Agenda pack
North Lanarkshire Council · 18 May 2023
Back to Audit and Scrutiny Panel — 18 May 2023 and its agenda
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Our Ref: Your Ref: Contact: Tel: Fax: E-Mail: Date: Lesley Dysart dysartl@northlan.gov.uk 9 May 2023 Members of the Audit and Scrutiny Panel Chief Executive’s Office Archie Aitken Chief Officer (Legal and Democratic) Civic Centre, Windmillhill Street Motherwell ML1 1AB DX 571701, Motherwell 2 www.northlanarkshire.gov.uk Notice is given that a Meeting of the AUDIT AND SCRUTINY PANEL is to be held in Committee Room 1, Civic Centre, Motherwell on Thursday, 18 May 2023 at 2p.m. which you are requested to attend. The agenda of business is attached. Chief Officer (Legal and Democratic) Members : Councillors: H Dunbar, T Fisher, J Hume, D Johnston, T Johnston, H Loughran, F McNally, G Robinson, K Stevenson, R Sullivan, and S Watson. Page 1 of 222
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AGENDA (1) Declarations of Interest in terms of the Ethical Standards in Public Life Etc. (Scotland) Act 2000 SCRUTINY RELATED ITEMS (2) Strategic Performance Framework - Performance Reporting Schedule Quarterly Performance Assurance Review (page 5 - 32) Submit report by the Chief Officer (Business and Digital) providing a summary of the cycle 1 performance reports submitted to the Council's Committees in line with the Schedule (copy herewith) (3) In-Depth Scrutiny on the Provision of a Payment Solution for Tower Laundries (page 33 - 38) Submit report by the Chief Officer (Housing Management) responding to the Panel's request for additional information in respect of the Provision of a Payment Solution for tower Laundries with Electrolux Professional Services (copy herewith) (4) In-Depth Review of Supported Businesses (page 39 - 50) Submit report by the Chief Officers (Asset and Procurement), (Place), and (Education - South) providing the Panel with an in-depth scrutiny review process that has been carried out to address matters and questions raised regarding the Council's governance, support, business functions and operational processes used, to facilitate the involvement of Supported Businesses in its procurement and enterprise development activity (copy herewith) AUDIT RELATED ITEMS (5) Audit and Risk-Related Items: Action Log (page 51 - 54) Submit report by the Chief Officer (Audit and Risk) allowing Members to track implementation of outstanding requests and recommendations made by the Panel in respect of adult and risk- related items (copy herewith) (6) Audit Scotland - Annual Audit Plan 2022-23 (page 55 - 80) Submit report by the Chief Officer (Audit and Risk) providing Members with sight of the Annual Audit Plan 2022-23 received from Audit Scotland, the Council's appointed external auditors (copy herewith) (7) Internal Audit Progress Report (page 81 - 140) Submit report by the Chief Officer (Audit and Risk) (1) providing an overview of Internal Audit activity, and (2) reporting the results of internal Audit outputs finalised since the last update to the Panel in February 2023 (copy herewith) (8) Internal Audit: Follow-Up of Actions previously agreed by Management in response to Audit Recommendations (page 141 - 154) Submit report by the Chief Officer of Audit and Risk updating the Panel on the results of Internal Audit's follow-up work reviewing the extent to which Management have implemented actions previously committed to in response to previous Internal and External Audit recommendations (copy herewith) Page 3 of 222
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2 (9) Internal Audit Annual Plan 2023-24 (page 155 - 176) Submit report by the Chief Officer (Audit and Risk) seeking approval of the proposed Internal Audit Plan 2023-24 (copy herewith) RISK MANAGEMENT RELATED ITEMS (10) Risk Management Update (page 177 - 186) Submit report by the Chief Officer (Audit and Risk) providing a brief overview of key risk management developments since the most recent update report to the Panel in February 2023 (copy herewith) (11) Review of Corporate Risk: Educational Outcome - Raising Attainment and Closing the Attainment Gap (page 187 - 198) Submit report by the Chief Officer (Education - South) (1) identifying a corporate risk that current strategies and approaches do not improve attainment and achievement levels and/or do not reduce the poverty related attainment gap (Excellence and Equity), and (2) providing an overview of the current risk environment as set out and assessed within the draft Deep Dive document attached at Appendix 1 to the report (copy herewith) Reports called for at the previous Audit and Scrutiny Panel Meeting of 16 February 23 (12) Use of Teaching Supply Staff (page 199 - 206) Submit report by the Chief Officer (People Resources) providing information regarding an audit exercise carried out on short and long term supply teaching staff to provide assurance on the adequacy and effectiveness of the Council's key controls and management arrangements associated with ensuring that teaching supply staff are recruited and employed in a manner consistent with the Council's legal obligations, the approved Devolved School Management scheme, the Council's Financial Regulations and corporate budget monitoring and control arrangements (copy herewith) (13) Mandatory Learning (page 207 - 216) Submit report by the Chief Officer (People Resources) providing information to support the Council in ensuring that staff are aware of, and fully understand, key statutory and legislative requirements associated with the Council, and that they must complete six mandatory e- learning modules on a two-yearly basis (copy herewith) (14) Pre-Employment Checks (page 217 - 222) Submit report by the Chief Officer (People Resources) providing information regarding (1) actions which are now underway to identify where an employee has previously been employed by the Council, and (2) the relevant checks which can be undertaken to lawfully be used to assess their suitability or otherwise to be re-employed in a similar or other capacity (copy herewith) Page 4 of 222
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☒ Yes ☐ No Ref KH/SL Date 18/05/23 Strategic Performance Framework - Performance Reporting Schedule quarterly performance assurance review From Katrina Hassell, Chief Officer (Business and Digital) E-mail HassellK@northlan.gov.uk Telephone 07903 096121 Executive Summary Following on from the Strategic Performance Framework - Performance Reporting Schedule 2023 to 2024 report at the Audit and Scrutiny Panel meeting in February 2023, this report herewith provides a summary of the cycle 1 performance reports submitted to the council’s committees in line with the Schedule. The summary of cycle 1 reports focuses on the following three aspects of performance reporting: (1) Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. (2) Corporate reporting to the Audit and Scrutiny Panel and/or Policy and Strategy Committee in line with the Strategic Performance Framework. (3) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. Incorporating all these aspects of performance reporting together demonstrates the extent of performance reporting in place across the council, including reporting that meets statutory requirements in terms of service specific delivery and governance arrangements, reporting to fulfil the principles of good corporate governance, reporting for compliance purposes, and reporting in line with the Strategic Performance Framework to help understand the impact of council activities on improving services and outcomes for local people and communities in line with The Plan for North Lanarkshire. In bringing together a summary of the council’s performance reports in one composite overview, this report herewith also supports the Audit and Scrutiny Panel in maintaining strategic oversight and awareness of the council’s performance reporting arrangements in line with the Panel’s remit to provide “independent review of the council’s governance, risk management, performance and control frameworks”. It also supports the Audit and Scrutiny Panel’s governance and accountability role in terms of ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny. Recommendations It is recommended that the Audit and Scrutiny Panel: AGENDA ITEM 2 Page 5 of 222
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1. Background 1.1 Members of the Audit and Scrutiny Panel will recall the report in February 2023 which contained the Strategic Performance Framework - Performance Reporting Schedule. This set out the reporting, review, and scrutiny arrangements for a range of performance information to be considered at each cycle of committee meetings for 2023 to 2024. 1.2 The Strategic Performance Framework comprises performance measurement at three levels (as per the diagram on the right). This aims to collectively provide an overview of performance to help understand the impact of council activities on improving services and outcomes for the people and communities of North Lanarkshire. The measures in this Framework allow for day to day activities, and progress towards achieving the long-term vision set out in The Plan for North Lanarkshire, to be regularly monitored, reported, assessed, and scrutinised. 1.3 The supporting Performance Reporting Schedule forms a key part of the scrutiny work programme that underpins the Best Value governance and accountability theme by ensuring the council can demonstrate the existence of robust arrangements for scrutiny and performance reporting. It also aims to fulfil the Audit and Scrutiny Panel’s remit as per the Scheme of Administration to: • Review and monitor the performance of the council in delivering upon its priorities, outcomes, programme of work and targets in the council plan, specifically performance in improving local services and outcomes and in demonstrating Best Value. • Review performance to assess whether intended policy outcomes have been achieved. 1.4 The Strategic Performance Framework comprises a set of non-negotiable standards which Chief Officers are required to apply in all performance reporting that supports the Framework. These standards aim to ensure that performance reporting is: • Aligned - to The Plan for North Lanarkshire to give stakeholders an insight into the performance of council activities both in the short-term and against the long-term ambitions. • Consistent - to ensure a standard, easily recognisable, and well established process across each different audience over time. This aims to help build credibility, reliability, and a common understanding. • Transparent - to allow stakeholders to understand what is being measured, what it means, what level of performance has actually been achieved, and what difference this means in reality for the people and communities of North (1) Review the composite overview of performance reporting provided in Appendices 1, 2, and 3 to maintain an awareness of each the reports within the Performance Reporting Schedule for 2023 to 2024, and (2) Identify where further information is required to understand or investigate performance further in line with the Panel’s scrutiny role. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Page 6 of 222
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Lanarkshire. • In context - to avoid the So What? question and provide a coherent narrative to ensure fully informed review, reporting, scrutiny, and decision making processes. • Balanced - to ensure any text adds value and tells a balanced narrative. Performance reports should identify areas requiring improvement as well as areas of good performance. Narrative should include reasons for performance levels not in line with targets and the remedial action undertaken to address this. 1.5 The Performance Reporting Schedule shows there is a significant volume of performance information timetabled to be reported to various council committees in each cycle of 2023 to 2024. Cycle 1 reports were reviewed by the Corporate Management Team in March 2023 to ensure the relevant assurances in terms of performance management arrangements that promote effective use of the council’s resources, performance information being scrutinised at a senior management level, and performance monitoring arrangements in place to effectively address areas of underperformance, identify the scope for improvement, and agree remedial action. 1.6 The volume of performance information in the cycle 1 reports has also been reviewed and summarised further in Appendices 1, 2, and 3 attached. This aims to provide Audit and Scrutiny Panel members with a composite, but easily digestible, overview for governance and assurance purposes in line with the scrutiny role of the Panel. 2. Quarterly performance assurance review 2.1 The Strategic Performance Framework - Performance Reporting Schedule for 2023 to 2024 set out three aspects of performance reporting which are noted below. Paragraphs 2.2 to 2.8 itemise the performance reports submitted to cycle 1 committees in line with these three aspects and in accordance with the timetable set out within the Performance Reporting Schedule. (1) Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. (2) Corporate reporting to the Audit and Scrutiny Panel and/or Policy and Strategy Committee in line with the Strategic Performance Framework. (3) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. (1) Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. 2.2 The Strategic Performance Framework comprises a range of performance indicators from each Chief Officer’s portfolio and the latest results in this respect are aligned to the respective ambition statements in The Plan for North Lanarkshire. The seven reports scheduled to be submitted to the relevant committee in cycle 1 of 2023 are listed in Table 1 below, along with the corresponding hyperlink for ease of access. Table 1 Report title Committee Date Strategic Performance Framework - latest performance results for Business and Digital https://mars.northlanarkshire.gov.uk/egenda/images/att100063.pdf Finance and Resources Committee 1 March 2023 Strategic Performance Framework - latest performance results for Finance https://mars.northlanarkshire.gov.uk/egenda/images/att100095.pdf Finance and Resources Committee 1 March 2023 Page 7 of 222
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Strategic Performance Framework - latest performance results for Legal and Democratic https://mars.northlanarkshire.gov.uk/egenda/images/att100084.pdf Finance and Resources Committee 1 March 2023 Strategic Performance Framework - latest performance results for Assets and Procurement https://mars.northlanarkshire.gov.uk/egenda/images/att100064.pdf Finance and Resources Committee 1 March 2023 Strategic Performance Framework - latest performance results for People Resources https://mars.northlanarkshire.gov.uk/egenda/images/att100065.pdf Finance and Resources Committee 1 March 2023 Strategic Performance Framework - latest performance results for Education https://mars.northlanarkshire.gov.uk/egenda/images/att100045.pdf Education, Children, and Families Committee 28 February 2023 Health and Social Care North Lanarkshire performance update - Quarter 2 (July - September 2022) https://mars.northlanarkshire.gov.uk/egenda/images/att100113.pdf IJB Performance, Finance and Audit Committee 14 February 2023 2.3 Each council report was produced in line with a standard template and (a) provides the reader with the current context within which the service is operating, (b) highlights areas of good performance that can be evidenced in the accompanying data, and (c) provides a summary of areas of performance requiring improvement along with narrative that gives an explanation for the level of performance achieved and summarises the remedial action implemented (or to be implemented) to bring performance back on track. 2.4 A short summary analysis for each of the seven reports is set out in Appendix 1 against the five non-negotiable standards. (2) Corporate reporting to the Audit and Scrutiny Panel and/or Policy and Strategy Committee in line with the Strategic Performance Framework. 2.5 This aspect of performance reporting is in place to meet Best Value requirements and support Elected Members to carry out their independent governance, accountability, and strategic oversight role in line with the Scheme of Administration. It corresponds to the annual composite programme for the scrutiny element of the Audit and Scrutiny Panel which was endorsed by the Panel in February 2023. 2.6 The three reports scheduled to be submitted to the relevant committee in cycle 1 of 2023 are listed in Table 2 below, along with the corresponding hyperlink for ease of access. A short summary for each of these reports is set out in Appendix 2 against the five non-negotiable standards. Table 2 Report title Committee Date Strategic Performance Framework - Performance Reporting Schedule 2023 to 2024 https://mars.northlanarkshire.gov.uk/egenda/images/att99866.pdf Audit and Scrutiny Panel 16 February 2023 Annual scrutiny programme https://mars.northlanarkshire.gov.uk/egenda/images/att99865.pdf Audit and Scrutiny Panel 16 February 2023 Strategic Performance Framework - the North Lanarkshire context https://mars.northlanarkshire.gov.uk/egenda/images/att100085.pdf Policy and Strategy Committee 16 March 2023 (3) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. Page 8 of 222
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2.7 This aspect relates to service specific reporting which is required to meet business and/or statutory obligations. This is included in the Performance Reporting Schedule to ensure all of the council’s performance reporting arrangements are captured in the one place and the Schedule reflects a one council approach to performance reporting. 2.8 The 13 reports scheduled to be submitted to the relevant committee in cycle 1 of 2023 are listed in Table 3 below, along with the corresponding hyperlink for ease of access. A short summary for each of these reports is set out in Appendix 3. While this summary is set out against the five non-negotiable standards it also recognises there may be statutory specific approaches or standards which require to be adhered to. Table 3 Report title Committee Date Planning performance framework 2021/22 https://mars.northlanarkshire.gov.uk/egenda/images/att100031.pdf Planning Committee 2 March 2023 Annual Report of the Chief Social Work Officer 2021/22 https://mars.northlanarkshire.gov.uk/egenda/images/att100042.pdf Education, Children, and Families Committee 28 February 2023 Adult Support and Protection 2021/22 and 2020/22 https://mars.northlanarkshire.gov.uk/egenda/images/att99988.pdf Adult Care and Social Work Committee 21 February 2023 Health and Social Care North Lanarkshire annual performance report 2021/22 https://mars.northlanarkshire.gov.uk/egenda/images/att100112.pdf Integration Joint Board Performance, Finance, and Audit Committee 14 February 2023 Quality assurance annual report 2021/22 https://mars.northlanarkshire.gov.uk/egenda/images/att99645.pdf Adult Care and Social Work Committee 15 November 2022 Annual data protection report 2021/22 https://mars.northlanarkshire.gov.uk/egenda/images/att100062.pdf Finance and Resources Committee 1 March 2023 Senior Information Risk Owner (SIRO) annual report 2021/22 https://mars.northlanarkshire.gov.uk/egenda/images/att99867.pdf Audit and Scrutiny Panel 16 February 2023 North Lanarkshire Community Planning Partnership - annual report 2021/22 https://mars.northlanarkshire.gov.uk/egenda/images/att99827.pdf Communities Committee 16 February 2023 Public Sector Duties Climate Change annual report 2021/22 https://mars.northlanarkshire.gov.uk/egenda/images/att99883.pdf Environment and Climate Change Committee 8 February 2023 Payment of location taxation and benefits update report https://mars.northlanarkshire.gov.uk/egenda/images/att100094.pdf Finance and Resources Committee 1 March 2023 Financial monitoring report - council summary (revenue) https://mars.northlanarkshire.gov.uk/egenda/images/att100050.pdf Finance and Resources Committee 1 March 2023 Financial monitoring report - council summary (capital) https://mars.northlanarkshire.gov.uk/egenda/images/att100051.pdf Finance and Resources Committee 1 March 2023 Financial monitoring - savings https://mars.northlanarkshire.gov.uk/egenda/images/att100054.pdf Finance and Resources Committee 1 March 2023 Next steps 2.9 Performance reports submitted to the respective committee (in line with the Performance Reporting Schedule) will continue to be kept under review by the senior management team of the council so that adherence to the timetable is maintained. This will also seek to ensure the relevant assurances in terms of the efficient and effective operation of the council and the ongoing delivery of the long-term ambition set out in Page 9 of 222
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The Plan for North Lanarkshire underpinned with corporate governance, risk management, and financial management controls. 2.10 Assurance reviews will continue to be undertaken and reported to the Audit and Scrutiny Panel on a quarterly basis in order to achieve the measures of success set out in paragraph 3.1. 3. Measures of success 3.1 Measures of success include: • Regular oversight and monitoring of performance across the organisation to gain assurances in terms of governance and accountability. • Regular review and challenge processes to scrutinise the performance of the council to ensure effective use of resources and that resources are directed in accordance with agreed policy and according to priorities, while ensuring sound decision making and clear accountability for the use of resources in achieving improved outcomes for service users and the local community. • Performance monitoring, management, and reporting arrangements that support the demonstration of improved performance in local services and outcomes, and the delivery of Best Value. 4. Supporting documentation Appendix (1) Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. Appendix (2) Corporate reporting to the Audit and Scrutiny Panel and/or Policy and Strategy Committee in line with the Strategic Performance Framework. Appendix (3) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. Katrina Hassell Chief Officer (Business and Digital) 5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ Page 10 of 222
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If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The Local Government Act 1992 established the role of the Statutory Direction to direct the “publication of information as to standards of performance”. The Local Government in Scotland Act 2003 introduced the duty of Best Value; this requires that councils “make arrangements to secure continuous improvement in performance”. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Improvements in the presentation of performance information to various audiences are being advanced in line with the development of the DigitalNL work package for the Business Intelligence (BI) Hub. Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ Page 11 of 222
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If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Implementation of the Performance Reporting Schedule, which will facilitate effective review and scrutiny processes, contributes to the mitigation of the risk on the Corporate Risk Register for governance, leadership, and decision making. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. Page 12 of 222
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Appendix 1 (1) Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework (SPF). Report title Summary SPF - Latest performance results for Business and Digital March 2023 Business and Digital have 11 indicators in the Strategic Performance Framework covering two areas of activity (technology strategy solutions and business strategy) that work corporately across the council. https://mars.northlanarkshire.gov.uk/egenda/images/att100063.pdf Aligned Priority: • Enhance participation, capacity, and empowerment across our communities. • Improve North Lanarkshire’s resource base. Ambition statement: 18. Ensure our digital transformation is responsive to all people’s needs and enables access to the services they need. 24. Review and design services around people, communities, and shared resources. 25. Ensure intelligent use of data and information to support fully evidence based decision making and future planning. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: Volume measures: • Service desk - % tickets logged through the self-help portal. • Master citizen record - % of NL population with a master citizen record. • IT incidents. • IT service requests. Governance indicators: • Data protection - number of breaches. • Data protection - number of near misses. Benchmarking indicators: • Broadband - % of properties receiving superfast broadband. In context • The service played a significant role in supporting the council in responding to and recovering from the pandemic over the last two years, while resuming business as usual activities at pace. • Recent service context includes insourcing of services previously outsourced to Wipro, alignment of service provision following the insourcing of culture / sport / leisure services, integration of the schools’ technician’s service, advancements of the procurement for the connectivity project in December 2021, and the end of the Agilisys contract and ensuing significantly reduced resource available going into 2022/23. • The direction for DigitalNL was set out in the Year 4 Roadmap report submitted to the Policy and Strategy Committee in September 2022 and the follow up DigitalNL - Next Steps report approved in December 2022. • An Integrated Programme Plan is now in place for Business and Digital to capture all areas of service activity and support resource planning and operational delivery, as well as project management and governance controls. Balanced Performance highlights: • The indicator measuring the number of occasions in a month that a priority IT service (P1) has not been available to users continues to show improvement. Areas of performance requiring improvement: • Following the insourcing of Wipro, the indicator measuring IT service desk incidents resolved within target changed to capture all severity level 3 tickets in Page 13 of 222
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order to provide a more complete picture of all incidents. This changed the operating model from one that had been contractually driven to one requiring workload scheduling and prioritisation across the whole service. Further information regarding the increased volume of incidents recorded is currently being analysed monthly to identify any recurring issues in this respect and ensure an appropriate balance moving forward in terms of development, maintenance, and operational activities. • The complaints handling ratio is currently under review to ensure that the council continues to be proactive in responding to all routine complaints at the frontline at stage 1 (in line with the national local authority model Complaints Handling Procedure). Historical figures in this respect show that the council has consistently responded to 9 out of 10 complaints received at stage 1. Implementation of the new Dynamics complaints system, combined with a significant increase in the volume of complaints received, has impacted on the ratio for 2021/22 and further analysis is underway to identify the root cause and the actions that need to be implemented to improve this indicator moving forward. Report title Summary SPF - Latest performance results for Finance March 2023 Finance has 22 indicators in the Strategic Performance Framework that are designed to report compliance with financial regulations and good governance, demonstrate Best Value in the use of resources through financial management and financial sustainability, assess efficiency in service processing times, and ensure effective administration of a wide range of national welfare grants and payments that are designed to help households in need and provide a safety net for local people on low incomes. https://mars.northlanarkshire.gov.uk/egenda/images/att100095.pdf Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: Volume measures: • Scottish Welfare Fund community care grant - number of applications received. • Scottish Welfare Fund community care grant - council spend. • Scottish Welfare Fund crisis grant - number of applications received. • Scottish Welfare Fund crisis grant - council spend. • Discretionary housing payments - number of applications. • Discretionary housing payments - value of awards. Benchmarking indicators: • Scottish Welfare Fund crisis grants - % decisions made within one day. • Scottish Welfare Fund community care grants - % decisions made within 15 days. • Scottish Welfare Fund - % of budget spent. • Discretionary housing payments - % of funding spent. In context • Throughout 2022/23 the service has managed a number of pandemic and cost of living related support measures initiated by the council, such as the Fuel Hardship Grant, Pensioner Fuel Grant, and the North Lanarkshire Child Payment. • In addition, the service continues to administer payments such as the Self Isolation Support Grant and Scottish Child Payment Bridging Payment on behalf of Page 14 of 222
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the Scottish Government. • Following the pandemic and the developing cost of living crisis, the service has experienced increased demand for service such as Scottish Welfare Fund and other benefit applications. • The insourcing of culture / sport / leisure services, and pace of capital investment activity following the pandemic, have both contributed to increasing volumes of payments required to creditors. Balanced Performance highlights: • In-year reporting for council tax collection shows an increased year to date collection rate. • Average number of days to process both new claims and changes of circumstances for benefits both remain low and below the target. • Although the total number of Scottish Welfare Fund Crisis Grant applications has increased compared to the same period last year, the council continues to meet Scottish Government guidance for decisions to be made within two working days. Areas of performance requiring improvement: • In-year collection to date for non-domestic rates remains lower than the target. This measure continues to be affected by the pandemic and wider cost of living impacts. The latest year to date figure is largely attributable to later than anticipated payment of rates charges from a number of public sector bodies, including the council itself. If these payments had been made when anticipated, and in line with 2021/22 dates, the year to date performance would have shown an improved position. • Invoices paid within 30 calendar days of receipt shows a lower year to date figure for 2022/23 compared to the same period in 2021/22. The service has been proactively managing the creditors position with more staff trained to ensure peak demands can be met. In addition, the service continues to work with frontline service areas to improve the accuracy of payment requests and reduce delays in authorised invoices reaching the creditors team. An action plan is in place to improve service resilience and performance. Report title Summary SPF - Latest performance results for Legal and Democratic March 2023 Legal and Democratic has 8 indicators in the Strategic Performance Framework. Significant areas of activity across the service (within each of the areas of service delivery, i.e. democratic, enterprise, litigation, and people matters) are carried out in support of other council services and, accordingly, performance targets are often not within the sole gift of Legal and Democratic. The indicators monitored through the Strategic Performance Framework therefore focus on those areas where the service does have control of performance. https://mars.northlanarkshire.gov.uk/egenda/images/att100084.pdf Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. 25. Ensure intelligent use of data and information to support fully evidence based decision making and future planning. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: New indicator from 2023/24: • Children's panel expenses - % processed and passed for payment within 3 working days. Page 15 of 222
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In context As a result of the service restructure in April 2022, it was necessary to allow a period of time for the new arrangements to be implemented, including a change to the roles and responsibilities of a number of officers and this process was concluded by the end of July in time for the new committee cycle. As a consequence of these changes, the performance indicators for the service are currently those considered to be the most meaningful. They will, however, be subject to ongoing review to ensure that they set out targets which accurately reflect the operational activities of the service and are able to be measured against service specific controls. Balanced Performance highlights: • The ratio of legal versus non-legal work undertaken reflects the continuance in delivery of an efficient and effective service, with a low hourly rate and a high proportion of staff time spent on the delivery of legal advice and support as opposed to management / administration. • In terms of responding to Freedom of Information requests, there has been full recovery from the pandemic’s impacts on service delivery and a return to previous compliance levels has been achieved. Areas of performance requiring improvement: • While there are no red indicators in terms of RAG status and, therefore, no identified areas for improvement, each indicator will continue to be closely monitored on a regular basis. Report title Summary SPF - Latest performance results for Assets and Procurement March 2023 Assets and Procurement has 23 indicators in the Strategic Performance Framework covering a range of service areas that support the delivery of the place based ambition set out in The Plan for North Lanarkshire. This includes asset rationalisation and development , the hub development and delivery programme, climate change - committing to net zero, improving procurement capability, and school meals. https://mars.northlanarkshire.gov.uk/egenda/images/att100064.pdf Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. 22. Facilitate a North Lanarkshire wide approach to asset rationalisation, including with communities and partners. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: Benchmarking indicators: • Procurement assessment score - procurement and commercial improvement programme (PCIP). Page 16 of 222
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In context Assets and Procurement have streamlined office accommodation across the estate and supported management teams as they have moved to more agile ways of working. The service has continued to progress the development of Community Growth Areas to promote inward investment in North Lanarkshire, delivering new build community hubs (including the newly opened Newmains / St Brigid’s) and Riverside and Chryston opening later in 2023. The service also leads on the implementation of a number of national policy initiatives including full roll out of free school meals, nutritional standards for school meals, and climate change duties. With a significant level of capital and revenue resources under the service’s control, the service closely manages and monitors inflationary and logistical challenges on major capital and revenue projects. Balanced Performance highlights: • The policy framework for the council’s procurement activity is well developed. In the last procurement and commercial improvement programme (PCIP) the council’s performance assessment improved from quartile 4 to quartile 1. The council has a well-established relationship with collaborative framework providers, such as Scotland Excel and Hub South West Scotland, which enables procurement activities to be progressed efficiently and effectively. • The council has a well-defined five year Climate Plan with good progress being made. • For school meals the service continuously promotes the benefits of a nutritional meal and the savings it can offer to parents. Areas of performance requiring improvement: • Two indicators which show as requiring improvement relate to the occupancy levels in schools - that being the number of pupils at any given school, compared with the number of spaces within any given school. However, there is a fine line between removing some capacity and removing too much capacity which then presents a capacity issue in future years. In both primary and secondary school sectors, it is the view from an operational perspective that it is better to have some under occupancy, rather than have over occupancy. Where there is significant under occupancy, the council does look for ways to reduce the capacity of the school while keeping the school sustainable. Different uses of spaces for use by cluster staff, or as touchdown spaces are areas being explored. However, these spaces must be within the right geographical area for the user demand. Equally, capital investment is required to adapt spaces and maintain the secure bubble of the school. Capital funding has in recent years, primarily focused on creating spaces where there is excess occupancy (i.e. too many pupils, too few spaces), rather than on under occupancy. However, the teams in Assets and Procurement continue to work with the Education and Families services responsible for the delivery of initiatives which could use spaces within establishments. Report title Summary SPF - Latest performance results for People Resources March 2023 People Resources has 6 indicators in the Strategic Performance Framework in relation to key council policies that include absence management and the wider focus on equality and commitment to the Public Sector Equality Duties. https://mars.northlanarkshire.gov.uk/egenda/images/att100065.pdf Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 23. Build a workforce for the future capable of delivering on our priorities and shared ambition. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: Governance indicators: • RIDDOR - number of reported injuries, diseases, dangerous occurrences. Benchmarking indicators: • Gender pay gap - % gap between average hourly rate of pay for male and female employees. • Equal opportunities - % of women employees in top 5% earners of all employees. Page 17 of 222
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In context The council’s overall performance comes in the context of particular challenges with absence performance over the course of the pandemic, and the impact of this can be seen within the overall data. Despite these challenges, the council has recently implemented a revised approach to absence management for non- teaching employees, the benefits of which continues to be reflected in the figures for 2021/22. Further targeted work within key services and a revised absence policy for teaching employees are also in progress, and these are expected to bring further benefits over the course of 2022/23 and into 2023/24. The council has key strengths in terms of its consistently low gender pay gap and strong senior female representation across all services, and these will continue to form a core part of the wider focus on equality. A reduction in Riddor reportable health and safety incidents was seen in 2020/21 due to the reduction of operational activity in some services. Balanced Performance highlights: • The council agreed a new Absence Management Policy for non-teaching employees in March 2021, with a much clearer approach to targets and the management of absence stages. This has now been rolled out across all services and is yielding results particularly with respect to the numbers of long-term mental health related absences which have decreased over the last 12 months. This can be seen in the council’s overall absence performance which has not returned to the previously high levels of absence seen in 2019/20 before the start of the pandemic. • With respect to the gender pay gap, the council has a stable gender pay gap which is significantly lower than the UK average pay gap. • The council also has good female representation in its senior positions, including Chief Officers, across all services. Areas of performance requiring improvement: • Despite significant improvements seen in overall absence between 2019/20 and 2021/22, and a cumulative reduction over time, levels of absence in non- teaching employees remain high and above the council’s intended target. • While the revised Absence Policy is yielding results, more targeted work is required within key frontline services including health and social care and enterprise and communities to bring levels down further to meet the councils target. • Work is currently underway to revise the Managing Absence Policy for teachers in 2023. Although levels of teacher absence are low in comparison to non- teaching employees, the council remains ranked 29th out of 32 councils suggesting there is room for improvement in this area. Report title Summary Strategic Performance Framework - latest performance results for Education February 2023 Education has 32 indicators in the Strategic Performance Framework. These largely comprises benchmarking measures which have been summarised to identify which service areas show improved performance over time and are favourable when compared to the national average. Several measures also relate to performance information collected through external HMIe inspection processes. https://mars.northlanarkshire.gov.uk/egenda/images/att100045.pdf Aligned Priority: • Support all children and young people to realise their full potential. Ambition statement: 6. Raise attainment and skills for learning, life, and work to enhance opportunities and choices. 7. Enhance collaborative working to maximise support and ensure all our children and young people are included, supported, and safe. 8. Engage children and families in early learning and childcare programmes and making positive transitions to school. 9. Invest in early interventions, positive transitions, and preventative approaches to improve outcomes for children and young people. 10. Engage with children, young people, parents, carers, and families to help all children and young people reach their full potential. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: Inspection indicators: • Parent satisfaction - % parents agree or strongly agree that the school is well led and managed. • Parent satisfaction - % parents agree or strongly agree that they receive helpful, Page 18 of 222
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regular feedback about how their child is learning and developing. • Parent satisfaction - % parents agree or strongly agree that overall they are satisfied with the school. Benchmarking indicators: • Primary school education - cost per pupil. • Secondary school education - cost per pupil. • Pre-school education - cost for each child registered for early learning and childcare. • % adults satisfied with local schools. • Educational attainment - % of pupils achieving 5 or more awards at SCQF Level 5 or higher. • Educational attainment - % of pupils achieving 5 or more awards at SCQF Level 6. • Educational attainment - % of pupils living in the 20% most deprived areas gaining 5 or more awards at SCQF Level 5 or higher. • Educational attainment - % of pupils living in the 20% most deprived areas gaining 5 or more awards at SCQF Level 6. • National qualifications - overall average tariff score for pupils in the senior phase. • National qualifications - average tariff score for pupils in the senior phase living in SIMD quintile 1 (most deprived), quintile 2, quintile 3, quintile 4, and quintile 5 (least deprived). • Attainment - % of P1, P4, P7 pupils combined, achieving expected Curriculum for Excellence level - in (a) literacy and (b) numeracy. • Attainment gap (P1, P4, P7 combined) - % point gap between least and most deprived pupils - in (a) literacy and (b) numeracy. • Attendance at school - % attendance for all pupils, primary and secondary school. • Attendance at school - % attendance for looked after children. • Exclusions from school, all pupils - exclusion rate per 1,000 pupils. • Exclusions from school, looked after children - exclusion rate per 1,000 pupils. Equalities indicators: • Exclusions from school for children from Additional Support Needs (ASN) schools - exclusion rate per 1,000 pupils. • Attendance at school - % attendance for disabled children. • Educational attainment - % of visually impaired leavers gaining national qualifications level 3 and above in Maths or English within the SCQF framework. • Educational attainment - % of hearing impaired leavers gaining national qualifications level 3 and above in Maths or English within the SCQF framework. In context • The emergence of the pandemic had a significant impact on the service’s internal and external (HMIe) scrutiny processes with routine HMIe inspections being paused from March 2020 to till August 2022. During this period, inspectors only engaged with establishments who were awaiting further engagement. This had a significant impact on data collected in relation to the indicators reported. In addition, the terminology used in relation to some of the key indicators changed over this time as did elements of the parental satisfaction data which is derived from HMIe questionnaire results. • The pandemic also had a significant impact on national and local exam arrangements, with new processes being introduced. There were also changes to Achievement of a Level data (ACEL) collection processes across Scotland. Data therefore requires to be interpreted within this context. Balanced Recent performance highlights • Despite challenges presented in collating robust data against the performance benchmarks, the data evidences improvements in pupils achieving 5 or more awards at SCQF Level 5 or higher and P1, P4, P7 pupils achieving expected Curriculum for Excellence levels in both literacy and numeracy. • At the Broad General Education (BGE) stage, the data also shows a reduction in the attainment gap in literacy and numeracy. Progress is also being made towards closing the poverty related attainment gap at the senior phase which recorded an increase in the proportion of pupils living in the 20% most deprived areas gaining 5 or more awards at SCQF Level 5 or higher; this is the highest level recorded to date. • Funded early years provisions graded good or better has continued to increase and the quality rating of early years establishments has remained positive. Attendance for looked after children has increased. Areas of performance requiring improvement • Changes to the HMIe Inspection process impacted on the council’s ability to gather a full dataset in relation to identified performance indicators. However, the service recognise that this was only a contributing factor and have identified the need to monitor the indicators and implement refreshed quality assurance procedures in order to secure immediate improvements. • When viewed against local data it suggests that three of the HMIe indicators which focus on levels of parental satisfaction do not represent the view of the wider parental body, and there is likely to be a direct correlation with the increased number of negative inspection results. However, the service will track and monitor internal and external parental feedback to support improvement. Implementation of the refreshed quality assurance processes will facilitate monitoring at individual establishment level. Work to develop a new parental engagement strategy will also allow for focused feedback from parents / carers. Page 19 of 222
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• Data and internal self-evaluation processes highlight the need to improve pupil attendance rates. This area has been identified as a key priority across the service. An integrated cluster approach has been established wherein attendance data is monitored and shared regularly with key stakeholders to allow early identification and support for individuals whose attendance is causing concerns. This early identification and intervention will support improved attendance levels. The upcoming deployment of family engagement workers will further strengthen this approach. Report title Summary Health and Social Care North Lanarkshire performance update - Quarter 2 (July - September 2022) February 2023 The Chief Officer (for the Health and Social Care Partnership) has joint quarterly performance review meetings with the Chief Executive of NHS Lanarkshire and the Chief Executive of North Lanarkshire Council. These meetings are supported by a Chief Executive Performance Framework comprising a range of performance measures from across both health and social work systems, including relevant targets and trajectories. Quarterly reports are subsequently submitted to the Integration Joint Board Performance, Finance, and Audit Committee. https://mars.northlanarkshire.gov.uk/egenda/images/att100113.pdf Aligned Priority: • Improve the health and wellbeing of our communities. Ambition statement: 12. Ensure our residents are able to achieve, maintain and recover their independence through appropriate supports at home and in their communities. 13. Improve preventative approaches including self-management and giving people information and choice over supports and services. 14. Ensure the highest standards of public protection. Consistent A pre-defined template is in place to ensure a standard, easily recognisable, and well established process for quarterly reporting. Transparent Based on a traffic-light system there are areas for improvement identified within the performance framework each quarter for those areas that are flagged as Red or Amber. The areas for improvement identified are progressed as a matter of priority, and progress updates are reported at future meetings of the Integrated Joint Board and/or the Integration Joint Board Performance, Finance, and Audit Committee as appropriate. In context The joint performance review meetings (involving the Chief Officer for the Health and Social Care Partnership, the Chief Executive of NHS Lanarkshire, and the Chief Executive of North Lanarkshire Council) are used as a means for jointly agreeing corrective actions. Balanced The quarterly report to committee sets out the corresponding narrative and corrective actions agreed for the areas identified for improvement. Page 20 of 222
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Appendix 2 (2) Corporate reporting to the Audit and Scrutiny Panel and Policy and/or Strategy Committee in line with the Strategic Performance Framework. Report title Summary Strategic Performance Framework - Performance Reporting Schedule 2023 to 2024 February 2023 Scrutiny of this item aims to support the Audit and Scrutiny Panel carry out their strategic oversight role in line with their purpose as per the Scheme of Administration which includes providing “independent review of the council’s governance, risk management, performance and control frameworks”, and their remit in relation to the scrutiny function which is to: • Review and monitor the performance of the council in delivering upon its priorities, outcomes, programme of work and targets in the council plan. • Review performance to assess whether intended policy outcomes have been achieved. • Consider the council's performance, improvement, and governance arrangements to ensure that approaches continues to facilitate effective and efficient delivery of planned services and outcomes and the council's vision. • Commission independent short life task group reviews (based on evidence), and carry out reviews recommended from service committees, to enable in-depth scrutiny of policy, practices, and performance where the challenge and scrutiny function can make an impact or add value. https://mars.northlanarkshire.gov.uk/egenda/images/att99866.pdf Aligned Priority: All Ambition statement: All Consistent The reporting timetable in the Performance Reporting Schedule is consistent with the style and format of the timetable and review programme within each of the Frameworks that support The Plan for North Lanarkshire (i.e. Policy, Governance, Performance, and Self-Evaluation). Transparent The Performance Reporting Schedule provides a timetable outlining dates for all council performance reporting to committee for 2023 to 2024. In context The report in February 2023 advised of a standardised template developed for Chief Officers to use when reporting the items in Appendix 1 to the respective service committee. This approach aims to achieve consistency of approach and requires performance to be reported within the relevant context. Balanced The aforementioned template also necessitated an approach to performance reporting that is in line with the Accounts Commission statutory direction. This places a requirement on councils to report a range of information in terms of improving local services and outcome and demonstrating Best Value that ensures a balance in reporting areas of performance that have (and have not) been achieved. Title Summary Annual scrutiny programme February 2023 Scrutiny of this item aims to support the Best Value governance and accountability theme by ensuring the council’s scrutiny structures support Elected Members in reviewing and challenging performance. https://mars.northlanarkshire.gov.uk/egenda/images/att99865.pdf Aligned Priority: All Ambition statement: All Consistent The reporting timetable in the annual composite scrutiny programme is consistent with the approach for timetabling that is used by each of the Frameworks that support The Plan for North Lanarkshire. Transparent The report in February 2023 sets out the annual composite scrutiny programme with timetable of reports to future Panel meetings for 2023 to 2024. This programme will be updated as new items requiring scrutiny are identified, scoped, assessed, and prioritised. Page 21 of 222
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In context The approach set out in the annual scrutiny programme report aims to ensure all scrutiny activity remains framed within the context of The Plan for North Lanarkshire and is focused on improving local public services and improving local outcomes. Balanced Traditionally, the scrutiny function of the Audit and Scrutiny Panel has been twofold, comprising (1) items, functions, or activities requiring scrutiny identified and submitted by Panel members, and (2) the presentation of information and reports aligned to the long-term vision set out in The Plan for North Lanarkshire and its supporting strategic frameworks. The report in February 2023 combined both these aspects in a composite programme which lists all scrutiny related reports scheduled to be presented to the Audit and Scrutiny Panel during each cycle of 2023 to 24. Report title Summary Strategic Performance Framework - the North Lanarkshire context March 2023 Strategic oversight of this item by the Policy and Strategy Committee is in line with their remit as per the Scheme of Administration to “oversee the development, co-ordination and monitoring of the Plan for North Lanarkshire”. Scrutiny of this item through the Audit and Scrutiny Panel aims to support the Panel to carry out their strategic oversight role to review and monitor the performance of the council in delivering upon its priorities, outcomes, programme of work and targets in the council plan. https://mars.northlanarkshire.gov.uk/egenda/images/att100085.pdf Aligned Priority: All Ambition statement: All Consistent The Plan for North Lanarkshire is supported by a suite of high level Health Check Performance Indicators that collectively provide the context for North Lanarkshire as a place. By providing the local demographic, social, and economic profile these indicators were key to shaping the long-term vision set out in The Plan for North Lanarkshire when it was approved in 2019, and they have continued to provide a robust, consistent, and independent way of assessing progress since then. The suite of indicators also play an important role in terms in informing the council’s strategic planning process through the Programme of Work. Transparent The latest results in this respect were reported to the Policy and Strategy Committee as scheduled in March 2023. The reporting format differed to previous years to ensure that the latest results for the 28 Health Check Indicators: • Include graphs displaying a longer-term time series in order to show, for example, trends over time that cover before, during, and in the aftermath of the pandemic. It was noted that some national data sources recalibrate their time series at every publication, where this is the case the most up to date data was reflected in the results presented in the appendix to the report. • Incorporate - where appropriate for added interpretation - supplementary measures, commentary, and analysis. • Reflect the baseline for The Plan for North Lanarkshire in the North Lanarkshire commentary. This baseline was established using the most up to date data available at the time The Plan for North Lanarkshire was approved and monitoring began. This allows for improvements to be identified over the lifespan of the council’s corporate strategy. In context The reporting format in the March 2023 report also presented the results in a different way this year in order to better show the North Lanarkshire position within the relevant context. Balanced In changing the reporting format, this enabled the results to include more detailed information and analysis. This analysis identified significant and positive trends, as well as the challenges that remain. This was instrumental in informing the development of the Programme of Work to 2028 which was approved at Policy and Strategy Committee in March 2023. Page 22 of 222
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Appendix 3 (3) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. Report title Summary Planning performance framework 2021/22 March 2023 This report provides an update on the Scottish Government’s feedback on the performance of the planning and place service for the latest year based on the annual Planning Performance Framework (PPF). Prepared annually, the PPF details the performance of the service against key performance indicators which were agreed with the Scottish Government. This report covers the Scottish Government’s feedback for the period 2021/22 based on the PPF submitted in September 2022. https://mars.northlanarkshire.gov.uk/egenda/images/att100031.pdf Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 4. Market and promote North Lanarkshire as the place to live, learn, work, invest, and visit. Consistent The Planning Performance Framework was developed by the Heads of Planning Scotland (HOPS) to capture and highlight a balanced measurement of planning performance across all 32 local authorities and to provide Ministers, councils, and the public with a better understanding of how a planning authority is performing and delivering high quality development on the ground. Transparent In 2021-22, for the 13 relevant performance markers, the council received nine green markers, two amber, and one red in the feedback from the Scottish Government. The report to the Planning Committee in March 2023 provided supporting narrative in terms of the red and amber markers. In context The case studies in the 2021-22 report focus on a range of planning activities that have been undertaken during the year to support the provision of high quality development on the ground. Balanced The report highlights examples of good practice by using case studies and details the ongoing work being undertaken by the service to deliver continuous improvement. The report sets out the improvements that the service is focusing on in the year 2022/23. Report title Summary Annual Report of the Chief Social Work Officer 2021/22 February 2023 The requirement that each local authority appoint a professionally qualified Chief Social Work Officer is contained in Section 45 of the Local Government (Scotland) Act 1994. Statutory guidance updated in 2016 reflected the impact of Health and Social Care integration, extending the responsibilities of the role to provide advice to the Integration Joint Board (IJB). In addition, the role carries key responsibilities for professional leadership, values, and standards for both directly provided and commissioned services. Within North Lanarkshire social work services are delivered and governed through both the Health and Social Care Partnership (Adult Social Work Services) and the Education and Families Services (Children, Families and Justice Social Work) with the Chief Social Work Officer’s responsibilities for practice and staff governance covering social work functions across both areas. The North Lanarkshire Chief Social Work Officer’s report provides information on the delivery of statutory functions, and performance and improvement activity across the range of social work services over 2021/22. In addition, information is provided on the wider governance and planning of social work provision in North Lanarkshire, including its key role in local partnerships. https://mars.northlanarkshire.gov.uk/egenda/images/att100042.pdf Aligned Priority: • Support all children and young people to realise their full potential. • Improve the health and wellbeing of our communities. Page 23 of 222
