Agenda item

The Committee wishes to state its disappointment and concerns on the findings of the report, despite previous recommendations and actions.  Accordingly, it recommends that in the event of any further findings, the Chief Executive and responsible Chief Officer be requested to attend the Audit Committee to give appropriate explanation.

The Corporate Finance Manager introduced the Wales Audit Office (WAO) annual report on the grant claim certification for the year ending 31 March 2014.  He confirmed that the findings of the report had been considered by the Corporate Finance Management Team and that appropriate actions had been put in place which would be subject to monitoring.  A total of 19 grants had been certified with a net adjustment to claims of £0.224m, which was a relatively small proportion of the total £183m, of which £0.200m related to the timing of the receipt of grant income.  Having acknowledged that further work was required to address the issues raised by WAO, Council officers had worked with WAO colleagues to identify control measures to be implemented immediately.  In addition, all officers dealing with grants would be obliged to attend forthcoming training sessions with WAO.

Ms. Amanda Hughes of WAO expressed her disappointment on the findings of the overall report.  Although it was noted that the Council had generally adequate arrangements in place for the production and submission of its 2013-14 grant claims, she said there was a need to further embed and improve the arrangements which had been adopted following recommendations in reports for previous years.   Of the 19 claims submitted, ten were qualified and nine unqualified, of which five were subject to amendment.  Ms. Hughes referred to her work with the Finance team to assist with the arrangements and identify improvements such as the training sessions, as a result of which she was confident that claims for 2014/15 would see a marked improvement.

In response to a question by Councillor Haydn Bateman, Ms. Hughes explained the grant claim process relating to Families First where a number of transactions had been identified outside the 2013/14 period and should not have been included as expenditure within that grant claim.  The Corporate Finance Manager confirmed that the officer dealing with this matter had been made aware of the issue.  Ms. Hughes went on to respond to queries on other grant claims explaining the need for the Council to adhere to rules applied to grant claims.

Councillor Alison Halford felt that there were major issues with grant claims and that the situation was unacceptable in light of the issues raised in previous years, questioning the root of the problem.  Ms. Hughes said that the grant claims rules were not too complex and that the issues may have arisen due to a lack of understanding of the requirements for grant expenditure and following up the rules.  She referred to the Grant Completion Checklist which had previously been implemented to accompany and verify grant claims and explained that it had not been used consistently or correctly completed.  Having discussed this with the Chief Executive, Corporate Finance Manager and his team, all were keen to ensure this was quickly resolved.  A pre-audit check certified by a senior Finance officer was also due to be introduced to identify any issues prior to the audit.

Councillor Halford commented on the expectation for basic finance issues to be dealt with appropriately and asked Ms. Hughes whether it was possible for the issues raised to be partly attributable to the restructuring of the Finance department.  Ms. Hughes said that the processing of grant returns was routinely carried out by accountants and would not be impacted by the restructure.  She felt that the issue was around raising awareness with officers dealing with grant claims - not just in Finance but across the organisation - to improve understanding on putting together auditable grant claims.

Mr. Paul Williams remarked that grant claims had been an issue since he was co-opted on the Committee in 2012 and that the Committee should be concerned that its recommendations had not been followed through.  He felt that the Committee’s dissatisfaction and call for accountability should be conveyed to the Chief Executive if no improvement was shown this year.

Whilst the Corporate Finance Manager shared concerns, he gave assurance of the steps being taken to improve matters, eg  the central grants register to collate and document claims, pre-audit checks and encouraging service managers to attend the training which was mandatory for all officers dealing with grant claims, focussing on those areas where issues had been identified.

Following up the comments by Mr. Williams, the Chairman suggested that officers could be held accountable in future by appearing before the Committee to explain and justify the reasons for any errors.

The Chief Officer suggested that the requirement for the relevant Chief Officer or senior manager to attend and provide explanation on how the error arose and preventative action could form part of the Committee’s recommendation.

Councillor Glyn Banks referred to the Welsh average for qualified claims and requested more information to provide context on the numbers involved.  Ms. Hughes agreed to find out and respond separately.  Following the meeting, she confirmed that the Welsh average for local authority errors was £105k on £141m (in comparison to the Council’s £200k on £183m).

Following a suggestion by Councillor Banks, the Corporate Finance Manager agreed that attendance at the WAO training sessions would be made compulsory for service managers in addition to officers responsible for dealing with grant claims.

Concerns were raised by Councillor Arnold Woolley that seven previously reported qualification issues were deemed by WAO to be still ongoing.  He went on say that assurance was needed that officers had the necessary skills and capacity to enable them to undertake their roles effectively.

In acknowledging the concerns raised, the Corporate Finance Manager said that the previous year had been particularly challenging due to the introduction of the new operating model and departmental capacity in dealing with the implementation of Single Status.  He hoped that the Committee would be assured by the processes under review to understand the reasons for issues identified.

Mr. Williams proposed that the Committee state its disappointment and concerns on the findings of the report, despite previous recommendations and actions.  Accordingly, to recommend that in the event of any further findings, the responsible Chief Officer be requested to attend the Audit Committee to give appropriate explanation.  In seconding the proposal, Councillor Halford added that the Chief Executive should also be in attendance.  This was agreed by the Committee.

The Chairman thanked WAO colleagues for their work on the report.

RESOLVED:

The Committee wishes to state its disappointment and concerns on the findings of the report, despite previous recommendations and actions.  Accordingly, it recommends that in the event of any further findings, the Chief Executive and responsible Chief Officer be requested to attend the Audit Committee to give appropriate explanation.