The Chief Internal Auditor introduced a report, that presented the Committee with the Council’s Internal Audit Strategy and Annual Risk Based Audit Plan for the year April 2018 to March 2019.

Attached at Appendix A to the report, was the draft Internal Audit Strategy document for 2018/19. This demonstrated how the Internal Audit Service will be delivered and developed, in accordance with the relevant Terms of Reference and how it links to the Council’s objectives and priorities. The Strategy would be reviewed and updated annually, in consultation with stakeholders, namely the Audit Committee, Corporate Management Board, External Auditors and Senior Management.

The Chief Internal Auditor added that the 2018/19 draft Annual Risk Based Plan of work had been formulated to ensure compliance with the Standards as contained within the PSIAS. She further added that in order to keep Members of the Audit Committee fully informed, and to ensure compliance with Standards for Internal Audit, the draft detailed Plan was attached to the report at Appendix B.

The Chief Internal Auditor then referred Members to the audits that had been undertaken between the above period in the different service areas of the Directorates so specified, and then referring back to Appendix A, she pointed out those audits that had identified some significant Internal Control Weaknesses, such as in the Mayoral Review where following a review a number of weaknesses were identified, so much so, that no assurance could be provided on the overall internal control environment. This had resulted in work with the Charity Committee being ceased until such time a meeting was set-up between the Committee and the Council’s Chief Executive on the way forward. The Chief Internal Auditor further added, that the main concern was the Charity Committees governance arrangements which were extremely weak.

The second such audit that had given only a limited assurance was in place in respect of the SWTRA Grant Verification, and the Chief Internal Auditor referred to page 89 of the report, where three key issues had been highlighted to be addressed, and she expanded upon these for the benefit of Members.

The Chief Internal Auditor then referred to the School Agency audit undertaken in April 2016 and followed up in June 2017, both of which had resulted in the issue of Limited Assurance reports. As there was a potential risks arising from the outcome of these audits, a review had been undertaken, to ensure that the recommendations agreed by management had been implemented in an attempt to reduce these risks. These were outlined in this section of the report.

She proceeded by confirming that the current follow-up review confirmed that a number of recommendations remained outstanding, with the following areas of concern being identified:-

• Low use of the approved provider, New Directions
• No monitoring of spend/usage at a central level
• No assurance of compliance with Contract Procedure Rules relating to procurement
• No assurance of required checks being carried out by the agencies

The Head of Education and Family Support and the Group Manager School Improvement were then invited into the meeting to give an explanation on what action was being taken so as to address the above areas of concern.

The Head of Education and Family Support advised that though there was a Framework Agreement in place recommending that the approved provider New Directions be used by schools for recruitment of staff etc, the company  was not being utilised by all schools, and furthermore, there was no ability to require schools to use the company for this purpose, so they often pursued this through other methods.

This was resulting in problems, for example in the monitoring of spend of secondary schools for advertising in the recruitment of teaching and agency staff.

There was also a problem by not using this approved provider she added, in that there was less control over health and safety checks of potential new staff if any school recruited through a different provider.

The reason schools were giving for not using New Directions, was that this provider could not always provide staff within certain specialist areas. A proforma had therefore been issued to all schools, asking for them to give detailed reasons for not using this approved organisation for recruitment purposes.

It was directed in the Headteachers handbook and Induction Programme, that New Directions should be used, and they were being challenged to follow this directive.

The Chairperson asked what percentage of agency staff were being provided by this preferred supplier, adding her concerns that nothing had been in put in place to address the concerns raised as part of the first audit carried out in April 2016.

The Head of Education and Family Support advised that there was an issue that was proving problematic, namely that New Directions should be used by all 22 local authorities under an agreed procurement arrangement. A considerable number of schools however, were not conforming to this arrangement.

She added that only around 10% of all school staff employed were being recruited through this agreed provider, with schools choosing to use a better local provider or recruiting through ‘word of mouth’ methods.

The Chairperson reiterated that if the situation didn’t change in the future, then this would inevitably result in the issue of further Limited Assurance reports in the future, which seemed a bit nonsensical.

A Member asked if there was any significant benefits as a result of schools using this provider.

The Head of Education and Family Support confirmed that the main benefit was that New Directions as a matter of course, carried out all the required security checks on potential employers, whereas this could not be guaranteed to be undertaken by other smaller recruitment agencies. Schools who used this agency were 100% indemnified she added. She further added that there was no financial disadvantage however, if schools used a different provider to New Directions for recruitment purposes.

A Member was aware that New Directions was also based in Cardiff, and therefore schools often wished to use more local providers for recruitment of staff. 

The Head of Finance and Section 151 Officer stated that it was difficult in changing to different providers to New Directions, due to the fact that the agency had been secured by way of a National Procurement Agreement, where all 22 local authorities had been contracted to use the agency to secure efficiencies and potential savings. She felt that it may be that there is a need to review the terms of the Contract currently in place.

The Chief Internal Auditor then outlined some of the key points of the Bridgend and Vale Internal Audit Service: Head of Internal Audit’s Outturn and Annual Opinion Report – April 2017 to March 2018 (Appendix A to the report).

She added that processing all the work planned was becoming increasingly difficult to achieve, given the ongoing problems that had been experienced for some considerable time in the Internal Audit Section with the recruitment and subsequent retention of staff, with the former being particularly difficult to achieve. In effect therefore, the Section was functioning with a significant reduced staffing compliment which was showing little sign of improving.

If the latest recruitment exercise for staff proved unsuccessful, she would look for continued support to be given to Bridgend from the joint partnership in the Vale of Glamorgan CBC.

RESOLVED:                  That Members considered the Internal Audit Final Outturn Report covering the year ending March 2018, including the Head of Audit’s Annual Opinion, in order to ensure that all aspects of their core functions are adequately being reported.