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Ambition statement: 9. Invest in early interventions, positive transitions, and preventative approaches to improve outcomes for children and young people. 12. Ensure our residents are able to achieve, maintain and recover their independence through appropriate supports at home and in their communities. 13. Improve preventative approaches including self-management and giving people information and choice over supports and services. 14. Ensure the highest standards of public protection. Consistent The Chief Social Work Officer of each local authority is required to provide an annual report and a standard template for this purpose is issued by the office of the Chief Social Work Advisor to the Scottish Government. Transparent The report provides a factual account in terms of the delivery of statutory functions and performance and improvement activity across the range of social work services in North Lanarkshire. It represents a significant volume of information that also includes links to other materials. In context The extent of the challenges, both national and local, impacting on the delivery of social work services in North Lanarkshire are highlighted in the report. These include rising demand and complexity of need, reflecting and overlaid by the lasting impact of the pandemic on local communities and the subsequent cost of living crisis. Continued coherence of planning and delivery across all areas of social work is supported both by the core council operating model and specific cross- cutting arrangements within social work, such as leadership and workforce meetings. This close alignment has been particularly important to ensuring a responsive and effective approach to some of the challenges experienced during this period - where both the direct the impacts of the pandemic and the related changes in the needs of local communities have required adjustments in service delivery and flexibility in the deployment of resources. The report also looks forward to reflect on the opportunities for improvement in outcomes for people arising from national policy commitments such as the Promise and the facilitative local context, but also notes the risks to delivery of both improvement and key functions arising from key demand, and financial and workforce pressures (including the level of change capacity required). This is particularly relevant to the uncertainties introduced with respect to proposals for root and branch structural reform through the implementation of a National Care Service (NCS). The recently agreed establishment of a Member Officer Group within the council will support focus on this issue. Balanced • In terms of highlights, a key strength with respect to social work service delivery in North Lanarkshire remains a strong balance of care which has been sustained despite the challenges in service delivery during the pandemic and recovery period. • North Lanarkshire continues to benchmark well nationally with respect to the proportion of adults and children, including those with complex needs, who continue to receive support, including intensive support, within their own homes and communities. • Work across all social work care groups continues to deliver improvement with respect to effective early support, for example, through the testing of the three conversation model in adult services, enhancements in family support and family group decision making for children and families, and a continuing focus on diversion in both adult and youth justice. • Performance in some areas of the service has however been impacted by the significant demand and workforce pressures that are outlined within the report and this has at times impacted on responsiveness and ability to consistently deliver the level of high-quality individualised support which is the aim for all those who are supported. This has meant, for example, some people assessed as having less immediate or critical needs having to wait longer for some aspects of service. • Pressures have been particularly acute with respect to the delivery of home support services but are a feature across many areas of the service. In response, and as reflected more fully within the report, a range of actions are ongoing to redesign and enhance services, maximise the benefits of integrated working, and support the recruitment and retention of staff. Report title Summary Adult Support and Protection 2021/22 and This reports on the work carried out by social work services in respect of the statutory duties set out in the Adult Support and Protection (Scotland) Act 2007. The Adult Support and Protection (Scotland) Act 2007 set up multi-agency Adult Protection Committees (APCs) in every Page 24 of 222
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2020/22 February 2023 local authority area. The committee monitors and reviews what is happening locally to safeguard adults. It is made up of senior staff from many of the agencies involved in protecting adults who may be at risk. These include staff from the council, the NHS, and the police. The composite report in February 2023 provided an overview of two inter-related Adult Support and Protection reports: a) Social Work Adult Protection Report 2021/22 published in December 2022 - this provides information on adult support and protection activity undertaken by social work services in North Lanarkshire. The council’s social work service remain the statutory lead agency for adult support and protection and, as such, this report details all referrals received during the year in comparison to previous years, and what stage they reached in the adult protection process. The report also provides analysis of the information collated regarding performance and wider developments in adult protection across North Lanarkshire. b) Adult Protection Committee Biennial Report 2021/22 published in November 2022 - this is the seventh Biennial Report which explores strategic, operational, and governance details of adult support and protection on a multi-agency basis, as reflected through the work of the multi-agency Adult Protection Committee. https://mars.northlanarkshire.gov.uk/egenda/images/att99988.pdf Aligned Priority: • Improve the health and wellbeing of our communities. Ambition statement: 14. Ensure the highest standards of public protection. Consistent Adult Protection Committees are chaired by independent convenors, who cannot be members or officers of the council. Adult Protection Committees have a central role to play in taking an overview of adult protection activity and making recommendations to ensure that adult protection activity is effective. Adult Protection Committees are required to submit a report to Scottish Ministers every two years. Transparent The two reports provide a factual account in terms of the delivery of statutory functions and performance and improvement activity across the range of adult support and protection services in North Lanarkshire. They represent a significant volume of information that also includes links to other materials. In context a) Social Work Adult Protection Report 2021/22 • Throughout the year, regular performance management reports have highlighted increased demand on social work human and service resources and the impacts on resources across partner agencies. The service has continued to be effective in providing a consistent statutory response to referrals, and the mitigation of risk. b) Adult Protection Committee Biennial Report 2020/22 • The report reflects the significant partnership response to addressing adult support and protection concerns during the pandemic, including increased monitoring, support, and scrutiny activity given the demographic links between adult support and protection risks and vulnerable members of local communities. This includes a shift to some virtual activity, revised training provision, and operational flexibility to respond to changing risk and need. Balanced a) Social Work Adult Protection Report 2021/22 • Public protection is identified as a high risk on the councils’ corporate risk register. It therefore continues to be subject to scrutiny and monitoring activity as a matter of course. An audit report submitted to the council’s Audit and Scrutiny Panel in September 2021 concluded that arrangements were satisfactory and offered an opinion of reasonable assurance; it also recognised the prioritisation of public protection during the pandemic. • Routine self-evaluation activity of the Chief Officers Group Public Protection has also informed a refresh of multi-agency action plans across all public protection areas to promote consistency of structure. • The 2021/22 annual report provides information on developments to monitoring and supporting adult support and protection activity and reviewing adult at risk referrals from care homes. This has promoted an early intervention approach to identify emerging concerns, specific patterns and/or trends, and provides additional scrutiny and assurance for senior managers and the Chief Social Work Officer. b) Adult Protection Committee Biennial Report 2021/22 • In terms of highlights the report reflects the positive self-evaluation findings of the work of the Adult Protection Committee, with well-established arrangements in place across all aspects of partnership working. This led to reinforced Adult Protection Committee representation across key agendas, such as care home assurance, acute, and the Alcohol and Drug Partnership and is helping to raise the profile of adult support and protection. Page 25 of 222
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• Positive and innovative practice from partners includes work with the national missing persons project to understand and respond to concerns across all ages and services. This culminated in the development of the North Lanarkshire Multi-Agency Missing Persons protocol. • Commitment to a trauma informed approach to adult protection means that all training and policy development has awareness of the impact of trauma embedded in its content and language. This includes a commitment to safeguarding approach shared with the Child Protection Committee. • Training and learning activity of the Adult Protection Committee includes the development to online training, with over 1,100 people accessing various training opportunities over the two-year period. This has included new training provision to address emerging need, such as self-neglect and hoarding, a GP training programme, and relaunching multi-agency forums to share learning and good practice. • In terms of areas for improvement, the report reflects the progress of the Adult Protection Committee’s Improvement Plan, including ongoing work to improve the quality of chronologies and risk assessments in adult protection cases, and strengthen information sharing. This also includes activity to develop guidance, for example in terms of working with neglect and financial harm. Work is also underway to strengthen representation from people with lived experience within the Committee framework. Report title Summary Health and Social Care North Lanarkshire annual performance report 2021/22 February 2023 The Public Bodies (Joint Working) (Scotland) Act 2014 requires the Integration Joint Board to publish an Annual Performance Report, setting out an assessment of performance in planning and carrying out those functions for which it is responsible. Prior to the pandemic this report carried a statutory reporting timescale. With the cessation of the ensuing emergency legislation, the Annual Performance Report for 2022/23 will revert to the original statutory reporting timescale of 31st July each year. https://mars.northlanarkshire.gov.uk/egenda/images/att100112.pdf Aligned Priority: • Improve the health and wellbeing of our communities. Ambition statement: 12. Ensure our residents are able to achieve, maintain and recover their independence through appropriate supports at home and in their communities. 13. Improve preventative approaches including self-management and giving people information and choice over supports and services. 14. Ensure the highest standards of public protection. Consistent Guidance on the production of the Annual Performance Report was issued by the Scottish Government in March 2016. The report evidences performance against the National Health and Wellbeing Outcomes, National Core Integration Indicators, the Ministerial Strategic Group indicators, and a range of local performance measures. Transparent The Annual Performance Report is a summary of the Health and Social Care Partnership’s performance over the last year (2021/22); it sets out what has been achieved and what needs to be focused on in the future. In context The report highlights the emergency response to the pandemic and the need to refocus available resources on critical areas affected in this respect. While these priorities are continuing into 2022/23, every effort is being made to progress the Response, Recovery, and Remobilisation Plans. Remobilising the full range of Health and Social Care Partnership services is challenging and maintaining innovation and learning from the pandemic has been essential. Although the current operational and financial challenges will inevitably drive the pace of change, improving outcomes for individuals will continue to underpin the IJBs strategic commissioning intentions and the ongoing redesign and integration of health and social care services. The Strategic Commissioning Plan for 2023-26 was approved by the Integrated Joint Board in March 2023. This sets out how the Health and Social Care Partnership will plan and deliver services for North Lanarkshire over the medium term and how these arrangements are intended to achieve and contribute towards achieving the national health and wellbeing outcomes ( https://mars.northlanarkshire.gov.uk/egenda/images/att100339.pdf ). Balanced The report includes benchmarks from a range of other Health and Social Care Partnerships to enable appropriate comparison across the National Page 26 of 222
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Outcome Indicators. The report contains a summary dashboard in the appendix which provides quarterly performance data for all indicators in the framework as well as targets, and a corresponding RAG status. Report title Summary Quality assurance annual report 2021/22 November 2022 The role of quality assurance covers a range of functions across social work to facilitate the delivery of high-quality services through effective business planning, maintaining quality standards, and information monitoring. The information covered in the November 2022 report relates to social work activities in relation to contracts and contract management, regulatory activity, procurement, complaints, duty of candour, provider sustainability, and children and families. https://mars.northlanarkshire.gov.uk/egenda/images/att99645.pdf Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 24. Review and design services around people, communities, and shared resources. Consistent The report for 2021/22 was the first annual quality assurance report produced in this respect. It sets out a commitment to hereinafter provide an annual quality assurance report on activity carried out in the preceding year. Transparent This report was submitted to the Adult Care and Social Work Committee in November 2022 where it was agreed that the report be remitted to the Integration Joint Board, Education Children and Families Committee, and Audit and Scrutiny Panel, for information. The Audit and Scrutiny Panel received this report for due consideration at the Panel meeting in February 2023. In context The covering report sets out the context within social work in which the activities in the annual quality assurance report are undertaken. Balanced The report highlights several developments which have improved the operation of the social work service and the performance of independent social care contractors. It also lists planned developments for 2022/23. Report title Summary Annual data protection report 2021/22 March 2023 This reports on the council’s data protection compliance and activity for the latest financial year in line with the General Data Protection Regulation (GDPR) and the Data Protection Act 2018 (DPA) which came into force on 25 May 2018. https://mars.northlanarkshire.gov.uk/egenda/images/att100062.pdf Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 25. Ensure intelligent use of data and information to support fully evidence based decision making and future planning. Consistent The UK GDPR introduced a duty for a public authority to appoint a Data Protection Officer (DPO) to assist in terms of monitoring internal compliance, inform and advise on data protection obligations, provide advice regarding Data Protection Impact Assessments (DPIAs), and act as a contact point for data subjects and the Information Commissioner’s Office (ICO). Accountability is one of the data protection principles and, as such, the council is not just responsible for complying with the UK GDPR but also for demonstrating compliance in this respect. The report in March 2023 from the council’s DPO therefore fulfils the duties of the DPO and demonstrates the council’s compliance in terms of accountability in line with the data protection principles. Page 27 of 222
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Transparent The report is from the council’s DPO and provides an update in relation to data sharing, breaches, complaints, and training. It complements the Senior Information Risk Owner (SIRO) annual report. In context With a residual risk score of 20 (March 2022) prevalent in respect of the risk for Information Governance and Information Security on the council’s corporate risk register, this subject matter remains as a high priority improvement area for the council. Balanced The report advises that a review of corporate data protection arrangements is currently underway and will be submitted to the relevant committee once concluded. The report also advises that it was previously identified that there was a need to review corporate procedures for dealing with subject access requests to ensure that requests were being dealt with consistently across the council. Although this work was impacted by the pandemic, comprehensive Subject Access Request Guidance was completed in April 2021 and circulated to services in June 2021 for implementation. Report title Summary Senior Information Risk Owner (SIRO) annual report 2021/22 February 2023 This report provides an update relating to the responsibilities of the council’s Senior Information Risk Owner (SIRO). A SIRO is a professional role, which has responsibility for implementing and managing information risks within the organisation. https://mars.northlanarkshire.gov.uk/egenda/images/att99867.pdf Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 25. Ensure intelligent use of data and information to support fully evidence based decision making and future planning. Consistent The SIRO role is mandatory for public sector organisations and organisations which are contracted to deliver services under the NHS Standard Contract. The SIRO has oversight of information risks within the organisation and is required to inform and advise on how to mitigate the risk in accordance with the organisation’s risk appetite. The report in February 2023 from the council’s SIRO fulfils the organisation’s responsibilities in this respect. Transparent This report outlines activity and performance related to information governance. It provides assurances that information risks are being effectively managed; what is going well, and where improvements can be made. It complements the data protection annual report by the council’s Data Protection Officer (DPO). In context With a residual risk score of 20 (March 2022) prevalent in respect of the risk for Information Governance and Information Security on the council’s corporate risk register, this subject matter remains as a high priority improvement area for the council. Balanced The report comprises a live improvement plan highlighting activity planned to strengthen existing arrangements. It reports that these actions are progressing well and will be detailed within the SIRO annual report for 2022/23 for due consideration by the Audit and Scrutiny Panel (this is scheduled to be reported in the Panel in February 2024). The key priorities identified within the improvement plan include (a) refreshing and strengthening the approach to mitigating cyber security risks, (b) implementing the improvement actions identified in the Data Governance Board self-evaluation exercise, (c) raising the profile and prioritisation of Information Governance and Data Protection responsibilities, and (d) incremental implementation of the Data and Information Management Strategic Roadmap. Progress against the improvement plan set out in the SIRO annual report will be managed by the Data Governance Board, who will look to further develop policies, guidance, standards, processes, and approaches as appropriate to improve awareness, understanding and compliance with legislative requirements and good practice. Detailed discussions at the Audit and Scrutiny Panel meeting in February 2023 enabled scrutiny to take a deep dive into the council’s information Page 28 of 222
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governance and information security arrangements. Report title Summary North Lanarkshire Community Planning Partnership - annual report 2021/22 February 2023 The Community Empowerment (Scotland) Act 2015 introduced a range of new requirements on local authorities and community planning partners to empower and strengthen community involvement in the design, planning and delivery of local services. The statutory duty of community planning requires all public sector agencies to work collaboratively in agreeing both strategic and local priorities for their areas to improve outcomes and address poverty and inequalities. https://mars.northlanarkshire.gov.uk/egenda/images/att99827.pdf Aligned Priority: All Ambition statement: All Consistent All Community Planning Partnerships are required to annually review and report on their progress. Transparent The 2021/22 report highlights where community planning in North Lanarkshire is making a positive impact in strengthening partnership working and improving outcomes in line with the shared ambition set out in The Plan for North Lanarkshire. In context The annual report is set out within the context of four key areas which the North Lanarkshire Partnership’s community planning work falls into, i.e. community empowerment and engagement, strategic priorities, partnership initiatives and joint working, and strengthening governance accountability and reporting. Balanced The February 2023 report advises of a self-evaluation exercise - incorporating the views of all those with a role in the differing layers of community planning (i.e. the North Lanarkshire Partnership Strategic Leadership Board members, the officers making up the Local Partnership Teams supporting community planning, and the nine Community Boards). This exercise is currently underway with a view to ensuring continuous improvement in what community planning ultimately aims to achieve, i.e. “community planning is about how local public services work together with communities and third sector organisations to plan and deliver services that will improve long-term outcomes and tackle inequalities”. Report title Summary Public Sector Duties Climate Change annual report 2021/22 February 2023 The Climate Change (Duties of Public Bodies; Reporting Requirements) (Scotland) Order 2015 introduced a legal obligation for public bodies to report annually detailing their compliance with the duties specified in the Climate Change (Scotland) Act 2009 and its subsequent amendments. The report is produced annually for the most recently completed financial year with a submission date of 30th November each year. The annual submission requires the council to demonstrate that, as a public sector organisation, it is contributing to the nationally set climate change targets as well as adhering to its other responsibilities in terms of both adaptation and sustainability. https://mars.northlanarkshire.gov.uk/egenda/images/att99883.pdf Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 25. Ensure intelligent use of data and information to support fully evidence based decision making and future planning. Consistent A standard report template is provided to all local authorities which comprises a number of sections which require information on the organisation’s profile, governance, emissions and projects, adaptation, procurement and validation. Within the council, this information is collated annually and verified for submission by council services. Following the introduction of mandatory reporting in 2015, the council took the opportunity to reset its baseline and ensure that any progress reported Page 29 of 222
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thereafter was consistently based on the carbon boundary identified for 2015/16. Transparent A summary of the council’s annual footprint in terms of emissions (tCO2e) from the baseline year (2015/16) to the end of the latest reporting year (2021/22) is set out in the report in February 2023. This includes the annual emissions target set. A list of the council’s consumption and resulting emissions is contained within an appendix to the report. The report in February 2023 also highlights a sample of the activity and actions contained within the Climate Plan Action Plan which contribute to reducing North Lanarkshire’s emissions as well as encouraging more sustainable practices within the area. In context While the council exceeded its reduction targets in 2019 and 2021, for the current reporting year emissions have increased but not as much as anticipated. This may in part by attributed to the introduction of the Energy Policy in November 2021 where a refined heating regime was introduced. There has been a significant increase in staff mileage resulting in additional miles travelled. Another increase is food waste from commercial premises as they became fully functional at the end of the pandemic restrictions. These two examples highlight the influence policy and other factors (aside consumption) have on greenhouse gas emissions. Balanced The statutory reporting process is supported by the Sustainable Scotland Network who also analyse the annual submissions from the public sector bodies’ reports and report their overall findings publicly. This includes identifying strengths and weaknesses ( https://sustainablescotlandnetwork.org/reports ). Report title Summary Payment of location taxation and benefits update report March 2023 This report provides a regular update on the payment performance for council tax and non-domestic rates, the administration of a range of welfare benefits, and the council tax reduction scheme. https://mars.northlanarkshire.gov.uk/egenda/images/att100094.pdf Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. Consistent Produced quarterly, this report provides Elected Members with detailed in year performance figures which can be compared to the same period in previous years. Transparent The year to date performance set out in the report covers a wide range of service activities as well as the amount of funding paid out to help households in need in order to provide a safety net for local people on low incomes. In context The report includes the latest context within which the service is operating; this is of particular relevance given the ongoing administration of grants and support payments required for low income households. The report also advises of any new national grants when they are introduced, or will cease, and the qualifying conditions for receipt of such. Balanced In terms of grants, the report specifies the volume of applications assessed as well as the volume awarded and which were unsuccessful. Report title Summary Financial monitoring report - council summary (revenue) March 2023 This report presents the council’s revenue monitoring position for the General Fund Account, Housing Revenue Account, and Adult Health and Social Care. https://mars.northlanarkshire.gov.uk/egenda/images/att100050.pdf Aligned Priority: • Improve North Lanarkshire’s resource base. Page 30 of 222
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Ambition statement: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. Consistent The report at each financial period end consolidates the budget monitoring position of all council services into one council summary. Transparent The report highlights and explains major variances as per the council’s approved Financial Regulations. The Financial Regulations require services to remain within their approved budgeting provision, and to report all significant deviations - defined as the higher of £100,000 or 5% - within their budget monitoring reports. In context All activities undertaken by the council are subject to risk, and in acknowledging the council’s approved Risk Management Strategy, services manage these as part of their overall corporate and service planning processes. The March 2023 report states that the current economic climate - such as the rising forecast of pay and non-pay inflation, ongoing pandemic impact, the cost of living crisis, and other external factors - have the potential to impact upon the council’s ability to provide quality services within approved budget levels. Balanced Where significant deviations are identified, services must provide explanatory commentary, outline the action required to rectify such deviations and where relevant, must also highlight the impact this has on other budget headings. This information is captured by Finance and summarised in the overall council report. Report title Summary Financial monitoring report - council summary (capital) March 2023 This report presents the council’s capital monitoring position for the council’s capital programmes, including general services, housing revenue account, City Deal, etc. https://mars.northlanarkshire.gov.uk/egenda/images/att100051.pdf Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. Consistent The report at each financial period end consolidates the capital monitoring position of all council services into one council summary. Transparent The Strategic Capital Investment Programme 2021/22 to 2025/26 was originally approved at Policy and Strategy Committee in March 2021, with an updated programme profile for 2022/23 to 2025/26 approved in March 2022. It represents the total Community Investment Programme incorporating the General Services Capital Programme and HRA Capital Programmes. The programme was developed in conjunction with services and led by the Strategic Capital Delivery Group (SCDG) using the principles established by the council’s Capital Strategy. In context The March 2023 report states that the capital programme continues to face challenges in relation to the wider economic climate linked to availability of materials, contractors and inflationary pressures. Balanced The report provides a breakdown of the overall 2022/23 budget by service programme and associated approved budget movements. Further financial performance information regarding each of the service programmes is also included to provide a narrative in terms of the current position of the capital programme. Report title Summary Financial monitoring - savings March 2023 This report provides an update on the achievement of the three-year financial savings targets and progress in implementing one-off investment priorities. https://mars.northlanarkshire.gov.uk/egenda/images/att100054.pdf Page 31 of 222
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Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. Consistent This six monthly report ensures ongoing oversight by Elected Members in terms of the progress in implementing savings. Transparent A summary of the approved savings for 2022/23 by service is attached to the report in an appendix. In context The six monthly report presents the up to date savings position within the context of the overall budget position for the council. Balanced Each report sets out the context for savings in that services are required to monitor the delivery of their target savings to ensure they remain within their approved budgets and provide periodic progress updates within individual service revenue monitoring reports, identifying alternative solutions to any in- year shortfall envisaged. In addition, services are required to monitor whether the original approved saving has been implemented and if not, provide an explanation along with alternative action required to ensure the recurring financial saving will be achieved going forward. This information is captured by Finance and summarised in the overall council report. Key to RAG status green Performance is on target and/or within acceptable thresholds red Performance does not meet target and is outwith acceptable thresholds blue Performance surpasses the target and exceeds expectations Page 32 of 222
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref SL/DS/JB Date 18/05/23 In-depth scrutiny on the Provision of a Payment Solution for Tower Laundries (NLC-CPT-21-083) From Stephen Llewellyn, Chief Officer (Housing Management) E-mail Llewellyns@northlan.gov.uk Telephone 01698 274192 1. Background The purpose of this laundry payment solution is to provide a more efficient payment method for tenants who use the 67 laundries across the 24 towers included within this programme of work. This was based on feedback from both members and residents that the current solution was restrictive for tenants and took no account of a tenant’s ability to access the payment facilities available within Libraries and First Stop Shops. The Council are limited by available providers for such payment solutions as the Electrolux system is only compatible with the payment system provided by Electrolux due to the complexity of the software provided within the platform. After review of solutions available from Electrolux the current contract was procured and awarded. 2. Report 2.1 Contract mobilisation commenced in February 2022. Executive Summary The purpose of this report is to respond to the Audit and Scrutiny Panels request for additional information in respect of the Provision of a Payment Solution for Tower Laundries with Electrolux Professional Services. Recommendations It is recommended that the Audit and Scrutiny panel note the contents of this report. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (12) Ensure our residents are able to achieve, maintain, and recover their independence through appropriate supports at home and in their communities AGENDA ITEM 3 Page 33 of 222
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Site surveys in all locations were conducted in April/May 2022. This highlighted there was the requirement for electrical work to be carried out in some locations for which the appropriate work orders were issued. In addition to electrical work there was also a need for broadband connection to 9 of the towers, this work was passed to the Councils Infrastructure team to arrange for Virgin Media installation. Prior to installation of the hardware, residents were lettered, and information sessions were held by the Tenant Participation team. Twelve sessions covering morning, afternoon and evening were set up and the sessions were well attended. The new payment units were delivered in July and installed throughout August. 2.2 There were delays with installation of broadband due to Virgin Media’s ordering process and issues gaining access to the sites. The ordering process is lengthy and complex at Virgin Media who also deal with BT on the Councils behalf which added to the delays experienced. These delays were also partly due to a post covid backlog of work for the supplier. 2.3 Prior to the units being commissioned a contract was required to be signed with the finance solution provider Nayax. Whilst this contract was being reviewed concerns were raised by Legal and Democratic services regarding the third party clearing agreement (Nayax) and the onboarding process. This resulted in dialogue over a number of months with final agreement reached in March 2023, with final paperwork currently being concluded. The new card system will not be fully operational until all units have been commissioned and a plan established to remove the free vend. It is now projected that the implementation date will be mid August 2023. 2.4 An operational decision following member and tenant enquiries during the Covid pandemic and lockdown resulted in the laundry machines being switched to free vend. This decision required to be made as residents were advised not to travel, libraries were closed and First Stop Shops were only opened for essential business. 2.5 During the transition to the new solution there has been no additional contract costs and loss of use of facilities to the users. There has however been a loss in income received per annum amounting to £0.100m. 2.6 In terms of loss of income, the Council has experienced reducing income generation from laundries even prior to the Covid pandemic. From recovering nearly £0.120m in 2015/16 the recovery reduced to £0.095m in 2019/20. During 2020/21, only £0.017m was recovered given the Covid restrictions. For 21/22 and 22/23 no income was recovered. There is no mechanism to separately identify the cost of electricity used in the facilities. We can however separately identify the ongoing maintenance costs. The reference to a freeze in charges in budget monitoring reports is reflective of the continuation of free vend and the decision taken beyond covid restrictions whilst the business case and process for the new payment facility were being undertaken. It is accepted that the use of the word ‘freeze’ could cause confusion where ‘temporary removal of charges’ would have been more appropriate. Page 34 of 222
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The under-recovery amount is the difference between the budget for laundry income and the actual income received. See table below. 3. Measures of success 3.1 The solution will provide a more efficient convenient payment method using modern technology for tenants living within the multi storey towers within North Lanarkshire to charge their laundry fobs. 4. Supporting documentation 4.1 No appendices Stephen Llewellyn Chief Officer (Housing Management) 5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Income Recovered (£) Budget (£) Difference (£) 2015/16 119,551 126,000 6,449 2016/17 119,546 126,000 6,454 2017/18 112,233 115,000 2,767 2018/19 102,858 105,000 2,142 2019/20 94,528 105,000 10,472 2020/21 17,071 105,000 87,929 2021/22 0 105,000 105,000 2022/23 0 105,000 105,000 Page 35 of 222
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Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Costs will be met within the current HRA capital and revenue budgets. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☒ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Broadband and connectivity. Page 36 of 222
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Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. Page 37 of 222
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref Date 18/05/23 In-Depth Review of Supported Businesses From James McKinstry, Chief Officer (Assets and Procurement) Pamela Humphries, Chief Officer (Place) Janie O’Neill, Chief Officer (Education, South) E-mail mckinstryj@northlan.gov.uk humphriesp@northlan.gov.uk oneillja@northlan.gov.uk Telephone 07939 281102 07939 280710 1. Background 1.1 Panel Members will recall the previous Scrutiny Work Programme report of 8 September 2022 detailing that in-depth scrutiny reviews identified by Panel Members were to be undertaken on specific areas of activity or issues that were identified. 1.2 Approval of the annual composite Scrutiny Programme was granted at the meeting of 16 February 2023, and this contained the requirement to undertake an in-depth scrutiny review of Supported Businesses. 1.3 This followed a request submitted by an Audit and Scrutiny Panel Member in February 2023 requesting that an in-depth scrutiny review was undertaken of Supported Businesses. Executive Summary This report notifies the Audit and Scrutiny Panel of the in-depth scrutiny review process that has been carried out to address matters and questions raised regarding the council’s governance, support, business functions and operational processes used, to facilitate the involvement of Supported Businesses in its procurement and enterprise development activity. Recommendations It is recommended that the Audit and Scrutiny Panel: • Consider the information presented in relation to the in-depth scrutiny requested and note the position. The Plan for North Lanarkshire Priority Improve economic opportunities and outcomes Ambition statement (5) Grow and improve the sustainability and diversity of North Lanarkshire's economy AGENDA ITEM 4 Page 39 of 222
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1.4 The source document used to initiate the review was the Council’s Annual Procurement Report 2021-22 which was approved by Finance and Resources Committee on 14 September 2022. https://mars.northlanarkshire.gov.uk/egenda/images/att98654.pdf 1.5 In the reporting year 2021-22 the council spent £1.4 million pounds with Supported Businesses. This included internal procurement expenditure with North Lanarkshire Industries and 7 low value contract awards made to other Supported Businesses. 1.6 Procurement legislation requires the council to include a summary within its Annual Procurement Report of any steps taken to facilitate the involvement of Supported Businesses in Regulated Procurements during the reporting year. 2. Report 2.1 This report refers to both Supported Businesses and Social Enterprises. For clarity a definition of each is set out in paragraphs 2.2 and 2.3 as while terms can be interchangeable, there are clear distinctions. 2.2 Supported Businesses are social enterprises whose main aim is to integrate disabled or disadvantaged people socially and professionally. Their workforce must be at least 30% disabled or disadvantaged, as specified in EU Directive 2014/24/EU. 2.2 Social Enterprises are businesses with a social or environmental purpose and whose profits are re-invested into fulfilling their mission. They empower communities, tackle social problems, and create jobs - particularly for people who are at a disadvantage in the standard jobs market. 2.4 In relation to the in-depth scrutiny review request of Supported Businesses, Chief Officers were asked to provide a response to each of the following 9 individual questions: 1 How many supported businesses does the council have/support? 2 What processes does the council have in place for assisting Supported Businesses/Social Enterprises? 3 Who decides on funding and how are any funding awards monitored? 4 What is the council budget in 2023-24 for Supported Businesses? 5 What is the process in place to identify Supported Businesses eligible for contract awards in the first place? 6 What checks are in place to verify such businesses are in operation and are a viable entity? 7 How does the council monitor if the business that was awarded the contract, actually spends the money on what’s been stipulated in the contract? 8 What community benefits do these contracts generate for local communities? 9 How does the council monitor/measure it’s return on the £1.4 million investment and ensure value for money. 2.5 Appendix 1 of this report provides the Audit and Scrutiny Panel Members with a full detailed response for each question. 3. Measures of success Page 40 of 222
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3.1 Where possible and in line with Procurement Legislation and internal procurement procedures, Supported Businesses and Social Enterprises are provided with the opportunity to bid for contracts that support the delivery of council and service priorities. 3.2 Other measures of success include the following: • An increase in the appointment of Supported Businesses and Social Enterprises who have suitable experience and capability to deliver the required supplies, services or works. • Continued delivery on the vision of the North Lanarkshire Social Enterprise Framework and the implementation of the Action Plan 2021-26 against the main themes to Stimulate the Sector, Develop Stronger Organisations and to Realise Market Opportunities. • Continued work with external business support partners to offer training and development and other complimentary support to facilitate the growth and development of the social enterprise sector in North Lanarkshire. • Continued promotion of the use of North Lanarkshire Industries as a route to market for the goods and services identified in their portfolio. • Best Value is both demonstrable and achieved. 4. Supporting documentation 4.1 A full response to the questions raised can be found in Appendix 1 of the report. James McKinstry Chief Officer (Assets and Procurement) Pamela Humphries Chief Officer (Place) Janie O’Neill Chief Officer, (Education - South) Page 41 of 222
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☒ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Page 42 of 222
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Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. Page 43 of 222
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Appendix 1 – Response to Questions 1. How many Supported Businesses does the council have/support? The council owned Supported Business is North Lanarkshire Industries (NLI). Council procuring services are required to assess whether their goods and services can be procured internally from NLI against the identified portfolio of goods and services that they provide, before making their decision to procure externally. The council’s e-procurement solution Pecos is used to place purchase orders with NLI for goods and services. Contract awards to other supported businesses can vary from year to year depending on the demand for goods and services and the number of successful bids made by Supported Businesses in response to the council’s contracting opportunities. In the reporting period under scrutiny, outwith the internal business allocated to NLI, the council made a total of 7 individual contract awards to the 3 suppliers highlighted. Procurement Type Supplier Contract Title Community Benefits Contract Strategy Chief Officer Regulated: Above £50k for Services Angela Harvey Salon Training and Education Vocational & Skills Based Interventions (Hairdressing & Beauty Care) £277,777.00 Yes Education Non- Regulated Supplies Scotland’s Bravest Manufacturing Company Signage - Hartwood Road, Shotts £7,042.00 Not Required Community Operations Non- Regulated Works Aqua Specialist Environmental Services Headstone Foundation Repair - Coltswood Cemetery £24,051.00 Not Required Assets & Procurement Non- Regulated Works Aqua Specialist Environmental Services Playground Upgrade - St Joseph’s PS £24,619.00 Not Required Assets & Procurement Non- Regulated Works Aqua Specialist Environmental Services Headstone Base Repairs - Coltswood Cemetery £48,838.00 Not Required Assets & Procurement Non- Regulated Works Aqua Specialist Environmental Services Nursery Footpath - Christ the King PS £24,035.00 Not Required Assets & Procurement Non- Regulated Works Aqua Specialist Environmental Services MUGA Footpath - St Maurice’s HS £81,290.00 Not Required Assets & Procurement Total £487,562.00 £487,562.00 Page 44 of 222
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2. What processes does the council have in place for assisting Supported Businesses / Social Enterprises? Procurement leads are required to complete a contract strategy document for goods and services above £50,000 and for works above £500,000. The document is signed off by Chief Officer, Corporate Procurement and Service Procurement Leads prior to the commencement of a contract award process. The document contains a section with a declaration to establish whether the requirements of a particular contract can be provided by NLI and if so, council services are required to commit to engaging in dialogue with them to procure the goods and services. If it is established that NLI cannot provide the requirements of the contract, the reasons must be documented. In addition, this section also contains a declaration to establish whether the contract can be considered as a ‘Reserved Contract,’ i.e., exclusively reserved for other Supported Business only to be invited to bid for the contract opportunity. If it is established that the requirements of the contract are not suitable to be exclusively reserved for other Supported Businesses, the reasons must be documented. The council co-produced a North Lanarkshire Social Enterprise Framework and Action Plan which covers the period 2021 to 2026. This document can be viewed at: Social Enterprise Framework.pdf (northlanarkshire.gov.uk) A Steering Group is in place to oversee the implementation of the Framework and Action Plan. The Framework’s vision is for a competitive and dynamic social enterprise sector in North Lanarkshire which supports inclusive and green growth, delivering innovative solutions and proactive responses to local needs and to maximise local public and private procurement opportunities. The three key themes of the Framework are to Stimulate the Sector, Develop Stronger Organisations and to Realise Market Opportunities. A range of business support is in place to support the sector. An officer is also in place in the Enterprise Team who specialises in sectoral support for social enterprises. The main support available locally and nationally includes: Lanarkshire Business Gateway Services – Social Enterprise and Supported Businesses can receive free support to set-up, grow and sustain their businesses. This is through a range of 1 to 1 advisory services, workshops, events and access to the council’s Expert Help Framework (subject to eligibility) which can provide a range of specialist advisory support in key areas including strategy, HR, marketing, digital and procurement. Supplier Development Programme – This Programme provides free support to organisations to assist them to become more able to tender for public procurement. A range of events and training are delivered including national and local meet the buyer events. More information can be viewed at: www.sdpscotland.co.uk Business Grant Funding – The council’s business grant funding schemes are available to social enterprises and supported businesses subject to eligibility criteria. North Lanarkshire Social Enterprise Network – The Network supports new, established or aspiring social enterprise in North Lanarkshire to grow and develop. Just Enterprise –is a national programme designed to help sustain, develop and grow social enterprises and enterprising charities in Scotland providing one to one specialist support, group workshops and programmes, webinars and online learning. Just Enterprise - National Support, Delivered Locally Page 45 of 222
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First Port - supports individuals all across Scotland to start, develop and grow their ideas into businesses with social impact at their core. They can provide funding, advice and support - About – Firstport VANL – Provides support to the sector and in particular around governance and through the promotion and support for volunteering and the development of the voluntary and community sector. Social Enterprise Scotland - Social Enterprise Scotland – is an independent membership- led organisation which is the representative body for social enterprises in Scotland. Social Enterprise Academy – Social Enterprise Academy International Support through transformational learning and development of individuals, teams, organisations and communities to build sustainable enterprises that achieve their social impact. They also operate a schools programme which North Lanarkshire participates in. Through the UK Shared Prosperity Fund, additional support is being developed to put in place to additional and complementary support to facilitate the growth and development of the social enterprise sector in North Lanarkshire aligned to the Framework and action plan up to 31 March 2025. 3. Who decides on funding and how are any funding awards monitored? In relation to business grant funding, applications are reviewed against the criteria for the scheme and the evidence of the need for funding. An officer reviews the application and makes a recommendation to a manager within the Council’s Enterprise Team for final approval. Applicants must submit evidence of how the grant funding has been spent. Funding is retrospective based on the successful completion of the activity funded. 4. What is the council budget in 2023/24 for Supported Businesses? The council do not have a budget that is specifically reserved for supported business in relation to contract award procedures but as per the response to Question 2, the council and External Partner Agencies provide a wide range of local and national business support services to support the sector. 5. What is the process in place to identify Supported Businesses eligible for contract awards in the first place? As per the process documented in response to Question 2, if it has been identified in a contract strategy document that a contract opportunity can be reserved specifically for a Supported Business, the Council has access, through Scottish Procurement, to a national collaborative framework designed for the Scottish Public Sector and third sector bodies, with a clear path for the procurement of goods and services from Supported Businesses and in doing so, support the integration of disabled and disadvantage citizens into the mainstream workforce. The commodity groupings within this Framework are Furniture and Associated Products; Document Management Services; Personal Protective Equipment and Uniforms and Signage. There are a total of 7 contracted Supported Businesses across all commodity ranges on this Framework. Under Procurement Legislation, if there is not a suitable Framework that the Council can use to establish a call-off contract, a contract opportunity for supplies and services above £50,000 Page 46 of 222
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and for Works above £500,000 must be openly advertised through the Public Contracts Scotland Advertising Portal. In terms of transparency, equal opportunity and fair treatment for all, these contract opportunities are available to all Suppliers including Supported Business who have registered on the portal. When contract award procedures have been completed, the Council is also required under legislation to publish Contract Award notices to inform interested parties of the contract award details including value, duration and the successful supplier (s). This can potentially lead to supply chain opportunities for Supported Businesses and other third sector organisations. The North Lanarkshire Industries Business Plan for 2015-2021 was approved at the Housing and Social Work Services Committee in April 2015. This demonstrates the Council’s continued commitment to support NL Industries and to secure a sustainable and viable future for the business in the key workstream areas of Soft Furnishing Activity (Re-upholstery/Re-cycling), Beds, Sofa Production, Removals/Storage, Secure Document Storage and Fire Maintenance and Equipment Maintenance. 6. What checks are in place to verify such businesses are in operation and are a viability entity? The source data to support the information provided in the council’s Annual Procurement Report is extracted from the National Public Sector Advertising Portal - Public Contracts Scotland. This is a 3rd party software solution managed by Scottish Government. The registration process requires each supplier to identify whether they are a third sector supplier and thereafter to indicate if they are a: • Supported Business or Supported Employment Programme whose main aim is the social and professional integration of disabled or disadvantaged persons, where at least 30% of the employees are disabled or disadvantaged workers. • Social firm (where their primary purpose is to support the employment of people at a disadvantage in the workplace, at least 25% of the workforce is disadvantaged, and which generates over 50% of its income through sales of goods and/or services). • Charity (described by the Office of the Scottish Charities Regulator as an organisation which meets the charity test, meaning it must have only charitable purposes as defined in charity law and must provide public benefit). • Other type of third sector body. If they indicate that they are a Charity, they must provide their Charity Number and CIC Incorporation number. The council then has access to standard reports in the portal to analyse the number of contract awards made in a particular reporting period, to organisations who have declared that they are operating in the Third Sector and also for contract awards that were reserved for sheltered workshops and economic operators, whose main aim is the social and professional integration of disabled or disadvantages persons. 7. How does the council monitor if the business that was awarded the contract, actually spends the money on what’s been stipulated in the contract? Page 47 of 222
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Procurement leads are required to complete a contract strategy document for goods and services above £50,000 and for works above £500,000. The document is authorised by key stakeholders prior to the commencement of a contract award procedure. The document contains a section on contract management to establish the ongoing contract and supplier management arrangements throughout the duration of each specific contract. It covers the following areas: • Nominated contract owner; • Level of CSM to be applied; • CSM Performance Scorecard Frequency; • Minimum CSM scored to be maintained throughout the contract; • Detailed KPI’s and areas of assessment • Mitigating factors/actions to be incorporated into the contract in the event of continued failure to maintain minimum CSM scores; • Management Information reports required to be provided throughout the contract term. 8. What community benefits do these contracts generate for local communities? The council’s General Contract Standing Orders and the ‘Reform Act,’ legislation set out the requirement for Community Benefits related to regulated contracting activity, which is contract awards in excess of £50,000 for supplies and services and £2,000,000 for works. In addition to complying with the community benefit requirement the appropriate Chief Officer must, in carrying our all-relevant procurement exercises where the estimated value is in excess of £500,000 comply with the council’s policy of promoting community benefits. The contract strategy document contains a section to identify sustainable benefits for each specific contract. Procurement leads are required to identify if community benefits are achievable within the contract and to identify the specific community benefits expected to be delivered. From the contract analysis table provided in response to Question 1, there were 6 non- regulated contract awards made that were not required under legislation or internal policy to be considered for the inclusion of community benefits. The only regulated contract award made to Angela Harvey Salon Training and Education was for vocational and skill-based interventions (2021-25) for young people across all North Lanarkshire school establishments. The primary aim of this framework was to enhance to employability skills and post school pathways to better equip our young people for the world of work. A significant focus of the framework is to ensure the availability of adequate specialist provision for our schools and programmes supporting pupils with complex and additional needs. The nature of this framework already delivers benefit to our communities so there were no other specific additional community benefits identified on the contract strategy for this procurement. North Lanarkshire Industries (NLI) is a supported business and a discrete part of Employability Services which is within Education and Families and all staff are North Lanarkshire Council employees. NLI has several NLC and external contracts to fulfil on an annual basis alongside income targets. For other Council services they deliver on a range of contracts, and these include: - manufacturing and upholstering furniture (beds, sofas and seating areas) Page 48 of 222
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- soft furnishings (bedding and curtains) - furniture storage service for displaced tenants - document storage service - Council fire equipment maintenance contract Each of these contracts is negotiated and delivered within the terms of a contract agreed with each customer. In terms of the benefits secured by our communities through NLI delivering services on behalf of the Council these are at the heart of the supported business. NLI has 31 staff in total of whom 25 (81%) have a range of significant disabilities. While receiving the rewards and benefits due to all NLC employees this group of staff also get support from the management team at NLI on a range of issues. These include training and support within the workplace in all employment skills such as team working, communication, health and safety at work and specific vocational skills related to their role. In addition, staff are supported by the management team on a range of subjects not directly related to employment, but which are either a concern for individuals or an issue requires additional support because of their disability. These are wide and varied subjects but include signposting employees to support with housing, money management, benefits and health challenges and, at times, acting as their advocate in such matters. Therefore, the social return on this investment by various NLC departments in contracting services with NLI is that 25 people with significant disabilities are employed in a real working environment with all the rewards that having a job brings. These are not only the financial rewards of employment; the psychological benefits of work also promote positive physical and mental health and research tells us that those in work see their GP less often than people who are unemployed. There is also a contribution to every community of having residents in work and the financial security combined with a sense of pride and purpose, that this offers employees and their families. 9. How does the council monitor / measure its return on the £1.4m investment and ensure value for money? The council monitors and measures its return on investment through standardised contract and supplier management processes and procedures. The vocational education team along with the ASN strategy group are responsible for managing individual contract awards from the overarching flexible framework. The control mechanisms of the direct award ensure which provider best suits the needs of the pupil and compliance with rank order and spend. Call-off decisions are based around the school leader’s assessment of the learner group/child’s needs and therefore the suitability of the course for the child, the availability and the affordability. Supplier performance and feedback is shared with all schools to determine future decisions. Through active contract and supplier management the council will also be able to determine whether the framework is still fit for purpose. The contract awards made to Aqua Specialist Environmental Services and Scotland’s Bravest Manufacturing Company were low value, non-regulated, one-off contract awards for supplies, services and works. Page 49 of 222
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These contracts would have been managed by the respective Contract Owners at a low level to ensure a quality service was provided by the contracted suppliers in accordance with the specification of requirements, delivered by the agreed timelines and within budget. All services contracted with NLI by other Council services are subject to a Service Level Agreement (SLA) which details the service being required and its costs, along with any other conditions applied by the service to the contract. There are monthly contract review meetings with each service to review performance, budget and issues such as health & safety against those agreed in the SLA. NLI is also commercially competitive with mainstream businesses and secures external contracts with a range of customers including NHS and other local authorities. Page 50 of 222
