Presentation.
Minutes:
The Committee received a presentation from Stephen McDonnell, Assistant Director, Commercial and Operations, on the actions taken in response to the recommendations arising from the internal audit waiver report. The presentation set out the key findings of the audit report, the progress that had been made since 2015/16 and what these meant in practice, and the outcomes from the measures that had been put in place.
The Committee noted with concern the audit finding regarding the lack of justification for over half of waivers tested, and sought assurance that the new processes that had been put in place represented a genuine change in practice and did not simply make it easier for waivers to be granted without good reason. Mr McDonnell gave his opinion that significant improvement had been made in this area as the result of the focus on addressing this issue, and the fact that there had been a significant reduction in the number of waivers overall indicated that improvements had been made and that services were not seeking to circumvent the procurement rules. The changes to the Contract Standing Orders strengthened the framework for ensuring compliance with the rules, and the service had worked directly with officers and suppliers to effect a culture change around this area. It was hoped that the follow-up audit planned for 2017/18 would reaffirm that this was the case.
The Committee asked about the reported change in the Contract Procedure Rules relating to contracts below £160k; it was confirmed that for contracts between £10k and £160k in value, at least three competitive quotes would be required, and anything above the £160k threshold would require a full tender process. Mr McDonnell advised that the previous Procedure Rules required a full tender process for contracts exceeding £25k in value.
The Committee asked about the sample of waivers that had been looked at in the audit, and it was confirmed that the audit had covered 20 of the total of 80 waivers for 2015/16. In terms of value, it was confirmed that the audit had aimed to look at as wide a range of waiver values as possible in the sample. The Head of Audit and Risk Management advised that in line with the Internal Audit Plan for next year, a continuous audit approach was planned for Accounts Payable, meaning that reports would be generated on a quarterly basis and would enable much closer monitoring of all expenditure. In response to a request from the Committee, it was confirmed that the total cash value of all 80 waivers from 2015/16 would be provided, to establish a baseline figure.
Action: Assistant Director, Commercial and Operations.
The Committee asked about the resources in place to undertake the work outlined, as this had been a concern previously. Jane West, Interim Head of Financial Administration, confirmed that there was now a Compliance Manager and a Management Information Officer, two support officers and Vendor Management Officers in place to support this work and that all these posts, with the exception of one Vendor Management Officer post which was covered by a temporary member of staff, were filled on a permanent basis. Mr McDonnell advised that three of the four Strategic Procurement Partner posts were filled, and recruitment was taking place currently for the one vacant post.
In response to a question regarding the structure of the procurement service, Mr McDonnell confirmed that there was a centralised Procurement function, who provided strategic support and advice to the Commissioners based in each of the service areas. The central procurement team worked with the service areas to develop their commissioning strategies from the outset, as this was felt to deliver better outcomes than waiting until services reached the point of entering the actual procurement process. Members welcomed this approach.
RESOLVED
That the update be noted and that the Committee would continue to seek assurance from the service in respect of its progress.