Agenda item

(a)       That the Committee agree to the implementation of the guidance, subject to further work on the implications of the engagement of employees in a separate paid capacity for the auditing of school funds; and

(b)       That a follow-up review be included on the Audit Plan for next year.

The Internal Audit Manager explained that this item had arisen in response to Members’ concerns raised at the previous meeting on the lack of clear guidance on the use of school funds following a review carried out by Internal Audit.  The findings of the review had been included as part of the Internal Audit Progress Report which identified nine significant recommendations and the Chair reminded the Committee of these.

The Finance Manager presented the report which highlighted the action taken by the Lifelong Learning Directorate to address the issues raised by Internal Audit, including the need for extensive guidance to be given to schools.  It was explained that the draft guidance had been produced in consultation with the School Budget Forum, Secondary and Primary Heads Federations and business manager groups, with the final copy to be submitted for approval at School Budget Forum on the following day prior to circulation to schools.  The document included a draft Constitution with the suggestion that school governors agree that this be taken up as good practice for all schools.  The Finance Manager said that feedback on the guidance so far had been positive and that if schools chose to follow the guidance, this would address the issues raised.

The Finance Manager explained that Secondary Head Teachers had expressed difficulty in finding suitably qualified individuals to carry out audits on school funds and had requested assistance from the Council.  As a result, a number of qualified Council officers were being sought to offer this service on an independent basis.

In response to a question by the Chair on the training of school governors, the Finance Manager said that feedback had identified training as a high priority and that consideration on how this could be delivered would include liaison with the Governors Association.  She added that training provision did not currently form part of the draft guidance but that there was a wish to include this.

Councillor G.S. Banks asked if an hourly rate for undertaking an audit could be set as a guideline.  The Finance Manager said that payment arrangements would need to be made between the individuals and the schools.

Councillor R.B. Jones raised concerns about this arrangement and felt that it should be up to schools to identify their own resources.  The Finance Manager stated that the Council had only been asked to provide a list of suitable individuals and that it was the choice of schools who they wished to engage.

The Chair invited Moira Owen, Senior Auditor, who was present in the public gallery, to speak on her involvement in the audit.  She explained that most schools had experienced difficulty in finding individuals to carry out audits and that there were already a number of Flintshire employees who were undertaking this work.  This prompted further concern by Councillor Jones on identifying those employees who were already undertaking audits and he favoured the inclusion of private sector companies in the list provided to schools.

Councillor J.B. Attridge questioned whether the draft guidance had received input from the Leader and Cabinet Member.  The Finance Manager confirmed that this had been the case at School Budget Forum.

The Chief Executive spoke about the contractual obligations of employees set out in the standard terms of employment which required employees to have the permission of the employer to enter into third party paid work such as this.  Whilst recognising that this was a valuable service to schools where employees might have the time and skill to provide an affordable audit service, there was a risk that an employee might find themselves with a conflict of interest if, for example, they worked in Finance or Lifelong Learning.  He agreed that controls were needed and wished to look in more detail at employee involvement in carrying out school fund audits in liaison with Human Resources and Internal Audit.  He also agreed that any such offers should not be anti-competitive.

Councillor Jones proposed that the recommendations be noted at this stage, until a further report could be received to consider the actions.  This was not formally moved or seconded.

Mr. P. Williams welcomed the timely actions taken to address the issues raised by Internal Audit and sought assurance that this would be built into the Audit Plan.  The Internal Audit Manager confirmed that this would be included in the Plan for next year.  Mr. Williams proposed an amendment that the Committee agree to the implementation of the procedures subject to the suggestion made by the Chief Executive for further work to be carried out on employee implications.  This was duly seconded by Councillor Attridge.

Councillor Jones then repeated his proposal as an amendment to the motion which was seconded by Councillor Woolley.  On being put to the vote, the amendment was lost and Mr. Williams’ motion was carried as the substantive motion.

RESOLVED:

(a)       That the Committee agree to the implementation of the guidance, subject to further work on the implications of the engagement of employees in a separate paid capacity for the auditing of school funds; and

(b)       That a follow-up review be included on the Audit Plan for next year.