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref KA/ASP/May23 Date 18/05/23 Audit and risk-related items: Action log From: Ken Adamson, Chief Officer (Audit and Risk) Email: adamsonk@northlan.gov.uk Telephone: 07939 280602 Executive Summary The purpose of this report is to allow elected members to track implementation of outstanding requests and recommendations made by the Panel in respect of audit and risk-related items. The attached log (at Appendix 1) records those audit and risk-related requests and recommendations made by the Panel and when these were addressed and/or are expected to be addressed. Recommendations The Panel is invited to note the report. The Plan for North Lanarkshire: Priority: All priorities Ambition statement All ambition statements Ken Adamson, Chief Officer (Audit and Risk) AGENDA ITEM 5 Page 51 of 222
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Appendix 1 Audit and risk related items: Outstanding action log. Meeting Requests or agreed action Status February 2023 Request a further report be brought back by management to a future meeting outlining how the Council plans to strengthen pre-employment checks or otherwise address the issue highlighted in the Investigation: Primary School A Internal Audit report regarding the Council re-employing someone who has previously left during a live fraud or disciplinary investigation. Now complete - A report on these matters is included in the papers submitted to the May meeting of the Panel. February 2023 Request a further report be brought back by management to a future meeting outlining progress of agreed actions in respect of issues raised in the Internal Audit report on Supply Teachers Now complete - A report on these matters is included in the papers submitted to the May meeting of the Panel. February 2023 Request a further report be brought back by management to a future meeting outlining how the organisation identifies, ensures, and gains assurance that staff are undertaking all relevant mandatory training. Now complete - A report on these matters is included in the papers submitted to the May meeting of the Panel. November 2022 A further report be brought back by management to a future meeting on progress made implementing agreed actions in relation to audit recommendations in the Internal Audit report on Sundry Debtors/Debt management. Outstanding - Given the timescale for completion of the agreed action is April 2023, it was previously reported that a report providing an update would be submitted to the Panel in Cycle 2 (meeting on 18/5/23). Although relevant actions are largely complete, there has been some minor slippage in concluding this work and which has prevented a report being available for this meeting. A report will now be prepared and submitted to the Panel in Cycle 3 (meeting on 8/9/23). November 2022 A further report be brought back by management to a future meeting on progress implementing agreed actions in relation to audit recommendations in the Internal Audit report on Equalities. Outstanding - Given the wide range of timescales for completion of the agreed actions, the Chief Officer (Audit and Risk) has agreed with the Service that a report will be submitted to the Panel in Cycle 3 (meeting on 8/9/23). This is based, amongst other factors, on the planned dates for the establishment of the Delivery Board, the publication of the Mainstreaming Report and the planned review of the EQIA process. September 2022 Internal Audit to provide specific assurance that management actions proposed in response to Business Continuity Planning are progressed in line with agreed timescales. Partially complete - timescales for agreed actions are not yet due and will be reported on, as they fall due, in line with Internal Audit’s arrangements for reporting on follow-up. September 2022 Updates on the management of key corporate risks to be provided to the Panel in accordance with agreed timetable included at Appendix 3 of Risk Management update report. Partially complete – two of the three planned reports (Supply chain and Governance, leadership and decision-making) were included in the papers for the November 2022 meeting. Work on the third planned report (Resources aligned with future target operating model) is underway but not yet complete and will be reported later. Page 52 of 222
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Appendix 1 Audit and risk related items: Action log (continued) Meeting Requests or agreed action Status June 2022 Internal Audit to provide an update on whether management actions proposed in response to Internal Audit investigation into overtime issues within Waste and Fleet have been implemented and adequately addressed the weaknesses/identified areas for improvement. Outstanding – Work on this has now been completed and a draft report on these matters issued. The report findings and recommendations are currently being discussed with management. It is now expected that this report will be finalised shortly and available for inclusion in the Internal Audit Progress Report submitted to the August meeting of the Panel Standing item Implementation by management of actions agreed in response to External Audit's recommendations (Annual Report) be monitored through reports from Internal Audit. Complete – This is addressed through the Follow- up of Internal and External Audit recommendations report included as a separate agenda item for this meeting. Internal Audit provide a report to future meetings of the Panel on progress made in implementing agreed management actions in relation to all Internal Audit recommendations categorised as “red” or “amber”. Complete – This is addressed through the Follow- up of Internal and External Audit recommendations report included as a separate agenda item for this meeting. Page 53 of 222
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No ☐approval ☒noting Ref KA/ASP/May23 Date 18/05/23 Audit Scotland – Annual Audit Plan 2022-23 From: Ken Adamson, Chief Officer (Audit and Risk) E-mail: adamsonk@northlan.gov.uk Telephone 07939 280602 Executive Summary The purpose of this report is to provide members with sight of the Annual Audit Plan 2022-23 received from Audit Scotland, the Council’s appointed external auditors. As outlined by Audit Scotland at the February meeting of the Panel, Covid-19 impacted on the completion of the 2021/22 audits with ongoing extensions to statutory deadlines. This, along with the changeover in the appointed auditor, impacted the timing of their planning work on the 2022/23 audits and an interim planning document only was circulated at the previous meeting of the Panel. The formal Annual Audit Plan has now been received and is at Appendix 1. Appendix 1 provides an overview of key issues arising from the audit planning process including a summary of the proposed audit approach, how wider audit scope work will be carried out and a timetable for key audit outputs. The external auditors will speak to the Panel about their plan at the meeting and highlight to members any issues arising that they wish to bring to the Panel’s attention. Recommendations The Panel is requested to invite Audit Scotland to comment on their 2022-23Annual Audit Plan. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements AGENDA ITEM 6 Page 55 of 222
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1. Background 1.1 The Accounts Commission appointed Audit Scotland as the Council’s external auditor for the five-year period from 2022-23. 1.2 Audit Scotland’s Code of Audit Practice and International Standards on Auditing stipulate that areas to be examined and expected outputs to be produced by the external auditors require to be outlined each year in their annual planning document. 2. Report 2.1 As outlined by Audit Scotland at the February meeting, Covid-19 impacted on the completion of the 2021/22 audits with ongoing extensions to statutory deadlines. This, along with the changeover in the appointed auditor, has impacted on the timing of their planning work on the 2022/23 audits and an interim planning document only was circulated at that meeting. The formal Annual Audit Plan has now been completed and is at Appendix 1. 2.2 The Plan provides an overview of key issues arising from the audit planning process including a summary of the proposed audit approach, how wider audit scope work will be carried out and a timetable for key audit outputs. 2.3 Panel members should note that good professional practice requires the external auditor to communicate and discuss planned external audit activity with the senior management of a body and with those elected members charged with governance matters, but it is for the external auditor alone to determine the work considered necessary by him/her to fulfil their responsibilities. 3. Measures of success 3.1 The external auditors report annually to the Council and the Controller of Audit on the results of their work. 4. Supporting documentation Appendix 1 Audit Scotland Annual Audit Plan 2022-23 Ken Adamson, Chief Officer (Audit and Risk) Page 56 of 222
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact because of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ Page 57 of 222
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Prepared for North Lanarkshire Council March 2023 North Lanarkshire Council Annual Audit Plan 2022/23 Page 58 of 222
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North Lanarkshire Council Annual Audit Plan 2022/23 | 2 Contents Introduction 3 Financial statements audit planning 5 Wider Scope and Best Value 11 Reporting arrangements, timetable, and audit fee 15 Other matters 18 Appendix 1. Your audit team 20 Page 59 of 222
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Introduction | 3 Introduction Summary of planned audit work 1. This document summarises the work plan for our 2022/23 external audit of North Lanarkshire Council. The main elements of our work include: • evaluation of the key controls within the main accounting systems • an audit of the annual accounts, and provision of an Independent Auditor’s Report • an audit opinion on regularity and other statutory information published within the annual accounts including the Management Commentary, the Governance Statement and the Remuneration Report • consideration of arrangements in relation to wider scope areas: financial management; financial sustainability; vision, leadership and governance; and use of resources to improve outcomes • consideration of Best Value arrangements • providing assurance on the Housing Benefit Subsidy Claim, Non- Domestic Rates Return and the Whole of Government Accounts (WGA) return • review North Lanarkshire Council’s arrangements for preparing and publishing statutory performance information. Audit Appointment 2. We are pleased to be appointed as the external auditor of North Lanarkshire Council for the period 2022/23 to 2026/27 inclusive. You can find a brief biography of your audit team at Appendix 1. 3. In the first year of the audit appointment, we invest significant time gaining an understanding of your business and identifying and assessing the risks of material misstatement to the financial statements. While we use our initial assessment of risk to inform our planned audit approach, we keep our assessment of risks under review as the audit progresses. We will inform you of any significant changes in assessed risks and any resulting changes in our planned audit work. 4. The audit team will actively engage with you over the course of the audit to ensure our audit work continues to be focused on risk. Page 60 of 222
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Introduction | 4 Adding value 5. We aim to add value to North Lanarkshire Council through our external audit work by being constructive and forward looking, by attending meetings of the Audit and Scrutiny Panel and by recommending and encouraging good practice. In so doing, we will help the Council promote improved standards of governance, better management and decision making and more effective use of resources. Respective responsibilities of the auditor and Audited Body 6. The Code of Audit Practice 2021 sets out in detail the respective responsibilities of the auditor and North Lanarkshire Council. Key responsibilities are summarised below. Auditor responsibilities 7. Our responsibilities as independent auditors are established by the Local Government (Scotland) Act 1973 and the Code of Audit Practice (including supplementary guidance) and guided by the Financial Reporting Council’s Ethical Standard. 8. Auditors in the public sector give an independent opinion on the financial statements and other information within the annual accounts. We also review and report on the wider scope arrangements in place at North Lanarkshire Council. In doing this, we aim to support improvement and accountability. North Lanarkshire Council responsibilities 9. The Council is responsible for maintaining accounting records and preparing financial statements that give a true and fair view. 10. The Council has the primary responsibility for ensuring the proper financial stewardship of public funds, compliance with relevant legislation and establishing effective arrangements for governance, propriety and regularity that enable them to deliver their objectives. Page 61 of 222
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Financial statements audit planning | 5 Financial statements audit planning Introduction 11. The annual accounts are an essential part of demonstrating the Council’s stewardship of resources and its performance in the use of those resources. 12. We focus our work on the areas of highest risk. As part of our planning process, we prepare a risk assessment highlighting the audit risks relating to each of the main financial systems relevant to the production of the financial statements. Materiality 13. The concept of materiality is applied by auditors in planning and performing the audit, and in evaluating the effect of any uncorrected misstatements on the financial statements. We are required to plan our audit to obtain reasonable assurance that the financial statements are free from material misstatement. The assessment of what is material is a matter of professional judgement over both the amount and the nature of the misstatement. Materiality levels for the 2022/23 audit 14. We assess materiality at different levels as described in Exhibit 1. The materiality values for North Lanarkshire Council and its group are set out in Exhibit 1. Exhibit 1 2022/23 Materiality levels for North Lanarkshire Council and its group Materiality Council Group Planning materiality – This is the figure we calculate to assess the overall impact of audit adjustments on the financial statements. Materiality has been set based on our assessment of the needs of the users of the financial statements and the nature of North Lanarkshire Council’s operations. For the year ended 31 March 2023 we have set our materiality at 2% of gross expenditure adjusted for IJB contributions based on the audited financial statements for 2021/22. £24.5 million £26.4 million Performance materiality – This acts as a trigger point. If the aggregate of errors identified during the financial statements audit exceeds performance materiality, this could indicate that further audit procedures should be considered. Using our professional judgement, £14.7 million £15.8 million Page 62 of 222
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Financial statements audit planning | 6 we have assessed performance materiality at 60% of planning materiality. Reporting threshold (ie clearly trivial) – We are required to report to those charged with governance on all unadjusted misstatements more than the ‘reporting threshold' amount. Our reporting threshold is set at 5% overall materiality up to a maximum of £250,000 as prescribed in the Audit Scotland audit planning guidance. £250 thousand £250 thousand Source: Audit Scotland Significant risks of material misstatement to the financial statements 15. Our risk assessment draws on our cumulative knowledge of North Lanarkshire Council, its major transaction streams, key systems of internal control and risk management processes. It is informed by our discussions with management, meetings with internal audit, attendance at committees and a review of supporting information. 16. Audit risk assessment is an iterative and dynamic process. Our assessment of risks set out in this plan may change as more information and evidence becomes available during the progress of the audit. Where such changes occur, we will advise management and where relevant, report them to those charged with governance. 17. Based on our risk assessment process, we identified the following significant risks of material misstatement to the financial statements. These are risks which have the greatest impact on our planned audit procedures. Exhibit 2 summarises the nature of the risk, the sources of assurance from management arrangements and the further audit procedures we plan to perform to gain assurance over the risk. Exhibit 2 2022/23 Significant risks of material misstatement to the financial statements Significant risk of material misstatement Sources of assurance Planned audit response 1. Risk of material misstatement due to fraud caused by management override of controls As stated in International Standard on Auditing (UK) 240, management are in a unique position to Owing to the nature of this risk, assurances from management are not applicable in this instance • Assess the design and implementation of controls over journal entry processing. • Make inquiries of individuals involved in the financial reporting process about inappropriate or unusual activity relating to the processing of journal entries and other adjustments. Page 63 of 222
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Financial statements audit planning | 7 Significant risk of material misstatement Sources of assurance Planned audit response perpetrate fraud because of management’s ability to override controls that otherwise appear to be operating effectively. • Test journals at the year-end and post- closing entries where there may be increased incentive for fraud and management override. • Consider the need to test journal entries and other adjustments during the period. • Evaluate significant transactions outside the normal course of business. • Assess the adequacy of controls in place for identifying and disclosing related party relationship and transactions in the financial statements. 2. Estimation in the valuation of land and buildings The Council held land and buildings with a net book value of £2,860 million as at 31 March 2022. There is a significant degree of complexity and subjectivity in the valuation of land and buildings. Changes in assumptions can result in material changes to valuations. Valuations should reflect conditions at 31st March 2023 including those subject to valuation at the year end, earlier in the year and those not re- valued. This is particularly relevant given the significant inflationary pressures on build cost rates. There is a risk that the carrying value of land and buildings does not reflect the current value as at 31 March 2023. • Discussions with internal valuers, external valuers, and management • Valuations carried out every five years as part of rolling revaluation programme • Detailed working papers to support year end reconciliation of assets to valuations, asset reviews and impairments • Review the information provided to the external valuer to assess for completeness. • Evaluate the competence, capabilities, and objectivity of the internal and external professional valuers. • Obtain an understanding of the management’s involvement in the valuation process to assess if appropriate oversight has occurred. • Assessing the reasonableness of the assumptions used in the valuation applied. • Critically assess the approach North Lanarkshire Council has adopted to assess the risk that assets not subject to valuation at 31 March 2023 are materially misstated, consider the robustness of that approach and the appropriateness of any assumptions made. • Test the reconciliation between the financial ledger and the property asset register. • Critically assess the adequacy of North Lanarkshire Council’s disclosures regarding the assumptions in relation to the valuation of land and buildings. Source: Audit Scotland Page 64 of 222
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Financial statements audit planning | 8 18. As set out in International Standard on Auditing (UK) 240: The auditor’s responsibilities relating to fraud in an audit of financial statement, there is a presumed risk of fraud over the recognition of revenue. There is a risk that revenue may be misstated resulting in a material misstatement in the financial statements. 19. We have rebutted this risk as funding received from the Scottish Government is clearly communicated and can be readily agreed to third party confirmations. In addition, the Council’s other income streams comprise of a high volume of low valued transactions and we have concluded there is limited opportunity or incentive to manipulate the recognition of income in the financial statements. 20. In line with Practice Note 10: Audit of financial statements and regularity of public sector bodies in the United Kingdom, as most public-sector bodies are net spending bodies, the risk of material misstatement due to fraud related to expenditure recognition may in some cases be greater than the risk relating to revenue recognition. 21. We have rebutted this risk as the main expenditure streams of the Council can be readily forecast based on a predictable pattern of spend and mainly comprise a high volume of relatively low value items. We also consider there to be limited incentive and opportunity for the manipulation of expenditure recognition in the financial statements. 22. We have not, therefore, incorporated specific work into our audit plan in these areas over and above our standard audit procedures. Other areas of audit focus 23. As part of our assessment of audit risks, we have identified other areas where we consider there are also risks of material misstatement to the financial statements. Based on our assessment of the likelihood and magnitude of the risk, we do not consider these to represent significant risks. We will keep these areas under review as our audit progresses. 24. The areas of specific audit focus are: • The pension liability valuation due to the material value and significant assumptions used in the calculation of the liability. We will utilise the work of PwC as auditor expert in assessing the reasonableness of the methodology used and assumptions made by the Council’s actuary, Hymans Robertson LLP, in arriving at the IAS 19 pension valuation as at 31 March 2023. Group Consideration 25. As group auditors, we are required under International Standard on Auditing (ISA) (UK) 600: Audits of group financial statements (including the work of component auditors) to obtain sufficient appropriate audit evidence on which to base our audit opinion on the group financial statements. 26. North Lanarkshire Council has a group which comprises the following component entities: Page 65 of 222
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Financial statements audit planning | 9 North Lanarkshire Council Group Structure Significance and audit approach Subsidiaries Fusion Assets Ltd North Lanarkshire properties LLP Both subsidiaries have been assessed as not significant, and not material. Assurance will be through overall analytical procedures and agreement to Council’s records. Associates Strathclyde Concessionary Travel Joint Board Strathclyde Partnership for transport Lanarkshire Valuation Joint Board Routes to work Ltd All four associates have been assessed as not significant, and not material. Assurance will be through overall analytical procedures and agreement to Council’s records. Joint Ventures North Lanarkshire Integration Joint Board Amey Public Services LLP Mears Scotland LLP All three joint ventures have been assessed as not significant, and not material. Assurance will be through overall analytical procedures and agreement to Council’s records. Source: Audit Scotland 27. Our planned audit approach for the components is informed by our assessment of risk at the component bodies and our consideration of the size and nature of assets, liabilities and transaction streams. 28. The audits of the financial information of some of the components are performed by other auditors. These components have been assessed as being not significant through our audit planning process. No reliance will be placed on the work of these auditors. 29. We will obtain sufficient appropriate audit evidence in relation to the consolidation process and the financial information of the components on which to base our group audit opinion. Audit of the trusts registered as Scottish charities 30. The 2006 Regulations require charities to prepare annual accounts and require an accompanying auditor’s report where any legislation requires an audit. The Local Government (Scotland) Act 1973 specifies the audit requirements for any trust fund where some or all members of a council are the sole trustees. Therefore, a full and separate audit and independent auditor’s report is required for each registered charity where members of the Council are sole trustees, irrespective of the size of the charity. Page 66 of 222
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Financial statements audit planning | 10 31. Members of North Lanarkshire Council are sole trustees for the JC McNaught Poor Children’s Holiday Fund and the North Lanarkshire Council Educational Endowments trusts registered as Scottish charities, with total assets of £0.7 million. The preparation and audit of financial statements of registered charities is regulated by the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. Materiality levels for the 2022/23 audit of trusts registered as Scottish charities 32. Materiality levels for the various trusts are set out in Exhibit 3. Exhibit 3 2022/23 Materiality levels for charitable trusts Charitable trust Planning Materiality Performance Materiality Reporting Threshold JC McNaught Poor Children’s Holiday Fund £74 (Based on 1% of audited 2021/22 net asset value) £56 (Based on 75% of planning materiality) £4 North Lanarkshire Council Educational Endowments trusts £189 (Based on 1% gross expenditure) £142 (Based on 75% of planning materiality) £9 Source: Audit Scotland Page 67 of 222
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Wider Scope and Best Value | 11 Wider Scope and Best Value Introduction 33. The Code of Audit Practice sets out the four areas that frame the wider scope of public sector audit. The Code of Audit Practice requires auditors to consider the adequacy of the arrangements in place for the wider scope areas in audited bodies. 34. In summary, the four wider scope areas cover the following: • Financial management means having sound budgetary processes. We will consider the arrangements to secure sound financial management including the strength of the financial management culture, accountability and arrangements to prevent and detect fraud, error and other irregularities. • Financial sustainability – as auditors, we consider the appropriateness of the use of the going concern basis of accounting as part of the annual audit. We will also comment on financial sustainability in the longer term. We define this as medium term (two to five years) and longer term (longer than five years). • Vision, leadership and governance – we conclude on the arrangements in place to deliver the vision, strategy and priorities adopted by the Council. We also consider the effectiveness of the governance arrangements to support delivery. • Use of resources to improve outcomes – we will consider how the Council demonstrates economy, efficiency and effectiveness through the use of financial and other resources. Wider scope risks 35. We have identified wider scope audit risks in the areas set out in Exhibit 4. This exhibit sets out the risks, sources of assurance from management arrangements and the further audit procedures we plan to perform to gain assurances over the risks. Page 68 of 222
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Wider Scope and Best Value | 12 Exhibit 4 2022/23 wider scope risks Description of risk Sources of assurance Planned audit response 1. Financial sustainability North Lanarkshire Council continues to operate in an increasingly complex and challenging environment where they aim to provide the best possible service within the resources available. Although plans are in place to meet the 2023/24 shortfall, the Council, like many authorities face significant financial challenges over the medium term. Officers have identified a considerable gap to be addressed in the medium term with £65 million for the three years to 2025/26. The delivery of this level of savings is likely to require careful consideration of the services the Council delivers and how these are delivered. There is a risk that the Council does not have robust plans to identify and deliver the required savings, including assessment of the impact on services of decisions made. • Regular budget monitoring and reporting • Regular scrutiny of financial plans at governance committees • Review of the Council’s annual budget setting arrangements • Review and assessment of budget monitoring arrangements • Review of the Council’s medium to longer-term financial planning • On-going review of the Council’s financial position and delivery of planned savings Source: Audit Scotland 2. Our planned work on our wider scope responsibilities is risk based and proportionate and in addition to local risks we consider challenges which are impacting the public sector as a whole. In 2022/23 we will consider tackling climate change and responding to cyber security threats. Climate Change 3. Tackling climate change is one of the greatest global challenges. The Scottish Parliament has set a legally binding target of becoming net zero by 2045 and has interim targets including a 75% reduction in greenhouse gas emissions by 2030. The public sector in Scotland has a key role to play in ensuring these targets are met and in adapting to the impacts of climate change. Page 69 of 222
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Wider Scope and Best Value | 13 4. The Auditor General and Accounts Commission are developing a programme of work on climate change. In 2022/23, we will gather information on (audited body’s) arrangements for responding to climate change covering areas such as the development of climate change strategies and the monitoring and reporting of progress against targets for reducing emissions. Cyber Security 5. There continues to be a significant risk of cyber-attacks to public bodies, and it is important that they have appropriate cyber security arrangements in place. A number of recent incidents have demonstrated the significant impact that a cyber-attack can have on both the finances and operation of an organisation. In 2022/23, we will consider North Lanarkshire Council’s arrangements for managing and mitigating cyber security risks. Best Value 6. Under the 2021 Code of Audit Practice, the audit of Best Value in councils is fully integrated within our annual audit work. 7. Best Value at North Lanarkshire Council will be assessed comprehensively over the period of the audit appointment and will include an annual evaluation of North Lanarkshire Council’s approach to demonstrating improvement in its strategic priorities and public performance reporting. We will also follow up findings reported previously on Best Value to assess the pace and depth of improvement. This work will be integrated with the wider scope audit areas discussed above. 8. In addition to our annual work on Best Value we will conduct thematic reviews as directed by the Accounts Commission. In 2022/23 the thematic review across the sector will be on the effectiveness of council leadership in developing new local strategic priorities following the elections in May 2022. Our conclusions and judgements will be reported in a separate report to management and summarised in our Annual Audit Report. 9. At least once every five years, the Controller of Audit will report to the Accounts Commission on North Lanarkshire Council’s performance in meeting its Best Value duties. The first year of the programme will be form October 2023 to August and will cover the councils listed in Exhibit 5. Page 70 of 222
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Wider Scope and Best Value | 14 Exhibit 5 Controller of Audit reports Falkirk South Ayrshire Moray Dumfries and Galloway Clackmannanshire West Dunbartonshire Orkney Islands City of Dundee Source: Audit Scotland Page 71 of 222
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Reporting arrangements, timetable, and audit fee | 15 Reporting arrangements, timetable, and audit fee Reporting arrangements 10. Audit reporting is the visible output for the annual audit. All Annual Audit Plans and the outputs, as detailed in Exhibit 6, and any other outputs on matters of public interest will be published on our website: www.audit-scotland.gov.uk. 11. Matters arising from our audit will be reported on a timely basis and will include agreed action plans. Draft management reports will be issued to the relevant officers to confirm factual accuracy. 12. We will provide an independent auditor’s report to Audited Body, the Scottish Parliament and Accounts Commission setting out our opinions on the annual report and accounts. We will provide North Lanarkshire Council and the Accounts Commission with an annual report on the audit containing observations and recommendations on significant matters which have arisen during the audit. 13. Exhibit 6 outlines the target dates for our audit outputs, and we aim to issue the independent auditor’s report by the statutory deadline of 30 September 2023. Exhibit 6 2022/23 Audit outputs Audit Output Target date Audit and Scrutiny Panel Date Annual Audit Plan 31 March 2023 Agreed via correspondence Best Value Management Report 30 June 2023 31 August 2023 Independent Auditor's Report 30 September 2023 September 2023 Annual Audit Report 30 September 2023 September 2023 Source: Audit Scotland Page 72 of 222
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Reporting arrangements, timetable, and audit fee | 16 Timetable 14. To support an efficient audit, it is critical that the timetable for producing the annual report and accounts for audit is achieved. We have included a proposed timetable for the audit at Exhibit 7 that has been discussed with management. 15. Covid-19 has had a considerable impact on the conduct and timeliness of the audit. We recognise that it is in the best interests of public accountability to get the reporting of audited accounts back to pre-pandemic timelines. We are identifying ways to work more efficiently to expedite the 2022/23 audits whilst at the same time maintaining high standards of quality. 16. We intend to take a hybrid approach to the 2022/23 audit with a blend of onsite and remote working. We will continue to work closely with management to identify the most efficient approach as appropriate and will keep timeframes and logistics for the completion of the audit under review. Progress will be discussed with management and finance officers over the course of the audit. Exhibit 7 Proposed annual report and accounts timetable Key stage Provisional Date Consideration of the unaudited annual report and accounts by those charged with governance June 2023 Latest submission date for the receipt of the unaudited annual report and accounts with complete working papers package. 30 June 2023 Latest date for final clearance meeting with the Head of Financial Solutions September 2023 Issue of draft Letter of Representation and proposed Independent Auditor’s Report September 2023 Agreement of audited and unsigned annual report and accounts September 2023 Issue of Annual Audit Report to those charged with governance. September 2023 Signed Independent Auditor’s Report September 2023 Certified Non-Domestic Rates Return October 2023 Certified Housing Benefit subsidy claim October 2023 Latest date for WGA assurance To be confirmed Source: Audit Scotland Page 73 of 222
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Reporting arrangements, timetable, and audit fee | 17 Audit fee 17. In determining the audit fee, we have taken account of the risk exposure of the North Lanarkshire Council and the planned management assurances in place. The proposed audit fee for 2022/23 is £607,796 as set out in Exhibit 8. 18. Our fees have increased in 2022/23 and this is a reflection of the current audit market and the rising costs in delivering high quality audit work. There are increased regulatory expectations and risks placed on audit and its quality, as well as a widening in the scope of work audit must cover. Exhibit 8 Audit fees (including VAT) Fee component Fees (£) External Auditor Remuneration 356,320 Contribution to Audit Scotland costs 13,510 Contribution to Performance and Best Value 118,120 Sectoral Cap Adjustment 115,660 2022/23 Audit fee 603,610 Audit of Charitable Trusts 4,186 Total 2022/23 fee 607,796 Source: Audit Scotland 19. In setting the fee for 2022/23 we have assumed that North Lanarkshire Council has effective governance arrangements and will prepare comprehensive and accurate accounts for audit in line with the agreed timetable for the audit. The audit fee assumes there will be no major change in respect of the scope of the audit during the year and where our audit cannot proceed as planned, a supplementary fee may be levied. Page 74 of 222
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Other matters | 18 Other matters Internal audit 20. It is the responsibility of North Lanarkshire Council to establish adequate internal audit arrangements. We will review the internal audit plan and the results of internal audit’s work. 21. While we are not planning to place formal reliance on the work of internal audit in 2022/23, we will review internal audit reports and assess the impact of the findings on our financial statements and wider scope audit responsibilities. Independence and objectivity 22. Auditors appointed by the Auditor General for Scotland or Accounts Commission must comply with the Code of Audit Practice and relevant supporting guidance. When auditing the financial statements, auditors must also comply with professional standards issued by the Financial Reporting Council and those of the professional accountancy bodies. These standards impose stringent rules to ensure the independence and objectivity of auditors. 23. Audit Scotland has robust arrangements in place to ensure compliance with these standards including an annual ‘fit and proper’ declaration for all members of staff. The arrangements are overseen by the Executive Director of Innovation and Quality, who serves as Audit Scotland’s Ethics Partner. 24. The appointed auditor for North Lanarkshire Council is John Boyd, Audit Director. Auditing and ethical standards require the appointed auditor to communicate any relationships that may affect the independence and objectivity of audit staff. We are not aware of any such relationships pertaining to the audit of North Lanarkshire Council. Audit Quality 25. Quality is at the core of public audit in Scotland and is the foundation for building consistency and confidence across all audit work. High quality audits provide assurance, add value and can support public bodies to achieve their objectives. 26. Until 2021/22, the applicable audit quality standard was International Standard on Quality Control 1 (ISQC (UK) 1). This set out an audit practice’s responsibilities for its system of quality control for audits. 27. ISQC(UK) 1 has been replaced by two new audit quality standards: Internal Standards on Quality Management (ISQM (UK) 1) applicable from 15 December 2022 and (ISQM(UK) 2) effective for the 2023/24 audits. Work is underway at Audit Scotland to meet the requirements of these quality standards. Page 75 of 222
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Other matters | 19 28. Audit Scotland is committed to delivering high quality audits. The foundation of our quality framework is our Audit Guide, which incorporates the application of professional auditing, quality and ethical standards and the Code of Audit Practice (and supplementary guidance) issued by Audit Scotland and approved by the Auditor General for Scotland. To ensure that we achieve the required quality standards, Audit Scotland conducts peer reviews and internal quality reviews. Additionally, the Institute of Chartered Accountants of England and Wales (ICAEW) have been commissioned to carry out external quality reviews. 29. As part of our commitment to quality and continuous improvement, Audit Scotland will periodically seek your views on the quality of our service provision. We welcome feedback at any time, and this may be directed to the engagement lead. Page 76 of 222
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Appendix 1. Your audit team | 20 Appendix 1. Your audit team 30. The audit team involved in the audit of North Lanarkshire Council have significant experience in public sector audit. John Boyd Audit Director JBoyd@audit- scotland.gov.uk John has overall responsibility for the Audit Engagement. He has considerable audit experience across public sector audits including local government, IJB, pension, health and central government sectors. John is the Audit Scotland Audit Services Group Lead for local authority audit and is a member of the Local Authority (Scotland) Accounting Advisory Committee (LASAAC). Pauline Murray Senior Audit Manager PMurray@audit- scotland.gov.uk Pauline has over 14 years of public sector audit experience and has delivered external audit services to a range of bodies including local authorities, health boards and central government bodies. Fiona Owens Audit Manager FOwens@audit- scotland.gov.uk Fiona has 10 years of experience in planning and delivering audits and has delivered external audit services to a range of bodies including local authorities, health boards and central government bodies. Fiona will manage the team and work alongside the Senior Audit Manager and Audit Director to deliver the audit. Emma Carrigan Senior Auditor ECarrigan@audit- scotland.gov.uk Emma has considerable experience in planning and delivering audits across the public sector. Emma will work alongside the Audit Manager to deliver the audit. Lindsay Stother Best Value Auditor LStother@audit- scotland.gov.uk Lindsay has 14 years of experience working in local government across a number of different local authorities and over four years of public sector audit experience. She has worked on five local authority best value audits and one performance audit. She has also been involved in the most recent review of the Accounts Commission’s SPI Direction in 2021 Page 77 of 222
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Appendix 1. Your audit team | 21 31. The local audit team is supported by a specialist technical accounting team, all of whom have significant experience of public bodies and work with accounting regulatory bodies. 32. Where possible and appropriate, we use our data analytics team to enable us to capture whole populations of your financial data. This analysis allows us to identify specific exceptions and anomalies within populations to enhance the focus of audit testing and support efficiency. Page 78 of 222
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Appendix 1. Your audit team | 22 North Lanarkshire Council Annual Audit Plan 2022/23 Audit Scotland’s published material is available for download on the website in a number of formats. For information on our accessibility principles, please visit: www.audit-scotland.gov.uk/accessibility For the latest news follow us on social media or subscribe to our email alerts. Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN Phone: 0131 625 1500 Email: info@audit-scotland.gov.uk www.audit-scotland.gov.uk AS.4.0 Page 79 of 222
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No ☐approval ☒noting Ref KA/ASP/May23 Date 18/05/23 Internal Audit progress report From: Ken Adamson, Chief Officer (Audit and Risk) E-mail: adamsonk@northlan.gov.uk Telephone 07939 280602 Executive Summary The purpose of this report is to provide an overview of Internal Audit activity and to report the results of Internal Audit outputs finalised since the last update to the Panel in February 2023. This report highlights the most significant issues arising from these recently completed Internal Audit assignments as well as providing updates on other aspects of the work of Internal Audit. Appendix 1 provides a summary of the scope and key findings of each substantive planned audit report and relevant investigative outputs. Full copies of the relevant audit outputs highlighted in this report are also included in the meeting papers In line with best professional practice and the approved Internal Audit Charter and associated reporting protocol. One report issued in the period has been assessed as providing only limited assurance, while the other four reports provided more positive levels of assurance. The report providing only limited assurance was that in relation to Payments to staff: overtime and travel and subsistence where we have identified significant control weaknesses in relation to the prevention of duplicate claims being processed for payment and issues relating to inconsistencies between the Council’s authorised signatory database and authorisation levels within the Council’s payroll system. The 2022-23 Annual Plan was approved by the Audit and Scrutiny Panel in September 2022. The Internal Audit Charter, most recently approved by the Panel in September 2021, requires that the results of Internal Audit’s work be periodically reported to CMT and the Panel. This report fulfils that expectation. Recommendations The Panel is invited to: (a) note the findings, conclusions and recommendations of completed Internal Audit reports together with the associated management responses; (b) consider whether there are any issues raised by Internal Audit which the Panel consider are sufficiently significant to require a further report from management to be submitted to a future meeting of the Panel; (c) request that Internal Audit provide a report to future meetings of the Panel reporting progress made by management implementing agreed management actions in relation to all audit recommendations categorised as ‘High’ or ‘Medium’; and (d) otherwise note this report. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements AGENDA ITEM 7 Page 81 of 222
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1. Background 1.1 The 2022-23 Annual Plan was approved by the Audit and Scrutiny Panel in September 2022. The Internal Audit Charter, most recently approved by the Panel in September 2021, requires that the results of Internal Audit’s work be periodically reported to CMT and the Panel. This report fulfils that expectation. 2. Report Audit reviews completed in the period 2.1 Table 1 below provides an overview of completed Internal Audit reports since the last update to the Panel in February. Work is currently underway on other assignments included in the 2022-23 Plan and this work will be reported to the Panel as it is completed. Table 1: Completed Internal Audit outputs in the period Subject Internal Audit Opinion 1. Payments to staff: overtime and travel and subsistence Limited assurance (Amber-Red) 2. Contract management Reasonable assurance (Green-Amber) 3 City Deal Substantial assurance (Green) 4 Corporate governance: Principles C and D Reasonable assurance (Green-Amber) 5 Cost of living crisis: welfare and poverty-related payments Substantial assurance (Green) 6 Investigation: Primary School B (Note 1) Not applicable Note 1: In line with the Internal Audit Reporting Protocol, a summary of the key findings of this investigation is included in this report, but a copy of the full audit report is not included in the papers for this meeting. 2.2 Appendix 1 provides a summary of those reports forming part of the annual programme of planned assurance work and investigation reports as required by the Internal Audit Charter and associated reporting protocol. This report excludes audit outputs produced for the North Lanarkshire IJB which are reported directly to its senior management team and audit committee. 2.3 Appendix 2 contains detailed definitions of the categories used by Internal Audit when making recommendations, providing an audit opinion and on the extent of assurance which is being provided to management and Panel members on those systems or areas of Council operations examined by Internal Audit. 2.4 In addition to the above reports, work is currently underway on a range of topics including the use of contract awards with single tender responses, Social Work quality assurance arrangements, housing allocations and climate change. Once finalised, these reports will be submitted to a future meeting of the Panel. Commentary on completed planned ‘core’ Internal Audit work 2.5 The nature of Internal Audit exercises means that most audit reviews invariably find some scope for improvement, usually in the form of controls which are weak or only partially effective and, therefore, contain recommendations. Page 82 of 222
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2.6 One of the five substantive non-investigation reports being reported in the period is assessed as providing only limited assurance, while four of the reports provided more positive levels of assurance. All five reports contain a range of improvement actions and audit recommendations. 2.7 Our work on Payments to staff: overtime and travel and subsistence focused on the adequacy and effectiveness of selected key controls associated with the authorisation and payment of employees’ travel and subsistence and overtime claims. The audit sought to review whether payments were only being made where there was proper entitlement; that sums paid were properly calculated and that relevant authorisation procedures were in place and operating effectively. 2.8 The Council has well-established rules and guidance covering both entitlement to, and the processing of, overtime and travel and subsistence claims. Over the last few years People Resources has continued to roll out, across the Council, the use of the Employee Self Service Portal ‘MySelf’ within iTrent to allow employees to complete and submit electronically claim forms for overtime and expenses to Mangers who authorise these claims electronically within the iTrent system. 2.9 Based on the results of our work, we were satisfied that in general authorised travel and subsistence claims were in respect of eligible costs necessarily incurred undertaking Council business and that overtime claims were in respect of work undertaken, with claims correctly calculated. However, we have categorised the audit as offering ‘limited assurance’, as we have identified significant gaps or weaknesses in the control environment and instances of non-compliance with expected procedures which we consider require to be urgently addressed by management. 2.10 Most notably we have identified significant weaknesses in the system controls/processes designed to prevent duplicate overtime transactions being authorised and paid. The combination of inadequate and/or ineffective controls means that we consider that there is a significant risk that the controls as currently operating would neither prevent error and/or fraud occurring nor detect either after the event. As such, we have recommended that management needs to urgently improve the control environment to prevent duplicate claims being authorised and paid in the future and consider what actions are required where such duplicate claims have previously been made, authorised and paid. 2.11 In addition, the Council’s financial processes require transactions to be authorised by staff who have been given the delegated authority to do so. As with previous audits in this area, we have again identified instances of overtime and expense claims authorised by officers who are either not recorded on the Council’s authorised signatory database as an authorising officer or are authorising claims for values outwith their delegated limit. In all cases, the authorising officer formed part of the Services management structure, appeared to have appropriate knowledge to determine the validity of the claim and had user permissions within iTrent to authorise overtime and expense claims. As such, we consider that there is a need for the adequacy and effectiveness of the long-established arrangements/operation of the authorised signatory database to be reviewed against the current operating environment for processing payroll transactions. 2.12 Management has responded positively to the audit recommendations contained in the report and has committed to a range of actions which are intended to address the control weaknesses identified. 2.13 Our report on Contract management was designed to provide assurance on the adequacy and effectiveness of the Council’s arrangements for contract management activities. Page 83 of 222
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2.14 Based on the results of our audit work, we have categorised this audit as offering ‘reasonable assurance’. In general, we are satisfied that the Council’s contract and supplier management guidance is generally sound and broadly reflects good practice principles. Some minor areas for improvement were identified and these have been notified separately to service management for further consideration. 2.15 In respect of the actual contract management arrangements in place for our sample, for eight of the 12 individual contracts selected for testing, we were generally satisfied that contract and supplier management was being undertaken in accordance with the guiding principles within the contract and supplier management guidance, although we identified some areas where we consider that there is scope for improvement. For the remaining four contracts, however, there was little evidence of formal contract and supplier management activity having been carried out, with the contract owners seemingly unaware of their roles and responsibilities in this regard. 2.16 Issues arising for management consideration/action are detailed at Section 3 of the report and include that there is currently no formal mechanism that allows the Council to assess whether effective contract and supplier management is being undertaken across the organisation and there is a need to ensure that all officers undertaking contract and supplier management roles are aware of their responsibilities and have been provided with appropriate training. Satisfactory responses have been received from management in response to the audit findings and recommendations. 2.17 Our work on City Deal was designed to provide assurance on the adequacy and effectiveness of the Council's arrangements in respect of its participation in the Glasgow City Region (GCR) City Deal by assessing whether the Council is adhering to key elements of the GCR City Deal Assurance framework with a focus on the processes surrounding the preparation and submission of grant claims, processes in place around change control and conduct of procurement/tendering arrangements in the period. 2.18 We also extended our audit remit for this exercise to address aspects of an intended audit by the Glasgow City Council Internal Audit Team (in their role as Internal Auditors for the GCR Cabinet) on Project Procurement Strategies. This work involved reviewing the project procurement arrangements designed to help achieve competitive bids and value for money and seeking assurance that there are appropriate controls in place particularly surrounding supply chain and supplier continuity risk identification and management. 2.19 We were satisfied with management arrangements in place and no significant issues were identified. We have assessed the audit as providing ‘substantial assurance’. 2.20 Our work on Corporate governance: Principles C and D was designed to provide independent assurance on the adequacy and effectiveness of the Council’s arrangements for ensuring that it complies with Principles C and D of the CIPFA/SOLACE ‘Delivering Good Governance in Local Government Framework (2016)’ (Principle C relates to ‘Defining outcomes in terms of sustainable economic, social, and environmental benefits’, while Principle D relates to ‘Determining the interventions necessary to optimise the achievement of the intended outcomes’). 2.21 Based on the results of our work, together with our wider general knowledge gained from previous Internal Audit reviews undertaken on this topic and work on other associated areas, we consider that the Council’s corporate governance arrangements in relation to the areas examined are generally adequate and appear to have operated effectively. We have, therefore, assessed the audit as providing ‘reasonable assurance’. Page 84 of 222
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2.22 We were pleased to note that as part of the annual review of the Council’s Strategic Governance Framework, the Council had undertaken a full self-assessment of its Local Code of Governance against the Good Governance framework. We consider that this process, which was endorsed by the Corporate Management Team (June 2022) and approved by the Audit and Scrutiny Panel (September 2022), was generally robust. In addition, we noted that the corporate self-assessment indicated a high level of compliance with the corporate governance framework, which was broadly consistent with Internal Audit’s assessment of Principles C and D. 2.23 We have however, identified a small number of areas where we consider scope for improvement exists and/or where further action is required to fully address some of the recommendations made in previous audit reports in this area. These are identified in the action plan at Section 3 of the audit report and include the need for management to take further action to ensure that key documents are reviewed, updated as appropriate and implemented/communicated to relevant staff. Satisfactory responses have been received from management in response to the audit findings and recommendations 2.24 Work on Cost-of-living crisis: welfare and poverty-related payments was designed to provide independent assurance on the adequacy and effectiveness of controls associated with a number of cost-of-living crisis, welfare and poverty related payment schemes administered by the Council. The review focused on whether there are adequate controls in place to ensure that funding is properly targeted and that the Council has adequate and effective grant administration processes in place to ensure payments are properly controlled and made only to those who meet the relevant criteria for eligibility. 2.25 Significant funding has been allocated, both from the Scottish Government and from the Council’s own resources, to respond to both the increasing financial insecurity of people on lower incomes and the increasing rate of poverty arising from the economic impacts of both the pandemic and, more recently, the cost-of-living crisis. Funding has been allocated across several different areas and is targeted at a range of groups including those at greatest risk of fuel poverty; lower-income families with children and those most likely to be at risk of, or experiencing, acute financial distress. 2.26 Funding streams reviewed by Internal Audit as part of this exercise included fuel hardship payments, tenant hardship rent grants and various other payments open to families eligible to free school meals and/or school clothing grants because of their low incomes. 2.27 Based on the results of our work, we have categorised this audit as offering ‘substantial assurance’ as we consider that the grant administration processes are adequate and have operated substantially as intended with any control issue or weaknesses identified presenting only a low risk to the control environment. We were also pleased to note that funding is being targeted at those most in need and that the processes in place generally mean that payments are being adequately controlled and being made only to those who meet the relevant criteria for eligibility. Commentary on completed unplanned ‘non-core’ Internal Audit work 2.28 There is one fraud/irregularity investigation report arising from areas of unplanned or ‘non-core’ work undertaken by Internal Audit in the period that I require to bring to your attention in accordance with the Internal Audit reporting protocol. This relates to our investigation in respect of work undertaken in response to concerns raised by the Service about the operation and administration of the school fund at Primary and Nursery School B. 2.29 Based on the results of our work, we have established that the Council’s Educational Establishment Fund Procedures (school fund) are not being adhered to at the school. We also identified a lack of expected involvement and oversight of the operation of the school fund by the Head Teacher. Page 85 of 222
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2.30 Due to the absence of records retained with regards to cash income collected by school and office staff, we have been unable to determine whether there has been any misappropriation of school funds. We consider, however, that arrangements in place with regards to cash handling within the school are significantly deficient and have made several recommendations where we consider immediate actions are required to urgently improve the control environment. 2.31 I am pleased to be able to confirm that satisfactory responses have been received from management in response to the audit findings and recommendations. As Panel members may be aware, we have had to report on issues relating to the poor administration and cash handling arrangements in respect of school funds on a number of occasions in recent years. I am pleased therefore to report that as part of the management response, as well as actions designed to address the issues identified in this school, the Service has also committed to a more general review of the Establishment Fund Procedures and that once complete, revised procedures and training material will be clearly communicated to all Heads of Establishment re-iterating their role and responsibilities. 2.32 There are no other issues arising from core Internal Audit work which I consider sufficiently significant to highlight to the Panel. Future follow-up reports will provide the Panel with information on the implementation, or otherwise, of all actions proposed by management in response to audit recommendations categorised as ‘High’ or ‘Medium’. Other Matters – Internal Audit Performance 2.33 In March 2021, the Panel were presented with a revised performance management framework for Internal Audit that was to be implemented from April 2021. Most indicators are reported on an annual basis. There are two indicators however that are subject to quarterly reporting. The first is about the implementation of agreed actions arising from Internal Audit reports by the implementation date. 58% of agreed actions have been implemented by the agreed implementation date in the period to March 2023. Progress in implementing agreed actions is monitored and reported separately to the Panel each cycle. 2.34 The second performance indicator is about client satisfaction. Appendix 4 provides a summary of the results of four key questions we ask audit clients at the conclusion of each audit assignment. The results presented continues to show positive feedback on the work of Internal Audit, with 93% of respondents in the period agreeing that Internal Audit added value by assisting in providing assurance, and that reports were relevant and constructive with findings clearly and accurately communicated. 2.35 Where management raise concerns over Internal Audit’s work, these matters are discussed with relevant senior management to fully understand the nature of any concerns and, where it is considered appropriate, to identify areas for improvement. We also seek Services’ views on what they liked or disliked about the audit process and comments received are used to inform future action plans for improving the service provided by Internal Audit. 3. Measures of success 3.1 Internal Audit reports annually on its performance to the Panel and is also subject to review annually by the Council’s appointed external auditors. Page 86 of 222
