Issue - meetings

[Report of the Assistant Director for Corporate Governance. To be introduced by the Cabinet Member for Corporate Resources.]

Cabinet will be asked to approve the award of the contract for the provision of internal audit services.

The Cabinet Member for Corporate Resources introduced the report which recommended entering into a contract with Croydon Council, by means of their Audit Services Framework Agreement, from 1 April 2018 for six years to provide audit resources to deliver the Internal Audit service for Haringey Council at a total cost of £1.5m over the duration of the contract.

RESOLVED

1. That the Council enter into contract with Croydon Council, by means of their Audit Services Framework Agreement, from 1 April 2018 for six years to provide audit resources to deliver the Internal Audit service for Haringey Council at a total cost of £1.5m over the duration of the contract; and

2. That if the Croydon Council framework contract is extended in compliance with the EU regulations (up to a maximum of two years), and satisfactory contract performance is maintained, agreed that the Council extends its contract with Croydon Council and associated framework agreement up to a maximum of two years, subject to compliance with Haringey Council’s Constitution. The total value of the contract for the 8-year period would be £2m.

Reasons for decision

The current internal audit contract commenced on 1 April 2012 and is due to expire on 31 March 2018. Internal audit is a statutory function which Haringey Council is required to maintain. It is therefore necessary to ensure that an appropriate internal audit service is in place from 1 April 2018, to ensure ongoing compliance with statutory requirements.

Alternative options considered

Five options have been considered and these are set out below.

It should be noted that experience has proved that it is highly unlikely that an in-house resource could be recruited and retained to deliver the Council’s internal audit service in its entirety. All London boroughs have outsourced their internal audit service to some extent and none are looking to bring this service fully back in-house due to the ongoing costs of recruitment, retention and specialist audit training required.

Option 1 – OJEU Open Tender

The potential contract values involved for this length of contract would require a full re-tender following European procurement legislation, commonly known as the OJEU rules, unless an acceptable alternative procurement route is used e.g. an appropriate framework agreement. The full open tender approach by Haringey alone is not recommended as taking an independent procurement route in this way would be resource-intensive and unlikely to achieve better results in terms of value for money than the other options available.

Option 2 – Crown Commercial Services (CCS)

This is a framework agreement established by central government for the provision of internal audit services under their Management Consultancy Framework. Although geared towards provision within Central Government, local authorities are included in the list of organisations eligible to use the framework. The framework includes the provision of services from all the main providers of Local Government internal audit, namely: BDO LLP, Deloitte LLP, Ernst & Young LLP, Grant Thornton LLP, KPMG LLP, Mazars LLP, PWC LLP, and RSM Tax and Accounting PLC.

To utilise the framework, it would  ...  view the full minutes text for item 153