendation

To keep the Audit Committee informed.


  1. One of the Audit Committee's Terms of Reference is:
  • To maintain an overview of contract procedure rules, financial regulations and officers' code of conduct and behaviour and to make recommendations to Cabinet and / or Council as appropriate.
  1. Contained within the Audit Committee's Forward Work Programme and scheduled for July's Audit Committee is the requirement for the Committee to receive a report on compliance to the Council's Contract Procedure Rules.
  2. The Council has a suite of corporate policies supported by various procedures and guidance notes, one of which is the Council's Contract Procedure Rules which is incorporated within Section 17 of the Council's Constitution.  Comprehensive written procedures which are easily accessible by all Members and Officers can reduce the risk of errors and inconsistency.  They are beneficial for the training of current and new employees and provide management with assurance of correct and consistent practices being followed.  This review has focused on providing the Committee with an update on progress made since 2016 when Contract Management was considered a significant issue and therefore included within the Annual Governance Statement 2015/16.  It is intended that any resultant outcomes of this work will inform the audit programme going forward.

Relevant Issues and Options

  1. During 2015/16, as a result of work undertaken on Contract Management, it was deemed necessary to reflect the significant governance issues identified within the Council's Annual Governance Statement.  Following conclusion of ongoing audit work during 2016/17 it was clear from these reviews that contract management was a key issue throughout the Council and one that was taken very seriously by the Managing Director and the Corporate Management Team.  Regular updates were provided to the Council's Audit Committee in order to ensure oversight as well as regular progress reports to the Managing Director and Corporate Management Team.  During 2016/17 significant improvements were made, so much so that this was no longer considered a significant risk and therefore was not included in the 2016/17 Annual Governance Statement.

6.        In order to assist the Audit Committee in ensuring that the issues identified were addressed, the following list provides Members with some of the improvement measures that have been put in place to demonstrate compliance. 

  • The Council recognises that it operates in a changing procurement landscape that is led by an agenda for improvement.  New technology, changing demographics, increasing awareness of sustainability issues and legislative changes are all transforming the world of public procurement at a rapid pace.  These changes create challenges to which the Council must respond.  As a consequence, the Council has revisited and enhanced its Procurement Strategy and has developed and implemented a Procurement Code of Practice (PCOP), together with updating the Council's Contract and Financial Procedure Rules which replaced the old Contract Standing Orders and Financial Regulations.
  • The Council has incorporated, published and implemented Contract Management Guidance and a Contract Management Toolkit within the PCOP.
  • The Managing Director and the Council's Section 151 Officer received fortnightly progress reports to ensure that the Contract Management actions were being addressed and this continued throughout 2016/17 and into 2017/18 until they were satisfied that all actions had been implemented.
  • A programme of Senior Management Training has been delivered covering procurement, contract management and project management.  This also forms part of the Management Development Programme.
  • Specific requests from service areas have resulted in bespoke training being delivered on Contract Procedure Rules by the Council's Section 151 Officer and Head of Audit.
  • Internal Audit concluded a number of follow up audits which clearly evidenced that improvements had been made to the Council's overall Contract Management arrangements.
  • The Council's Monitoring Officer maintains a Contract schedule which provides updates on specific contracts and is a standing item on the Corporate Management Team agenda.
  • The Insight Board's work programme contains an item on procurement with the action tracker containing actions associated with contract management.
  • During 2017/18 a Healthy Organisation review was undertaken on Commissioning and Procurement together with Project and Programme Management.  Whilst the review did highlight some areas for attention which are being addressed, overall it was concluded that a level of high assurance could be placed on the control environment with a low level of risk.
  • The Audit Plan for 2018/19 includes a number of reviews which should continue to provide the necessary assurances on compliance to Contract Procedure Rules.
  • The procedure and protocol for the request to waiver Contract Procedure Rules is well embedded and Internal Audit provides the necessary challenge prior to any waiver being granted.
  • The Operational Manager for Property developed a Contract Register which was introduced in March 2017.  The register tracks the process and progress from Cabinet approval through to contracts being completed for all Property managed schemes where a contract is required.  A copy of the monthly updated register is provided to both the Head of Finance and the Principal Lawyer - Property and Contracts Team.  The register is a useful mechanism for recording and checking that all necessary approvals are in place with relevant dates recorded and that contracts have been awarded where required.

Resource Implications (Financial and Employment)

7.        There are no resource implications as a direct consequence of this report.

Sustainability and Climate Change Implications

8.        There are no sustainability and climate change implications as a direct result of 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 2014 as amended from time to time.

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.

Corporate/Service Objectives

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 Performance and Resources.

Background Papers


Contact Officer

Helen Smith - Operational Manager - Audit

Officers Consulted

External Audit - Wales Audit Office

Responsible Officer:

Carys Lord - Head of Finance / Section 151 Officer