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4. Supporting documentation Appendix 1 Summary of Internal Audit assignments completed in the period Appendix 2 Audit gradings Appendix 3 Internal Audit performance framework Appendix 4 Internal Audit client feedback results Ken Adamson, Chief Officer (Audit and Risk) Page 87 of 222
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact because of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If yes, please provide a summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Effective responses by management to the weaknesses, control issues and/or areas of improvement identified by Internal Audit will increase the likelihood of the Council achieving its ambitions by improving control frameworks and more effectively mitigating potential risks and threats to the achievement of planned outcomes. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ Page 88 of 222
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Appendix 1 Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 1 Payments to staff: Overtime and travel and subsistence Internal Audit Opinion: Limited assurance (Amber-Red) Audit recommendations: High 2 Medium 1 Low 0 The purpose of this audit was to provide independent assurance on the adequacy and effectiveness of selected key controls associated with the authorisation and payment of employees’ travel and subsistence and overtime claims. The audit sought to review whether payments were only being made where there was proper entitlement; that sums paid were properly calculated and that relevant authorisation procedures were in place and operating effectively. The Council has well-established rules and guidance covering both entitlement to, and the processing of, overtime and travel and subsistence claims. Over the last few years People Resources has continued to roll out, across the Council, the use of the Employee Self Service Portal ‘MySelf’ within iTrent to allow employees to complete and submit electronically claim forms for overtime and expenses to Mangers who authorise these claims electronically within the iTrent system. Based on the results of our work, we are satisfied that in general authorised travel and subsistence claims were in respect of eligible costs necessarily incurred undertaking Council business and that overtime claims were in respect of work undertaken, with claims correctly calculated. However, we have categorised the audit as offering ‘limited assurance’, as we have identified significant gaps or weaknesses in the control environment and instances of non-compliance with expected procedures which we consider require to be urgently addressed by management. Most notably we have identified significant weaknesses in the system controls/processes designed to prevent duplicate overtime transactions being authorised and paid. The combination of inadequate and/or ineffective controls means that we consider that there is a significant risk that the controls as currently operating would neither prevent error and/or fraud occurring nor detect either after the event. As such, management needs to urgently improve the control environment to prevent duplicate claims being authorised and paid in the future and consider what actions are required where such duplicate claims have previously been made, authorised and paid. In addition, the Council’s financial processes require transactions to be authorised by staff who have been given the delegated authority to do so. As with previous audits in this area, we have again identified instances of overtime and expense claims authorised by officers who are either not recorded on the Council’s authorised signatory database as an authorising officer or are authorising claims for values outwith their delegated limit. In all cases, the authorising officer formed part of the Services management structure, appeared to have appropriate knowledge to determine the validity of the claim and had user permissions within iTrent to authorise overtime and expense claims. As such, we consider that there is a need for the adequacy and effectiveness of the long-established arrangements/operation of the authorised signatory database to be reviewed against the current operating environment for processing payroll transactions. A range of issues were identified and our recommendations are detailed at section 3 of the report. Satisfactory responses have been received from management in response to the audit findings and recommendations. Page 89 of 222
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 2 Contract management Internal Audit Opinion: Reasonable assurance (Green-Amber)) Audit recommendations: High 1 Medium 1 Low 1 The purpose of this audit was to provide assurance on the adequacy and effectiveness of the Council’s arrangements for contract management activities. The Council spends significant sums from both revenue and capital budgets with external contractors to provide a range of works, goods and services. Effective contract management arrangements are important in ensuring that the Council’s contractual arrangements are sustainable, deliver expected outcomes and represent best value. In 2018 the Council published its Contract and Supplier Management (C&SM) guidance, which aims to establish a consistent approach to C&SM across Council services and achieve best value and improved supplier relationship through effective engagement with suppliers throughout the lifecycle of the contract. We undertook an assessment of the Council’s C&SM guidance and existing contract management arrangements/expectations against the National Audit Office (NAO) ‘Good Practice Contract Management Framework (2008)’ and ‘Commercial and Contract Management: Insights and emerging best practice (2016)’. We also undertook in-depth reviews of the detailed operational arrangements currently in place in respect of a small sample of major contracts operated by the Council (as detailed in Appendix 2 of the report). Based on the results of our audit work, we have categorised this audit as offering ‘reasonable assurance’. In general, we are satisfied that the Council’s C&SM guidance is generally sound and broadly reflects good practice principles. Some minor areas for improvement were identified and these have been notified separately to service management for further consideration. In respect of the actual contract management arrangements in place for our sample, for eight of the 12 individual contracts selected for testing, we were generally satisfied that contract and supplier management was being undertaken in accordance with the guiding principles within the C&SM guidance, although we identified some areas where we consider that there is scope for improvement. For the remaining four contracts, however, there was little evidence of formal contract and supplier management activity having been carried out, with the contract owners seemingly unaware of their roles and responsibilities in this regard. Recommendations for management consideration/action are detailed at Section 3 of the report and include: • there is currently no formal mechanism that allows the Council to assess whether effective contract and supplier management is being undertaken across the organisation; and • there is a need to ensure that all officers undertaking C&SM roles are aware of their responsibilities and have been provided with appropriate training. Satisfactory responses have been received from management in response to the audit findings and recommendations. Page 90 of 222
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 3 City Deal Internal Audit Opinion: Substantial assurance (Green) Audit recommendations: High 0 Medium 0 Low 1 The purpose of this audit was to provide assurance on the adequacy and effectiveness of the Council's arrangements in respect of its participation in the Glasgow City Region (GCR) City Deal by assessing the extent to which the Council is adhering to key elements of the GCR City Deal Assurance framework with a focus on the processes surrounding the preparation and submission of grant claims, processes in place around change control and conduct of procurement/tendering arrangements in the period. We also extended our audit remit for this exercise to address aspects of an intended audit by the Glasgow City Council Internal Audit Team (in their role as Internal Auditors for the GCR Cabinet) on Project Procurement Strategies. This work involved reviewing the project procurement arrangements designed to help achieve competitive bids and value for money and seeking assurance that there are appropriate controls in place particularly surrounding supply chain and supplier continuity risk identification and management. Internal Audit is also required to return an annual assurance statement to Head of Audit at Glasgow City Council, in their role as the lead auditor for the GCR City Deal, and this work will underpin the completion of the statement for 2022-23. Based on the results of our work, we have concluded that: • we are satisfied that during 2022-23 the Council complied with the GCR Assurance Framework; • the City Deal team has substantively complied with the Council’s General Contract Standing Orders in its procurement/tendering processes for City Deal projects; • the Council has continued to successfully apply expected governance arrangements in relation to the planning, controlling, monitoring and oversight of City Deal projects; and • City Deal grant claims in 2022-23 were properly prepared and submitted in accordance with the terms and conditions under which the grant award was made, the funds have been used for the intended purposes in accordance with the relevant terms and conditions under which the grant is made and the sums claimed are properly due. We have categorised the audit as offering ‘substantial assurance’ as the control environment appears adequate and to have operated as intended with only a small number of minor discrepancies or areas for improvement identified which are outlined in the Action Plan at Section 3. Based on the results of this review and our other knowledge and understanding of the Council’s arrangements, we have returned an assurance statement for City Deal to Glasgow City Council Internal Audit which states that there are no significant matters that require to be raised which could have a material impact on the GCR Annual Assurance Statement for financial year 2022- 2023. Satisfactory responses have been received from management in response to the audit findings and recommendations. Page 91 of 222
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 4 Corporate Governance: Principles C and D Internal Audit Opinion: Reasonable assurance (Green-Amber) Audit recommendations: High 0 Medium 1 Low 2 The purpose of this audit was to provide independent assurance on the adequacy and effectiveness of the Council’s arrangements for ensuring that it complies with Principles C and D of the CIPFA/SOLACE ‘Delivering Good Governance in Local Government Framework (2016)’. Principle C relates to ‘Defining outcomes in terms of sustainable economic, social, and environmental benefits’. Principle D relates to ‘Determining the interventions necessary to optimise the achievement of the intended outcomes’. As part of the audit, we assessed existing Council operational practices and management arrangements against the relevant sub-principles cited in the framework (see Appendix 2 of the audit report). We also considered the extent to which recommendations raised in previous Internal Audit reports on corporate governance had been progressed by management and reviewed the robustness and effectiveness of the Council’s Strategic Governance and Strategic Self-evaluation Frameworks in so far as they relate to compliance with the Delivering Good Governance Framework. Based on the results of our work, together with our wider general knowledge gained from previous Internal Audit reviews undertaken on this topic and work on other associated areas, we consider that the Council’s corporate governance arrangements in relation to the areas examined are generally adequate and appear to have operated effectively. We have, therefore, assessed the audit as providing ‘reasonable assurance’. We were pleased to note that as part of the annual review of the Council’s Strategic Governance Framework, the Council had undertaken a full self-assessment of its Local Code of Governance against the Good Governance framework. We consider that this process, which was endorsed by the Corporate Management Team (June 2022) and approved by the Audit and Scrutiny Panel (September 2022), was generally robust. In addition, we noted that the corporate self-assessment indicated a high level of compliance with the corporate governance framework, which was broadly consistent with Internal Audit’s assessment of Principles C and D. We have however, identified a small number of areas where we consider scope for improvement exists and/or where further action is required to fully address some of the recommendations made in previous audit reports in this area. These are identified in the action plan at Section 3 of the audit report and include the need for management to take further action to ensure that key documents are reviewed, updated as appropriate and implemented/communicated to relevant staff. Satisfactory responses have been received from management in response to the audit findings and recommendations. Page 92 of 222
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 5 Cost of living crisis: welfare and poverty-related payments Internal Audit Opinion: Substantial assurance (Green) Audit recommendations: High 0 Medium 0 Low 2 The purpose of this audit was to provide independent assurance on the adequacy and effectiveness of controls associated with a number of cost-of-living crisis, welfare and poverty related payment schemes administered by the Council. The review focused on whether there are adequate controls in place to ensure that funding is properly targeted and that the Council has adequate and effective grant administration processes in place to ensure payments are properly controlled and made only to those who meet the relevant criteria for eligibility. Significant funding has been allocated, both from the Scottish Government and from the Council’s own resources, to respond to both the increasing financial insecurity of people on lower incomes and the increasing rate of poverty arising from the economic impacts of both the pandemic and, more recently, the cost-of-living crisis. Proposals for the use of the Council’s Local Authority Covid Economic Recovery Fund (LACER) to assist residents impacted by the cost of-living crisis were approved by the Policy and Strategy Committee in September 2022. Funding has been allocated across several different areas and is targeted at a range of groups including those at greatest risk of fuel poverty; lower-income families with children and those most likely to be at risk of, or experiencing, acute financial distress. Funding streams reviewed by Internal Audit as part of this exercise included fuel hardship payments, tenant hardship rent grants and various other payments open to families eligible to free school meals and/or school clothing grants because of their low incomes. Based on the results of our work, we have categorised this audit as offering ‘substantial assurance’ as we consider that the grant administration processes are adequate and have operated substantially as intended with any control issue or weaknesses identified presenting only a low risk to the control environment. We were also pleased to note that funding is being targeted at those most in need and that the processes in place generally mean that payments are being adequately controlled and being made only to those who meet the relevant criteria for eligibility. We have, however, identified a small number of areas where scope for further improvement exists and accordingly, we have made a small number of recommendations for management attention at section 3 of this report. Satisfactory responses have been received from management in response to the audit findings and recommendations. Page 93 of 222
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 6 Investigation: Primary and Nursery School B Internal Audit Opinion: N/A Audit recommendations: High 3 Medium 0 Low 0 This report presents Internal Audit’s findings in response to concerns raised by management with Internal Audit about the operation and administration of the school fund at Primary and Nursery School B. Internal Audit visited the school on several occasions and met with the Head Teacher, Depute Head Teacher and Clerical Assistant to obtain a general understanding of the relevant financial management arrangements within the school, including how the school fund operates on a day-to-day basis and the record keeping arrangements in place. As part of the work undertaken, we reviewed the cash book and supporting records held for the school fund for the current session. Given that there were limited records held by the school, we did not undertake a detailed review of the cash book and supporting records from previous sessions. Based on the results of our work, we have established that the Council’s Educational Establishment Fund Procedures (school fund) are not being adhered to at the school. We also identified a lack of expected involvement and oversight of the operation of the school fund by the Head Teacher. Due to the absence of records retained with regards to cash income collected by school and office staff, we have been unable to determine whether there has been any misappropriation of school funds. We consider, however, that arrangements in place with regards to cash handling within the school are significantly deficient and have made a number of recommendations where we consider immediate actions are required to urgently improve the control environment. Satisfactory responses have been received from management in response to the audit findings and recommendations. As well as actions to address the issues identified at this school, the Service has recognised that there have been ongoing issues historically with the administration of school funds and has also committed to a more general review of the Establishment Fund Procedures and that once complete, revised procedures and training material will be clearly communicated to all Heads of Establishment re-iterating their role and responsibilities. Page 94 of 222
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Appendix 2 Audit gradings Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance There are minimal or minor control weaknesses that present low risk to the control environment. The control environment has substantially operated as intended although some minor errors have been detected. Very few or no improvements are needed. Green-Amber Reasonable Assurance There are some control weaknesses that present a low to medium risk to the control environment. The control environment has mainly operated as intended although errors have been detected. Some improvements should be made. Amber-Red Limited Assurance There are significant control weaknesses that present medium to high risk to the control environment. The control environment has not operated as intended. Significant errors have been detected. Substantial improvements should be made. Red No Assurance There are fundamental control weaknesses that present an unacceptable level of risk to the control environment. The control environment has fundamentally broken down and is open to significant error or abuse. Immediate and major changes need to be made. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but it is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 95 of 222
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Appendix 3: Internal Audit performance framework Category Measure Internal Audit management Reported to Chief Executive and CMT Reported to A&SP (Quarterly) Reported to A&SP (Annual) 1. Delivery of Annual Plan Percentage completion of agreed plan X X X 2. Targeting Percentage of key corporate risks and key financial systems over which assurance provided X X X 3. LGBF - Efficiency Cost of Internal Audit per £ million revenue budget X X 4. LGBF - Efficiency % of productive hours delivered v Plan X X 5. Delivery / recommendations Percentage implementation of agreed actions by implementation date (cumulative year to date) X X X X 6. Delivery / other Number of significant irregularity / fraud investigations X X X 7. Customer satisfaction results Scores from customer satisfaction questionnaires (audit assignments) (cumulative year to date) X X X X 8. Customer satisfaction results Scores from key stakeholders (CMT and A&SP) questionnaires (overall performance of the function) X X X 9. Quality / standards Reliance placed by External Audit on the work of Internal Audit X X X 10. Quality/ standards Quality review outcomes – EQAR or internal self- evaluation X X X 11. Delivery of Annual Report Annual opinion /report prepared by 31 May annually X X X 12. Targeting Approval by CMT and A&SP of strategy and annual plan by 31 May annually X X X Internal management performance indicators 13. Efficiency Actual v planned days on completed assignments X 14. Efficiency Time between completion of fieldwork and draft reports being issued X 15. Efficiency Time between draft reports and final reports being issued X Page 96 of 222
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Appendix 4: Internal Audit client feedback results Responses received in this period from five clients related to 2022-23 assignments reported to the Panel (note these responses primarily relate to audit assignments reported in the Internal Audit Progress Reports presented to the February 2023 meeting of the Panel) Question Strongly Agree or Agree Neither agree nor disagree Disagree Internal Audit added value to my area by assisting in providing assurance and/or identifying weaknesses and/or improvements in relevant governance/business process and internal controls 100% 0% 0% Internal Audit findings were accurate and clearly communicated 100% 0% 0% The Internal Audit report made relevant, constructive and practical recommendations to help improve operations 80% 20% 0% Internal Audit staff were professional and courteous throughout the audit process 100% 0% 0% Page 97 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0350.2023.001 - payroll - overtime, travel and subsistence/a. findings and report/a06a 20230420 payments to staff ot & ts final report v1.0 as issued.docx 1 INTERNAL AUDIT REPORT PAYMENTS TO STAFF KEY CONTROLS: OVERTIME AND TRAVEL AND SUBSISTENCE Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Issued to: Chief Officer of People Resources (point 1 and 3) and Chief Officer of Finance (point 2) Copied to: HR Operations and Workforce Manager, Chief Executive and Depute Chief Executive Headlines The purpose of this audit was to provide independent assurance on the adequacy and effectiveness of selected key controls associated with the authorisation and payment of employees’ travel and subsistence and overtime claims. The audit sought to review whether payments were only being made where there was proper entitlement; that sums paid were properly calculated and that relevant authorisation procedures were in place and operating effectively. The Council has well-established rules and guidance covering both entitlement to, and the processing of, overtime and travel and subsistence claims. Over the last few years People Resources has continued to roll out, across the Council, the use of the Employee Self Service Portal ‘MySelf’ within iTrent to allow employees to complete and submit electronically claim forms for overtime and expenses to Mangers who authorise these claims electronically within the iTrent system. Based on the results of our work, we are satisfied that in general authorised travel and subsistence claims were in respect of eligible costs necessarily incurred undertaking Council business and that overtime claims were in respect of work undertaken, with claims correctly calculated. However, we have categorised the audit as offering ‘limited assurance’, as we have identified significant gaps or weaknesses in the control environment and instances of non-compliance with expected procedures which we consider require to be urgently addressed by management. Most notably we have identified significant weaknesses in the system controls/processes designed to prevent duplicate overtime transactions being authorised and paid. The combination of inadequate and/or ineffective controls means that we consider that there is a significant risk that the controls as currently operating would neither prevent error and/or fraud occurring nor detect either after the event. As such, management needs to urgently improve the control environment to prevent duplicate claims being authorised and paid in the future and also consider what actions are required where such duplicate claims have previously been made, authorised and paid. In addition, the Council’s financial processes require transactions to be authorised by staff who have been given the delegated authority to do so. As with previous audits in this area, we have again identified instances of overtime and expense claims authorised by officers who are either not recorded on the Council’s authorised signatory database as an authorising officer or are authorising claims for values outwith their delegated limit. In all cases, the authorising officer formed part of the Services management structure, appeared to have appropriate knowledge to determine the validity of the claim and had user permissions within iTrent to authorise overtime and expense claims. As such, we consider that there is a need for the adequacy and effectiveness of the long-established arrangements/operation of the authorised signatory database to be reviewed against the current operating environment for processing payroll transactions. The issues identified and our recommendations are detailed at section 3 of the report for management consideration/action. Internal Audit Opinion (see definition at Appendix 1) Limited assurance (Amber-Red) Organisational impact (see definition at Appendix 1) Moderate Report status FINAL Audit ref 0350/2023/001 Date issued 20/04/22 Audit Team Jacquie Howden, Paula Hendry, Elizabeth Sweeney and Hugh Shevlin Page 98 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0350.2023.001 - payroll - overtime, travel and subsistence/a. findings and report/a06a 20230420 payments to staff ot & ts final report v1.0 as issued.docx 2 1. Executive Summary Objectives The purpose of this audit was to provide independent assurance on the adequacy and effectiveness of selected key controls associated with the authorisation and payment of employees’ travel and subsistence and overtime claims. In particular, the work was designed to offer an audit opinion on whether: • all authorised travel and subsistence claims were in respect of eligible costs necessarily incurred undertaking Council business; • all authorised overtime claims were in respect of work undertaken and contractual entitlement; • only properly authorised travel and subsistence and overtime claims were passed for payment; • all travel and subsistence claims were supported by receipts where appropriate or where required; and • all claims and payments were correctly calculated. A key objective of this exercise was to substantively test a sample of payments to ensure that controls are operating effectively so that such payments are only being made where there is proper entitlement; sums paid are properly calculated; and authorisation procedures are robust and were operating effectively. We therefore selected a sample of 50 overtime and 80 expenses (travel and subsistence (50), mileage (30) and excess travel(10)) payments made during the period January to August 2022 covering a broad range of service activities across the council. While some work was required in respect of the Employee Service Centre (ESC), the focus of this exercise was on the relevant controls within Services. The audit did not consider or review payments in respect of designated user allowances (DUA) but did include a sample of excess travel payments. This engagement has been conducted in accordance with the ‘Public Sector Internal Audit Standards’. The Internal Audit section reports formally on conformance with these standards to the Audit and Scrutiny Panel. 2. Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 2 1 0 Key areas requiring management action (High) The following key areas requiring urgent management action have been identified: • There are significant weaknesses in the system controls/processes designed to prevent the duplication of overtime transactions which require urgent management action; and • The adequacy and effectiveness of the authorised signatory database needs to be reviewed. Good practice identified We noted the following areas of good practice during the audit: • The Council has well-established rules and guidance (available on mySelf and MyNL) covering both entitlement to, and the processing of, overtime and travel and subsistence claims. • Proforma templates for claiming overtime, expenses and mileage are also held on mySelf, providing a standardised approach to submitting claim information, with most claims being processed by members of staff directly through the mySelf portal. • All overtime and expenses claims are subject to a separate authorisation process by the employee’s line manager prior to processing and payment of the claim. • There are documented core conditions of service for all Council employees, which include detailed guidance on eligibility, entitlement and rates of pay in respect of overtime payments. • Overtime claims are being paid at the appropriate rates. Other areas for improvement (Medium) A further area for improvement was also identified: • Overtime and expenses claims are not being claimed in accordance with the Council’s guidance and expected procedures. Page 99 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0350.2023.001 - payroll - overtime, travel and subsistence/a. findings and report/a06a 20230420 payments to staff ot & ts final report v1.0 as issued.docx 3 3. Action Plan Key controls - overtime and travel & subsistence claims 0350/2023/001 Ref Finding 1 There are significant weaknesses in the system controls/processes designed to prevent the duplication of overtime transactions which require urgent management action. The current configuration of the iTrent system does not prevent an overtime claim for the same period being submitted and/or authorised more than once. We noted that a warning has been built into some of the forms set up in the iTrent system (at the top of the employee’s claim submission screen and managers’ authorising screen) to highlight potential duplicate overtime transactions and prompting appropriate checks to be undertaken prior to submitting and authorising the claim. It is our view that as this warning is not prominent on screen and as it does not appear as a pop-up on the screen, it could be easily missed by the employee and/or manager. During our audit testing, we identified nine cases (from a sample of 50 claims) where duplicate overtime claims had been processed and subsequently authorised and paid. All duplicate claims identified had been processed through the mySelf module of iTrent where employees input claims directly on the system for electronic authorisation by managers. The total estimated overpayment for our sample was £5,648. From discussions with the Workforce Systems and Analytics Manager, we noted some significant weaknesses within the current system and process which we consider require urgent management attention and action as follows: • For a warning to be triggered, the details of the overtime claims must be processed in an identical way (i.e. dates, number of hours worked and the reason for the overtime). Where any of these elements differ, the system does not automatically recognise the potentially duplicate transaction. We understand that, although the system includes fields for entering the start and finish times for overtime, these fields are ’free text’ and therefore, the system does not undertake any validation checks based on this data or provide a warning if similar information appears within another claim; • The system allows both the employee and the authorising manager to ignore the warning and submit or authorise the claim without any further checks being undertaken; • Authorising officers can currently authorise overtime claims via their ‘To do’ list without viewing the detailed content of the individual claim. In such instances, we understand that the manager would not be alerted to the warnings and would, therefore, be able to authorise the transactions without further checks or other preventative measures being triggered; • The warning is not currently active on any forms within iTrent created before the current system functionality was introduced in February 2020. We understand that the ESC plans to update all forms to ensure that the validation checks are in place, although no timescales have as yet been set for undertaking this; and • As a significant number of employees now complete an online form to claim overtime, the system does not provide a user friendly or efficient mechanism for Mangers to undertake the necessary checks on previously approved claims to be able to confirm that any overtime claimed has not previously been claimed and/or paid. People Resources are aware of the current limitations with the system and we understand that the system supplier has developed additional functionality which, if implemented, is expected to resolve many of the issues identified, however any system enhancements would require further investment by the Council. We also noted that there are no routine periodic checks undertaken by the ESC to identify any potential duplicate payments, therefore current operating arrangements solely rely on managers undertaking appropriate checks prior to approval of claims. Whilst it could be argued that this represents a reasonable approach, the results of our testing have shown that this is neither an adequate nor an effective control. Following discussion with the Workforce Systems and Analytics Team, a report to identify potential duplicate claims over the last few years has been generated. This report has identified that of approximately 97,000 claims processed in the period, 2,431claims from 739 employees contained a potential duplicate entry (i.e. employee number, date of claim, overtime code, start time and hours claimed all match across more than one claim). This report will require further review and analysis to determine frequency of claims by individual employees and the value of overpayments arising from any confirmed duplicate payments. We understand that ESC management intend to introduce this as a standing report each pay period and are currently considering how and who will action the output from this report which would allow duplicate claims to be identified and stopped prior to payment. Page 100 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0350.2023.001 - payroll - overtime, travel and subsistence/a. findings and report/a06a 20230420 payments to staff ot & ts final report v1.0 as issued.docx 4 3. Action Plan (continued) Key controls - overtime and travel & subsistence claims 0350/2023/001 Implication Recommendation Priority Management response Implementation Month/Year A lack of effective preventative controls increases the risk of duplicate claims being processed at potentially significant cost to the council. Without periodic checks and/or robust reports, management may not be aware of the scale of the issues in respect of duplicated claims. The Chief Officer of People Resources should: (1) as a matter of urgency, review the current control framework to identify, and thereafter introduce, more effective preventative controls to ensure duplicate claims cannot be submitted, authorised and processed for payment; (2) put in place interim arrangements to highlight potential duplicate claims prior to payment (through the use of appropriate exception reports) and to identify and resolve any issues arising; (3) use relevant information to identify any areas of recurring non-compliance and report this to the appropriate Chief Officer; and (4) in conjunction with relevant Service management, consider and determine appropriate actions to be taken with regards the duplicate claims identified during our audit and in the subsequent exception report referenced in the finding above. High Agree Jennifer Hardy, HR Operations and Workforce Manager The review of the current control environment has been completed and this has confirmed the control weakness identified by Internal Audit. Interim arrangements have now been determined with a process developed to identify duplicate claims and these will be deleted prior to payruns being finalised for payment to be made to staff. This process will remain under review with amendments made as necessary to ensure it remains effective. As part of this process Managers who authorise duplicate claims will be notified of the error. Employees who continually submit duplicate claims will be notified to the relevant Manager for review, investigation, and action. In addition, details of Managers who continually authorise duplicate claims will be escalated to Chief Officers for appropriate review, investigation and action. A CMT report will be prepared to highlight this issue to all Chief officers and advise that further investigation is required to identify a longer-term solution within the iTrent system to improve the current control environment. This report will also include detailed analysis of the duplicate claims paid over the last few years including frequency of occurrence and value of claims. Initial interrogation of this report indicates the total value of overpayments to be in the region of £150,000 but this has still to be further interrogated to determine the actual value. A decision on how these overpayments will be recovered will be sought from CMT as part of this report. Work will then commence to investigate and determine such solutions with a report back to CMT for a decision on the way forward. Complete April 2023 June 2023 December 2023 Page 101 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0350.2023.001 - payroll - overtime, travel and subsistence/a. findings and report/a06a 20230420 payments to staff ot & ts final report v1.0 as issued.docx 5 3. Action Plan (continued) Key controls - overtime and travel & subsistence claims 0350/2023/001 Ref Finding 2 The adequacy and effectiveness of the authorised signatory database needs to be reviewed. The Council’s financial processes are well established and require all transactions to be authorised by staff who have been given the delegated authority to do so. The types, and values/limits of the transactions set for each authorising officer are determined by management and are recorded in the Council’s Authorised Signatories Database (ASDB) maintained by Financial Solutions. All overtime and expenses claims must be authorised by an appropriate authorising officer (generally the employees’ line manager) prior to payment in accordance with the Council’s delegated authority arrangements. The processes for authorising overtime and expenses claims are clearly set out in the ‘mySelf Mileage, expenses and overtime guide’. In addition, we noted that guidance on the authorisation of payments is available on myNL and myTeams, with periodic myTeam sessions run for managers throughout the year. From the sample of overtime and expenses claims reviewed we identified several claims where the authorisation processes were not operating as expected. In particular, we identified: • eight overtime and five expenses claims where the authorising officer was not included in the ASDB; • two expenses claims where the authorising officer was included in the ASDB but did not have the appropriate delegated authority to approve travel and subsistence expenses; and • seven overtime and three expenses claims where the authorising officer had authorised claim values in excess of their delegated authorisation limits. In each case, the authorising officer had line management responsibility for the employee submitting the claim and had user permissions within iTrent that enabled them to authorise overtime and expense claims. These findings are consistent with the results of audits in this area in previous years and, in response to those audit findings, an action was identified by People Resources to work with Financial Solutions to seek to determine how to integrate the ASDB into the iTrent system. To date, however, whilst we understand People Resources have been actively engaging with Financial Solutions on this, how this could be achieved has not been identified and/or progressed. Current processes, therefore, rely on authorising officers checking that they have the appropriate financial authority before authorising a claim. Although we understand that the email notification alerting the manager to a claim requiring authorisation includes the financial value of the claim, the actual claim on the iTrent system which is reviewed and authorised does not include the financial value of the claim, therefore at the point of authorisation, the manager cannot see the value of the claim they are authorising. Internal Audit considers that, although delegated authority remains a requirement for payroll related transactions, the ongoing move to authorisation processes being completed within the iTrent system, means a review is required as to whether the current standalone authorised signatory database remains fit for purpose in relation to the authorisation of payroll related transactions or if parameters/permissions can be set against job roles within the iTrent system to discharge this requirement. Implication Recommendation Priority Overtime and expenses transactions which have not been properly authorised may be processed, resulting in an increased risk of incorrect, invalid or inappropriate payments being made. The Chief Officer of Finance should: (1) in conjunction with the Chief Officer of People Resources, review the appropriateness of the current authorised signatory database for payroll transactions and consider if controls built into the iTrent system itself would provide a more effective means of operating delegated authority requirements; and (2) undertake a review of the appropriateness and effectiveness of the current arrangements for the ASDB for other types of transactions, taking into consideration current operating environments (with many authorisations now taking place using user permissions set-up within relevant systems), to determine whether it remains fit for purpose and how delegated authorities can, going forward, be best established and effectively discharged. High Page 102 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0350.2023.001 - payroll - overtime, travel and subsistence/a. findings and report/a06a 20230420 payments to staff ot & ts final report v1.0 as issued.docx 6 3. Action Plan (continued) Key controls - overtime and travel & subsistence claims 0350/2023/001 Management response Implementation Month/Year Agree Elaine Kemp, Chief Officer (Finance) and Fiona Whitaker, Chief Officer (People Resources) (1) We agree that in-built controls to the iTrent system would provide a more effective means of operating delegated authority requirements for payroll transactions. At present there are no validation options within iTrent. However, with some development work it is possible to create a report, to highlight in advance any payments that have been authorised beyond the Manager’s limit. People Resources and Financial Solutions will review and explore the opportunities around this, including the possibility to hold all authorised signatories and limits within iTrent, thus removing the requirement to maintain a separate ASDB going forward (this links to recommendation 2). This review will include setting out any new governance arrangements as a result i.e., how iTrent is updated/ maintained/ by whom/ access etc., perhaps as part of the starters/ leavers/ movers’ procedures. Currently Financial Solutions supply a weekly report to ESCWT of any recent changes to the ASDB and vice versa. This captures leavers, vacancies etc. In addition, there is on-going collaboration between both teams to incorporate information required on iTrent, into the ASDB database e.g., additional field such as POSN number. However, in light of the audit findings, such as missing permissions on the ASDB, a review exercise will be undertaken to reconcile both the list of staff with permissions to authorise payroll claims held by ESC Workforce Team (ESCWT) and the list in the Financial Solutions ASDB. Following this, all relevant service users will be contacted to ensure necessary procedures have been followed and appropriate forms completed. This is a short-term measure subject to the development work outlined above. The above actions will not prevent iTrent users approving claims they are not authorised to do. Therefore, in the absence of iTrent system controls on authorisation limits, the responsibility for ensuring users approve transactions within their approved limits remains a compliance matter for all services. (2) As a result of the migration to MS Teams and associated decommissioning of physical servers, along with no future support from Business Solutions for Access databases, which is the format in which the ASDB is held, a need to review the current arrangements for the ASDB has already been identified by Financial Solutions. In light of the audit recommendations this exercise will also include the need to review the appropriateness and effectiveness of the current arrangements for the ASDB for other types of transactions, taking into consideration current operating environments, to determine whether it remains fit for purpose and how delegated authorities can, going forward, be best established and effectively discharged. Part of this review will include exploring the possibility of in-built system controls/ validations of approved users/limits of the various central systems. The development work referenced at (1) above may provide a new solution or support from Business Solutions may be required to develop an alternative system that can be accessed by all relevant services for checking and maintaining authorised persons and limits. It should be noted that in lieu of any possible systems developments to successfully provide such in-built controls, responsibility remains with all central systems owners and users to pro-actively check all transactions to ensure compliance with approvals permitted per the ASDB. September 2023 Page 103 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0350.2023.001 - payroll - overtime, travel and subsistence/a. findings and report/a06a 20230420 payments to staff ot & ts final report v1.0 as issued.docx 7 3. Action Plan (continued) Key controls - overtime and travel & subsistence claims 0350/2023/001 Ref Finding 3 Overtime and expenses claims are not always being claimed in accordance with the Council’s guidance and expected procedures. The Council’s ‘Mileage, Expenses and Overtime guide’ was revised in January 2022 and is currently available to all staff, on Myself and MyNL. The guide, together with further summary guidance on Myself, clearly sets out the rules for claiming overtime and expenses and detailing the expected procedures and documentation to be used in each case. We selected a sample of overtime and expenses (travel and subsistence, mileage and excess travel) claims from a broad range of service activities across the Council for the period January to August 2022, with a view to ensuring that only valid/eligible claims were being made; claims were properly calculated and were supported by the appropriate receipts; and the claims were being submitted in accordance with the expected timescales. We were satisfied that the claims were generally valid and necessarily incurred and had generally been processed and authorised through mySelf using the relevant expenses claim form (where appropriate). However, we noted that there was a high level of both overtime and expenses where we consider that claims had not been made in accordance with the guidance/expected procedures. The majority of these claims also contained one or more errors, suggesting that insufficient checks were being undertaken prior to submitting claims for authorisation and payment. In each of these cases, the claim had been authorised and paid. The key issues arising include: • Insufficient information recorded in mySelf and/or timesheets to support the reason for/eligibility of the overtime/expenses being claimed (including start/end times for overtime and journeys); • Overtime claims incorrectly input by employees, with half hour breaks not being deducted for periods of overtime worked of six hours or more and/or overtime being claimed for periods of less than half an hour; • Receipts for travel, subsistence and mileage claims not always being attached to claim forms within mySelf to support the expenses being claimed and/or the receipts provided not corresponding with the amounts being claimed; • Instances of subsistence being claimed over the maximum rate for meals; • mileage being claimed for journeys that exceeded the expected mileage for the journey (mileage and excess travel claims) when compared to the distance as calculated using on-line tools such as the AA Route Map etc; • mileage/travel costs being claimed which related to normal home to work commutes (and should therefore not have been re-imbursed). It appears that some Services may be unclear on the expectations surrounding excess travel when an employee’s designated place of work has changed; and • Employees’ driving licence/current insurance certificates were not always being routinely reviewed and confirmation of this check being recorded in myTeam to support the mileage claims in accordance with the expected procedures. Implication Recommendation Priority Management response Implementation Month/Year Claims may be submitted, authorised and paid that do not reflect amounts properly due and/or incurred undertaking Council business. A lack of properly documented claims and supporting evidence increases the risk that incorrect and/or inappropriate payments may be processed. The Chief Officer of People Resources should ensure that regular reminders/communications are issued to all staff and authorising officers outlining the key expectations regarding completion and review of overtime and expense claim forms ensuring the specific issues noted above are sufficiently covered in any such reminders. Medium Agree Jennifer Hardy, HR Operations and Workforce Manager Reminders will be issued periodically from March 2023. March 2023 Page 104 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0350.2023.001 - payroll - overtime, travel and subsistence/a. findings and report/a06a 20230420 payments to staff ot & ts final report v1.0 as issued.docx 8 Appendix 1 - Audit Grading Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Green-Amber Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Amber-Red Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. Red No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation as a whole. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation as a whole. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation as a whole. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required. Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 105 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 1 INTERNAL AUDIT REPORT CONTRACT MANAGEMENT ARRANGEMENTS Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Appendix 2: Contracts selected for testing Appendix 3: Contract and Supplier Management corporate expectations Issued to: Chief Officer of Asset and Procurement (point 1(1), 2 and 3), Chief Officers of Education (North and South) (point 1(2) only) Copied to: Chief Executive, Deputy Chief Executive and all Chief Officers Headlines The purpose of this review was to provide assurance on the adequacy and effectiveness of the Council’s arrangements for contract management activities. The Council spends significant sums from both revenue and capital budgets with external contractors to provide a range of works, goods and services. Effective contract management arrangements are important in ensuring that the Council’s contractual arrangements are sustainable, deliver expected outcomes and represent best value. In 2018 the Council published its Contract and Supplier Management (C&SM) guidance, which aims to establish a consistent approach to C&SM across Council services and achieve best value and improved supplier relationship through effective engagement with suppliers throughout the lifecycle of the contract. We undertook an assessment of the Council’s C&SM guidance and existing contract management arrangements/expectations against the National Audit Office (NAO) ‘Good Practice Contract Management Framework (2008)’ and ‘Commercial and Contract Management: Insights and emerging best practice (2016)’. We also undertook in-depth reviews of the detailed operational arrangements currently in place in respect of a small sample of major contracts operated by the Council (as detailed in Appendix 2 of the report). Based on the results of our audit work, we have categorised this audit as offering ‘reasonable assurance’. In general, we are satisfied that the Council’s C&SM guidance is generally sound and broadly reflects good practice principles. Some minor areas for improvement were identified and these have been notified separately to service management for further consideration. In respect of the actual contract management arrangements in place for our sample, for eight of the 12 individual contracts selected for testing, we were generally satisfied that contract and supplier management was being undertaken in accordance with the guiding principles within the C&SM guidance, although we identified some areas where we consider that there is scope for improvement. For the remaining four contracts, however, there was little evidence of formal contract and supplier management activity having been carried out, with the contract owners seemingly unaware of their roles and responsibilities in this regard. Recommendations for management consideration/action are detailed at Section 3 of the report and include: • there is currently no formal mechanism that allows the Council to assess whether effective contract and supplier management is being undertaken across the organisation; and • there is a need to ensure that all officers undertaking C&SM roles are aware of their responsibilities and have been provided with appropriate training. Internal Audit Opinion (see definition at Appendix 1) Reasonable assurance (Green-Amber) Organisational impact (see definition at Appendix 1) Moderate Report status FINAL Audit ref 0900/2023/006 Date issued 20/04/23 Audit Team Jacquie Howden, Paula Hendry, Hugh Shevlin and Elizabeth Sweeney Page 106 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 2 1. Executive Summary Objectives The purpose of this review was to provide assurance on the adequacy and effectiveness of the Council’s arrangements for contract management activities. In particular, the review sought to consider the following: • Whether the Council prepares adequately for contract management, including ensuring clear accountability/responsibility for carrying out contract management activities; • How effectively the Council develops strong internal and external relationships to facilitate delivery; • How the Council ensures that the goods and services and service performance provided is in line with the contract; • Ensuring payments are made to suppliers in line with contracts and that, where relevant, appropriate incentive mechanisms are in place and well managed; • Whether the Council understands and effectively manages contractual and supplier risk; • Where appropriate, whether any changes to contracts are handled effectively; and • Where appropriate, how well the Council undertakes supplier development, supplier relationship management and wider market management activities. Internal Audit last reviewed the Council’s contract management arrangements in 2018. Recent audit work in relation to procurement has focused on the processes associated with inviting, evaluating and awarding contracts while recent work in relation to Creditors has focused on controls relating to the authorisation of payments. The focus of this audit was on the post-procurement and post tendering/evaluation contract management processes. We did not, therefore, undertake a review of relevant procurement activity as part of this audit. Work undertaken included a review of the adequacy of the Council’s existing corporate expectations/requirements and included an assessment of the Council’s practices and management arrangements against the National Audit Office (NAO) ‘Good Practice Contract Management Framework (2008)’ and ‘Commercial and Contract Management: Insights and emerging best practice (2016)’. We also undertook in-depth reviews of the detailed operational arrangements currently in place in respect of a sample of major contracts operated by the Council. The Council’s joint-venture arrangements with Amey and Mears were specifically excluded from the scope of this audit as, despite both representing significant commercial arrangements, the contract management arrangements in place are significantly different from that expected in respect of other contractors (reflecting the Council’s relationship with each as a joint venture vehicle). This engagement has been conducted in accordance with the ‘Public Sector Internal Audit Standards’. The Internal Audit section reports formally on conformance with these standards to the Audit and Scrutiny Panel. 2. Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 1 1 1 Key areas requiring management action (High) The following key area requiring urgent management action has been identified: • There is currently no formal mechanism that allows the Council to assess whether effective contract and supplier management is being undertaken across the organisation. Good practice identified We noted the following areas of good practice during the audit: • The Council’s Contract and Supplier Management (C&SM) guidance was issued in 2018 and is available to all staff on InsideNL (and previously on Connect). It was developed in conjunction with/compliments the Council’s Procurement Strategy (updated for 2022-2023), the General Contract Standing Orders and the values of the Scottish Procurement & Commercial Directorate (SPCD) Supplier’s Charter. It also encompasses the best practice set out in the SPCD Procurement Journeys. Page 107 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 3 Good practice identified (continued) We noted the following areas of good practice during the audit: • The C&SM guidance clearly sets out the roles and responsibilities of the Contract owner and includes a ‘contract owner checklist’ which summarises the key actions the contract owner requires to take during the planning and preparation, managing service delivery, managing supplier relationship and contract administration phases, together with further details points/areas to consider in the C&SM process. • The C&SM guidance also contains a number of proforma documents designed to standardise the approach to C&SM across the council, allow for operational day-to-day management throughout the lifecycle of the contract and maintaining the relationship between the Contract Owner and the Supplier. Other areas for improvement (Medium) Another area for improvement was also identified: • There is a need to ensure that all officers undertaking C&SM roles are aware of their responsibilities and have been provided with appropriate training. Page 108 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 4 3. Action Plan Contract Management 0900/2023/006 Ref Finding 1 There is currently no formal mechanism that allows the Council to assess whether effective contract and supplier management is being undertaken across the organisation In 2018, the Corporate Procurement Team (CPT) within Asset & Procurement Solutions produced its Contract and Supplier Management (C&SM) guidance, which aims to provide a consistent approach to C&SM activities across the Council and improve supplier relationship through effective engagement with suppliers throughout the lifecycle of the contract. The guidance recognises that some services may have existing, embedded, and compliant C&SM processes in place and is not designed to replace these. The presumption in the guidance is, however, that any alternative arrangements must reflect the same principles and priorities as are included in the corporate guidance. From discussions with the former Procurement & Support Manager, we noted that the CPT is not currently aware of the extent to which services are (or are not) using the C&SM guidance or any alternative arrangements and/or the extent to which any alternative arrangements reflect the principles contained in the corporate guidance. We also noted that, at present, there is no corporate group/resource in place with overarching responsibility for driving C&SM activities/performance across the council and/or for monitoring performance and ensuring that services are complying with the principles and priorities contained in the guidance. We understand that the CPT is responsible for providing support and advice to services for procurement exercises only, with responsibility for C&SM passing fully to the Contract Owners within individual services as soon as the contract is awarded. The Council maintains a register of all live contracts in excess of £50,000. We obtained a copy of the contracts register database from the former Procurement & Support Manager and noted that it contained the key contract details including the reference number, procurement title/category, contract value, key CPT/Service lead officers and the contract award/start/end dates together with the details of any applicable extension periods. The database also contained a ‘Contract Management overview’ section which we understand is designed to record/monitor key aspects of C&SM activity, including the name of the contract manager, the assessed level of C&SM and the frequency, date and outcome/score of the latest performance appraisals. We noted, however that a significant amount of the data held within the database regarding this was out of date or incomplete, with contract manager details often incorrect/unknown and no details of the performance appraisals being held, resulting in the contract status generally showing as ‘action overdue’ or ‘no information available’. From discussions with the CPT, we understand that there is no formal process in place to ensure that the database is regularly/routinely updated to reflect the recent C&SM activity within Services and/or for ensuring that performance appraisals are being undertaken in accordance with the assigned level of C&SM for each contract. Instead, we understand that the CPT reviews the database on an ad hoc basis and will issue informal reminders to contract leads to obtain updated information, which isn’t always followed-up where the service does not provide the required information. We also understand that the database information is not routinely reported to senior management. In addition, we noted that there is currently no contract management ‘community’ within the Council, which allows Contract Owners to share good practice/lessons learned and/or lead the wider contract management arrangements. The Corporate Procurement Working Group’s (CPWG) terms of reference state that the group is responsible for ensuring that ‘continuous improvement is embedded in contract management and service provision’. However, despite this we noted that the CPWG and the Procurement Networking Group (PNG) currently in place deal exclusively with procurement-related issues. We selected a sample of 12 individual contracts from across the council (as detailed in Appendix 2) to determine the extent to which the C&SM guidance and associated arrangements were being followed in practice. We noted that in eight cases the services were either using their own adapted C&SM guidance, a hybrid of the Council’s C&SM and project management processes and documentation and/or the contracts were being managed externally/on a national level. The extent of C&SM being undertaken in these cases varied significantly between services and we noted that the alternative processes used did not always allow for all expected elements of C&SM activities to be formally evidenced. In the remaining four cases, there was little/no evidence of formal C&SM activity being undertaken on the contracts, with proforma C&SM documents not being routinely completed, supplier health checks not being undertaken and/or balanced scorecards/KPIs not being used to routinely monitor supplier performance. Two of these contracts related to Education & Families and further discussion with Service management has indicated a lack of formal C&SM activity being undertaken more generally on contracts across the Service. We understand that Education and Families management has committed to identifying all live contracts within their service and implementing a formal training programme for relevant officers to ensure that expected requirements are understood and that appropriate and proportionate formal contract management arrangements are put in place. (Continued over page) Page 109 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 5 3. Action Plan Contract Management 0900/2023/006 Implication Recommendation Priority Management response Implementation Month/Year Without robust over- arching review/ monitoring arrangements, management would not be able to determine whether effective C&SM activities were being undertaken in accordance with corporate expectations. C&SM performance issues may not be appropriately managed, and lessons learned/good practice may not be adequately shared across the council. (1) The Chief Officer (Asset and Procurement) should: (a) review and determine a proportionate risk-based approach for the Council to gain assurance on the extent of compliance across Services with key corporate expectations in relation to contract and supplier management. This might include requiring Chief Officers to attest that the arrangements within their Service areas comply with the guiding principles within the C&SM guidance (where alternative Service specific arrangements are in place), an annual confirmation by Chief Officers that C&SM activity within their Services is operating as intended and periodic compliance checks on a sample of contracts to verify that expected processes are being properly adhered to; and (b) consider the adequacy of the current arrangements for reviewing/updating the contract management information within the contract register database and determine how this might be used to facilitate effective C&SM monitoring and oversight as per recommendation (a) above. (2) The Chief Officers of Education (North and South) should, as a matter of priority, ensure that all current contracts under their remit are identified and appropriate contract management arrangements established for each contract including identifying training needs for those staff identified as contract owners. High (1) Agree James McKinstry, Chief Officer (Asset and Procurement) (a) The Chief Officer (Asset and Procurement) will establish and implement a process for a proportionate risk-based approach for the Council to gain assurance on the extent of compliance across Services with key corporate expectations in relation to contract and supplier management. This will include an annual confirmation by Chief Officers that C&SM activity within their Services is operating as intended and periodic compliance checks to verify that expected processes are being properly adhered to. (b) The Chief Officer (Asset and Procurement) will consider the adequacy of the current arrangements for reviewing/updating contract management information contained within the contract register database to determine how it can be used to facilitate effective C&SM monitoring and corporate oversight of the Council’s C&SM activity. (2) Agree Gerard McLaughlin and Janie O’Neill, Chief Officers of Education (North and South) We will ensure that all current contracts awarded through the Council’s GCSO process within Education and Families are identified and formal contract management arrangements are thereafter put in place to ensure that the Council’s corporate expectations as set out in the Contract and Supplier Management (C&SM) guidance are followed. We will also ensure that moving forward all contract owners are fully trained and understand the corporate C&SM guidance. December 2023 September 2023 Page 110 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 6 3. Action Plan (continued) Contract management 0900/2023/006 Ref Finding 2 There is a need to ensure that all officers undertaking C&SM roles are aware of their responsibilities and have been provided with appropriate training The council’s C&SM guidance states that Chief Officers are required to identify appropriately experienced/knowledgeable Contract Owners to manage every contract and to ensure that the officers attend training to develop the necessary skills and expertise to lead the C&SM process. The C&SM guidance clearly sets out the roles and responsibilities of the Contract Owner for C&SM throughout the lifetime of the contract. Through discussions with the former Procurement & Support Manager we noted that, whilst for construction contracts the Contract Owner tends to be an Architect (or similar), there is currently no standardised approach across the Council to assigning appropriately experienced officers as Contract Owners for non-construction contracts. We understand that the C&SM guidance was developed around the skills and competencies contained in the Scotland’s National Procurement Competency Framework and that Chief Officers are expected to follow these when assigning suitable Contract Owners. The guidance does not, however, currently specify what skills the Contract Owner is expected to have. We also noted that there is currently no formal process in place for ensuring that Contract Owners are aware of their responsibilities for C&SM and/or for assessing their performance in respect of delivering C&SM. For the sample of 12 individual contracts selected for testing, we noted that in four cases the Contract Owner either did not consider that they had the appropriate skills/experience to effectively undertake the role, had not been made aware of the C&SM guidance and/or had not been given any training to allow them to effectively undertake this role. We also noted that although the guidance is currently available to all staff on InsideNL (and previously on Connect), that there had been no formal reminders issued to staff making them aware of the existence of the guidance since it was issued in 2018. In addition, we noted that there has been no review of, or updates to, the C&SM guidance since it was originally issued. We also noted that the eLearning training module ‘Procurement – effective contract management essentials’ currently available on LearnNL does not refer to the Council’s C&SM guidance or the process for assessing the level of C&SM to be undertaken in accordance with the corporate methodology. We understand that the module is part of a series of training courses linked to the new Scheme of Delegated Procurement Authority (DPA), which is currently being developed by the CPT in conjunction with the Talent & Organisational Development (TOD) team as part of the 2023-2025 Procurement Improvement Plan. We also understand that it is intended that training (including training on the C&SM guidance) will be provided to officers identified as Contract Owners in due course. At the time of our audit, we noted that several eLearning modules on Procurement have now been developed and published on LearnNL. The original module in respect of contract management essentials (above), however, has not as yet been amended to incorporate reference/links to the C&SM guidance and no formal training dates have as yet been planned. Implication Recommendation Priority Inexperienced officers may be identified as Contract Owners which may prevent the contracts from being managed effectively. Staff may not be aware of the Council’s C&SM guidance and/or the corporate expectations on Contract owners for undertaking C&SM. Without the appropriate training, officers would not be able to effectively undertake their duties for C&SM. The Chief Officer (Asset and Procurement) should ensure that: (1) all Chief Officers are reminded of the need to nominate appropriately skilled/experienced officers as contract owners and ensure that such staff are made aware as soon as possible of the C&SM guidance and the responsibilities and corporate expectations placed on them when undertaking such a role; (2) the eLearning modules and associated training continue to be developed in accordance with the expected timescales and consideration is given to the need for specific mandatory training on the corporate C&SM guidance for those nominated as Contract Owners; and (3) the C&SM guidance is subject to periodic review to ensure that it continues to be adequate and reflects current corporate expectations in relation to C&SM activity across the Council. Medium Page 111 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 7 3. Action Plan (continued) Contract management 0900/2023/006 Management response Implementation Month/Year Agree James McKinstry, Chief Officer (Asset and Procurement) (1) All Chief Officers will be reminded of the need to nominate appropriately skilled/experience officers as Contract Owners and to ensure that they are made aware of the corporate C&SM guidance, and the responsibilities expectations placed on them when undertaking the role. (2) Asset and Procurement will continue with the development of eLearning modules and associated training and will also consider the need for mandatory training and awareness of the corporate C&SM guidance for officers nominated as Contract Owners (3) The Chief Officer (Asset and Procurement) will ensure the C&SM guidance is subject to periodic review to ensure that it continues to be adequate to reflect the corporate expectations in relation to C&SM activity across the Council. June 2023 December 2023 December 2023 Page 112 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 8 3. Action Plan (continued) Contract management 0900/2023/006 Ref Finding 3 Some compliance issues were identified where management action should be considered With regards contracts, the Council’s financial regulations (section 15.4) state that “any variations where the outturn/expected costs exceed the tendered contract price by the higher of £25,000 or 5%, or where the outputs/outcomes achieved by the expenditure differ significantly from those originally envisaged, shall be reported by the appropriate Chief Officer/Head of Service (Budget Holder) to the relevant Spending Committee at the earliest opportunity”. Our review of the financial monitoring arrangements for the 12 contracts from across the Council (as detailed in Appendix 2 highlighted that there was scope for improvement to the financial monitoring arrangements in place. Whilst we were satisfied that appropriate arrangements for monitoring contract spend where in place for five contracts, we obtained limited information regarding the arrangements for the remaining seven and as such were unable to fully consider and determine the appropriateness of these arrangements. In addition, our review of the sample of 12 individual contracts from across the council (as detailed in Appendix 2) to determine the extent to which the C&SM guidance and associated arrangements were being followed in practice identified the following compliance issues: • Proforma C&SM documents (including Contract Mobilisation documents, Mobilisation Plans, lessons learned and exit strategies not being routinely completed; • Supplier health checks not always being regularly undertaken; • Balanced scorecards and/or KPIs not always being used to routinely monitor supplier performance. • Contract risks not always being effectively managed through formal risk registers; and • Review meetings with suppliers not being undertaken in accordance with the appropriate level of C&SM. Implication Recommendation Priority Management response Implementation Month/Year If contract management activity is not undertaken in accordance with key corporate expectations performance, financial and/or related issues may not be identified, and appropriate action taken on a timely basis. The Chief Officer (Asset & Procurement) should remind Services of the need to ensure that key aspects of contract and supplier management noted above are complied with including the need to ensure that robust arrangements are put in place to enable accurate and up to date financial spend management information to be collated and reported to key stakeholders on a timely basis. Low Agree James McKinstry, Chief Officer (Asset and Procurement) The Chief Officer (Asset and Procurement) will remind Services of the need to ensure that key aspects of C&SM are complied with including the need to ensure that robust arrangements are in place to enable accurate and up to date financial spend management information to be collated and reported to key stakeholders on a timely basis. June 2023 Page 113 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 9 Appendix 1 - Audit Grading Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Green-Amber Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Amber-Red Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. Red No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation as a whole. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation as a whole. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation as a whole. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required. Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 114 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 10 Appendix 2 – Contracts selected for testing The following contracts were selected for detailed testing purposes as part of our audit. Sample Contract ref Contract name Contract value (£) 1 NLC-CPT-20-070 Flexible framework for Self-Directive Services (SDS) 820,000,000 2 NLC - CPT-20-057 New Build Programme - construction of units at Dykehead Road, Airdrie 26,996,625 3 NLC-CPT-19-038 MTC - Replacement of windows and doors 2020-2025 25,000,000 4 CPT-194-ML-FC-15 Office equipment & print management software 4,852,403 5 CPT-NT-ED-18-426 Framework for Foundation Apprenticeship 2018-2023 4,000,000 6 NLC-CPT-19-083 Liquid Fuels (SP-19-009) 8,000,000 7 NLC-CPT-21-016 Provision of Digital Connectivity Partner 150,000,000 8 NLC-CPT-21-091 Design and Build Development agreement for construction of Carnbroe and Sikeside Community Hub 24,821,452 9 NLC-CPT-19-090 Janitorial and cleaning products 3,500,000 10 CPT-DS-HSC-18-411 NL Adults and Young Carers Support Services 4,315,264 11 NLC-CPT-20-058 Flexible framework for outdoor education centre 15,500,000 12 NLC-CPT-20-005 MTC-Re-roofing, re-rendering and insulation works 2020-2023 32,500,000 Page 115 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 11 Appendix 3 – Contract and supplier management (C&SM) corporate expectations Key questions that contract management arrangements were assessed against to determine extent of compliance with key corporate expectations in the CSM guidance. Ref Question 1 Has a named contract owner been identified/assigned to the contract? 2 Does the contract owner have appropriate experience and knowledge to undertake the C&SM role? 3 Has the contract owner received appropriate C&SM training to undertake the role? 4 Is the Contract owner aware of their role/responsibility in respect of C&SM and the relationship with the contracted supplier throughout the lifecycle of the contract? 5 Is the Contract owner aware of/have they received a copy of the Council’s Contract & Supplier Management Guidance and proforma C&SM documents? 6 Is the Contract owner aware of the specific tasks and detailed activities (as detailed on page 5 and Appendix 6 of the C&SM guidance) in respect of: • Contract and Relationship Management (Performance and Measurement Structure); • Operational & Administrative Contract and Supplier Management; • Reporting to Senior Management; and • Contract Review. 7 Has the Chief Officer provided the Contract Owner with the appropriate resources to ensure that the contract can be managed and are these resources considered proportionate for the contract? 8 Is there evidence to support a formal handover of the contract from the Corporate Procurement Team (CPT) Lead and Chief Officer to the Contract Owner? 9 Has a proforma Contract Mobilisation document been fully completed which clearly sets out: • The key contract information (including start/end dates, contract value, mobilisation team, contract owner); • Admin set up (including details of any employers/public liability insurances and/or professional indemnity, supplier certifications, ordering/invoicing set up – PECOS/CEDAR refs, risk assessment and escalation process); • Contractual requirements (including the contract methodology and performance requirements); • A contract mobilisation plan (including milestones/actions, responsible owners, key staff, start/end date, dependencies, risks and RAG status); and • Contract management activities (including performance meetings schedule, reporting requirements and service levels/monitoring arrangements. 10 Has a formal assessment of the level of C&SM been undertaken in accordance with the methodology contained within the C&SM Guidance (page 9) i.e. based on size, value, length of contract, business criticality, number of customers, public visibility, performance criteria and risk)? Page 116 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 12 Appendix 3 (continued) – Contract and supplier management (C&SM) corporate expectations Ref Question 11 Have formal arrangements been put in place to ensure that the contract can be managed in accordance with the agreed level of C&SM: • Low level C&SM – monitoring management information from the supplier/end-user feedback, managing delivery and compliance of the contract using four high level indicators (i.e. cost, quality, delivery and service); • Medium level C&SM – monitoring management information from the supplier/end-user feedback, managing delivery and compliance of the contract using four high level indicators (i.e. cost, quality, delivery and service) plus a minimum of a bi-annual or annual review meeting; and • High level C&SM – monitoring management information from the supplier/end-user feedback, managing delivery and compliance of the contract using four high level indicators (i.e. cost, quality, delivery and service) use of a Balanced Scorecard and quarterly review meetings. 12 Has a Contract Implementation Plan been completed with the following contact information: • Contract title; • Supplier name; • Contract owner; • Key milestones/activities; • Senior responsible officer; • Key staff required to input to the activity; • Start/completion dates; • Dependencies: • Cost: • Relevant risks: and • RAG status. 13 Has a Contract & Supplier Management Plan been fully completed with the following details: • Roles and responsibilities of each of the key contract personnel; • The agreed level of management (low/medium/high); • Contract objectives; • The agreed performance management framework (setting out the expected performance and quality levels to be delivered along with the method by which performance will be monitored, measured, reported and managed); • A summary of the mobilisation plan; • A summary of the Migration plan (from supplier to ‘go live’); • Contract compliance – cost, quality, delivery and service performance indicators; • Escalation process (within supplier organisation and the Council); • A Contract Exit Plan which sets out: o The contract details; o A brief description of the need for an exit plan and the plan itself; o Key milestones/activities; and o The items to be handed over. • Review schedule meeting; • Risks and issues; and • Process for conducting supplier financial checks. Page 117 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 13 Appendix 3 (continued) – Contract and supplier management (C&SM) corporate expectations Ref Question 14 Is there documented evidence to support the initial/kick-off meeting having been held with the supplier? 15 Is there appropriate evidence held on file to support the contract being managed/monitored in accordance with the approved level of C&SM? i.e. For Low level C&SM contracts is contract/supplier performance being managed through: • A review of management information received from supplier/end-user feedback; and • Is the contract compliance being considered in respect of the agreed performance indicators i.e. o Cost; o Quality; o Delivery & o Service; For Medium level C&SM contracts – is contract/supplier performance managed through: • A review of management information received from supplier/end-user feedback; • Is the contract compliance being considered in respect of the agreed performance indicators i.e. o Cost; o Quality; o Delivery & o Service; and • have review meetings been held with the supplier on a bi-annual or annual basis as a minimum For High Level C&SM contracts – is the contract and supplier performance being monitored/managed using: • A review of management information received from supplier/end-user feedback; • Is the contract compliance being considered in respect of the agreed performance indicators i.e. o Cost; o Quality; o Delivery & o Service; • Are Balanced Scorecards being used to monitor performance in respect of cost, quality, delivery and service (as above); and • have quarterly review meetings been held to monitor performance and are the Balanced Scorecards being discussed routinely at each meeting 16 Are arrangements for undertaking supplier health checks throughout the lifetime of the contract in place and are these are being undertaken at least annually. Do these checks include: • Financial status; • Legislation & regulatory provisions; • Insurances; • Relevant accreditations/registrations; • Corporate social responsibility; • Business probity; • Sustainability and environmental; • Criminal conviction checks; and • Health and safety arrangements. Page 118 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 14 Appendix 3 (continued) – Contract and supplier management (C&SM) corporate expectations Ref Question 17 Have performance review meetings been held with the suppliers to formally discuss performance and feedback? Does this include formal discussion of, and is there documentary evidence on file to support: • supplier business review & update (including new developments/products, news, customer affecting issues and value adds); • Council business review/SIP update (including SIPS and council performance/issues); • Supplier Scorecard review (high level C&SM contracts); • Current contract performance against target/SLA (including review of contract delivery and issues for escalation); • Contract risk register review (including review of existing risks and mitigating actions, new risks identified, removal of old risks from the register, BCP considerations and contract exit strategy considerations); • Sustainability and community benefits (including social/economic/environmental and other benefits realised); • Financial monitoring (including purchases to pay, invoices/billing, financial sustainability, the results from the latest assessment, issues and supporting guarantees) • Process (if appropriate) including changes to delivery/contract/agreement/SLA, supporting processes and regulatory/statute; • Actions for improvement (including innovations); • Sign posting (including supplier development programme, SW Hub and the Economic Development team); and • Feedback (on council performance for each contract and the scorecard review process). 18 Is there evidence to show that minutes of review meetings, agreed actions and balanced scorecard results have been communicated to all stakeholders following each meeting? 19 Is a risk register maintained for the contract? 20 Are arrangements in place for identifying/managing/ monitoring risks at regular intervals? 21 Is a process in place escalating new/emerging risks to the Chief Officer and/or key stakeholders? 22 For reports provided to senior management in respect of the C&SM process, ensure that the reports contain the following information as a minimum (in accordance with the guidance and CSOs): • Performance; • Compliance with specification and contract terms; • Cost; • Best value requirements; and • User satisfaction and risk management 23 Does the Contract Owner regularly review financial monitoring information for all contracts above £50,000 including monitoring spend against contract value and are variances reported to Senior Management? 24 Has a formal Change Control process been put in place which sets out the respective roles and responsibilities of both the council and the supplier along with the procedures for raising, evaluating, costing and approving change requests? 25 Where changes (variations) have been made to a contract, have sequentially numbered Contract Change Notices been completed which clearly set out: • The reason for the change; • Full details of the change; • Details of the likely impact of the change on the contract; and • Agreement of the change (signed and dated) by both the Contract Owner and the supplier. Page 119 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.006 - contract management arrangements/a - findings & report/a07a 20230420 contract management final report v1.0 as issued .docx 15 Appendix 3 (continued) – Contract and supplier management (C&SM) corporate expectations Ref Question 26 Have all contract changes been formally recorded in a Contract Change log? 27 Has a formal Contract Exit Strategy been developed as part of the procurement process? 28 Where the contract is due to end within 6-12 months, is there evidence of the Contract Exit strategy being utilised, including a lessons learned review which incorporates feedback from stakeholders, end-users and the supplier? 29 Has a final Performance Review meeting been held with the supplier and have the lessons learned been clearly documented and communicated to the appropriate stakeholders to inform any future procurement process? 30 Has the Contract Owner recorded and provided statistical data on the C&SM activity/outcomes to the Chief Officer (Asset & Procurement) as part of the Annual Procurement report for Scottish Government? Page 120 of 222
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Https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Recurring/CITY DEAL/0750.2023.002 City Deal - Assurance work 2022-23/A - Findings and Reports/A06a - 20230424 CITY DEAL Final report v1.0 as issued.docx 1 INTERNAL AUDIT REPORT CITY DEAL Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Appendix 2: City Deal Assurance Statement Issued to: Chief Officer (Place) and Chief Officer (Finance) Copied to: City Deal Manager, Business Finance Manager, Deputy Chief Executive and Chief Executive Headlines The purpose of this audit was to provide assurance on the adequacy and effectiveness of the Council's arrangements in respect of its participation in the Glasgow City Region (GCR) City Deal by assessing the extent to which the Council is adhering to key elements of the GCR City Deal Assurance framework with a focus on the processes surrounding the preparation and submission of grant claims, processes in place around change control and conduct of procurement/tendering arrangements in the period. We also extended our audit remit for this exercise to address aspects of an intended audit by the Glasgow City Council Internal Audit Team (in their role as Internal Auditors for the GCR Cabinet) on Project Procurement Strategies. This work involved reviewing the project procurement arrangements designed to help achieve competitive bids and value for money and seeking assurance that there are appropriate controls in place particularly surrounding supply chain and supplier continuity risk identification and management. Internal Audit is also required to return an annual assurance statement to Head of Audit at Glasgow City Council, in their role as the lead auditor for the GCR City Deal, and this work will underpin the completion of the statement for 2022-23. Based on the results of our work, we have concluded that: • we are satisfied that during 2022-23 the Council complied with the GCR Assurance Framework; • the City Deal team has substantively complied with the Council’s General Contract Standing Orders in its procurement/tendering processes for City Deal projects; • the Council has continued to successfully apply expected governance arrangements in relation to the planning, controlling, monitoring and oversight of City Deal projects; and • City Deal grant claims in 2022-23 were properly prepared and submitted in accordance with the terms and conditions under which the grant award was made, the funds have been used for the intended purposes in accordance with the relevant terms and conditions under which the grant is made and the sums claimed are properly due. We have categorised the audit as offering ‘substantial assurance’ as the control environment appears adequate and to have operated as intended with only a small number of minor discrepancies or areas for improvement identified which are outlined in the Action Plan at Section 3. Based on the results of this review and our other knowledge and understanding of the Council’s arrangements, we have returned an assurance statement for City Deal to Glasgow City Council Internal Audit which states that there are no significant matters that require to be raised which could have a material impact on the GCR Annual Assurance Statement for financial year 2022-2023 (Appendix 2). Internal Audit Opinion (see definition at Appendix 1) Substantial assurance Organisational impact (see definition at Appendix 1) Moderate Report status FINAL Audit ref 0750/2023/002 Date issued 24/04/2023 Audit Team Elaine MacDonald, Paula Hendry and Hugh Shevlin Page 121 of 222
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Https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Recurring/CITY DEAL/0750.2023.002 City Deal - Assurance work 2022-23/A - Findings and Reports/A06a - 20230424 CITY DEAL Final report v1.0 as issued.docx 2 1. Executive Summary Objectives The audit was designed to assess the extent to which the Council is adhering to key elements of the GCR City Deal Assurance framework with a focus on the processes surrounding change control, the preparation and submission of grant claims and reviewing the regularity, or otherwise, of any relevant procurement/tendering arrangements. In addition, we extended our audit remit to address aspects of an intended audit by the Internal Auditors for the GCR Cabinet (Glasgow City Council Internal Audit Team) on Project Procurement Strategies for which North Lanarkshire Council had been selected for sample testing. The main additional areas of control considered were engagement with LPSG meetings, including communication with colleagues in member authorities to feedback on relevant procurement challenges and share lessons learned, that supplier continuity risks and supplier chain risk management are identified, documented and mitigation actions put in place and suitable management information is provided to the appropriate groups for scrutiny. This engagement has been conducted in accordance with the ‘Public Sector Internal Audit Standards’. The Internal Audit section reports formally on conformance with these standards to the Audit and Scrutiny Panel. 2. Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 0 0 1 Key areas requiring management action (High) No key areas requiring urgent management action have been identified. Good practice identified • We noted the following areas of good practice during the audit: • The Service has substantially complied with the Council’s General Contract Standing Orders in its procurement/tendering processes for City Deal projects; • The Council has established a series of governance arrangements in relation to the planning, delivery, controlling, monitoring and oversight of projects which is consistent with the requirements set out in the Glasgow City Region Assurance Framework 2019; • Change control processes are in place and are operating in line with identification, monitoring and reporting expectations; • Grant claims for 2022-23 have been prepared and submitted in accordance with the terms and conditions under which the grant award is made; and • NLC is represented on and attends meetings of the Procurement Support group (PSG) and Sustainable Procurement Strategy Group (SPSG) which replaced the LPSG. Lessons learned by individual authorities are shared at these meetings for others to reflect upon. Other areas for improvement (Medium) No other areas for improvement were identified. Page 122 of 222
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Https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Recurring/CITY DEAL/0750.2023.002 City Deal - Assurance work 2022-23/A - Findings and Reports/A06a - 20230424 CITY DEAL Final report v1.0 as issued.docx 3 3. Action Plan CITY DEAL 0750/2023/002 Ref Finding 1 Grant claims generally appeared accurate, fairly stated and the expenditure claimed was consistent with the terms and conditions of the grant offer, although some discrepancies were identified. While the results of our review of the Council’s grant claim processes was generally satisfactory, we noted: • the grant claim for quarter 2 of 2022/23 differed from the financial ledger by £6,691 (grant claim was less than ledger balance). We ascertained that this difference was costs that were to be funded by NLC directly and which had been posted to the already established City Deal ledger codes. This is because current cost centre and account codes are arranged to manage City Deal costs, however, some costs attributable to NLC and which are not rechargeable to City Deal grant funding, have also been posted here. We understand it is Finance’s intention to create new and separate cost centres for the NLC funded elements related to City Deal projects to be allocated to; • there were several coding errors on the City Deal projects ledger accounts that had not been corrected at the earliest opportunity. These were due mainly to invoices not being coded to the correct cost centre/account code initially and a delay in the Service City Deal Team actioning requests to correct these. While these had been in the main adjusted as part of the grant claim analysis, we understand the intention is to correct any still wrongly coded as part of the year end process (note – no impact on amounts claimed but purpose is to ensure all individual City Deal projects cost centres are accurate); and • salaries of the City Deal team are apportioned to the City Deal projects they work on. We noted salary for a vacant post had been capitalised, apportioned and claimed in quarter 2 of 2022/23. While the expectation had been to fill this post earlier, this had not happened. Further checks confirmed costs for this vacant post had also been claimed in part of quarter 1 and 3 grant claims for 2022/23. We understand that the Finance team intend to correct this overclaim at the year-end within the Q4 claim. Implication Recommendation Priority Management response Implementation Month/Year Control of ongoing capital expenditure for individual projects may be compromised. Expenditure may not be claimed on a timely basis and/or in accordance with the terms and conditions of the grant award. The Chief Officer (Finance) should: (1) ensure that separate ledger codes to record NLC funded elements of City Deal project costs are created promptly and used thereafter; (2) remind the City Deal team of the need to ensure invoices are coded accurately to the correct project account, or where invoices have been wrongly coded, that corrections are made in a timely manner; and (3) ensure that arrangements are put in place as part of the quarterly grant claim process to ensure that salaries are apportioned and claimed for employees only where costs have actually been incurred and that any overclaims are adjusted/reflected in subsequent claims at the earliest opportunity. Low Agree Greg Telfer, Business Finance Manager The Service will ensure all aspects of the recommendations are implemented in full. April 2023 Page 123 of 222
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Https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Recurring/CITY DEAL/0750.2023.002 City Deal - Assurance work 2022-23/A - Findings and Reports/A06a - 20230424 CITY DEAL Final report v1.0 as issued.docx 4 Appendix 1 - Audit Grading Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Green-Amber Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Amber-Red Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. Red No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation as a whole. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation as a whole. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation as a whole. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required. Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 124 of 222
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Https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Recurring/CITY DEAL/0750.2023.002 City Deal - Assurance work 2022-23/A - Findings and Reports/A06a - 20230424 CITY DEAL Final report v1.0 as issued.docx 5 Appendix 2 Glasgow City Region – City Deal North Lanarkshire Council Assurance Statement 2022-2023 1. Purpose of Statement The purpose of this statement is to provide assurance that sound internal control and governance arrangements exist within North Lanarkshire Council in relation to City Deal, and that no material issues have been identified which may directly or indirectly have an effect on the delivery of the City Deal programme. Any issues which are identified will be used to inform the Glasgow City Region Annual Assurance Statement for financial year 2022-2023. 2. Assurance by Chief Officer (Audit and Risk), North Lanarkshire Council North Lanarkshire Council seeks at all times to adhere to the laws and regulations relating directly to the financial statements and the laws, regulations and the local code of governance under which the organisation conducts its business. I confirm that any issues identified which may have a negative impact on the City Deal programme (such as cases of actual or potential non-compliance with relevant laws and regulations, significant failures in the control environment and all known or suspected cases of fraud) have been reported to the Head of Audit of Glasgow City Council (previously, or as set out below). While I acknowledge that no system of control can ever give an absolute assurance that all transactions are properly processed, all errors have been prevented, and all policies and procedures have been fully implemented throughout the organisation I can confirm that there are no known material issues which have not been considered in the completion of this Assurance Statement. 3. Declaration There are, in my opinion, no significant matters that require to be raised in this statement which would have a material impact on the Glasgow City Region Annual Assurance Statement for financial year 2022-2023. It is my opinion that reasonable assurance can be placed upon the adequacy and effectiveness of the Council’s framework of governance, and financial controls in relation to City Deal for the year ended 31 March 2023. Ken Adamson Chief Officer (Audit and Risk), North Lanarkshire Council 24 April 2023 Page 125 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.009 - corporate governance - principles c & d/a - findings and report/a05 20230503corporate governance final report v1.0 as issued.docx 1 INTERNAL AUDIT REPORT CORPORATE GOVERNANCE – PRINCIPLES C and D Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Appendix 2: Good Governance Principles C and D Issued to: Chief Officer - Business and Digital (point 2 and 3) Chief Officer - People Resources (point 1(2)), Chief Officer – Legal and Democratic (point 1(1)) and Chief Officer (Audit and Risk) (point 1(3)) Copied to: Strategy and Performance Manager, Depute Chief Executive and Chief Executive Headlines The purpose of this audit was to provide independent assurance on the adequacy and effectiveness of the Council’s arrangements for ensuring that it complies with Principles C and D of the CIPFA/SOLACE ‘Delivering Good Governance in Local Government Framework (2016)’. • Principle C relates to ‘Defining outcomes in terms of sustainable economic, social, and environmental benefits’. • Principle D relates to ‘Determining the interventions necessary to optimise the achievement of the intended outcomes’. As part of the audit, we assessed existing Council operational practices and management arrangements against the relevant sub-principles cited in the framework (see Appendix 2). We also considered the extent to which recommendations raised in previous Internal Audit reports on corporate governance had been progressed by management and reviewed the robustness and effectiveness of the Council’s Strategic Governance and Strategic Self-evaluation Frameworks in so far as they relate to compliance with the Delivering Good Governance Framework. Based on the results of our work, together with our wider general knowledge gained from previous Internal Audit reviews undertaken on this topic and work on other associated areas, we consider that the Council’s corporate governance arrangements in relation to the areas examined are generally adequate and appear to have operated effectively. We have, therefore, assessed the audit as providing ‘reasonable assurance’. We were pleased to note that as part of the annual review of the Council’s Strategic Governance Framework, the Council had undertaken a full self-assessment of its Local Code of Governance against the Good Governance framework. We consider that this process, which was endorsed by the Corporate Management Team (June 2022) and approved by the Audit and Scrutiny Panel (September 2022), was generally robust. In addition, we noted that the corporate self-assessment indicated a high level of compliance with the corporate governance framework, which was broadly consistent with Internal Audit’s assessment of Principles C and D. We have however, identified a small number of areas where we consider scope for improvement exists and/or where further action is required to fully address some of the recommendations made in previous audit reports in this area. These are identified in the action plan at Section 3 and include the need for management to take further action to ensure that key documents are reviewed, updated as appropriate and implemented/communicated to relevant staff. Internal Audit Opinion (see definition at Appendix 1) Reasonable assurance (Green-Amber) Organisational impact (see definition at Appendix 1) Moderate Report status FINAL Audit ref 0900/2023/009 Date Issued 03/05/2023 Audit Team Jacquie Howden and Paula Hendry Page 126 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.009 - corporate governance - principles c & d/a - findings and report/a05 20230503corporate governance final report v1.0 as issued.docx 2 1. Executive Summary Objectives The purpose of this audit was to provide independent assurance on the adequacy and effectiveness of the Council’s arrangements for ensuring that it complies with Principles C and D of the CIPFA/SOLACE ‘Delivering Good Governance in Local Government Framework’ (2016) (‘the framework’). Principle C relates to ‘Defining outcomes in terms of sustainable economic, social, and environmental benefits’ whilst Principle D relates to ‘Determining the interventions necessary to optimise the achievement of the intended outcomes’. In particular, our work was designed to offer an audit opinion on the following: • Does the Council comply with Principles C and D of the Delivering Good Governance Framework? • Has the Council progressed previous Internal Audit recommendations in relation to corporate governance? • Does the Council have robust and effective arrangements in place to self-evaluate its compliance with the Delivering Good Governance Framework, including arrangements to agree and progress any improvement actions identified? • Is Internal Audit’s assessment broadly consistent with any self-assessment undertaken by management? As part of the audit, we assessed the existing Council operational practices and management arrangements against the relevant sub-principles cited in the framework (see Appendix 2). We also considered the extent to which previous recommendations in relation to corporate governance had been progressed by management and reviewed the status, adequacy, robustness and effectiveness of the Council’s strategic governance framework and self-evaluation framework in so far as they relate to compliance with the Delivering Good Governance Framework. This engagement has been conducted in accordance with the ‘Public Sector Internal Audit Standards’. The Internal Audit section reports formally on conformance with these standards to the Audit and Scrutiny Panel. 2. Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 0 1 2 Key areas requiring management action (High) There were no key areas identified which required urgent management action. Good practice identified We noted the following areas of good practice during the audit: • A formal self-assessment of the Council’s Local Code of Conduct against the CIPFA Delivering Good Governance Framework 2016 has been completed for 2021/2022 and there are formal and generally robust arrangements in place to ensure that such reviews are undertaken on an annual basis. • The Council has a range of supporting documentation, policies and procedures in place which are consistent with good practice and which embrace the supporting principles of the Good Governance Framework. These include a Scheme of Administration, Scheme of Delegation, Financial Regulations, Risk Management Strategy and Communications strategy. • The Council has a formal strategic governance framework in place to support the Plan for North Lanarkshire (‘The Plan’) and its one Council approach. This includes six inter-related frameworks which are key to monitoring delivery towards the Council’s overall vision and ensuring that each stage is appropriately planned, guided, implemented and governed. • The Strategic Performance Framework (SPF) was approved in February 2019 and comprises a group of performance indicators at three levels which collectively provides an overview of performance to held understand the impact of the Council’s activities on improving the services and outcomes for people and communities in North Lanarkshire. Formal reporting arrangements have been put in place to ensure that periodic performance reports are being presented to committee. Page 127 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.009 - corporate governance - principles c & d/a - findings and report/a05 20230503corporate governance final report v1.0 as issued.docx 3 Good practice identified (continued) We noted the following areas of good practice during the audit: • The Council robust financial plans and strategies in place which set out the framework for sound financial governance, planning and management of resources to support ‘The Plan’ and the financial planning assumptions relating to future revenue grants and other funding as well as clearly setting out the increasing cost pressures on the council. • The Council has formal arrangements in place for engaging with Communities through the ‘Community Matters – Working with Communities framework’ (approved in 2019) and ‘Delivering for Communities’ (approved in 2020) and a locality community planning model which includes nine Community Boards. The arrangements are currently being further developed with a view to strengthening community participation in decision-making processes. • The 5-year Medium Term Financial Plan (MTFP) sets out a range of risk-based outcomes together with the key challenges in meeting medium term financial sustainability for financial planning purposes; • There is a formal timetable for committee meetings with robust arrangements in place for ensuring committee papers are submitted in accordance with the expected timescales/frequencies. • The Council’s website contains copies of all key strategies and other information to inform service users and other key stakeholders of the council’s activities and any planned consultations. Other areas for improvement (Medium) An area for improvement was identified: • Management needs to ensure that key documents are reviewed, updated as appropriate and implemented/communicated to relevant staff. Page 128 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.009 - corporate governance - principles c & d/a - findings and report/a05 20230503corporate governance final report v1.0 as issued.docx 4 3. Action Plan (continued) Corporate Governance – Principles C and D 0900/2023/009 Ref Finding 1 Management needs to ensure that key documents are reviewed, updated as appropriate and implemented/communicated to relevant staff. The Corporate Management Team (CMT) is responsible for ensuring that the Strategic Governance Framework provides the most up-to-date evidence to inform the development of the Annual Governance Statement and that policies, strategies and other documents due for review are reported to Committee in accordance with the expected timescales. As part of the review of implementation of progress in implementing actions identified in our previous Internal Audit report on Corporate Governance in February 2022, we noted a number of key corporate documents which had not been recently reviewed in accordance with their expected timescales including: • the Council’s Scheme of Delegation to Officers was last updated in April 2019. The document requires to be updated to reflect the recent approved restructure (most recently the ‘One Place One Plan – Governance Update report’ – December 2022). We understand that work is currently underway with services given a deadline of mid-May to provide all proposed amendments and a report is due to be presented to Policy and Strategy Committee by June 2023; • the Code of Conduct for Chief Officers has not been updated since 2017. There was a management commitment to review/refresh this document for both the 2020/21 and 2021/22 assessments by March 2022 and 2023 respectively. We understand, however, that the review is now scheduled to commence in April 2023 with a report due to be presented to Policy and Strategy Committee in June 2023; • the Code of Conduct for Employees has not been updated since March 2021. There was a management commitment to review/refresh this document and consider the alignment/refresh of the Codes for the former Culture NL and NL Leisure employees (as appropriate) by October 2022. The timescale for completing this has now been extended to September 2023. In the meantime, management had also committed to issue an all users email to staff by January 2023 to remind them of their duties under the Code. We understand that this email has not yet been issued, but that it is due to be issued later in 2023 as part of a wider email which will also include reference to the revised Whistleblowing policy. We also noted that work is currently underway on developing the mandatory training course for the Code and this is expected to be launched during 2023. This is later than anticipated due to resource issues and competing demands within the TOD service. We understand that a first draft of the eLearning course for the Code has been prepared and is currently being reviewed by the Employee Relations team. We understand that once this has been completed the module will be rolled out to all staff on LearnNL; • the PRD process was last reviewed in 2017 and management had committed to review the process and associated documentation by March 2022 to reflect the changes regarding home working and the requirements for digital skills as part of the Digital NL programme. We understand that the review has now been undertaken and that the Learn NL functionality has now been enabled to allow staff to record their PRD conversation. We also understand that the new PRD process is due to be launched from April 2023, with the Talent and Organisational Development Team due to raise awareness sessions from May 2023; and • The Corporate Anti-Fraud Policy and Response Plan has not been updated since 2017 and requires to be reviewed to ensure that the policy properly reflects how the council responds to fraud following staffing and organisational changes. A review of the Council’s anti-fraud arrangements including review of this policy was included in the 2022-23 annual Internal Audit Plan and we understand this assignment is now underway, with a report due to be presented to the Policy and Strategy Committee in October 2023. Implication Recommendation Priority Without regular review, key corporate policies may not be appropriate or accurately reflect the Council’s arrangements and/or staff and other key stakeholders may not be aware of the most up to date policies and procedures. (1) The Chief Officer (Legal and Democratic) should ensure that the Scheme of Delegation to Officers is reviewed and updated in line with the revised timescales above; (2) The Chief Officer (People Resources) should ensure that the appropriate arrangements are put in place to allow for key HR related documents referenced in the finding above to be reviewed/refreshed and communicated to staff and that these are monitored to ensure revised timescales are achieved; and (3) The Chief Officer (Audit and Risk) should ensure that the Corporate Anti-Fraud Policy is reviewed/updated and reported in line with the expected timescales. Medium Page 129 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.009 - corporate governance - principles c & d/a - findings and report/a05 20230503corporate governance final report v1.0 as issued.docx 5 3. Action Plan Corporate Governance – Principles C and D 0900/2023/009 Management response Implementation Month/Year (1) Agree Andrew Rose – Democratic Services Manager The Scheme of Delegation to Officers is currently in the process of being reviewed, with all Services having been requested to provide their required changes by 19 May 2023. Thereafter, Legal Services will carry out a check of all statutory references to ensure that these are accurate prior to a report on the revisions to the Scheme being submitted firstly to the Corporate Management Team and then to the Council meeting on 22 June 2023. Archie Aitken - Chief Officer (Legal & Democratic) The Chief Officers’ Code of Conduct is currently being reviewed and a report will be submitted to the Corporate Management Team and then to the Policy & Strategy Committee on 8 June 2023. (2) Agree Fiona Whittaker – Chief Officer (People Resources) The Code of Conduct for Employees is currently being reviewed to consider the alignment of the former Culture NL and NL Leisure employees, where appropriate, and is on track for completion by September 2023. An all-users announcement will be issued thereafter to ensure that all staff are aware of the Code and their respective duties. A mandatory eLearning module on the Code of Conduct has been developed and an announcement was issued to staff in April 2023 regarding the new module and the need to complete it every two years. Agree Fiona Whittaker – Chief Officer (People Resources) As detailed in the report, the PRD process has been reviewed and the Learn NL system functionality has been enabled to allow staff to record their PRD conversations. Following an initial pilot of the new system earlier in the year, a report will be considered by BMT on 11th May 2023 to agree the full roll out and launch of the PRD process and supporting system. Full promotion of the new system approach will be undertaken as part of learning at work week in June, with further engagement and training available to support wider adoption following the launch. (3) Agree Ken Adamson, Chief Officer (Audit and Risk) As referenced in the finding above, the review of the Corporate Anti-Fraud Policy and Response Plan is underway and a refreshed anti-fraud policy will be reported to Policy and Strategy Committee during cycle 3 of 2023. June 2023 June 2023 September 2023 June 2023 October 2023 Page 130 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.009 - corporate governance - principles c & d/a - findings and report/a05 20230503corporate governance final report v1.0 as issued.docx 6 3. Action Plan Corporate Governance – Principles C and D 0900/2023/009 Ref Finding 2 Management needs to consider how best to evidence the process for identifying, recording and reporting improvement actions and/or future planned developments in relation to key governance arrangements. The ‘Strategic Governance Framework – annual review and refresh’ report presented to the Corporate Management Team (CMT) in June 2022 sets out the requirement under the CIPFA ‘Delivering Good Governance in Local Government framework’ for Council’s to test their arrangements against the good governance principles on an annual basis; ensure that the local code is up to date; and to report on compliance with the code. The report also sets out the CMT’s dual role in the review process in respect of ensuring the local code is assessed on an annual basis to ensure ongoing effectiveness and compliance and identifying any improvement actions and/or future planned developments in relation to key governance arrangements and continuous improvement activity. As part of the audit, we considered the adequacy and effectiveness of the Council’s process for reviewing and assessing its level of compliance with the framework and the extent to which CMT had fulfilled its dual role in this process. We were generally satisfied that appropriate and robust arrangements were in place to ensure that the assessment against the framework had been undertaken in accordance with the expected timescales and that the specific governance and strategic oversight and accountability elements included from the Programme of Work for 2022-2023 (as agreed with CMT) had been appropriately incorporated into the review process. We were also pleased to note that the process, which had been endorsed by the CMT (June 2022) and approved by the Audit and Scrutiny Panel (September 2022), demonstrated a high level of compliance with the Corporate Governance framework and was broadly consistent with the assessment undertaken by Internal Audit in relation to Principles C and D. We noted areas within the current arrangements, however, where we consider that there is scope to further improve the arrangements in respect of the CMT’s role for identifying, recording and reporting improvement actions and/or areas of continuous improvement in accordance with their remit. In particular, we noted that the annual Chief Officer’s Certificate of Assurance, which is used to inform the Annual Governance Statement (AGS), did not explicitly require Chief Officers to confirm that their governance arrangements had incorporated any areas for improvement arising from the work of others such as Internal Audit, External Audit, and other external review, regulatory or inspection bodies. Neither were Services asked to reflect on progress against any issues arising from the Council’s self-evaluation framework and/or Services ’own internal review processes. In addition, we noted that the Council’s Annual Governance Statement (AGS) generally contained expected commentary, however, there was only very high-level information regarding improvement actions. Although we were pleased to note detail was included regarding continuous improvement and reference to audit outputs as well as the outcome of rolling reviews undertaken during the year as part of the self-evaluation framework, the narrative regarding the resultant improvement actions was very limited. We consider that the AGS may benefit from inclusion of specific commentary around progress made on improvement actions identified in prior years as well as planned improvement activity that will be undertaken in the year ahead. Implication Recommendation Priority Management response Implementation Month/Year Without formal documented processes in place, the CMT would be unable to evidence that they were fulfilling their role of identifying, recording and reporting improvement actions and/or future planned developments in key governance arrangements. Improvement actions may not be adequately identified and/or acted upon. The Chief Officer (Business and Digital) should: (1) In reviewing the Annual Assurance Checklists for 2023-24 consider whether a question regarding identification and completion of relevant specific improvement activity/actions within their area of responsibility should be included; and (2) in preparing the AGS consider including specific commentary around progress made on improvement actions identified in prior years as well as planned improvement activity that will be undertaken in the year ahead to better allow key stakeholders to monitor performance. Low Agree Katrina Hassell, Chief Officer (Business and Digital) With the Annual Assurance Checklist process having been in place for a number of years with minimal changes, a substantial review has been scheduled to be undertaken by the end of 2023 with a view to implementing the updated checklist for the 2023/24 year-end process. Any further/future amendments to the Annual Governance Statement process will be considered, if relevant, when there has been time to review the Annual Assurance Checklist. This review will give due consideration to the issues raised in this finding. A report will be presented to CMT to ensure all Chief Officers are sighted on, and endorse, the new process and their role and responsibilities therein. March 2024 Page 131 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.009 - corporate governance - principles c & d/a - findings and report/a05 20230503corporate governance final report v1.0 as issued.docx 7 3. Action Plan (continued) Corporate Governance – Principles C and D 0900/2023/009 Ref Finding 3 Management should ensure that the planned review of the effectiveness of the Community Boards is completed in accordance with the agreed extended timescales. In our previous Internal Audit report on Corporate Governance (March 2021) we recommended that the Chief Executive should, after allowing a sufficient period of time for the new Community model and individual Boards to become established, undertake a formal review (or self-assessment) of the effectiveness of the Community Boards. Management commitment was initially given to undertaking work during 2022. This timescale has been extended to March 2023. We understand that changes to the CMT arrangements and the North Lanarkshire Partnership Strategic Leadership Board (NLP SLB) meeting dates were responsible for impacting on the original timescales. We noted that a self-assessment exercise was built into the Strategic Self-evaluation Framework rolling review programme for 2022-23 (as approved by CMT in October 2022) with a view to concluding in cycle 1 of 2023. The scope for the self-evaluation was agreed by CMT and we understand that the exercise is currently underway, led by the Chief Officer (Business and Digital) as the responsible officer and the Chief Officer (Audit and Risk) as the Champion for this self-evaluation on behalf of the CMT. The Strategy and Performance Manager (the project manager for the self-evaluation) has advised that the results from an online survey, which was facilitated independently by the Improvement Service, are expected to be received by the end of March 2023. We understand that, following an analysis of the survey results, the outcome of the process will be reported to ley stakeholders. Implication Recommendation Priority Management response Implementation Month/Year The operating model may result in Community Boards failing to discharge their roles and responsibilities adequately or effectively which may impact on the achievement of the shared ambition. Without formal plans to monitor/manage progress on previously agreed management actions, timescales for the implementation dates may be missed in error. The Chief Officer (Business and Digital) should ensure that appropriate action is being taken to enable the self- evaluation of the Community Boards to be completed in accordance with the expected timescales for completion and reporting with any issues arising taken forward as appropriate. Low Agree Katrina Hassell, Chief Officer (Business and Digital) / Ken Adamson, Chief Officer (Audit and Risk) – independent Champion for the self- evaluation exercise. In line with the report from the Self-Evaluation Champion to the CMT in November 2022, a subsequent report was presented from the Champion to the North Lanarkshire Partnership Strategic Leadership Board on 21 April 2023. This outlined the findings from the set of three inter-related exercises (that includes the Community Boards) and the emerging areas for improvement and suggested next steps. In this respect, the Strategic Leadership Board agreed the next steps which included an improvement planning session to be facilitated by the Improvement Service towards the end May or early June which is expected to result in a prioritised series of improvement actions being identified and agreed. The results of this planned session (agreed improvement actions and responsible officers/timescales) will then be reported formally through the Council’s governance arrangements and to key stakeholders as appropriate. An update report to CMT in May 2023 will ensure the senior management team of the Council are updated on the progress of the self-evaluation exercise including the decision of the Strategic Leadership Board as to how the exercise will now be progressed. September 2023 Page 132 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.009 - corporate governance - principles c & d/a - findings and report/a05 20230503corporate governance final report v1.0 as issued.docx 8 Appendix 1 - Audit Grading Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Green-Amber Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Amber-Red Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. Red No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation as a whole. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation as a whole. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation as a whole. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required. Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 133 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.009 - corporate governance - principles c & d/a - findings and report/a05 20230503corporate governance final report v1.0 as issued.docx 9 Appendix 2 – Good Practice Principles C and D The core principles and sub principles of good governance set out in the 2016 CIPFA/Solace ‘Delivering good governance in Local Government Framework (‘the framework’) are taken from the International Framework: Good Governance in the Public Sector (IFAC/CIPFA 2014) and interpreted for a local government context. It is the responsibility of each local authority to: (1) Set out its commitment to the principles of good governance included in the framework; (2) Determine its own governance structure or local code by these principles; and (3) Ensure that it operates effectively in practice. Principle C: Defining outcomes in terms of sustainable economic, social, and environmental benefits Sub-principles 1. Defining outcomes 1.1 Having a clear vision, which is an agreed formal statement of the organisation’s purpose and intended outcomes containing appropriate performance indicators, which provide the basis for the organisation’s overall strategy, planning and other decisions 1.2 Specifying the intended impact on, or changes for, stakeholders including citizens and service users. It could be immediately or over the course of a year or longer 1.3 Delivering defined outcomes on a sustainable basis within the resources that will be available 1.4 Identifying and managing risks to the achievement of outcomes 1.5 Managing service user’s expectations effectively with regard to determining priorities and making the best use of resources available 2. Sustainable, economic, social and environmental benefits 2.1 Considering and balancing the combined economic, social and environmental impact of policies and plans when taking decisions about service provision. 2.2 Taking a longer-term view with regard to decision making, taking account of risk and acting transparently where there are potential conflicts between the organisation’s intended outcomes and short-term factors such as political cycle or financial constraints 2.3 Determining the wider public interest associated with balancing conflicting interests between achieving the various economic, social and environmental benefits, through consultation where possible, in order to ensure appropriate trade-offs 2.4 Ensuring fair access to services Page 134 of 222
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2022-23/0900.2023.009 - corporate governance - principles c & d/a - findings and report/a05 20230503corporate governance final report v1.0 as issued.docx 10 Appendix 2 – Good Governance Principles C and D (continued) Principle D: Determining the interventions necessary to optimise the achievement of the intended outcomes Sub-principles 1. Determining interventions 1.1 Ensuring decision makers receive objective and rigorous analysis of a variety of options indicating how intended outcomes would be achieved and associated risks therefore ensuring best value is achieved however services are provided 1.2 Considering feedback from citizens and service users when making decisions about service improvements or where services are no longer required in order to prioritise competing demands within limited resources available including people, skills, land and assets and bearing in mind future impacts 2. Planning interventions 2.1 Establishing and implementing robust planning and control cycles that cover strategic and operational plans, priorities and targets 2.2 Engaging with internal and external stakeholders in determining how services and other courses of action should be planned and delivered 2.3 Considering and monitoring risks facing each partner when working collaboratively, including shared risks 2.4 Ensuring arrangements are flexible and agile so that the mechanisms for delivering goods and services can be adapted to changing circumstances 2.5 Establishing appropriate key performance indicators (KPI’s) as part of the planning process in order to identify how the performance of services and projects is to be measured 2.6 Ensuring capacity exists to generate the information required to review service quality regularly 2.7 Preparing budgets in accordance with objectives, strategies and the medium-term financial plan 2.8 Informing medium and long-term resource planning by drawing up realistic estimates of revenue and capital expenditure aimed at developing a sustainable funding strategy. 3. Optimising achievement of intended outcomes 3.1 Ensuring the medium-term financial strategy integrates and balances service priorities, affordability and other resource constraints 3.2 Ensuring the budgeting process is all-inclusive, taking into account the full cost of operations over the medium and longer term 3.3 Ensuring the medium-term financial strategy sets the context for ongoing decisions on significant delivery issues or responses to changes in the external environment that may arise during the budgetary period for outcomes to be achieved while optimising resource usage 3.4 Ensuring the achievement of ‘social value’ through service planning and commissioning Page 135 of 222
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.008 - Welfare and Poverty Related Grants/A - FINDINGS AND REPORT/A05A 230424 Welfare Payments Final Report .docx 1 INTERNAL AUDIT REPORT COST OF LIVING CRISIS - WELFARE AND POVERTY RELATED PAYMENTS Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Issued to: Chief Officer (Finance), Chief Officers (Education – North and South), Chief Officer (Housing Management) Copied to: Business Finance Manager (Resource Solutions), Housing Solutions Manager, Chief Executive and Deputy Chief Executive Headlines The purpose of this audit was to provide independent assurance on the adequacy and effectiveness of controls associated with a number of cost-of-living crisis, welfare and poverty related payment schemes administered by the Council. The review focused on whether there are adequate controls in place to ensure that funding is properly targeted and that the Council has adequate and effective grant administration processes in place to ensure payments are properly controlled and made only to those who meet the relevant criteria for eligibility. Significant funding has been allocated, both from the Scottish Government and from the Council’s own resources, to respond to both the increasing financial insecurity of people on lower incomes and the increasing rate of poverty arising from the economic impacts of both the pandemic and, more recently, the cost-of-living crisis. Proposals for the use of the Council’s Local Authority Covid Economic Recovery Fund (LACER) to assist residents impacted by the cost of-living crisis were approved by the Policy and Strategy Committee in September 2022. Funding has been allocated across several different areas and is targeted at a range of groups including those at greatest risk of fuel poverty; lower-income families with children and those most likely to be at risk of, or experiencing, acute financial distress. Funding streams reviewed by Internal Audit as part of this exercise included fuel hardship payments, tenant hardship rent grants and various other payments open to families eligible to free school meals and/or school clothing grants as a result of their low incomes. Based on the results of our work, we have categorised this audit as offering ‘substantial assurance’ as we consider that the grant administration processes are adequate and have operated substantially as intended with any control issue or weaknesses identified presenting only a low risk to the control environment. We were also pleased to note that funding is being targeted at those most in need and that the processes in place generally mean that payments are being adequately controlled and being made only to those who meet the relevant criteria for eligibility. We have, however, identified a small number of areas where scope for further improvement exists and accordingly, we have made a small number of recommendations for management attention at section 3 of this report. Internal Audit Opinion (see definition at Appendix 1) Substantial assurance (Green) Organisational impact (see definition at Appendix 1) Minor Report status FINAL Audit ref 0900/2023/008 Date issued 24/04/2023 Audit Team Lynn McCrum, Paula Hendry, Jacqueline Struthers and Elizabeth Sweeney Page 136 of 222
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.008 - Welfare and Poverty Related Grants/A - FINDINGS AND REPORT/A05A 230424 Welfare Payments Final Report .docx 2 1. Executive Summary Objectives The purpose of this audit was to provide independent assurance on the adequacy and effectiveness of controls associated with a number of cost of living, welfare and poverty related payment schemed administered by the Council. The key control objectives reviewed and tested during the audit considered whether: • the grant administration processes are adequate and efficient with payments made only to those who are eligible; and • funding is appropriately targeted at those persons who are likely to be eligible and in greatest need. Substantive testing was carried out on a sample of applications and/or payments made in respect of the Fuel Hardship Payment; Pensioner Fuel Grant; NL Child Payment; Scottish Child Bridging Payment and Free School Meals Holiday Payment. In addition, we assessed the adequacy of the monitoring and reporting of performance information in respect of these payments. This exercise was not designed to offer assurance on the appropriateness of the eligibility criteria determined by the Council for the aforementioned funding streams. This engagement has been conducted in accordance with the ‘Public Sector Internal Audit Standards’. The Internal Audit section reports formally on conformance with these standards to the Audit and Scrutiny Panel. 2. Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 0 0 2 Key areas requiring management action (High) There are no key areas requiring urgent management action identified during the audit. Good practice identified We noted the following areas of good practice during the audit: • An extensive communications and social media campaign has been undertaken in an attempt to reach those persons eligible for the Fuel Poverty Payment. • Eligibility criteria has been clearly defined and is being applied when assessing applications and/or making payments in respect of the welfare and poverty related payments. • Second officer checks are being undertaken on Fuel Poverty Payment applications. • Checks to identify potentially duplicate payments and confirm payee bank details are being undertaken. • Payment files are appropriately reviewed and authorised prior to being issued to Creditors for payment. • There is regular performance monitoring and reporting of relevant data to management and Committee. Other areas for improvement (Medium) No areas for improvement were identified. Page 137 of 222
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.008 - Welfare and Poverty Related Grants/A - FINDINGS AND REPORT/A05A 230424 Welfare Payments Final Report .docx 3 3. Action Plan Cost of living crisis - Welfare and Poverty related payments 0900/2023/008 Ref Finding 1 Checks should be undertaken as appropriate to ensure that payments are made to all persons assessed as eligible for those payments based on entitlement to Free School Meals and/or Clothing Grants. Children who are of school or nursery age and have been assessed as eligible for Free School Meals on a low-income basis and/or Clothing Grant are also eligible for NL Child Payment. Children who are of school age and entitled to Free School Meals on a low-income basis are also eligible for Scottish Child Bridging Payment and Free School Meals Holiday Payment. These are automatic payments and there is no application process. Payments of these funding streams are made based on the data held on the Free School Meals module on the SEEMIS Click & Go system. The NL Child Payment and Scottish Child Bridging Payment is administered by Financial Solutions and the Free School Meals Holiday Payment is administered by Education and Families. We selected a sample of persons eligible for Clothing Grants and/or Free School Meals on a low-income basis and checked records held by Financial Solutions and Education and Families to ensure that payment of the NL Child Payment; Scottish Child Bridging Payment and Free School Meals Holiday Payment were only made to those persons who had been assessed as eligible. While we found no payments being made to those not eligible, we did identify one case where the child had not received the NL Child Payment despite being entitled due to their eligibility for a Clothing Grant. The Revenue and Benefits Manager (Business Development & Performance) investigated this and identified an issue whereby a small number of children’s records had the Free School Meals box on SEEMIS Click & Go ticked but not approved. This resulted in them not appearing on the reports run from the system which were used by Financial Solutions and Education and Families to make payments. There were six cases where the child was entitled to, but had not received, NL Child Payment and the Autumn and Winter Scottish Child Bridging Payments and five cases where the child was entitled to but had not received the NL Child Payment. The Revenue and Benefits Manager (Business Development & Performance) advised that manual payments would now be made in respect of those persons identified and that Education and Families had been notified of the issue and requested to make Free School Meals Holiday Payments for holidays and strike days that have been missed. Implication Recommendation Priority Management response Implementation Month/Year Payments may not be made to those who are eligible and in need. The Chief Officer (Finance) should ensure that where these grant schemes continue, or similar grant schemes are put in place, appropriate checks are routinely undertaken prior to future payments being made in respect of those payments based on entitlement to Free School Meals and/or Clothing Grants, to ensure that any cases applied for but not approved are identified to prevent a similar issue arising to that referenced in the finding above. Low Agree Greg Telfer, Business Finance Manager The Service will ensure that any similar future payment schemes of this nature incorporate checks to capture all eligible pupils. April 2023 Page 138 of 222
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.008 - Welfare and Poverty Related Grants/A - FINDINGS AND REPORT/A05A 230424 Welfare Payments Final Report .docx 4 3. Action Plan (continued) Cost of living crisis - Welfare and Poverty related payments 0900/2023/008 Ref Finding 2 We identified a small number of issues regarding the Fuel Hardship Payment and Pensioner Fuel Grant. Two fuel hardship funds (Fuel Hardship Payment and the Pensioner Fuel Grant) were established by the Council and both are administered by the Revenues and Benefits section within Financial Solutions. The Fuel Hardship Payment is an NLC discretionary payment aimed at providing financial support to low-income households who would only receive the UK Government universal payment of £400. Applicants must complete and submit an on-line application form and documentary proof of income. This is then assessed to determine whether or not the applicant meets the eligibility criteria based on their household composition and income. There are different income limits depending on whether the applicant is single and/or a couple and whether or not they have children. There is no requirement for the applicant to submit evidence that they are a single person, part of a couple or a parent. The Revenue and Benefits Manager advised that checks would be made to the Council Tax system with regards to the number of adults and that the decision was made at the outset not to request evidence in respect of children as it was regarded as being covered by the self-declaration on the application, which states that information provided is ‘true and accurate’. The report to Policy and Strategy Committee in September 2022 on Tackling Poverty stated that applicants would not need to prove that they met the definition of fuel poverty (defined as a household which is spending more than 10% of their net income on fuel after payment of rent/mortgage). Instead, applicants will be asked to make a self-declaration that they meet this definition of fuel poverty. However, from our review of application, we noted that this is not included in the self-declaration and, as stated in the paragraph above, it only refers to the information provided being ‘true and accurate’. The Pensioner Fuel Grant was a payment made to pensioners in receipt of either Pension Credit (Savings) or Pension Credit (Guarantee). As the Council already holds details of eligibility, there was no application process. Payment were automatically made to those households where the Council holds their bank details and, where the bank account details were not held, a bank mandate was sent to eligible households requesting that they provide their bank details to allow payment to be made directly to their bank account. We reviewed a sample of applications received in respect of the Fuel Hardship Payment and consider that in seven of the 36 cases reviewed, based on the information available, our review of the application and decision indicates thar the correct decision may not have been made for the following reasons: • two cases where we consider that there was a lack of information provided in respect of the partner’s income; • three cases where we consider that there was disparity between the number of adults on the claim and that recorded on the Council Tax system; and • one case where we consider that there was an issue with the payslip provided. In addition, we noted that the processor’s notes on the database were not always completed and thus did not provide sufficient detail on the action taken by the processer to confirm the grant payment was due. In some cases, the notes did not fully reflect the action taken or the justification for the decision made. We also reviewed a sample of payments made in respect of the Pensioner Fuel Grant and noted one case where a duplicate payment had been made to the householder in error. The original payment had been returned due to incorrect bank details, correct details obtained and a new request for payment was issued on next payment run with a note added to this effect on the customer record held on the Services application database. However, another officer who picked up the same case via a payment returned report received from creditors, noticed that correct details had been obtained and made a request for payment which resulted in the duplicate payment being made. Implication Recommendation Priority Management response Implementation Month/Year Unless the necessary checks are undertaken, payments may be made to persons who are not eligible. The Chief Officer (Finance) should ensure that, in designing and implementing any similar future grant schemes: (1) staff are reminded of the importance of ensuring that adequate documentary evidence has been provided and assessed prior to awarding payments and the notes section on the database fully reflects any action taken and reasons for the decision made; and (2) consideration is given to the additional checks required when payments are rejected, and new payments need to be made to reduce the risk of duplicate payments being made to prevent a similar issue arising to that referenced in the finding above. Low Agree Greg Telfer, Business Finance Manager Although these specific payment schemes have been concluded, for any future payments schemes the Service will implement these recommendations in full. 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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.008 - Welfare and Poverty Related Grants/A - FINDINGS AND REPORT/A05A 230424 Welfare Payments Final Report .docx 5 Appendix 1 - Audit Grading Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Green-Amber Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Amber-Red Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. Red No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation as a whole. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation as a whole. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation as a whole. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required. Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 140 of 222
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref KA/LM/ASP/May 2023 Date 18/05/23 Internal Audit: Follow up of actions previously agreed by management in response to audit recommendations From: Ken Adamson, Chief Officer (Audit and Risk) E-mail: adamsonk@northlan.gov.uk Telephone 07939 280602 Executive Summary The purpose of this report is to update the Panel on the results of Internal Audit’s follow-up work reviewing the extent to which management have implemented actions previously committed to in response to previous Internal and External Audit recommendations. Information is contained in respect of the last two years External Audit outputs and those actions agreed in response to ‘High’ and ‘Medium’ Internal Audit recommendations which were due to be completed in the period up to the end of March 2023. The Panel should note that where actions are not yet ‘complete’ this does not mean that no relevant activity has been undertaken by management and that the actions taken/progress made to date will often have reduced the risk exposure in respect of the weaknesses previously identified even if the action is not yet complete. Those recommendations which were previously reported to the Panel as partially implemented but not yet complete are now monitored against revised target implementation dates agreed with management and previously reported to the Panel. Seven of the 12 actions agreed in respect of External Audit outputs have been completed, four are not yet due and one is no longer relevant. Ten of the 21 actions agreed in response to relevant Internal Audit recommendations due in the period have been fully completed, eight have been assessed as partially implemented and three are no longer relevant/have been superseded. Recommendations The Panel is invited to: a) note the contents of this report; b) note the recommendations made by Internal Audit at Appendix 1; and c) consider whether there are any issues arising from this report on which they wish to receive further information from relevant management. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements AGENDA ITEM 8 Page 141 of 222
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1. Background 1.1 Internal and External Audit reports contain management responses to audit recommendations which generally include a commitment to specific actions by a stated date. This report presents an overview of progress by management in addressing all External Audit recommendations made in the last two years and all ‘High’ and ‘Medium’ Internal Audit recommendations which were previously reported as outstanding or where the proposed actions were due to be completed by the end of March 2023. 1.2 The format of this report is designed to allow the Panel to focus on those issues where non-implementation of agreed actions presents the most significant ongoing risk to the Council and to enable the Panel to hold relevant senior management to account. 1.3 Internal Audit’s arrangements for following-up audit recommendation include, in certain circumstances, agreeing a revised implementation date and monitoring and reporting against these revised dates where we are provided with a strong rationale for the non- implementation of the audit recommendation by the originally agreed date. This avoids repeatedly reporting and focusing on actions which are ‘late’ where there are sound reasons for non-implementation by the originally agreed date. 1.4 This report presents the assessment of the potential risks arising from those planned actions agreed in response to Internal Audit recommendations due in the period (January to March 2023) which are not yet fully completed. 1.5 The updates from management on progress to date have been verified on a sample basis by Internal Audit as part of the preparation of this report. However, it should be noted that this review has focused on whether planned actions have been completed and has not included detailed substantive testing of whether the implemented actions have been effective in addressing previously identified weaknesses. 2. Report Actions previously agreed by management – Internal Audit recommendations 2.1 Table 1 below shows whether management have implemented those actions previously agreed to in response to ‘High’ and ‘Medium’ Internal Audit recommendations which were due to be completed by the end of March 2023. Overall, ten of the agreed actions have been completed, eight have been assessed as partially implemented and three are no longer relevant. Table 1 Complete Partially implemented No longer relevant Total Chief Officer Area Audit and Risk 0 1 0 1 Business and Digital 2 3 0 5 Education 2 0 1 3 Finance 1 0 1 2 People Resources 5 2 0 7 Place 0 1 0 1 Strategic Communication and Engagement 0 0 1 1 Social Work 0 1 0 1 TOTAL 10 8 3 21 Page 142 of 222
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2.2 Internal Audit has reviewed the management updates and agreed with relevant management revised implementation dates for all eight recommendations listed as partially implemented at Table 1. These recommendations will now be monitored in line with the agreed revised date and will be reported back to the Panel in accordance with this revised timescale, at which time consideration will be given as to whether previously identified weaknesses have now been addressed. 2.3 Detail in respect of each of these recommendations and the current residual risk assessed by Internal Audit as a result of partial implementation is provided in Appendix 1, in which we have also made suggestions as to how the Panel may wish to consider these issues. Definitions of the residual risk ratings are provided at Appendix 2. 2.4 The three issues assessed as being ‘no longer relevant’ relate to Creditors, Education and Corporate Governance. These have been followed up separately as part of detailed audit work recently undertaken in these areas and, where appropriate, updated recommendations have been made in the current audit report which supersede the earlier recommendations. Actions previously agreed by management – External Audit recommendations 2.4 Table 2 shows the status of actions agreed by management in response to External Audit reports issued as part of the 2020-21 and 2021-22 audits. Internal Audit has concluded that seven of the agreed actions have been completed, four are not yet due and the remaining action is no longer relevant. Table 2 Completed Partially implemented Not yet due No longer relevant Total Report Title/Year 2020-21 Interim Audit Report 3 0 0 1 4 Annual Report 3 0 0 0 3 2021-22 Annual Report 1 0 4 0 5 TOTAL 7 0 4 1 12 2.5 The External Audit action assessed as ‘no longer relevant’ relate to issues on which External Audit have made a similar recommendation in subsequent audit reports. 3. Measures of success 3.1 Internal Audit report each cycle to the Audit and Scrutiny Panel on the progress made by management in implementing actions previously committed to in response to Internal and External Audit reports. 4. Supporting documentation Appendix 1 Internal Audit recommendations: Management actions assessed as ‘not yet complete’ in this cycle Appendix 2 Residual risk rating definition Ken Adamson, Chief Officer (Audit and Risk) Page 143 of 222
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If yes, please provide a summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Failure by Services to address previously identified issues and/or weaknesses will impact on the effectiveness of the relevant control framework. This, depending on the nature of the issue, will be captured and should be reflected in the relevant service risk register or the corporate risk register (as appropriate). 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ Page 144 of 222
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Appendix 1 Internal Audit recommendations - Management actions assessed as ‘not yet complete’ in this cycle Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Audit and Risk) Risk Management (July 2022) Risk: The absence of a fully documented corporate risk register, subject to regular monitoring and challenge may mean that key stakeholders may fail to fully understand the key risks the Council faces and in turn may consequently fail to take appropriate action to mitigate them. Recommendation: The Head of Audit and Risk should ensure that the replacement and/or new corporate risks detailed in the finding are documented, assessed and moved to ‘live’ status with a reasonable timescale. Category: Medium The corporate risks on Supply Chain and the Scottish Child Abuse Inquiry have been developed, agreed and are now ‘live’. The corporate risk in relation to the National Care Service proposals has been documented as much as can be based on current information available and scored accordingly. This will continue to be developed as the national policy direction progresses and the current significant level of uncertainty hopefully begins to reduce. The corporate risk on Educational Outcomes has been finalised and a report on this matter is included as a separate agenda item for this meeting of the Audit and Scrutiny Panel. The corporate risk on the Target Operating Model is currently being refined following approval of both the budget for 2023-24 and the new Programme of Work to 2028. Revised governance arrangements in respect of the new Programme of Work are currently being finalised and were the subject of a report to CMT on 21 April 2023. The corporate risk on the Targeting Operating Model will be updated accordingly to reflect decisions made at that meeting and subsequent discussions and will be finalised shortly thereafter. Original timescale: September 2022 Revised timescale: December 2022 Further revised timescale: May 2023 We acknowledge that there has been ongoing activity to address the recommendations made and that delays in the finalisation of the two remaining risks are as a result of a number of factors. Given that further action is required to finalise this action, we have assessed the residual risk as ‘High’ and consider it appropriate that the remaining risk is finalised in line with the revised timescale. Accordingly, we would suggest that the Panel may wish to consider requesting a further update from relevant senior management at the next meeting of the Panel. Page 145 of 222
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Business and Digital) Digital NL (November 2021) Risk: Benefits and savings may not be being adequately tracked and monitored resulting in the Council being unable to demonstrate the achievement of the objectives of the programme. Recommendation: Management should ensure that the non-financial benefits tracker is finalised and approved with non-financial benefits thereafter identified, calculated, tracked and monitored for all workstreams. Category: Medium Although non-financial benefits were identified as a key driver of the DigitalNL programme, during the financial year 2019-20 with the Council moving towards a challenging 3-year budget, the emphasis on financial benefits became the main focus. For a variety of reasons, it has proved difficult to retrospectively identify and measure the non-financial benefits for those sprints now completed. The Business Analysts now have access to Dynamics which will enable them to access data to measure the non-financial benefits going forward. Data from the waste sprint has been gathered and the benefits tracker populated in this respect. All future financial and non-financial benefits identified on the Year 5 Roadmap (2023/24) will be progressed in line with the approved benefits approach. Full implementation of the Benefits Tracker remains a key objective and will be supported through maximising the use of the Digital Platform, linking with the BI Hub operating model and the Customer Service Hub feedback strategy. From a governance perspective, specific information on the non-financial benefits is now, and will continue to be, presented to the Project and Delivery Board meetings. Original timescale: April 2022 Revised timescale: September 2022 Further revised timescale: March 2024 We acknowledge that there has been considerable action taken in this area which demonstrates a positive direction of travel and have thus assessed the residual risk as ‘Low’. We consider that it is important going forward that non-financial benefits are identified, measured and reported in a timely and consistent manner for those sprints not yet underway/at an early stage and we take cognisance of the Service’s comments that this will be evidenced by the progression of all future financial and non-financial benefits identified on the Year 5 Roadmap. Accordingly, we would suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 146 of 222
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Business and Digital) Managing Strategic Change (June 2021) Risk: Key stakeholders may not be adequately informed of progress in the Council’s key corporate projects and may not be able to undertake effective oversight and/or ensure that timely remedial action, necessary to ensure that projects are delivered successfully, has been progressed by relevant management. Recommendation: Management should progress the previously identified action of establishing a reporting mechanism which better facilitates regular and ongoing oversight by key stakeholders of the progress of key projects against plan, including management of key risks, progress against timelines, cost against budget, achievement or otherwise of key milestones and expected outcomes or benefits realisation. We suggest that this could include introducing a standard reporting template and adopting a traffic light system to report progress against key criteria, project milestones and overall deliverability against expected time, cost and any other intended outcomes. Category: Medium The recent changes in the Council’s governance arrangements will impact on the oversight and reporting of key corporate projects. The Council’s Programme of Work covering the period to 2028 was approved at the Policy and Strategy Committee in March 2023. This now comprises 7 overarching themes which require to be integrated and aligned with the existing programmes and projects and the existing investment from the Strategic Capital Programme in order to prioritise activities and develop supporting delivery plans. The tasks in this process have been clearly defined and were approved by CMT on 21 April 2023. Work to progress this will take place over the next 12 months with interim updates on progress scheduled to be presented to CMT in August 2023 and February 2024 for submission thereafter to the Policy and Strategy Committee. The Strategic Capital Delivery Group has recently agreed a new approach to the reporting of capital projects, which would include CMT and/or BMT oversight and is currently under development. Original timescale: September 2021 Revised timescale: September 2022 Further revised timescale: March 2024 We acknowledge the change in direction of travel with the recently refreshed programme of work and the planned development of governance arrangements associated with this. We have assessed the residual risk as ‘Medium’ as the recommendation has not yet been fully addressed. It is Internal Audit’s view that the original audit recommendation can be addressed as part of actions scheduled during the next 12 months. This will include ensuring that the refreshed governance arrangements incorporate reporting on progress of all key corporate projects (both capital and non-capital) and the consideration of timely remedial action to ensure that projects are delivered successfully and on time. Accordingly, we would suggest that the Panel may wish to consider requesting a further update from relevant senior management after the first interim update has been presented to CMT and Policy and Strategy. Page 147 of 222
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Business and Digital) Performance Management (October 2022) Risk: It may be difficult to clearly demonstrate progress, improvement or achievement of the Council’s ambition statements and programme of work items, which could result in the Council failing to meet its obligations in relation to best value, good governance and public performance reporting. Recommendation: The Head of Business and Digital, in conjunction with all Services, should: (1) as part of the refresh of the SPF, ensure that consideration is given to all level 2 and 3 indicators to determine whether improvements in these performance indicators provide meaningful information in respect of progressing/achieving the ambition statements and programme of work items that they are linked to. This review should include the removal of any indicators which are not directly linked to planned outcomes and the identification of new indicators to assist with the monitoring of progress of ambition statements and key programme of work items; (2) consider preparing a document (or adding to existing documentation such as the SPF) which clearly indicates the Chief Officer responsible for each performance indicator; and (3) identify a suite of key performance indicators/reporting mechanism(s) that would facilitate effective scrutiny and challenge by CMT and elected members. Category: Medium A report submitted to CMT in December 2022 outlined the Performance Reporting Schedule for 2023 to 2024, which will facilitate scrutiny and challenge by CMT and elected members. This was also reported to the Audit and Scrutiny Panel in February 2023. Indicators within the Strategic Performance Framework are being reviewed and updated in line with the development of Chief Officers’ reporting to Committee as per the Performance Reporting Schedule. The review and update of indicators and targets within the Strategic Performance Framework is nearing completion and the updated suite of measures and targets will be made available for oversight and challenge by the BMT in June 2023 in line with their new governance and assurance role. Final developments to the Strategic Performance Framework will be considered in line with the requirements of the new Programme of Work and its associated delivery plans. The list of Calculating Officers and Verification Officers clearly show the corresponding service for each indicator in the Framework. Original timescale: December 2022 Revised timescale: March 2023 Further revised timescale: September 2023 We acknowledge that there has been significant action taken to address the recommendation made and that the requirements of the new Programme of Work and its associated delivery plans will be taken into consideration when finalising the review of performance measures and targets. We consider the revised timescale to be reasonable and have assessed the residual risk for this recommendation as ‘Low’. Accordingly, we would suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 148 of 222
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (People Resources) Equalities (November 2022) Risk: Without appropriate scrutiny/challenge or monitoring processes, the Council’s equalities arrangements may not be fit for purpose. Without clearly defined terms of reference, members if the relevant groups and other key stakeholders may not be fully aware of relevant roles and responsibilities in respect of the equalities agenda and/or be taking appropriate actions in respect of these responsibilities. There would be no effective process in place for ensuring that actions taken to address issues are being properly managed on a timely basis and/or monitored for impact. Management may not be aware of the extent of compliance with expected processes and actions. Recommendation: The Head of People and Organisational Development should ensure that: (1) the current governance arrangements for equalities are reviewed and updated (having due regard to the issues raised above) to ensure that the Council can better demonstrate compliance with its general and specific duties for equalities under the PSED. As a minimum, consideration should be given to establishing an Equalities Board (or equivalent) to ensure that equalities activities are being progressed and regularly reviewed/monitored at both corporate and service level; (2) an action/workplan capturing all required work around equalities, including responsible officers and timescales, is prepared and suitable monitoring arrangements are put in place to ensure any actions are appropriately progressed in line with expected timescales; and (3) a framework is developed to appropriately monitor compliance with key aspects of the Equality strategy and associated procedures. Category: High This action is largely complete. The governance arrangements for equalities have been reviewed and updated and an Equality Board has been established. The Terms of Reference for the Board have been agreed and are in place and the first meeting of the Board has taken place. The Delivery Framework for Equalities has been developed and was presented to the Wellbeing and Tackling Poverty Committee in February 2023. Both these tools will assist with ensuring that equalities activities and compliance with the Equalities Strategy, are being regularly reviewed and/or monitored. Work is still on-going to prepare and develop working group and Service action plans and these will be presented to Committee in Cycle 3. Original timescale: March 2023 Revised timescale: September 2023 We acknowledge that there has been significant action taken to address this recommendation and that work is on-going to complete the relevant actions plans, with the Service giving a firm commitment that these will be in place by the agreed revised timescale. We consider the revised timescale to be reasonable and have assessed the residual risk for this recommendation as ‘Low’. A report from management, at the Panel’s earlier request, is already scheduled to be submitted to the September meeting of the Panel giving an update on progress of implementation of all actions in the Equalities Internal Audit report. Page 149 of 222
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (People Resources) ESC: Testing of Selected Key Controls (March 2022) Risk: Failure to apply conditions of service appropriately could lead to inconsistency and/or errors in payments made to employees across the Council. Recommendation: The Head of People and Organisational Development should ensure that HR Business Partners, in conjunction with service management, review how non-core hours have been calculated for all relevant employees in receipt of a standing non-core hours payment each pay period to ensure that these are accurate and consistent with the employee’s work pattern/rota and Schedule A. Category: Medium People Resources have now ascertained that there are significant complexities, additional risks (including employment legislation and industrial relation risks) and potential increased costs to the Council which would flow from implementation of this recommendation. Due to the potential scale and impact, and the need for caution linked to the additional risks now emerging, further discussion has taken place with colleagues in Legal and Democratic and with the Chief Executive. Accordingly, it has been agreed that the Council will proceed with caution on this matter, and as such specialist legal advice from an external legal firm, on how best to address the matters highlighted, has now been sought. On receipt of this advice People Resources and Legal and Democratic, will determine how to proceed and document this within an action plan with clear milestones and responsible officers. The resulting proposed approach will be presented to CMT and Committee for approval by December 2023. It is expected that implementation of any approved action plan will be complete by December 2024. Original timescale: December 2022 Revised timescale: March 2023 Further revised timescale: December 2024 As highlighted in the management update, People Resources have identified that there are significant complexities, additional risks and potential increased costs to the Council which would flow from this recommendation and as such have sought specialist legal advice from an external legal firm to assist them in identifying how best to proceed. Once this advice has been received and considered, the Service has committed to identifying, securing approval for, and documenting the actions to be taken together with clear milestones, responsible officers and target dates. We have assessed the residual risk as ‘High’ as the recommendation has not yet been fully addressed by management and accordingly, we would suggest that the Panel may wish to consider requesting a further update in Spring 2024 from relevant senior management to the Panel once management have had sufficient time to consider the next steps and secure approval for any proposed course of action. Page 150 of 222
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Place) Economic Regeneration Development Plan (June 2021) Risk: Without formal plans which contain realistic and achievable milestones and actions and identified resource requirements, the programme may not achieve its objectives within the expected timescales. Recommendation: Management should ensure that appropriate formal plans/programmes of work are put in place in respect of the ‘Town Centre Regeneration’ and ‘Business and Industry’ themes as soon as possible. As part of this process, realistic and achievable actions should be developed and aligned with resourcing requirements to undertake the identified actions. Category: Medium Town Visions were finalised and approved by the Policy and Strategy Committee in September 2021. The next stage of the process was to develop Town Action Plans for each of the town centres and consultation on the first three of these covering Airdrie, Motherwell and Wishaw will be undertaken between March and April 2023. This was delayed avoiding occurring over the Winter period when turnout was expected to be low. An update report will be submitted to the Enterprise and Fair Work Committee in Cycle 2 with the Town Action Plans finalised thereafter. In addition, work on the Business and Industry Strategy is underway and is scheduled to be presented to Committee in Cycle 2, having been impacted by staff absence. Original timescale: March 2022 Revised timescale: March 2023 Further revised timescale: August 2023 We acknowledge that the finalisation and implementation of this action has been delayed due to staff absences and the consultation being delayed and extended to avoid it being carried out over the Winter period when turnout was expected to be low and thus have assessed the residual risk for this recommendation as ‘Medium’. We consider it important that the agreed extension date of August 2023 is achieved. We would suggest that the Panel may wish to consider agreeing to note the progress made to date and the revised completion date and to monitor progress being made as part of the follow-up report to be submitted in November 2023. Page 151 of 222
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Social Work Officer Tackling Poverty (November 2021) Risk: Without regular and/or appropriate reporting of significant issues and progress, key stakeholders would not be aware of how the programme is performing against expectations, milestones and/or planned targets and may not be able to take remedial action in a timely manner, where appropriate. Without a formal risk register, there is greater scope for relevant risks not to be identified and/or appropriately mitigated and greater potential for risks to impact on planned outcomes and/or the successful delivery of the programme. Recommendation: Management should: (1) ensure that an appropriate report format (perhaps based on, or similar to, the pro-forma highlights report contained within the Council’s project management methodology) is developed as soon as possible for consideration by the TPOAG and that key information on the progress of individual actions and the programme as a whole is reported to key stakeholders on a regular basis. The report should include, as a minimum, information on: • progress against key milestones, targets and measures of success; • details of expenditure v budget; • a summary of key issues arising and any decisions requiring to be made; and • details on key programme/operational risks as appropriate; and (2) prepare a risk register for the tackling poverty programme, which captures all key risks which have the potential to affect the successful delivery of the individual actions and the programme as a whole and ensure that this risk register is regularly monitored in accordance with the corporate risk management strategy. Category: Medium (1) A Data Group has been established to collate the data that allows progress to be measured against the key milestones and targets. A RAGG (Red, Amber, Green & Grey) rating has been introduced to track key milestones, targets, tasks completed and those requiring further development. Two new Assistant Tackling Poverty Manager posts were established in July 2022, and these posts will enable the Tackling Poverty Action Officers Action Group (TPAOG) to ensure reporting on individual actions, and the programme as a whole, on a more regular basis. The reporting format, including information to be reported as per the recommendation, has been added to the agenda of the next TPAOG meeting for consideration. The format of such reports will need to be agreed by the TPAOG. (2) The Tackling Poverty Team (Financial Inclusion Team) have 8 Operation risks which impact on the delivery of the Tackling Poverty Strategy. There are currently 3 drivers of poverty within the strategy with a 4th to be introduced in the new strategy which are wider than the Tackling Poverty Team. There are also controls within the corporate risk on tackling poverty that impact on the operational element of the tackling poverty programme. Further work is required in revising the operational risks of the programme. Original timescale: March 2023 Revised timescale: September 2023 We acknowledge that while there has been some action taken to address the points made in the recommendation, there is still further work required to determine and agree a reporting format for the Service to report on the progress of individual actions and the programme as a whole. Work is also required to further develop the operational risk register for the tackling poverty programme. We have assessed the residual risk for this recommendation as ‘Medium’ and consider it important that the agreed extension date of September 2023 is achieved. We would suggest that the Panel may wish to consider agreeing to note the progress made to date and the revised completion date and to monitor progress being reported at future meetings of the Panel. Page 152 of 222
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Appendix 2 Residual risk rating definition Internal Audit assessment of residual risk from non-implementation High Non-implementation of actions has the potential to significantly undermine the relevant control environment. Medium Non-implementation of actions has the potential to impact upon the achievement of the control environment. Low Other issues which require management attention but which pose less significant or less immediate impacts to the control environment. Page 153 of 222
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☒ Yes ☐ No Ref KA/ASP/May23 Date 18/05/23 Internal Audit Annual Plan 2023-24 From: Ken Adamson, Chief Officer (Audit and Risk) E-mail: adamsonk@northlan.gov.uk Telephone 07939 280602 Executive Summary The purpose of this report is to present the proposed Internal Audit Plan 2023-24 to members of the Audit and Scrutiny Panel for their consideration and approval. Although senior management is consulted in the development of the plan, the Chief Officer (Audit and Risk) is solely responsible for determining the content of Internal Audit’s plans. The work proposed for 2023-24 has been discussed with, and endorsed by CMT, but responsibility for the approval of the plan lies solely with the Audit and Scrutiny Panel. The report sets out the background and context within which the internal audit planning process is undertaken and provides a high-level overview of how it is proposed Internal Audit resources will be allocated in 2023-24. The Plan follows a well-established planning methodology which is designed to ensure cyclical internal audit coverage of key corporate risks, key corporate priorities and projects (as outlined in the recently approved Programme of Work to 2028), key governance arrangements and key financial systems. Members are asked to consider whether they are content that this represents an appropriate programme of work for Internal Audit to undertake in 2023-24 and/or whether there are any items in the draft Plan that they do not consider appropriate for inclusion and/or whether there are any additional items they would wish to suggest for possible inclusion. Recommendations The Panel is invited to: (1) note the approach adopted to produce the 2023-24 Internal Audit Annual Plan; (2) consider the detailed list of proposed Internal Audit assignments for the 2023-24 Plan (at Appendix 1); and (3) subject to any changes agreed by the Chief Officer (Audit and Risk) arising from discussions with the Panel during consideration of the proposed assignments at (b) above, approve the proposed 2023-24 Internal Audit Annual Plan (at Appendix 1). The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements AGENDA ITEM 9 Page 155 of 222
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1. Background 1.1 The Audit and Scrutiny Panel is required annually to consider and approve the Internal Audit Annual Plan for the coming financial year. 1.2 Responsibility for the production and execution of the audit plan and subsequent audit activities rests with the Council’s Chief Officer (Audit and Risk) (who fulfills the role of the ‘Chief Audit Executive’ as defined by the Public Sector Internal Audit Standards). Although senior management is consulted in the development of the plan, in line with relevant professional standards, the Chief Officer (Audit and Risk) is solely responsible for determining the content of Internal Audit’s plans. 1.3 This report sets out the background and context within which the Internal Audit planning process is undertaken and provides a high-level overview of how Internal Audit resources will be allocated in 2023-24. 1.4 In line with best professional practice, the draft plan has been discussed with the Council’s Corporate Management Team before it is presented to the Panel for consideration and approval. The main objectives of the Council’s Internal Audit service are outlined in the Internal Audit Strategy which was approved by the Panel in June 2019. 1.5 Internal Audit activity is governed by policies, procedures, rules, and regulations established by the Council including the Council’s Financial Regulations and Internal Audit Charter which is approved by the Panel, the Council’s s95 officer and the Chief Executive. The Internal Audit service is expected to comply with the standards laid down by the Public Sector Internal Audit Standards (PSIAS). 1.6 The planned work of the Internal Audit service is outlined in the Internal Audit Annual Plan, which is submitted to, and approved by, the Panel annually. Any proposed programme of work must be appropriate and sufficient to support the preparation of an opinion by the Chief Officer (Audit and Risk) on the overall soundness of the Council’s corporate governance, risk management and internal control systems. 2. Report 2.1 Internal Audit is an independent and objective assurance function whose work is designed to evaluate and improve the effectiveness of the Council’s risk management, control and governance processes. The service aims to provide a high quality and customer-focused internal audit service, which is responsive and flexible, consistent with best professional practice, aims to focus on areas that matter, to use resources efficiently and effectively and to be seen by stakeholders as adding value, providing valuable insights and making a vibrant and relevant positive contribution to the Council’s activities. The wider audit environment 2.2 The Council’s strategic-level plan (‘The Plan for North Lanarkshire’) and its associated ‘Programme of Work to 2028, most recently approved by the Policy and Strategy Committee in March 2023, sets out the Council’s strategic-ambitions and those key activities designed to deliver against them. These ambitions and the associated programmes and projects represent a bold and challenging approach to addressing the issues facing the Council and the people and communities of North Lanarkshire. 2.3 The Council also continues to seek to achieve its ambitions against a backdrop of significant financial pressures, increasing demands for many key services and ever- changing expectations about how services will be delivered. The Council also needs to respond to the impacts on it and its communities of a range of Scottish and UK Government policies. There also continue to be significant changes in governance structures and processes across the Council. Finally, ongoing events including the cost- of-living crisis, the performance of the UK and Scottish economies and the war in Ukraine as well as posing immediate challenges to which the Council is responding, also create considerable additional longer-term risks and uncertainties. Page 156 of 222
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2.4 Internal Audit has an unusual role within the Council. While part of the organisation, it is operationally independent which provides a core basis for its work and the ongoing independence and objectivity which is an important element in ensuring that it can effectively meet stakeholders’ needs and expectations. It seeks to provide assurance and an annual audit opinion on the adequacy and effectiveness of the Council’s risk management, internal controls and governance arrangements, while helping to secure wider improvements, ensuring best value and assisting the Council in delivering against its corporate ambitions. Planning considerations 2.5 Internal Audit will meet this objective by operating in accordance with the Public Sector Internal Audit Standards (PSIAS) and the associated CIPFA Local Government Application Note (LGAN) which will enable the section to fulfil the roles and responsibilities given to it by the Council as laid out in the Internal Audit Charter. 2.6 Internal Audit will do this by undertaking a risk-based work programme focused on cyclical coverage of the Council’s core corporate governance processes, key corporate risks, significant programme of work activities and key financial systems. In doing so, elected members and senior management will be supported in undertaking their roles by Internal Audit providing assurance on the management of key strategic risks and priorities which could impact on the achievement of the Council’s objectives. 2.7 The Internal Audit Annual Plan for 2023-24 (at Appendix 1) has been prepared in accordance with well-established planning methodology which includes consideration of a wide range of factors including the relative scale, significance and complexity of systems, previous experience of the control environment, proposed or known changes in the environment within which the Council operates, the potential financial, operational and reputational consequences of any significant failures in relevant internal controls and the possible impact of any failures on the achievement of the Council’s objectives, priorities and ambitions. Consideration is also taken of the extent and quality of assurance available from other sources with reliance placed upon alternative sources of assurance where it is appropriate to do so (such as external regulators and selected high-quality relevant internal sources). 2.8 The Council’s risk management arrangements continue to improve, and we have incorporated management’s assessment of the risks facing the Council into our planning processes but remain of the view that these arrangements are not yet sufficiently mature to enable me to fully align our audit planning with them, although the extent of alignment continues to increase each year. Careful consideration has been given, however, in preparing the plan to the key corporate risks identified by senior management and we expect to align our planning more closely with the corporate risk management processes each year as these risk management arrangements become more mature. 2.9 Internal Audit will continue to work closely with the Council’s external auditors to ensure that all audit activities are properly coordinated to minimise any duplication of work and that the Council’s external auditors are able to place reliance on our work, where they wish to do so. 2.10 As part of planning considerations, I have considered the level of resources and the experience and skills available to Internal Audit. The section’s staffing complement for 2023-24 remains unchanged from the prior year and I remain satisfied that the resources available are adequate for the function to carry out its role effectively. This assessment is based on the level of available resources enabling adequate coverage of core corporate governance processes, key corporate risks, programme of work items and key financial systems over a rolling three-year period. Page 157 of 222
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2.11 A formal review of staffing within the function has not been undertaken for some time and the Panel may also wish to note that a full review of the staffing structure within Audit and Risk is planned for Summer 2023, with a view to ensuring that the staffing structure continues to be ‘fit for purpose’ and reflects current and likely future demands placed on the Service by changes in the auditing landscape. 2.12 As previously outlined to the Panel, I continue to review the Section’s ability to deliver the range of ICT audit work necessary and will bring forward to the Panel detailed proposals if I consider additional specialist resources may be required to supplement the work of the core team. 2.13 I am also content that the Chief Executive and Chief Officer (Finance) have previously indicated that additional resource can be made available to Internal Audit in the event of any significant unexpected demands (such as for example, the need to undertake any major unplanned investigations). 2.14 If any concerns relating to resources arise during the year which might be seen as impacting on this assessment, these will be discussed initially with the Convener and, if necessary, highlighted at the next Panel meeting. 2.15 I can also confirm the continuing independence of the Internal Audit service and its ability to act in accordance with best professional practice free from undue interference by management and/or senior elected members. I have no concerns over the role and/or status of the function and I am satisfied that the Chief Officer (Audit and Risk) post has sufficient status within the organisation, being a member of the Corporate Management Team and reporting directly to the Chief Executive. 2.16 If any such matters arise during the year which might be seen as compromising Internal Audit’s independence or ability to discharge its role, these will be discussed with the Convener and if necessary, highlighted at the following Panel meeting. 2.17 The Panel are aware, I also have management responsibility for the Council’s risk management team. This creates a potential conflict of interest which could be seen as compromising my independence when Internal Audit is reviewing the Council’s risk management arrangements, but I have previously outlined to the Panel that I consider that this risk can be effectively managed and appropriate arrangements to ensure the Panel can have confidence in the independence and robustness of future Internal Audit reviews of the risk management function were set out in the Internal Audit Charter approved by the Panel in September 2021. Reporting the audit 2.18 Internal Audit will report regularly on the results of its work in line with the reporting protocol approved by the Panel in September 2021. Each individual Internal Audit report will be issued to the relevant Chief Officer and copied to the Chief Executive and Depute Chief Executive. Reports on the work of Internal Audit will also be presented regularly during the year to the Council’s Business and Corporate Management Teams. 2.19 The Internal Audit service will continue to report progress against the plan during 2023-24 to the Audit and Scrutiny Panel. In line with the Internal Audit reporting protocol agreed by the Panel in September 2021 full copies of all substantive audit reports will normally be made available to the Panel and progress reports will include the high-level reporting of all audit outputs included in the approved plan together with more detailed consideration of all significant matters arising from those reports that the Chief Officer (Audit and Risk) considers necessary to bring to the attention of the Panel. 2.20 An annual report prepared by the Chief Officer (Audit and Risk) on the adequacy and effectiveness of the Council’s internal controls will also be presented to the Panel and the Chief Executive. The opinion in relation to 2023-24 will be included in my Annual Report for that year which will be presented to the Panel in June 2024. Page 158 of 222
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2.21 A performance management framework for Internal Audit was approved by the Panel in March 2021. This sets out what information will be recorded and presented, to whom and with what frequency. As part of this framework, and in response to improvement actions agreed in response to our external review, this includes greater formality around seeking stakeholder feedback on Internal Audit performance from both senior management and elected members. Main areas of the 2023-24 Annual Plan 2.22 The proposed programme of Internal Audit activity is detailed at Appendix 1. There are several major categories of work within the Annual Plan. These include: • Work on core governance matters including the Council’s wider corporate governance, risk management and performance management arrangements. In 2023-24 this will include work associated with on the Council’s compliance with corporate governance principles, on the Council’s risk management arrangements and work assessing the adequacy and robustness of reported performance data. • Work examining a sample of key strategic/corporate risks, key programmes of work and/or service risks as part of regular cyclical audit coverage. In 2023- 24, this will include work on the Enterprise Project, the Council’s approach to asset management, reviewing progress in respect of business continuity arrangements and examining the Council’s approach to meeting the challenges of climate change and net zero. • Work examining the Council’s finances and key financial systems including, as part of regular cyclical audit coverage, work on payroll, council tax, general ledger and treasury management. • A range of follow-up work to ensure that previously agreed management actions in respect of both internal and external audit recommendations are being implemented by management. In addition to detailed follow-up work on specific audit reviews, we will also provide quarterly updates in respect of management implementation of actions agreed in response to ‘Red’ and ‘Amber’ audit recommendations; and 2.23 We will also continue to contribute to a wide range of corporate working groups and Project Boards and to provide internal audit services to the North Lanarkshire Health and Social Care Integrated Joint Board. 2.24 In line with good practice, the plan will be reviewed on a regular basis and may be adjusted where necessary in response to changes in the Council’s business, risks, operations, programmes, systems and controls. Any material changes and the rationale for such changes will be reported to the Panel. 3 Measures of success 3.1 Provision of independent assurance in accordance with Public Sector Internal Audit Standards. 3.2 Satisfactory assessment of the work of Internal Audit by the Council’s appointed auditors. 3.3 Positive assessment of the work of Internal Audit by key stakeholders including senior management and members of the Audit and Scrutiny Panel. Page 159 of 222
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4. Supporting Documents Appendix 1 Proposed Internal Audit Plan 2023-24 Appendix 2 Internal Audit coverage of current key corporate risks over the last 5 years Appendix 3 Internal Audit coverage of key financial systems over the last 5 years Appendix 4 Consideration of Internal Audit activity (previous and planned) against the Programme of Work to 2028 Appendix 5 Internal Audit performance framework Ken Adamson Chief Officer (Audit and Risk) Page 160 of 222
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi- Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ Internal Audit forms part of the control framework for the management of several corporate risks relating to corporate governance issues and these are documented in the relevant corporate risk ‘deep dive’ documents which are subject to periodic review by relevant management. Operational risks for the Service itself are documented in the Service’s risk register and are regularly reviewed by the Chief Officer (Audit and Risk) and the service management team. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex-Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ Page 161 of 222
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Appendix 1 Proposed Internal Audit Plan 2023-2024 Topic Days Rationale and proposed scope Corporate governance Risk management 30 Core corporate governance process. Follow-up of work undertaken in 2021-22 to review the adequacy and effectiveness of the Council's risk management arrangements with a particular focus on risk management arrangements within Services. Corporate governance 20 Core corporate governance process. Work will review the adequacy and effectiveness of the Council's corporate governance arrangements and how the Council assesses compliance with the relevant Code. The review will also follow-up previous recommendation and consider the ongoing adequacy and effectiveness of the Council’s strategic governance and self-evaluation frameworks including how management gains assurance on compliance and performance. Performance management 70 Core corporate governance process. Follow-up of work undertaken in 2021-22 to review the adequacy and effectiveness of the Council's strategic performance framework. A particular focus will be on arrangements rolled-out in 2022-23 for monitoring and reporting on performance to key stakeholders (including Service committees) and reviewing the accuracy and robustness of reported performance data. Key strategic / corporate risks Workforce planning 40 Carried forward from 2022-23, work will focus on providing assurance on the adequacy and effectiveness of the Council’s approach to workforce planning including the extent to which plans appear comprehensive and planned actions are being satisfactorily progressed. Enterprise Project 30 Depending on the outcome of work currently underway, we would expect to provide assurance on the adequacy and effectiveness of management processes and arrangements surrounding the Enterprise Project. Managing strategic change 30 Work will focus on providing assurance on the adequacy and effectiveness of the Council’s recently revised governance arrangements including those being implemented to oversee delivery of the Programme of Work to 2028. Climate change 30 Key corporate risk. Carried forward from 2022-23, work will focus on providing an assessment of the adequacy and effectiveness of the Council’s arrangements. This is expected to include reviewing how well the Council is developing/progressing realistic plans against relevant local and national commitments and statutory obligations. Page 162 of 222
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Appendix 1 Proposed Internal Audit Plan 2023-2024 (continued) Topic Days Rationale and proposed scope Key strategic / corporate risks / programmes of work (continued) ICT operational capability 40 Work will focus on the adequacy and robustness of ICT governance arrangements including how the Service manages relevant key risks. Follow-up: Business continuity planning 30 Work will focus on reviewing the effectiveness and impacts of actions taken by management in response to previous audit findings. Future operating model 30 Carried forward from 2022-23, work will focus on providing assurance that the Council’s future operating model is being managed and implemented in an efficient and effective manner. This will include consideration of any impacts on asset rationalisation and the implementation of hybrid working arrangements. Service / operational/ Programmes of work Housing Asset Management Plan 40 Work will be focused on providing assurance that the Council has adequate and effective asset management arrangements in respect of its own housing stock. Clyde Valley Waste Partnership 20 Assurance work required every two years in line with Inter-Authority Operating Agreement. City Deal 20 Assurance work required annually in line with Glasgow City Region assurance framework. Housing Capital Programme 40 Work will be focused on providing assurance on the adequacy and effectiveness of the Council’s arrangements for effective procurement, contract management and performance monitoring arrangements in relation to the housing capital programme. Social Work quality assurance arrangements 40 Work will be designed to provide assurance on the adequacy and effectiveness of the Council’s quality assurance arrangements in relation to the provision of social work and social care services. Page 163 of 222
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Appendix 1 Proposed Internal Audit Plan 2023-2024 (continued) Topic Days Rationale and proposed scope Financial management and key financial systems Payroll – selected controls 40 Work will focus on assessing the adequacy and effectiveness of arrangements designed to prevent and detect errors and/or regularity issues associated with the Council’s payroll operations. Regularity work - financial systems - Payroll 40 Substantive testing of selected key controls associated with the authorisation, regularity and processing of payroll transactions. Regularity work - financial systems - Creditors 30 Substantive testing on selected key controls associated with authorisation, regularity and processing of creditor payments. Council Tax 40 Work will focus on assessing the adequacy and effectiveness of key controls associated with the billing and collection of Council Tax income. Treasury Management 30 Work will focus on assessing the adequacy and effectiveness of key controls associated with the operation of the Council’s treasury management function including compliance with the relevant CIPFA Code. General Ledger 30 Work will focus on assessing the adequacy and effectiveness of key controls associated with selected activities associated with the operation of the Council’s general ledger. Provision of IA services to third parties Integrated Health and Social care - North Lanarkshire JIB 30 Annual programme of work to be agreed with relevant senior management and NL JIB Performance, Finance and Audit Sub-Committee. Fraud and irregularity Review of the Council's Anti-Fraud arrangements 30 Work reviewing the current corporate anti-fraud policies and arrangements and implementing any identified actions necessary to ensure that the Council’s arrangements are more fully consistent with recognised good practice (this may include developing a Counter Fraud strategy and/or an annual Counter Fraud Action Plan which more clearly sets out planned actions for managing the risk of fraud and corruptions and any planned fraud prevention and/or pro-active detection work). National Fraud Initiative 30 Work co-ordinating and progressing the Council’s involvement with the NFI. Allowance for fraud and irregularity investigations 70 Demand-led allowance to enable investigations to be undertaken as required. Page 164 of 222
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Appendix 1 Proposed Internal Audit Plan 2023-2024 (continued) Topic Days Rationale and proposed scope Audit Committee and External Audit Liaison with external audit 5 To ensure the external audit process can proceed efficiently and effectively. Assisting external audit to undertake their role including co-ordinating management responses to assist with the finalisation of audit outputs. Facilitating the work of the Audit and Scrutiny Panel 30 To enable the Audit and Scrutiny Panel to fulfil its role. Preparation of agendas and reports and attendance at meetings. Follow-up of IA and EA recommendations 80 To enable the Audit and Scrutiny Panel to fulfil its role. To monitor and report on whether management has implemented actions agreed by senior management in response to audit reports. Follow-up: Audit Scotland/Accounts Commission national reports 10 To ensure national audit reports are given proper consideration by management and to enable the Audit and Scrutiny Panel to fulfil its role in considering such reports and the Council’s responses. Focusing on how the Council is responding to key issues highlighted in national audit outputs. Contribution to good governance Provision of ad hoc advice on systems development and control issues 30 To reflect the provision of input into systems development and ongoing ad hoc advice to management on specific control and risk issues. Participation in a range of Corporate Working Groups and Project Boards 50 To ensure that Internal Audit contributes, as appropriate, to corporate arrangements for the oversight and/or development of any relevant control, risk and governance issues. Other PSIAS self-assessment and Quality Assurance Programme 20 To ensure that the service provided is consistent with expectations. Continuous improvement activity to progress recommendations arising from the PSIAS EQAR and internal self-assessment. To enable necessary work to ensure on-going PSIAS compliance can be substantiated. Community Councils 15 Facilitating the audit of community councils and liaising with external auditor on issues arising. Contingency 60 To deal with additional unplanned work Total 1180 Page 165 of 222
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Appendix 2 Internal Audit coverage of current key corporate risks Key Corporate Risk 2023-24 2022-23 2021-22 2020-21 2019-20 Comments (including date any relevant assignments reported to the Audit & Scrutiny Panel) 1. Information security and information governance NO √ - √ - No specific audit work planned in 2023-24. Previous audit work has provided sufficient recent assurance on this key risk. Previous reports: Cyber Security (February 2023) and Information Governance and Security (February 2021) 2. Information governance: data migration (new) NO - - - - No specific audit work planned in 2023-24. Specific risks arising from time-bound actions/project to rationalise how the Council holds its’ data. 3. Public protection NO - - √ - No specific audit work planned in 2023-24. Previous audit work has provided sufficient recent assurance on this key risk. Follow- up work will monitor implementation of agreed management actions. Previous reports: Public Protection (September 2021) 4. Managing strategic change YES - - √ √ This remains a significant key risk and continues to merit high-level review of relevant management arrangements on an annual basis given the scale of Council’s ambitions and the challenging environment in which it is operating. Previous reports: Managing Strategic Change (June 2021) and Managing Strategic Change (February 2020). 5. Health & Safety NO - - √ - No specific audit work planned in 2023-24. Previous audit work has provided sufficient recent assurance on this key risk. Previous reports: Health and Safety (May 2021) and Health and Safety (Management of Covid risks) (November 2020). 6. Business continuity planning YES - √ - - Audit work planned in 2023-24 will review the effectiveness and impacts of actions taken by management in response to previous audit findings. Previous reports: Business Continuity Planning (July 2022). Page 166 of 222
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Appendix 2 Internal Audit coverage of current key corporate risks (continued) Key Corporate Risk 2023-24 2022-23 2021-22 2020-21 2019-20 Comments (including date any relevant assignments reported to the Audit & Scrutiny Panel) 7. Financial sustainability NO - - √ - No specific audit work planned in 2023-24. Previous audit work has provided sufficient recent assurance on this key risk. This area is also being examined by external audit as part of their 2022-23 audit process. Separate and specific work proposed on individual financial systems is also shown below. Previous reports: Financial management (March 2021) and Financial sustainability (November 2020). 8. Human Resources YES - √ - - Work on workforce planning included in 2023-24 (carried forward from 2022-23). Recent audit work has provided sufficient recent assurance on other aspects of this key risk. Follow-up work will monitor implementation of any agreed management actions. Previous reports: Supporting attendance (August 2022). 9. Engagement and consultation NO - - √ √ No specific audit work planned in 2023-24. Previous audit work has provided sufficient assurance on some aspects of this key risk. Follow-up work will monitor implementation of any agreed management actions. Previous reports: Community engagement and empowerment (June 2020) and elements covered by work on Corporate Governance Principle B Openness and stakeholder engagement (February 2022). 10. Procurement risks YES - √ √ - No specific dedicated audit work planned in 2023-24 as previous audit work has provided sufficient assurance on tendering and contract award arrangements. Procurement aspects will however be included in planned work on the Housing Capital Programme. Previous reports: Contract management (May 2023), Procurement (November 2021) and Housing Investment Programme (June 2020). Assurance also obtained via work on Creditors (see below), work currently underway in relation to the Housing Investment Programme and through work on the Enterprise Contract (March 2021). Page 167 of 222
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Appendix 2 Internal Audit coverage of current key corporate risks (continued) Key Corporate Risk 2023-24 2022-23 2021-22 2020-21 2019-20 Comments (including date any relevant assignments reported to the Audit & Scrutiny Panel) 11. Enterprise Project YES - √ √ √ Although the nature of this project has been significantly revised, it remains a high-profile key risk which warrants coverage, the scope of audit work will be dependent on progress of the project. Previous reports: Enterprise Contract (May 2022), ESCP (March 2021) and ESCP (March 2020) 12. Climate change YES - - - √ Carried forward from 2022-23, work will be focusing on reviewing how well the Council is progressing realistic plans against relevant local and national commitments and statutory obligations. Previous reports: Carbon management (May 2020) 13. Serious organised crime, fraud and corruption YES - - √ √ Carried forward from 2022-23, work will review the adequacy and effectiveness of the Council’s anti-fraud arrangements and policy. A high-level review will also be kept on the SOC issue, through attendance at the relevant corporate working group and work underway corporately to assess the Council’s arrangements against recent Police Scotland guidance to LAs on this issue. Previous reports: Review of anti-fraud arrangements (May 2020) and NFI 2022 and 2020 exercises. 14. Terrorism NO - - - - No specific audit work is proposed but a high-level watch will be kept on the issue, through attendance at the relevant corporate working group, and commentary included, as appropriate, in IA progress reports and the IA Annual Report. Previous reports: None 15. Governance, Leadership and Decision-Making NO √ - √ √ No specific audit work is proposed on this risk in 2023-24 but planned work on corporate governance is expected to also cover many aspects which relate to this issue. Routine follow-up work will monitor implementation of any previously agreed management actions. Previous reports: Corporate Governance Principles C and D (May 2023), Corporate Governance (March 2021) Corporate Governance (March 2020) and Corporate Governance Principles A and B (February 2022). Page 168 of 222
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Appendix 2 Internal Audit coverage of current key corporate risks (continued) Key Corporate Risk 2023-24 2022-23 2021-22 2020-21 2019-20 Comments (including date any relevant assignments reported to the Audit & Governance/Scrutiny Panel) 16. ICT operational capability YES - - - √ Audit work planned in 2023-24 will address ICT governance arrangements including how the Service manages relevant key risks. Previous audit work has provided assurance on some aspects of this key risk. ICT operational capabilities and governance arrangements are also addressed via work on specific systems and by previous audit work on Digital NL. Previous reports: Digital NL (September 2021) and IT Network controls (September 2019) 17. Resilience planning NO - √ √ - See Business Continuity Planning (at 5 above). Previous reports: Business Continuity Planning (July 2022) and Covid-19 response (February 2021). 18. Digital and IT strategy NO - √ √ - No specific audit work is proposed. Recent Internal Audit work in this area has focused on providing ongoing assurance in relation to the implementation and governance of the approved DigitalNL transformation programme and the ongoing digitalisation of Council services and this focus will continue in 2022-23. Previous reports: Digital NL (November 2021 and October 2020) and Network controls (September 2019). 19. Tackling poverty NO √ √ - - No specific audit work is proposed. Routine follow-up work will monitor implementation of any previously agreed management actions. Previous reports: Cost of Living Crisis / Welfare payments (May 2023) and Tackling Poverty (November 2021) 20. Implementation of Economic Regeneration Development Plan NO - √ √ - No specific audit work is proposed. Recent audit work has provided sufficient recent assurance on this key risk. Follow-up work will monitor implementation of any agreed management actions. Previous reports: ERDP (June 2021). Page 169 of 222
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Appendix 2 Internal Audit coverage of current key corporate risks (continued) Key Corporate Risk 2023-24 2022-23 2021-22 2020-21 2019-20 Comments (including date any relevant assignments reported to the Audit & Governance/Scrutiny Panel) 21. Further developments: Impacts of integration of health and social care NO - - - - No specific audit work is proposed for 2023-24 pending further clarification of the detail and timing of the implementation of proposed legislation to create a National Care Service. Specific audit work is undertaken on behalf of, and reported to, the IJB. A range of audits examining operational Social Work activities are undertaken as part of the Council plan. Recent reports: Social Work Quality Assurance arrangement (expected Autumn 2023), Public protection (June 2021), Self-Directed Support (November 2020). 22. Supply chain risks (New) NO - - - - No specific audit work is proposed for 2023-24 but a watching brief will be kept as to how this risk develops and how well the Council is managing it. Recent reports: None, although aspects will have been addressed through work on creditors and contract management. 23. Educational attainment (New) NO √ - - - No specific audit work planned in 2023-24. Previous audit work has provided sufficient assurance on some aspects of this key risk. Recent reports: Education quality assurance arrangements (January 2023), additional aspects have also been addressed through previous audit work on Pupil Equity Funding (PEF) and Scottish Attainment Challenge Funding (SAC) (various). 24. Target operating model (New) YES - - - - Carried forward from prior year, specific audit work is proposed for 2023-24 examining how the Council’s is developing and managing planned activities under this heading. 25. Scottish Child Abuse Inquiry (New) NO - - - - No specific audit work planned in 2023-24. Risk staff working closely with relevant management to ensure risks associated with the Council’s engagement with this Inquiry are understood and are being managed appropriately. Page 170 of 222
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Appendix 3 Internal Audit coverage of key financial systems Key Financial Systems 2023-2024 2022-23 2021-22 2020-21 2019-20 Comments (including date any relevant assignments reported to the Audit & Governance/Scrutiny Panel) 1. General ledger YES - √ - Previous audit work has provided positive assurance but planned cyclical coverage will focus on key areas such as controls over journals, use of suspense accounts and other risk areas. Routine follow-up work will monitor implementation of any agreed management actions. Previous report: General ledger (November 2020) 2. Payroll YES √ √ √ √ Recent audit work has indicated some concerns over the robustness of the control environment, and this combined with the complexity and value of transactions requires regular audit coverage. Previous reports: Payroll – Overtime and T&S (April 2023), ESC selected controls (March 2022 and June 2021), Payroll – overtime (May 2020) and Payroll – selected key controls (November 2019). 3. Creditors YES √ √ √ √ Recent audit work indicates that the control environment is generally robust, but complexity and value of transactions requires regular audit coverage. Previous reports: Creditors (January 2023), Creditors (March 2022), Creditors selected key controls (February 2021, March 2020 and May 2019). 4. Council Tax YES - - √ - Previous audit work has provided positive assurance but planned cyclical coverage will focus on key aspects of the billing and collection of Council Tax income. Previous reports: Council Tax (November 2020). 5. Non- domestic rates NO - √ - - Previous audit work has provided positive assurance. Routine follow-up work will monitor implementation of any agreed management actions. Previous reports: Non-Domestic Rates (January 2022). 6. Housing Rents NO - √ - - Previous audit work has provided positive assurance. Routine follow-up work will monitor implementation of any agreed management actions. Previous reports: Housing Rents (October 2021 and November 2018). Page 171 of 222
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Appendix 3 Internal Audit coverage of key financial systems (continued) Key Financial Systems 2023-24 2022-23 2021-22 2020-21 2019-20 Comments (including date any relevant assignments reported to the Audit & Governance/Scrutiny Panel) 7. Treasury management YES - - √ - Previous audit work has provided positive assurance but planned cyclical coverage will focus on compliance with expected controls and relevant national guidance. Previous reports: Treasury management (December 2020) 8. Financial management NO - - √ - No work planned for 2023-24 as previous audit work and external inspections have provided positive assurance on this key risk area. This issue will also be examined by the Council’s external auditors in 2023 as part of their annual audit work. Previous reports: Financial management (February 2021) and Financial management (November 2020). 9. Housing Benefit NO √ - - √ No work planned for 2023-24 as previous audit work has provided positive assurance on this area and the control framework is relatively stable and transaction volumes are progressively lower due to Universal Credit. Previous reports: Housing Benefit and Council Tax Reduction (September 2022) and Housing Benefit (September 2019). 10. Cash/income collection NO √ - - √ No work planned for 2023-24 as previous audit work has provided positive assurance on this area. Previous reports: Income and cash collection - Cash offices (October 2022), Income and cash collection – Lesiure sites (January 2023) and Cash collection offices (August 2019). 11. Debtors NO √ - - √ No work planned for 2023-24 as recent audit work has provided assurance on this area. Management responses to previous audit findings will be tracked as part of routine follow-up work. Previous reports: Sundry Debt/Debt management (November 2022) and Debt management (December 2019) Page 172 of 222
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Appendix 4 Internal Audit coverage (recent and planned) of ‘Programme of Work to 2028’ strategic themes. 1. Transforming Places and Invest in North Lanarkshire Includes the following programmes, projects and activities: • City Deal • Economic Regeneration Delivery Plan activities • Housing New Supply Programme • Town Centre Visions • Cumbernauld Town Centre • Town and Community Hub Delivery • Towers Reprovisioning • Enterprise Project • Open Space strategy • Housing property repairs and maintenance activities • Business and inward investment support activity • Housing Asset Management Plan • Active Travel Strategy 2021-31 • Local Housing Strategy 2021-26 Recent audit coverage on activities relevant to this strategic theme has included work on ERDP (June 2021), City Deal ((May 2023 and required annually as part of GCR governance arrangements), New Supply (March 2020), Town and Community Hub Programme (November 2021) and Enterprise Project (June 2022). Internal Audit proposed coverage in 2023-24 will include the following: • City Deal • Housing capital programme • Enterprise Project • Housing Asset Management Plan 2. Sustainable Futures Includes the following programmes, projects and activities: • Climate Change/Climate Plan activities • Local Heat and Energy Efficiency Strategy • Vehicle replacement programme (decarbonisation of fleet) • Refuse collection and recycling. • Clyde Valley Waste Partnership • School transport • Corporate fleet maintenance • Strathclyde Country Park - Green Growth Accelerator • Eco Hub – Bellshill • Solar Farms - Auchinlea/Dalmacoulter Recent audit coverage on activities relevant to this strategic theme has included work on Carbon Management (May 2020), Waste and Fleet staffing issues (May 2023), Clyde Valley Waste Partnership (April 2022 and required bi-annually as part of contractual governance arrangements). Internal Audit proposed coverage in 2023-24 will include the following: • Climate change • Clyde Valley Waste Partnership Page 173 of 222
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Appendix 4 (continued) Internal Audit coverage (recent and planned) of ‘Programme of Work to 2028’ strategic themes. 3. Resilient People Includes the following programmes, projects and activities: • Home Support • Tackling Poverty • 1140 Hours Early Learning • ASN activities • SAC and PEF • Schools - Curriculum delivery • National Care Service • Public Protection • Children’s Services • Community Learning and Development activities • Range of services and activities delivered via Social Work, Third Sector and through IJB Strategic Commissioning Recent audit coverage on activities relevant to this strategic theme has included work on Tackling Poverty (November 2021), Public Protection (September 2021), SAC and PEF (various dates, most recently August 2021), Education Quality Assurance arrangements (January 2023) and Welfare and Poverty related payment (May 2023) Internal Audit proposed coverage in 2023-24 will include the following: • Social Work Quality Assurance 4. Brighter Futures Includes the following programmes, projects and activities: • Workforce for the Future • Skills development/Sector Academies • Employability Services No recent audit coverage has been undertaken on activities relevant to this strategic theme. • Workforce planning 5. Digital North Lanarkshire Includes the following programmes, projects and activities: • Digital NL • Smart NL • ICT support and systems management • BI Hub • HSMS replacement • Corporate and Service technology projects • IT and Information Security Recent audit coverage on activities relevant to this strategic theme has included work on Cyber Security (January 2023), Information Governance and Security (January 2021) and Digital NL (various dates, most recently in November 2021) Internal Audit proposed coverage in 2023-24 will include the following: • ICT operational capability Page 174 of 222
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Appendix 4 (continued) Internal Audit coverage (recent and planned) of ‘Programme of Work to 2028’ strategic themes. 6. One Service Includes the following programmes, projects and activities: • Office rationalisation • Leadership and Operating Model • Asset management • Demolition and New Build • Corporate property and repairs Recent audit coverage on activities relevant to this strategic theme has included work on Business continuity planning (July 2022), Asset rationalisation (May 2021) and Managing strategic change (June 2021). Internal Audit proposed coverage in 2023-24 will include the following: • Future operating model • Business continuity planning Page 175 of 222
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Appendix 5: Internal Audit performance framework Category Measure Internal Audit management Reported to Chief Executive and CMT Reported to A&SP (Quarterly) Reported to A&SP (Annual) 1. Delivery of Annual Plan Percentage completion of agreed plan X X X 2. Targeting Percentage of key corporate risks and key financial systems over which assurance provided X X X 3. LGBF - Efficiency Cost of Internal Audit per £ million revenue budget X X 4. LGBF - Efficiency % of productive hours delivered v Plan X X 5. Delivery / recommendations Percentage implementation of agreed actions by implementation date (cumulative year to date) X X X X 6. Delivery / other Number of significant irregularity / fraud investigations X X X 7. Customer satisfaction results Scores from customer satisfaction questionnaires (audit assignments) (cumulative year to date) X X X X 8. Customer satisfaction results Scores from key stakeholders (CMT and A&SP) questionnaires (overall performance of the function) X X X 9. Quality / standards Reliance placed by External Audit on the work of Internal Audit X X X 10. Quality/ standards Quality review outcomes – EQAR or internal self-evaluation X X X 11. Delivery of Annual Report Annual opinion /report prepared by 31 May annually X X X 12. Targeting Approval by CMT and A&SP of strategy and annual plan by 31 May annually X X X Internal management performance indicators 13. Efficiency Actual v planned days on completed assignments X 14. Efficiency Time between completion of fieldwork and draft reports being issued X 15. Efficiency Time between draft reports and final reports being issued X Page 176 of 222
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref: KA/ASP/2023/May Date 18/05/23 Risk Management update From Ken Adamson, Chief Officer (Audit and Risk) E-mail adamsonk@northlan.gov.uk Telephone 07939 280602 Executive Summary This report provides the Panel with a brief overview of key risk management developments since the most recent update report to the Panel in February 2023. As well as providing an update on the Council’s corporate risk register and highlighting a selection of the more significant issues which are of current focus from a risk perspective, the report also provides a brief overview of the refreshed Risk Management Strategy which was approved by the Policy and Strategy Committee on 16 March 2023 and of the subsequent actions being taken forward by management. The report also reflects on recent changes in internal governance arrangements and ongoing developments on how risk issues are managed and monitored by senior management and outlines the processes to be undertaken as part of the annual review of the corporate risk register. Strategically significant risks of current focus remain largely unchanged from the last update and include responding to the ongoing challenges presented by current inflationary pressures, delivering approved savings and ensuring the Council is able to effectively respond to expected ongoing pressure on future funding for local government. The Council is also fully engaged with ongoing attempts to assess and respond effectively to the likely significant impacts of the National Care Service draft legislation on service users, staff and the Council more generally. Finally, the approval of a revised Programme of Work to 2028 at the Policy and Strategy Committee in March is being reflected in revised governance arrangements within which effective risk management arrangements will continue to have a key role. Significant operational risks of current focus include work to ensure the resilience of the Council’s home care service in light of ongoing pressures, supporting the operation and resilience of school transport, ongoing work relating to staffing issues, including responding to recruitment and retention challenges and ensuring risk issues continue to be addressed in relation to a number of significant projects and programmes of work. Recommendations The Panel is asked to consider the contents of the report and to: (1) note the current residual scores for those risks agreed for inclusion in the corporate risk register for 2022-23 at Appendix 1; (2) note the references to other topical risk issues highlighted in Section 2; and (3) note the work ongoing to further strengthen and embed risk management arrangements. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements AGENDA ITEM 10 Page 177 of 222
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1. Background 1.1 The Council’s Risk Management Strategy requires that the corporate risk register is refreshed on an annual basis, led by the Corporate Risk Team, working with the Risk Management Corporate Working Group (RMCWG) on behalf of, and in consultation with, the Corporate Management Team (CMT). In addition, each Service is required to maintain its own risk register in respect of the operational service risks within their areas of responsibility. CMT previously approved the 2022-23 corporate risk register as outlined in the table at Appendix 1. 1.2 It is widely recognised that the environment within which the Council operates and provides services is dynamic, and corporate and service risk registers must continually evolve to keep pace with, and accurately reflect, the ongoing challenges facing the Council. The Risk Management Strategy sets out required frequencies for the ongoing review by management of both Corporate and Service risks. Revised Risk Management Strategy (approved March 2023) 1.3 The revised Risk Management Strategy recently approved at the Policy and Strategy Committee in March includes a number of changes from the previous version. Overall, these changes are minor and are designed to deliver incremental improvements to what was an already sound approach consistent with current risk management good practice. The revised strategy reflects the Council’s current organisational structures and corporate expectations in respect of risk management. 1.4 The most significant aspects of the revised Risk Management Strategy which differ from the previous version include: • Inclusion of a ‘Risk Management governance structure’ diagram which clearly lays out the key groups involved in risk management activity across the organisation, and the relationships between them; • A new group category within Roles and Responsibilities for ‘Service Risk Forums’ which has been established to allow Service Risk Champions to better liaise with and co-ordinate risk activities and reporting requirements with Risk Facilitators across each Service. These Service Risk Forums will support Service Management Teams in relation to their risk management responsibilities; • The Roles and Responsibilities section is now supplemented with information outlining ‘The 3 Lines of Defence’ principles for managing risk which will clarify and assist officers in understanding where responsibility for managing risk lies; • The approach to risk scoring and assessment has been refreshed to provide more specific guidance in the measurement of risk and expected responses to differing levels of risk. There has been some focus on ‘fine-tuning' the risk scoring approach to ensure this provides greater differentiation in ratings (and rationale for those ratings) within the ‘High’ residual risk category, which will enable Chief Officers and elected members to better distinguish areas that require more focus; • The opportunity has also been taken to formalise the Council’s risk reporting arrangements and these are detailed within a risk reporting matrix; and • For the first time, the strategy outlines how the organisation will go about monitoring performance and compliance with the strategy, noting that results of such checks will be included within future reporting to senior management and Elected Members. Page 178 of 222
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2. Report 2.1 The current approved corporate risk register for 2022-23 is at Appendix 1. Risks contained within the register have been subject to ongoing monitoring and review throughout the year, with regular risk reporting to CMT and the Panel both on the overall register, and with detail on individual risks being reported by relevant risk leads. 2.2 The definition of a corporate risk is ‘those risks which can impact the Council in achieving its priorities and stated objectives and/or which are more strategic in nature and require corporate oversight. For example, such risks may have the potential to impact many Services, and/or can impact significantly on the Council in terms of financial costs and/or reputational damage. The corporate risk register will reflect an amalgamated position of Service-level risks and may also include significant service- level risks which have been escalated for attention at a strategic level.’ Update on the 2022-23 corporate risk register 2.3 Since the last update to the Panel, there have been no substantive changes to the risks contained within the corporate risk register or the scores of most of those risks. 2.4 Changes include the ‘Information governance - Data migration’ risk which has reduced from 25 to 15, the ‘Improving educational outcomes’ risk which was previously awaiting scoring but has now been finalised with a residual score of 9 and the ‘Impact of the National Care Service proposals’ which was also previously unscored but which has now been given a residual score of 25, reflecting the significant potential impacts and the difficulty of assessing and mitigating associated risks given ongoing uncertainty about the scope, timing and detailed operational impacts arising from the relevant legislative process. 2.5 Additional issues currently being considered for future inclusion in the corporate risk register include Black Start/power resilience (which is a national risk and relates to how the Council would respond to the highly unlikely event of a total or partial shutdown of the National Electricity Transmission System), home support service delivery and home to school transport. 2.6 Currently all bar one of the risks are classified as ‘live’ with completed risk documentation; the one risk classified as ‘draft’ where relevant documentation is currently being finalised is ‘Target operating model’. 2.7 As reported to the Panel in February, the overall corporate risk profile continues to see a notable number of risks which sit within the ‘High’ category for residual risk rating. This is to be expected because of the complex and challenging environment in which the Council is operating, and the risk profile itself continues to be a key consideration in the planning and decision-making activities of the Council. 2.8 Generally, corporate risks are being reviewed within reasonable timescales, however, there can be occasions where they fall overdue and, when this occurs, Risk Leads are reminded of the need to contact the corporate risk management team promptly when e-mail reminders are received to advise that a risk is due its review. The corporate risk management team then assists in the facilitation and co-ordination of those reviews, and timely consideration allows risk review frequencies to be maintained aligned to risk rating, and avoid risks becoming out of date, ensuring risks are current and reflective of the most current position. Reviewing and updating the 2022-23 corporate risk register 2.9 The corporate risk register is amended as required on an ongoing basis, but is subject to a formal annual review each Spring. The object of undertaking a formal review is that it allows structured consideration of whether the corporate risk register remains up- to-date and properly reflective of the key risks, challenges and issues facing the Council. Page 179 of 222
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2.10 The process for reviewing the corporate risk register involves the corporate risk management team reviewing and updating a horizon scanning document which considers the strategic environment facing the Council. The process will also allow consideration of risks associated with the Council’s ambitions and priorities as set out in the revised Programme of Work and consideration as to whether any risks currently sitting within service risk registers should be included in the corporate risk register. Any proposed changes to the corporate risk register will be submitted for approval to the Council’s Business Management Team (BMT) and CMT. The 2023-24 review process will commence shortly and be concluded by the end of May. Governance arrangements - oversight of risk registers 2.11 Recent changes to internal governance arrangements at senior management level within the Council have provided an opportunity to strengthen and further embed risk management and specific responsibilities in respect of risk have been included in relevant terms of reference. CMT retains responsibility for oversight of corporate risks and ensuring that these are being managed in accordance with the approved risk management strategy. Service Management Team (SMT) meetings are now formally expected to regularly review and monitor service risk registers ensuring that registers are complete and up-to-date. They are also expected to ensure that new and emerging risks are identified, assessed, and managed effectively and that service risk registers are used appropriately to support management decision-making. 2.12 The corporate risk management team have now developed formal measures to review and report on compliance with the Council’s risk arrangements during 2023-24. The corporate risk management team will continue to work with corporate risk leads and service risk champions to ensure that risks registers continue to capture and reflect the current key challenges facing the organisation. Snapshot of service risks 2.13 It had previously been proposed to supplement the corporate/strategic risk register information included in this report with a summary of key service risks from service risk registers to enable members to have sight of those risks with the highest residual risk scores. The preparation of this information has, however, led a number of Services to indicate that they require to revisit their risk registers which they considered were not always as complete, accurate and up-to-date as senior management might have wished. 2.14 Rather than present the Panel with incomplete or out-of-date information, risk information drawn from service risk registers will now be reported in August. CMT has recently emphasised to Services that current reviews must be completed as quickly as possible and it is intended to undertake a dry-run at the end of June to assess Service’s ability to provide meaningful information on service risks which can be reported to the Panel in August. Actions are also being taken to ensure that Service Management Teams regularly formally review and monitor risk registers to ensure that registers are complete, accurate and up-to-date, that new and emerging risks are identified, assessed, and managed effectively and that service risk registers are used appropriately to support management discussions and inform decision-making. Strategic and operational risks of current focus 2.15 Strategically significant risks of current focus include responding to the ongoing challenges presented by current inflationary pressures and increased uncertainty over future levels of funding for local government in light of wider developments in UK and Scottish public sector finances. These issues have been the subject of recent reports to the Policy and Strategy Committee. Page 180 of 222
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2.16 The Council is also fully engaged with wider policy developments which have the potential to impact significantly on the Council and its corporate ambitions. This includes ongoing attempts to understand, assess and respond effectively to the likely significant impacts on service users, staff, and the Council more generally of the National Care Service draft legislation. Responding to any outcomes arising from the Scottish Government consultation on the future of education in Scotland is also likely to be of increasing focus. National developments in both areas will continue to be kept under review and actioned as required, with updates provided to relevant Committees at key development points. 2.17 Operationally, the Council continues to manage a wide range of risks associated with day-to-day service delivery and progressing projects and programmes of work. Significant operational risks of current focus currently include work underway to ensure the resilience of the Council’s home care service in light of ongoing pressures and the increased challenges facing the Service, and ongoing work around responding to short and longer-term challenges around the provision of school transport. Staffing issues, including recent industrial action, and responding to recruitment and retention challenges, have also featured prominently in recent months. Finally, risk issues continue to be addressed in relation to a number of significant projects and programmes of work including the Enterprise Contract and the planned acquisition of Cumbernauld Town Centre, both of which were the subject of recent reports to the Policy and Strategy Committee. 3. Measures of success 3.1 The corporate risk management team will continue to report quarterly to BMT, CMT and the Panel providing an overview of key developments in risk management and updating on progress in respect of planned improvements to the Council’s risk management arrangements. 3.2 The adequacy and effectiveness of the Council’s risk management arrangements will be independently and regularly reviewed by Internal Audit, who will report directly on the results of that work to the Panel. 3.3 Effective risk management arrangements assist the Council in achieving planned outcomes and/or help the Council mitigate the impacts of adverse events. 4. Supporting documentation Appendix 1: 2022-23 corporate risk register Appendix 2: Risk scoring matrix and descriptors Ken Adamson Chief Officer (Audit and Risk) Page 181 of 222
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact because of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If yes, please provide a summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Effective risk management arrangements including the identification, assessment, management and oversight of relevant risks will increase the likelihood of the Council achieving its ambitions and plans by making it more likely that the Council will be able to effectively mitigate potential threats to planned outcomes. It also contributes to effective management of risks relating to all service and operational areas. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ Page 182 of 222
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Appendix 1: 2022-23 corporate risk register CORPORATE RISKS (Operational) Likelihood Impact Rating Evaluation 1. Information governance and Information security 5 4 20 High 2. ICT operational capability 4 4 16 High 3. Public protection 4 4 16 High 4. Human resources 4 4 16 High 5. Governance, leadership and decision-making 4 4 16 High 6. Supply chain risk 4 4 16 High 7. Scottish Child Abuse Inquiry 4 4 16 High 8. Information governance – Data migration 3 5 15 Medium 9. Health and Safety 5 3 15 Medium 10. Business continuity planning 5 3 15 Medium 11. Terrorism 3 5 15 Medium 12. Procurement risk 3 4 12 Medium 13. Resilience planning 2 5 10 Medium 14. Serious organised crime, fraud and corruption 3 3 9 Medium CORPORATE RISKS (Strategic) Likelihood Impact Rating Proximity 15. Impact of National Care Service 5 5 25 Very High 16. Tackling poverty 5 4 20 High 17. Climate change 4 4 16 High 18. Implementation of Economic Regeneration Development Plan 3 5 15 Medium 19. Financial sustainability 3 5 15 Medium 20. Enterprise Project 3 4 12 Medium 21. Managing strategic change 3 4 12 Medium 22. Digital and IT strategy 4 3 12 Medium 23. Engagement and consultation 3 3 9 Medium 24. Improving educational outcomes 3 3 9 Medium 25. Target operating model – (Ensuring resources (workforce, digital and assets) and service delivery are fully aligned to support the successful implementation of the Council’s future operating model. To be confirmed To be confirmed To be confirmed To be confirmed Page 183 of 222
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APPENDIX 2: LIKELIHOOD / IMPACT DESCRIPTORS AND RISK MATRIX Likelihood Descriptors: Score Probability of occurrence Description 5 Over 90% Almost certain to occur within 12 months 4 61-90% Likely to occur within 12 months 3 31-60% Possible that it may occur within 12 months 2 11 - 30% Unlikely to occur within 12 months 1 10% or less Rare that it would occur within 12 months Impact Descriptors: Score Description of impact On Service Objectives Financial On people On time to recover On reputation 5 Catastrophic Unable to function, inability to fulfil obligations Severe financial loss (over 25% of budget) Death Serious – more than 2 years to recover to pre- event position Highly damaging, severe loss of public confidence 4 Major Significant impact on service objectives Major financial loss (between 10% and 25% of budget) Extensive injury, major permanent harm Major – between 1 and 2 years to recover to pre-event position Major adverse publicity, major loss of confidence 3 Moderate Moderate impact on service objectives Significant financial loss (between 2.5% and 10% of budget) Medical treatment required, semi- permanent harm up to one year Considerable – between 6 months to 1 year to recover to pre- event position Some adverse publicity, legal implications 2 Minor Minor impact on service objectives Moderate financial loss (between 1% and 2.5% of budget) First aid treatment, non- permanent harm up to 1 month Some – 2 to 6 months to recover to pre-event position Short-term public embarrassment and no damage to reputation 1 Insignificant Minimal impact, no service disruption Minimal loss (up to 1% of budget) No obvious harm/injury Minimal – up to 2 months to recover No interest to the media, internal only. Risk Matrix: Likelihood 5 - Almost certain 5 10 15 20 25 4 - Likely 4 8 12 16 20 3 - Possible 3 6 9 12 15 2 - Unlikely 2 4 6 8 10 1 - Rare 1 2 3 4 5 1 - Insignificant 2 - Minor 3 - Moderate 4 - Major 5 - Catastrophic Impact Risk Rating Insignificant 1-3 Low 4-6 Medium 8-12 High 15-25 Page 184 of 222
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☒ Yes ☐ No Ref Date 05/04/23 Raising attainment and closing the attainment gap – risk Janie O’Neill Chief Officer (Education -South) ONeillJa@northlan.gov.uk Executive Summary To support the Council in mitigating risks and uncertainty, the Council operates risk management arrangements which identify, evaluate, manage, and control a range of key corporate risks. All risks identified and agreed as meriting inclusion in the corporate risk register are subject to regular monitoring and review by relevant senior management and periodic review/consideration of individual risks by both the Corporate Management Team (CMT) and the Audit and Scrutiny Panel (ASP) in line with the Council’s Risk Management Strategy and their respective governance roles. This report identifies a corporate risk that current strategies and approaches do not improve attainment and achievement levels and/or do not reduce the poverty related attainment gap (Excellence and Equity). The report provides an overview of the current risk environment as set out and assessed within the draft Deep Dive document attached at Appendix 1. Members should note that although raising attainment and closing the poverty related attainment gap has been a priority for several years, recent findings outlined by Audit Scotland (March 2021) concluded that progress on closing the poverty-related attainment gap, between the most and least deprived school pupils, has been limited and falls short of the Scottish Government’s aims. Therefore, we propose that further work is required to fully analyse risk impacts and to reflect and develop mitigating actions and controls which may be exercised by the Council to support NLC to raise attainment and close the gap. The level of uncertainty associated with this risk is reflected in the inherent (16 - high) and residual risk (9-medium) ratings. Recommendations The Panel is asked to consider the contents of the report and to: (1) Note the draft deep-dive document (at Appendix 1) and indicative risk scoring which reflects both the high levels of uncertainty associated with the complex nature of this risk and the potentially wide-ranging impacts for the council associated with this risk. AGENDA ITEM 11 Page 187 of 222
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1. Background 1.1 CMT has previously approved the corporate risk register for 2022-23. 1.2 The definition of a corporate risk is ‘those risks which can impact the Council in achieving its priorities and stated objectives or are more strategic in nature and require corporate oversight. For example, such risks may have the potential to impact many Services, and/or can impact significantly on the Council in terms of financial costs and reputational damage’. 1.3 The Corporate Risk Register will reflect an amalgamated position of Service-level risks and may also include significant Service-level risks which have been escalated for attention at a strategic level. 1.4 Risks contained within the register are subject to ongoing monitoring and review throughout the year, with regular risk reporting to CMT and the Audit and Scrutiny Panel both on the overall register, and with details on individual risks being reported by relevant Risk Leads. 1.5 The Service recognises the risk and potential negative impact on the Council if current strategies and approaches do not improve attainment and achievement levels and reduce the poverty related attainment gap. Therefore, they propose this risk should be included on the risk register 2023-24. 2. Report 2.1 The Standards in Schools Act (2000), as amended by the Education (Scotland) Act 2016, places specific responsibilities on the Local Authority to improve the standards in schools. Specifically, it requires Local Authorities to: • Promote a reduction in inequalities of educational outcomes experienced by pupils as a result of socio-economic disadvantage. • Secure improvement in the quality of school education, aligning improvement and reporting activity with the strategic priorities identified in the National Improvement Framework. 2.2 To exercise our duty in relation to these responsibilities, the Education and Families Service has established robust quality assurance and governance procedures that enables them to track, monitor and report on the impact of improvement activity and attainment outcomes for learners. The Service sets ambitious goals for improvement and has clear processes to support improved attainment and outcomes for learners. (2) Note that this risk documentation will be regularly reviewed in keeping with both the high indicative scoring and the fluid risk environment. The Plan for North Lanarkshire Priority Support all children and young people to realise their full potential Ambition statement (6) Raise attainment and skills for learning, life, and work to enhance opportunities and choices Page 188 of 222
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2.3 In North Lanarkshire a significant number of children and families live in areas of high deprivation with over 25% in SIMD 1 and 2; approximately 15,500 in primary and secondary. There is clear evidence that poverty significantly influences children's educational outcomes with students from the richest households consistently outperforming those from poorer backgrounds (Scottish Government, 2014; Scottish Government, 2015b; OECD, 2016; Sosu and Ellis, 2014). Therefore, the Service has a clear focus on implementing strategies to close the poverty related attainment gap. 2.4 At establishment level, school leaders have access to delegated local authority funding and additional funding, provided through the Scottish Attainment Challenge (SAC), to improve outcomes and close the poverty related attainment gap. 2.5 In session 2022-23, the Scottish Government changed its approach to SAC funding, replacing this with Strategic Equity Funding (SEF). The introduction of this new model will see NLC receive a tapered reduction in financial support, from 7.5 million to 3.4 million by session 2025-26. The SEF model will operate from 2022-2026. 2.6 Local Authorities work with their assigned Education Scotland Attainment Advisor to produce a plan detailing how the funding will be used, and to report on the progress of this plan, in line with National guidance and governance arrangements. 2.7 The new SEF approach requires Local Authorities to use local intelligence and data to identify stretch aims (targets) for various measures and submit these to the Scottish Government and to report on progress towards achieving targets set. 2.8 Establishments also receive another layer of additional funding, from the Scottish Government, known as Pupil Equity Funding (PEF). PEF must be used to support schools to close the poverty related attainment gap. PEF is downloaded directly to individual establishments and Head Teachers are responsible for controlling and monitoring PEF spend (in accordance with Scottish Government guidance). The Scottish Government has committed to this funding as part of the new phase of the programme from 2022 to 2026. 2.9 The Council’s ability successfully raising attainment and closing the poverty related attainment gap is impacted upon by a range of internal and external factors as exemplified in the Deep Dive document (Appendix 1). 2.10 The Deep Dive identified three key factors impacting on this risk: • Risks associated with external factors for example changes to national policy drivers and grant funds, impact of National Curriculum Review, • Risks associated with the implementation processes and controls, e.g., workforce challenges, provision of appropriate curriculum pathways, establishment of effective quality assurance processes. These factors will require careful monitoring, controls and actions to support achievement of the aim and to reduce risk to the council. 2.11 The Service recognises this risk would have significant impact on the Council in terms of reputational damage, ability to meet future workforce demands, and potential longer term financial burden on the Council, associated with supported higher number of unemployed residents. Page 189 of 222
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3. Measures of success 3.1 CMT and ASP are content with, and have an appropriate understanding of, the key risks facing the Council and how these are being managed. 3.2 The corporate risk management team will continue to report quarterly to CMT and the ASP providing an overview of key developments in risk management and updating on progress in respect of planned improvements to the Council’s risk management arrangements. 3.3 The adequacy and effectiveness of the Council’s risk management arrangements will be independently and regularly reviewed by Internal Audit, who will report directly on the results of that work to the ASP. 3.4 Effective risk management arrangements assist the Council in achieving planned outcomes and/or help the Council mitigate the impacts of adverse events. 4. Supporting documentation 4.1 Appendix 1 – Deep Dive Report – Attainment and Achievement Janie O’Neill Chief Officer, (Education - South) Page 190 of 222
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Page 191 of 222
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Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Inclusion on the corporate risk management register will support effective risk management arrangements including the identification, assessment, management and oversight of relevant risks and will reduce potential threats to planned improved outcomes. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. Page 192 of 222
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Apr 4, 2023, 9:48 AM Deep Dive Report RIS0000625 Risk Title Education and Achievement Owner Janie O'Neill Risk Context The Standards in Schools Act (2000), as amended by the Education (Scotland) Act 2016, places specific responsibilities on the Local Authority to improve the standards in schools. Specifically, it requires Local Authorities to: Promote a reduction in inequalities of educational outcomes experienced by pupils as a result of socio-economic disadvantage Secure improvement in the quality of school education, aligning improvement and reporting activity with the strategic priorities identified in the National Improvement Framework. To exercise our duty in relation to these duties, the Education and Families Service has established robust quality assurance and governance procedures that enables them to track, monitor and report on the impact of improvement activity and attainment outcomes for learners. The Service sets ambitious goals for improvement, at Service and Establishment level, and has clear processes to support improved attainment and outcomes for learners. The Service follows established Council reporting processes, providing the senior leadership team and elected members with regular progress updates. In line with Scottish Government guidelines, the Service submits an annual Standards and Quality Report, summarising progress and attainment information, and an Annual Improvement Plan outlining priorities for the next session, to the Scottish Government for scrutiny and publication. Authority level attainment data, including Broad General (BGE) and Senior Phase attainment data, is published annually. Published data includes specific information around progress in closing the poverty related attainment gap. In North Lanarkshire a significant number of children and families live in areas of high deprivation with over 25% in SIMD 1 & 2; approximately 15,500 in primary and secondary. There is clear evidence that poverty significantly influences children's educational outcomes with students from the richest households consistently outperforming those from poorer backgrounds (Scottish Government, 2014; Scottish Government, 2015b; OECD, 2016; Sosu and Ellis, 2014). Therefore, the Service has a clear focus on implementing strategies to close the poverty related attainment gap. At establishment level, school leaders have access to delegated local authority funding and additional funding, provided through the Scottish Attainment Challenge (SAC), to improve outcomes and close the poverty related attainment gap. SAC funding is downloaded directly to Local Authorities to utilise in accordance with national guidance. Local Authorities work with their assigned Education Scotland Attainment Advisor to produce a SAC plan and to report on the progress of this plan, in line with National guidance and governance arrangements. In the initial SAC model 9 local authorities, including North Lanarkshire Council, were identified as Challenge Authorities, and received additional Scottish Government funding to support equity and to close the poverty related attainment gap. However, in session 2022-23, the Scottish Government changed its approach to SAC funding, replacing this with Strategic Equity Funding (SEF). SEF will continue to focus on improving outcomes for children and families impacted by poverty but will see all local authorities receiving additional funding instead of the original 9. Introduction of this new model will see NLC receive a tapered reduction in financial support, from 7.5 million to 3.4 million by session 2025-26. The SEF model will operate from 2022- 2026. The new SEF approach requires Local Authorities to use local intelligence and data to identify stretch aims (targets) for various measures and submit these to the Scottish Government. These measures are categorised as core and core plus. The core elements are part of a requisite package of measures identified by the Scottish Government mainly focusing on attainment. Local Authorities were able to identify their own Core plus stretch aims. Based on local data North Lanarkshire Councils Core Plus aims focus on improving attendance (primary and secondary) and include a participation measure reflecting the exceptional work that the Virtual School team have been working towards over the past 2 years in improving outcomes for our Care Experienced young people. To support schools to close the poverty related attainment gap, they receive another layer of additional funding from the Scottish Government known as Pupil Equity Funding (PEF). Although Pupil Equity Funding forms part of the overall £1 billion Scottish Attainment Challenge Fund, the governance arrangements are significantly different, with PEF funding being delegated directly to individual establishments. Head Teachers are responsible for controlling and monitoring PEF spend (in accordance with Scottish Government guidance). The Scottish Government has committed to this funding as part of the new phase of the programme from 2022 to 2026. The Local Government Benchmarking Framework (LGBF) is a high-level benchmarking tool. It is designed to support councils to compare their performance Last Assessment Due 17 January 2023 Last Assessment Undertaken 29 March 2023 Page 193 of 222
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Apr 4, 2023, 9:48 AM against a suite of efficiency, output and outcome indicators that cover all areas of local government activity. Publication of the LGBF forms part of each council’s statutory requirements for public performance reporting. Analysis of data contained in the framework contributes to risk management discussions. NLCs latest P1, 4 and 7 combined achievement of a level data for literacy (68.6%) and numeracy (79.4%) is higher than National attainment levels; Literacy (66.9%) and Numeracy (77.9%). Data also indicates that NLC are making progress in closing the attainment gap for literacy (19.0%) and numeracy (16.6%) with gap data remaining lower than National figures (21.3%) Literacy and (16.6 %) for Numeracy. However, NLCs gap is wider than the gap recorded within our comparator family groups and therefore must remain a focus. Senior phase 5@ level 5 (67%) and 5@ level 6 (37%) data indicates that NLC are outperforming their family group comparators, however we are still below national data levels, 69% and 40% respectively. Therefore, we must continue to focus on improving attainment levels in these measures. The attainment gap within NLC for both measures is broadly in line with National data. NLCs attendance rates (89.8%) and participation rates (90.2%) are below national comparison data, (92% and 92.4% respectively) and so will remain a focus for improvement to ensure all learners are supported to reach highest possibly levels of attainment and achievement. Risk Description There is a risk that current strategies and approaches do not improve attainment and achievement levels and reduce the poverty related attainment gap. (Excellence and Equity). Due To Uncertainty around what will truly influence poverty related attainment. Impact of the pandemic on learning and health and wellbeing, and the long- term impact of on attainment and outcomes. Current cost of living crisis and impact on children and families and the workforce. Inconsistent approaches to poverty proofing our establishments to ensure all children have equal access to all learning opportunities. (This includes digital etc.) Failure to utilise PEF funding appropriately to close the poverty related attainment gap. Changes to the Scottish Attainment Challenge funding model with a reduction in allocated funding and consequential impact. Introduction of the Scottish Equity Fund (SEF) and additional external measures and expectations. (Stretch Aims) Failure of NLC to keep abreast of changes in national and local curriculum drivers and advice and to plan strategically to support establishments to manage the changes to ensure a consistent educational offering across NLC (curriculum structure and content). NLC not having a curriculum that provides young people with the opportunity to develop a range of skills, knowledge and attributes required to succeed in learning, life and work. Increased focus on national assessment results pressuring schools to have an overly narrow focus on only academic qualification and outcomes. Recommendations from the National Conversation (Review), e.g. to assessment approaches and national governing bodies and the subsequent impact at Authority and School level and inability of the Service to implement the recommendations. Inability to identify and provide necessary support to children and families to ensure they are able to access all educational experiences. Failure to maximise partnerships and opportunities for learners to develop their skills for life, learning and work. Failure to apply strategies to ensure all parents, including those impacted upon by financial barriers, are provided with appropriate support and opportunities to enable them to support their child's learning. Failure to evidence the impact of additional funding (PEF/SEF) in improving outcomes for children and families. Difficulties in recruiting staff, particularly teachers, to deliver specific interventions. Lack of stakeholder engagement or participation. (This includes NLC staff, external parties and elected members.) Impact Decreasing levels of educational attainment and sustained positive destinations. Potential negative impact in preparing young people to meet local workforce demands. Failure to address Inequalities agenda and to close the poverty related attainment gap and the subsequent long-term detrimental impact on children and young peoples' capacity to progress into a sustained positive destination, to support themselves financially and to feel valued Organisation Structure North Lanarkshire Corporate Page 194 of 222
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Apr 4, 2023, 9:48 AM and able to contribute to their local community. Increased numbers of young people requiring support with Health & Wellbeing and resultant additional pressure on NLC resources and budgets. Unable to report accurately on the difference that funding and related interventions are making. Inability to report fully on the NIF drivers around Excellence and Equity and identified Stretch aims. Negative inspections and increased internal and external scrutiny. Reputational damage and loss of confidence in NLC as an Education authority, particularly with SG, Elected Members and parents whereby North Lanarkshire is not viewed as a place to live, learn, work, invest and visit. Long term financial impact on the Council in terms of providing additional financial support to residents if they are unable to secure employment. Corporate Priorities • Improve economic opportunities and outcomes • Support all children and young people to realise their full potential • Improve North Lanarkshire’s resource base • Improve the health and wellbeing of our communities Inherent Assessment ASM0003436 Likelihood - 4 Impact - 4 High - 16 Likelihood Reason North Lanarkshire is one of the most deprived Local Authorities in Scotland with a significant number of our children and families impacted upon by challenges associated with poverty. NLC receive additional Scottish Government funding, from the Scottish Attainment Challenge Fund, to deploy additional resources to help schools to raise attainment and to provide specific targeted support to close the poverty related attainment gap. With no control measures in place, the possibility of this risk occurring is thought to be likely. Impact Reason Failure to manage this risk could result in major impact with multiple service standards not met i.e. our educational provision failing to ensure all learners, regardless of socio economic background, leave school with the required skills and qualities to gain, and sustain, employment. This in turn will have a negative impact on our ability to meet local workforce demands and have a potentially negative financial impact on the Council, with more resources required to support unemployed NLC residents. There is also significant reputational damage associated with poor educational performance, with statistics published and compared at Local Authority and National Level. Decreasing attainment trends could also trigger increased external scrutiny from HMIE (External Inspectors). NLCs latest P1, 4 and 7 combined achievement of a level data for literacy (68.6%) and numeracy (79.4%) is higher than National attainment levels; Literacy (66.9%) and Numeracy (77.9%).For P1, P4 and P7 NLC is making progress in closing the attainment gap for literacy (19.0%) and numeracy. For Senior phase 5@ level 5 (67%) and 5@ level 6 (37%) data indicates that NLC are outperforming their family group comparators, however we are still below national data levels See Risk Context for further details. Controls and Actions Owner Status Target/Due Date CON0002475 - There is an overall SAC Plan which encompasses the strategy and outlines related initiatives to improve attainment and reduce the poverty related attainment gap with North Lanarkshire. This plan is informed by relevant research and has on-going monitoring built in to ensure best practice (new initiatives) will be incorporated into this plan. Michelle O'Halleron In Progress ACT0001078 - CON0002475 - Amend and adapt annual SAC Plan to accommodate reduction of £4.1m from Scottish Government. (This will impact on strategies/initiatives funded via SAC at authority level, but not those necessarily those funded through PEF. Michelle O'Halleron Underway 31 August 2023 Page 195 of 222
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Apr 4, 2023, 9:48 AM ACT0001079 - CON0002475 - Monitor revised (Dec. 2022) Framework and governance around SAC/PEF spend. William Collum Underway 31 May 2023 ACT0001080 - CON0002475 - Continued engagement with the Attainment advisor to support best practice and ensure compliance with National guidance Michelle O'Halleron Raised 30 June 2023 ACT0001113 - CON0002475 - Continuing engagement with external participants and suppliers, in line with procurement guidance. William Collum Raised 30 June 2023 CON0002476 - Clear processes in place to deploy additional staffing (via PEF and SAC funding) to provide additional support to improve outcomes and reduce poverty related attainment gap and impact of the pandemic. Geraldine Shearer In Progress ACT0001081 - CON0002476 - Continue to track, monitor and report on the impact of additional staffing and to adjust approaches based on feedback and evaluation results. Geraldine Shearer Underway 30 June 2023 CON0002477 - Implementation of refreshed quality assurance, planning and reporting processes to ensure a clear focus on self-evaluation and improvement, at all levels, complemented by proportionate arrangements for external scrutiny/quality assurance. (Validated self-evaluation processes). Regular progress reports provided to internal and external stakeholders including CMT, Elected Members and Scottish Government (financial and performance information). Michelle O'Halleron In Progress ACT0001082 - CON0002477 - Review and address action points identified through internal audit. Michelle O'Halleron Underway 30 June 2023 CON0002478 - Creation and use of toolkits and processes that facilitate the effective interrogation, analysis and use of data to identify, track and monitor progress and to identify areas for improvement. This enables Head Teachers to identify individuals impacted by poverty and to quantify their attainment gap. Michelle O'Halleron In Progress ACT0001083 - CON0002478 - Support all establishments to make effective use of these toolkits to identify, plan and deliver appropriate interventions, and track and report on the impact of interventions in improving attainment, closing the poverty related attainment gap and meeting stretch aims. Michelle O'Halleron Raised 29 September 2023 CON0002479 - Creation of a staff culture that encourages innovative and creative approaches to improvement, keeping abreast of new research and pedagogical developments to ensure all learners have consistent access to high quality learning experiences. Geraldine Shearer In Progress ACT0001084 - CON0002479 - Provide opportunities for staff to upskill and develop their understanding of the moderation cycle and national expectations to ensure all children are appropriately challenged and supported in their learning. Geraldine Shearer Underway 30 June 2023 CON0002480 - Clear structure to drive and support curricular review including Develop the Young Workforce, Pathways programme and Curriculum Toolkit to reflect CFE core components and aspirations. There is on-going Michelle O'Halleron Enhancing Page 196 of 222
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Apr 4, 2023, 9:48 AM involvement in Inter authority networks to develop common strategies and to share approaches and prepare for outcomes of National Conversation. (ES, WP, ADES) ACT0001114 - CON0002480 - Provide opportunities for school leaders to upskill and to work with internal and external stakeholders to create a curriculum rationale that reflects local contexts, principles of Curriculum for Excellence and best national practice to improve outcomes for learners Jacqueline Burton Underway 30 June 2023 CON0002481 - Establishment of networks and partnerships to improve outcomes for children and families (Empowering Our Clusters Model) West Partnership, Family Groups Iain Macaulay In Progress ACT0001085 - CON0002481 - Continue to build partnerships and to collect data to evidence impact of new approaches in improving outcomes for learners Iain Macaulay Raised 30 June 2023 ACT0001086 - CON0002481 - Review of NLC Parental Engagement Strategy to empower and support improved outcomes William Collum Raised 29 September 2023 ACT0001087 - CON0002481 - Employ strategies to ensure pupil voice is central to evaluations and improvement work; CL&D forums, Pupil Parliaments etc. Michelle O'Halleron Raised 29 September 2023 CON0002482 - Interaction with the Tackling Poverty Officers Action Group to align support for identified children and families and address council priorities in relation to tackling poverty. William Collum In Progress 28 February 2023 ACT0001088 - CON0002482 - Work with TPOAG to create the strategy and then to implement any assigned actions. William Collum Underway 29 September 2023 CON0002483 - Recruitment campaign for teachers and other key staff John McKenna In Progress ACT0001089 - CON0002483 - Implementation of revised SAC procurement framework and NLC?s recruitment procedures to secure as additional teaching staff including retaining finishing probationers and NQTs. Michelle O'Halleron Raised 29 September 2023 CON0002484 - Establishment of policies and procedures designed to remove barriers and ensure all children and families have equal access to learning experiences e.g. Poverty Proofing Policies, Processes for Digital access, Parental engagement/family support policies. Michelle O'Halleron In Progress ACT0001090 - CON0002484 - Monitor the impact of new Family Engagement workers. Iain Macaulay Raised 31 October 2023 ACT0001091 - CON0002484 - Further develop integrative practice model within all NL services to align support available across council services e.g. support from the Welfare Team, Club 365 etc. Michelle O'Halleron Raised 30 June 2023 CON0002485 - Ongoing engagement with Elected Members Michelle O'Halleron Implemented Page 197 of 222
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Apr 4, 2023, 9:48 AM Residual Assessment ASM0003436 Likelihood - 3 Impact - 3 Medium - 9 Likelihood Reason As this risk is intrinsically linked to several externally influenced factors including changing socio economic and political landscapes, reduced funding and potential staffing challenges, there remains a possible likelihood of this risk impacting on Service delivery. Impact Reason There remains a moderate level residual risk that the Service fails to adapt to changing contexts and to deliver a high quality educational provision that raises attainment and closes the poverty related attainment gap. This failure would lead to increased internal and external scrutiny and have a negative impact on NLC?s reputation. With appropriate controls and robust monitoring processes the risk can be tolerated and any decreasing trends in attainment could be addressed through an appropriate action plan, with results improving within a 12 month period. Page 198 of 222
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref AH/FW Date 17/04/23 Use of Teaching Supply Staff From Fiona Whittaker, Chief Officer People Resources E-mail whittakerf@northlan.gov.uk Telephone Executive Summary The audit exercise carried out regarding short and long term supply teaching staff was undertaken to provide assurance on the adequacy and effectiveness of the Council’s key controls and management arrangements associated with ensuring that teaching supply staff are recruited and employed in a manner consistent with the Council’s legal obligations, the approved Devolved School Management scheme and the Council’s Financial Regulations and corporate budget monitoring and control arrangements. The work was designed to offer an opinion on the following: (1) Are supply staff being recruited, employed and paid in accordance with key legal obligations and corporate expectations? (2) Is there appropriate and effective monitoring and oversight of how schools utilise supply staff to ensure that any risks arising from the use of such staff are appropriately managed? Although satisfied that supply staff are being recruited and paid in accordance with legislation, SNCT guidelines and corporate expectations, concerns were raised due to the retirement of aspects of the SEEMIS system impacting on the many of the key processes used for managing and monitoring the use of supply teachers. Section 3 of the audit report highlighted the specific concerns required to be addressed by People Resources in conjunction with the Education and Families service. To address these concerns an agreed action plan has now been put in place with appropriate timelines for completion from February 2023 to December 2023. The plan captures the complex iTrent system development works to be undertaken and the consultation with Teaching Trade Unions required to address the concerns highlighted in regard to the issuing of Contracts of Employment beyond 2 days in line with SNCT guidelines. To date a process to reclaim the overpayments highlighted in the report due to duplicate entries for payment being submitted and actioned has now been agreed and a reminder has been issued to all council staff including Headteachers of the requirement to ensure all claims for payment are accurately and fully completed prior to submission for authorisation and follow on processing. AGENDA ITEM 12 Page 199 of 222
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1. Background 1.1 An audit was undertaken to provide assurance on the adequacy and effectiveness of the Council’s key controls and management arrangements associated with ensuring that teaching supply staff are recruited and employed in a manner consistent with the Council’s legal obligations, the approved Devolved School Management scheme and the Council’s Financial Regulations and corporate budget monitoring and control arrangements. For staffing matters, the Council is required to adhere to the SNCT and LNCT Agreements which outline the legal obligations for the recruitment, employment and payment of teachers. 1.2 Although satisfied that supply staff were being recruited and paid in accordance with legislation, SNCT guidelines and corporate expectations, their was highlighted as follows a requirement for improvement in the management arrangements surrounding the Council’s use of short and long term supply teachers: There is a lack of clearly documented guidance and appropriate processes around the management of short-term supply teachers; Processes for the oversight of the use and payment of supply teachers need strengthened; The short and long term supply information, including the current supply register list and the timescales and notification requirements have been individually issued to all Headteachers. The register will be updated and re-issued on a quarterly basis, until an IT system process is fully developed that can allow continuous access via iTrent. Actions identified around financial management are being progressed by Financial Solutions. The Service has undertaken recruitment to all vacant AFA posts. Intensive support, training and mentoring continues to be offered to the AFA cohort. A programme of actions has been rolled out to AFAs and other relevant Financial Solutions staff detailing how the 2 current significant accounting tasks (Year-end accounts & creation of new year budgets) will be completed/managed. The People Resources team continue to work closely with both Financial Solutions and Education and Families colleagues on an ongoing basis to minimise all risks, including those highlighted in the audit report due to the limited available IT system solutions. Recommendations It is recommended that the panel: 1) Acknowledge the progress already undertaken by People Resources to date. 2) Endorse the timescales for the identified actions to be undertaken. 3) Note the challenges regarding iTrent System development The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (23) Build a workforce for the future capable of delivering on our priorities and shared ambition Page 200 of 222
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Several errors and duplicate entries were identified in payments made to short- term supply teachers; and There is a need to continue to progress identified actions around financial management. 1.3 The following information provides an update on the current position on addressing these concerns. 2. Report 2.1 Although accepted that the People Resources Business Partners aligned to the Education and Families service, met regularly with Headteachers, including undertaking twice yearly formal workforce staffing/planning review meetings, during which time the process for the use of short and long term supply teachers is discussed and staffing data collated, it was felt that these specific requirements would be enhanced if written documentation was issued individually to Headteachers for ongoing reference and also published on the Council’s MyNL website alongside other People Resources information for transparency and ease of reference. The individual email has now been issued to Headteachers specifying the above requirements with work currently ongoing for the publishing on MyNL and anticipated to be concluded for the beginning of new school term. 2.2 In order to accommodate the SNCT requirements regarding the issuing of employment contracts for short term supply work beyond 2 working days, an automated system solution is required. This is currently being scoped via ITrent regarding viability. To address the immediate position, discussions are being held with the Teacher trade unions to secure a local agreement for a manual process that is achievable given the volume of Contracts of Employment that require to be issued due to the short term nature of supply cover arrangements. 2.3 Going forward an automated system is required to provide wider oversight for the monitoring and management of the use of short term supply teachers by both Headteachers and Education and Families Managers. It is anticipated that development work on iTrent would allow an appropriate reporting mechanism to be made available that would cover the above but also the challenges faced regarding the issuing of the volume of short term supply employment contracts. In the immediate term, reports can be run providing information on current short and long term supply teachers in post, although this provides limited data in relation to Teachers undertaking short term supply work across different schools. The scoping work for an automated system via iTrent is currently ongoing. The timescale for this work to be concluded is December 2023 at the earliest. 2.4 The audit highlighted a number of duplicate errors and duplicate entries in payments made to short-term supply teachers. The iTrent system used for all payments to staff currently does not have the functionality to prevent duplicate claims being made and this would require recurring investment in the region of £60K for further development of the system. 2.5 All employees, including Teachers, have been reminded of their personal responsibility when making financial claims to ensure submissions are completed fully and accurately and that they should take all necessary precautions to not make duplicate claims. Page 201 of 222
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2.6 Managers, including Headteachers have been reminded of the requirement to ensure all claims are accurately and fully completed prior to submission for authorisation and follow-on processing. 2.7 In the short term until an iTrent solution is in place, the Employee Service Centre will check for duplicate claims and address these with relevant Head Teachers and employees, raising awareness of the process and ensuring these claims are not paid, avoiding an overpayment situation. 2.8 Due to the extent and labour-intensive process required to ensure that all claims made are singular, a review is currently being undertaken by Education and Families in conjunction with Support Services (People Resources and Financial Solutions) to consider the most appropriate way to assist Headteachers to monitor and manage the use and payment of temporary teachers. It is anticipated that a retrospective report-based process will be consistently implemented across the school estate to assist in this requirement. 2.9 The list of duplicate payments/errors has now been reviewed and a process for the recovery of monies and corrective action put in place. 2.10 Actions identified around financial management are being progressed by Financial Solutions. The Service has undertaken recruitment to all vacant AFA posts. Intensive support, training and mentoring continues to be offered to the AFA cohort. A programme of actions has been rolled out to AFAs and other relevant Financial Solutions staff detailing how the 2 current significant accounting tasks (Year-end accounts & creation of new year budgets) will be completed/managed. 3. Measures of success 3.1 The measures of success will include: - Reduction and ultimately eradication of duplicate claims - Increased awareness of Employee and Head Teacher responsibilities with regards to payment submissions and authorisations. - Wider visibility of supply teacher register and compliance with employment contract legislation. 4. Supporting documentation N/A Fiona Whittaker Chief Officer People Resources Page 202 of 222
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☒ No ☐ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Staff may require time off to attend learning events 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☒ No ☐ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☒ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Page 203 of 222
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Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Limited Itrent system development Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? If an automated system is not able to be invested in or developed their remains the risk of limited wider visibility of the use of short term supply staff across the council. Due to the limited functionality of iTrent regarding duplicate payments and the cost involved to remedy this, there is a continued risk that duplicate claims will be progressed. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. Page 204 of 222
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref PM/FW Date 18/05/23 Mandatory Learning From Fiona Whittaker, Chief Officer People Resources E-mail whittakerf@northlan.gov.uk Telephone Executive Summary To support the Council in ensuring that staff are aware of and fully understand key statutory and legislative requirements associated with the Council, they must complete six mandatory e-learning modules on a two-yearly basis. The six e-learning modules are available on LearnNL and cover Data Protection, Information Security, Managing Risk, Records and Information Management, Conflict of Interest and Counter Terrorism (PREVENT). Work is currently underway to create an appropriate learning resource for frontline staff to provide them with the required knowledge in the areas of Data Protection and Information Security and Records and Information Management which is at a level relevant to their role. To monitor completion levels across all Services, information is provided to the Data Governance Board on a quarterly basis on Data Protection, Information Security, Managing Risk and Records and Information Management. More recently, the Corporate Management Team has sought further information on completion levels across all mandatory modules to tackle areas where levels are low. This information has been presented to each SMT with individual reports sent to all Chief Officers highlighting all staff who have yet to complete their mandatory learning. There is a commitment to get levels of completion across all mandatory e-learning modules to 100% and this report outlines how the Council identifies, ensures and gains assurance that staff are aware of their responsibilities to ensure they have undertaken the mandatory learning modules. Recommendations It is recommended that the panel: 1) Endorse the approach to more closer monitoring of completion rates across the Council 2) Acknowledge the work which has been undertaken by the Talent and Organisational Development Team in conjunction with Business and Digital to increase completion levels across all Services 3) Endorse the approach for frontline staff which will introduce learning activities covering mandatory learning areas relevant to their role AGENDA ITEM 13 Page 207 of 222
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1. Background 1.1 Mandatory learning has been an essential requirement for all staff in the Council for many years. The modules form part of our corporate induction as well as being available to all staff on LearnNL. With the introduction of LearnNL in June 2020, the content of all mandatory e-learning modules was reviewed and new, refreshed and robust e-learning modules were created for staff to complete on a two-yearly basis. 1.2 The mandatory learning modules which must be completed and refreshed on a two- yearly basis by all staff are: • Data Protection • Data Protection Advanced (Managers and staff identified by their Service who regularly handle personal information only) • Information Security Awareness • Introduction to Risk Management • Records and Information Management • Conflict of Interest • PREVENT 1.3 The purpose of having mandatory learning modules for all staff is to ensure they understand their responsibilities and the legal and statutory obligations which affect their roles. There is a risk where employees do not complete these e-learning modules that they will not understand the impact of actions which they may take. The modules have been developed (in conjunction with subject matter experts) to cover the key essential information which all staff need to ensure they have the required knowledge to avoid situations such as data breaches. 1.4 LearnNL allows both employees and managers to keep track of completion status for each module. Completions for employees can be viewed within their learning dashboard with each module ‘ragged’ with a due date for completion. Managers can also view this information on their team dashboard allowing them to monitor completion levels across their teams. 1.5 Completion levels are monitored by the Talent and OD (TOD) team on a monthly basis and information is provided to Chief Officers and managers as and when required. On a quarterly basis, information on completion levels for Data Protection, Information Security, Risk Management and Records and Information Management is provided to the Data Governance Board. 1.6 This report provides members with an overview of the approach taken to mandatory learning to ensure staff are undertaking the modules as well as future proposals for increasing completion levels across all Services. 2. Report The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (23) Build a workforce for the future capable of delivering on our priorities and shared ambition Page 208 of 222
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2.1 The TOD team has been working with Business and Digital and the Data Governance group over the past 18 months to help increase awareness of the importance of completing all mandatory e-learning modules on LearnNL. This work has included reviewing and refreshing content, creating and developing robust reporting mechanisms for the Data Governance Board and working together to create toolbox talk type training for frontline staff. 2.2 A number of activities have taken place to raise awareness of the necessity for staff to complete all mandatory learning modules. This has included communication campaigns, promotion of modules in the Corporate Induction and visibility of the modules on everyone’s learning record. As at the end of March 2023, completion levels still average around 50% for the Council with Service levels detailed below (please note, these numbers do not include front line staff from Enterprise and Communities). 2.3 To ensure the data is as up to date as possible, completion levels are calculated on the basis of the number of completions in the past two years against the headcount in the Service. Within each Service there is a turnover in the numbers of staff, the headcount number therefore is taken from iTrent at a point in time which reflects the most accurate picture of the staff levels within the Service. This gives a percentage within the Service as to how many staff have completed the module. 2.4 On a quarterly basis, this data is presented to the Data Governance Board for scrutiny. The data presented does not include information on Conflict of Interest or PREVENT, this information is maintained by the TOD team and provided as and when required to Chief Officers and managers. The purpose of reporting this information on a quarterly basis is to ensure the Data Governance Board is aware of the levels of completions and monitor hotspot areas for low levels of completion. 2.5 As a result of this reporting structure, TOD in conjunction with Business and Digital has taken actions to increase completion rates. Completion rates have increased from 31% Council wide in April 2021 to 50% in March 2023. It is recognised that significant work is still required to improve this completion rate to 100% Council wide. Page 209 of 222
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2.6 At present, frontline staff do not complete the online e-learning modules and are therefore not included in this data. The approach for frontline staff is covered in the next section. Planned actions 2.7 As mentioned above, a number of key activities are already underway to ensure staff are completing their mandatory e-learning modules. This will continue and include: 2.7.1 Continued use of all user emails to promote mandatory learning. As part of the TOD team communications strategy for the year, regular emails will be sent out to highlight the importance of completing mandatory learning. 2.7.2 On a monthly/bi-monthly basis, the People Resources team issue a manager’s newsletter. Within this newsletter there is a dedicated article for learning and development which is used to promote upcoming activities as well as mandatory learning. This us a standing item and will continue to be included in the newsletter. It highlights the importance of checking the team dashboard on LearnNL and that it is a manager’s responsibility to ensure their staff are up to date on all their learning requirements. 2.7.3 LearnNL issues reminders to staff and their line managers when training is due. We will enhance this offering to set the system to email all staff who have not completed learning on a weekly basis until the learning has been completed. 2.7.4 Continued reporting to the Data Governance Board. This approach has raised awareness across the organisation as to the importance of completing mandatory e-learning. 2.8 While the above actions will continue, it is recognised that a more focussed approach is also required which will hold staff, managers and Chief Officers to account for ensuring mandatory learning is completed by all staff. The Corporate Management Team (CMT) have recently requested information on completion levels across all Services which has resulted in reports being sent to individual Chief Officers with details of all staff within their Service who have not completed the mandatory learning. 2.9 The intention of these reports is to highlight to Chief Officers where the hotspots are in their Service for non-completion. Chief Officers are then in a position to identify how best to increase uptake in their Service. These reports will be provided to Chief Officers on a monthly basis from April 2023 to monitor the situation within their Service. 2.10 To ensure accuracy of data within these reports, work is underway with the Workforce Analytics team to ensure the data feed containing employee information from iTrent to LearnNL is up to date and leavers from the Service are not included which could affect the data. 2.11 As mentioned in 2.8, from April 2023 Chief Officers will automatically receive a report from LearnNL detailing the staff in their Service who have not completed the learning. This information will also be reported at Service SMTs quarterly to ensure that all Chief Officers are taking responsibility for completion levels within their Service. This targeted approach has been approved by CMT who are confident that this will significantly increase awareness of the importance for staff to complete the modules and highlight the risk it poses to the organisation if people are not equipped with this knowledge. Support for this process will be provided by the new CMT Support Team. Page 210 of 222
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2.12 Paragraph 2.3 highlights above that four (plus Data Protection Advanced) of the mandatory learning modules are reported to the Data Governance Board on a quarterly basis. The remaining two modules, Conflict of Interest and PREVENT are not currently reported to any group. This information will be included in the information provided to Chief Officers on a monthly basis and reported to SMTs on a quarterly basis as detailed in 2.10. Frontline Staff 2.13 LearnNL is available to all staff including frontline staff. ‘Frontline’ covers a wide range of staff within the Council with different levels of knowledge required. For mandatory learning, all frontline staff with the exception of staff within Enterprise Communities should be completing all mandatory e-learning modules on LearnNL. The TOD team have been working with the Service and subject matter experts from Business and Digital and the Data Governance Groups to create relevant modules for frontline staff within Enterprise and Communities. 2.14 The priority mandatory learning for this group of staff is Data Protection and Information Security and Records and Information Management. The learning materials have been created and have been amended and reviewed based on feedback from subject matter experts. A programme of training is now in place within the Service to upskill all relevant frontline staff. 2.15 The modules have been created in a format which can be used in multiple ways to allow the training to reach different audiences. It will be delivered using a blended approach to include e-learning, classroom based sessions, online sessions, toolbox talks and self-directed learning activities. 2.16 Completion of these modules is underway and will be reported as part of the data which is provided to the Data Governance Board quarterly as well as Chief Officers on a monthly basis. 2.17 Based on the actions outlined in this report, members can be confident that Council identifies, ensures and gains assurance that staff are aware of their responsibilities to ensure they have undertaken the mandatory learning modules. 3. Measures of success 3.1 The measures of success will include: - Increase in completion levels across all Services. - Staff are knowledgeable in key statutory and legislative requirements. - Reduction in data breaches as staff know and understand their responsibilities. - 4. Supporting documentation Appendix Picture 1 – Learner Dashboard on LearnNL Picture 2 – Manager Dashboard on LearnNL Page 211 of 222
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Fiona Whittaker Chief Officer People Resources Page 212 of 222
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☒ No ☐ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Staff may require time off to attend learning events 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Page 213 of 222
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Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? TOD already have a communications plan in place with the Communications team 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? If mandatory learning does not reach 100% compliance across the Council, there is a risk that staff are not aware of statutory and legislative requirements associated with their role. This could result in the potential for an increase in data breaches. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. Page 214 of 222
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Appendices Learner Dashboard on LearnNL – this shows the view for learners when they log into their account. It shows which mandatory learning modules have been completed and those awaiting completion with a due date. Manager dashboard on LearnNL – picture 1 gives managers a visual of how many people have completed the learning. Picture 2 shows those who have yet to complete the learning and the date it was due. Picture 1 Page 215 of 222
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Picture 2 (names have been removed) Page 216 of 222
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref: FW Date 18/05/23 Pre-Employment Checks From Fiona Whittaker, Chief Officer People Resources E-mail whittakerf@northlan.gov.uk Telephone 1. Background 1.1 As part of a wider audit investigation process concluded in April 2023, it has been established that the Council re-employed an individual who had previously been suspended during an investigation in 2015, relating to the misappropriation of funds within a school environment. Following re-employment in 2018, this employee was subsequently found to be involved in a similar matter, and based on the evidence found, is likely to have been disciplined, however the employee declined to be involved in the investigation and resigned before this could be completed. Executive Summary Audit & Scrutiny Panel has requested an update on how the Council plans to strengthen pre-employment checks, or otherwise address the issue highlighted in the recent audit report regarding the Council re-employing someone who has previously left or been dismissed during investigation. The service has now considered a range of options for addressing the issues highlighted, whilst taking account of relevant legislation which applies in this space including employment, equalities and other data protection legislation, particularly as it applies to the rights of individuals. Recommendations It is recommended that the panel: 1) Note the actions which are now underway to identify where an employee has previously been employed by the Council and to undertake the relevant checks which can lawfully be used to assess their suitability or otherwise to be re-employed in a similar or other capacity. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (23) Build a workforce for the future capable of delivering on our priorities and shared ambition AGENDA ITEM 14 Page 217 of 222
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1.2 A key part of the audit finding was that a recommendation from 2015, to implement changes in the Council’s recruitment process to identify employees who had previously been employed by the Council and were subject to disciplinary action had not been actioned at that time. 1.3 This report sets out the actions which are now proposed to be taken by the People Resources service to enable hiring managers to identify where an employee has been previously employed by the Council, and to allow them to check if there are any flags on the persons record which would preclude them from being employed again in the future. 1.4 This is with an understanding that the Council must do this in a way which operates within the legal frameworks which govern the holding and use of employee data including the data protection regulations and the Equality Act 2010. 2. Report 2.1 Under data protection regulations, employers can keep the following data about their employees without their permission: • Name, address, date of birth • sex • education and qualifications • work experience • National Insurance number • tax code • emergency contact details • employment history with the organisation • employment terms and conditions (eg pay, hours of work, holidays, benefits, absence) • any accidents connected with work • any training taken • any disciplinary action taken 2.2 Over and above this an employee also has the right to be told: • what records are kept and how they’re used • the confidentiality of the records • how these records can help with their training and development at work If an employee asks to find out what data is kept on them, the employer will have 30 days to provide a copy of the requested information. 2.3 The Data Protection Act 2018 (DPA) tightened the law to deal with data storage and incorporated the agreed provisions of the EU General Data Protection Regulation (GDPR). It applies to most HR records, whether held in paper, or digital format. Page 218 of 222
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2.4 Importantly, data must not be kept any longer than is necessary for a legitimate purpose and it must not be excessive. The emphasis is on the employer (the data controller) to have systems in place to determine how long the data should be retained and when records should be destroyed. The DPA and GDPR do not expressly set out any specific minimum or maximum retention periods. 2.5 Additionally, there are many rules about record retention in the public sector. The Freedom of Information Act 2000 obliges authorities to maintain records in line with a code of practice on records management. 2.6 It should be noted that all employee data within the Council is stored on i-Trent and no records are held on paper. Subject to certain exceptions, employees have the right to access this data and the Council must ensure that the data is accurate and seek the employee’s permission before releasing it. Employees who leave the Council are also entitled to access tis information under a subject access request and the rules and regulations which underpin this. 2.4 Due to the fact that certain documents such as employment contracts, accident record books and other personnel records may be needed outside the DPA in a legal action, the Council has specific retention schedules for leavers which are currently 6 years unless the post is subject to disclosure (for example in Health & Social Care) where the retention period is 25 years. This is in line with the Council’s corporate policy on data retention. 2.5 It should be noted that when an employee is issued with a warning under the disciplinary procedure, the details of this are only held for the period of the warning - so 18 months for example. Holding data on more punitive action such as suspension or dismissal for conduct, capability, or some other substantive reason (SOSR) is lawful and is retained against the employees record for the full retention time set out above. 2.3 Audit & Scrutiny should also be aware that where an employee resigns in the course of an investigation, and that investigation has not formally concluded that the employee be suspended or dismissed due to inappropriate behaviour, this will not be captured on the employees record in line with the retention schedule. 2.4 In the case of the previous employee involved in the School A investigation, the employee had been previously suspended pending investigation, so this information would have been available to the hiring manger if the necessary changes had been applied. Planned actions 2.6 With regards to pre-employment checks, the People Resources service is now proposing to implement the following changes in the recruitment process: • A question will immediately be added to the application form to ask if the applicant has worked for the Council before, in what capacity and over which dates. • Hiring manager guidance will be updated to reflect this change and for managers to probe further at interview on the role they undertook, performance and timings etc. • Managers and where relevant HR Business Partners will be asked to contact People Resources for more information on any Page 219 of 222
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candidate who has worked with the Council, prior to making an employment offer to check if there are any flags. Informal conversations may also be pursued with previous known line managers. • HR Business Partners will be updated to ensure that managers are adhering to the change in pre-employment checks for previously employed candidates. 2.7 It is also believed that this approach will act as a deterrent to stop people applying as if they have previously been subject to disciplinary action, as they are not likely to be aware of what information is held by the Council on their previous employment. 2.8 People resources will also continue to monitor requests for this type of information as part of the hiring process. 3. Measures of success 3.1 The measures of success will include: - Reduced likelihood of the Council re-employing staff who have previously been subject to disciplinary action or are otherwise deemed unfit to hold a role within a public sector organisation. 4. Supporting documentation N/A Fiona Whittaker Chief Officer People Resources Page 220 of 222
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☒ No ☐ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Recruitment procedures and policies will need to be updated. 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Page 221 of 222
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Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? The proposed changes will meet the recommendations set out in the Audit report to improve controls and reduce risk to the Council. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. Page 222 of 222