Agenda Document Pack - Audit and Scrutiny Panel - 20/11/2023
North Lanarkshire Council · 20 November 2023
Back to Audit and Scrutiny Panel — 20 November 2023 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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9 November 2023 Members of the Audit and Scrutiny Panel Chief Executive’s Office Archie Aitken Chief Officer (Legal & Democratic) Civic Centre, Windmillhill Street, Motherwell ML1 1AB www.northlanarkshire.gov.uk Notice is given that a Meeting of the Audit and Scrutiny Panel is to be held in the Gartsherrie Room, Civic Centre, Windmillhill Street, Motherwell, ML1 1AB on Monday, 20 November 2023 at 13:00 PM which you are requested to attend. The agenda of business is attached. Archie Aitken Chief Officer (Legal & Democratic) Members : Clerk Name: Andrew Rose Clerk Telephone: 07951409714 Clerk Email: rosean@northlan.gov.uk S Watson, H Dunbar, H Brannan-McVey, A Duffy-Lawson, T Fisher, M Hughes, J Hume, D Johnston, J Leckie, B McCulloch, G Robinson. Page 1 of 176
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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 Self-Evaluation of the Audit and Scrutiny Panel - Outcome Report and Improvement Plan Submit report by the Chief Officer (Legal and Democratic) (1) enclosing the outcome from the self-evaluation of the Audit and Scrutiny Panel as a synopsis in Appendix 1 to the report, and (2) seeking approval of the resultant improvement plan as set out in Appendix 3 of the report, and to identify any further development required (copy herewith) 5 - 34 3 Strategic Frameworks Annual Position Statement Submit report by the Chief Officer (Business and Digital) presenting the annual position statement for each Framework and the next steps to ensure each remains aligned to the Plan for North Lanarkshire (copy herewith) 35 - 52 4 Strategic Performance Framework - Performance Reporting Schedule Quarterly Performance Assurance Review Submit report by the Chief Officer (Business and Digital) providing the Panel with the outcome from the latest performance assurance review that has been undertaken of performance reports submitted to Council Committees during Cycle 3 of 2023, in line with the Performance Reporting Schedule (copy herewith) 53 - 84 Audit-Related Items 5 Audit and Risk-Related Items Action Log Submit report by the Chief Officer (Audit and Risk) enclosing the items in the Audit and Risk Action Log which will allow Members to track implementation of outstanding requests and recommendations made by the Panel (copy herewith) 85 - 88 6 Internal Audit Progress Report 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 August 2023 (copy herewith) 89 - 140 Page 3 of 176
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7 Internal Audit Follow-up of Actions Previously Agreed by Management in Response to Audit recommendations Submit report by the Chief Officer (Audit and Procurement) 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) 141 - 168 Risk-Related Item 8 Risk Management Update Submit report by the Chief Officer (Audit and Risk) providing the Panel with an update on developments and changes in relation to the Corporate Risk Register, and other key risk management developments since the last update to the Panel in September, with particular focus on changes to corporate risk scores and new or emerging risk issues (copy herewith) 169 - 176 Page 4 of 176
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☒ Yes ☐ No Ref AA/SL Date 20/11/23 Self-Evaluation of the Audit and Scrutiny Panel - outcome report and improvement plan From Archie Aitken, Chief Officer (Legal and Democratic) E-mail AitkenA@northlan.gov.uk E-mail 07939 280102 Executive Summary Through the discrete functions of both Audit and Scrutiny, the Audit and Scrutiny Panel play an important role in relation to the council’s governance arrangements. As set out in the terms of reference in the Scheme of Administration, the purpose of the Panel is “to provide independent assurance to the council and those charged with governance on the adequacy of the council’s risk management framework and internal control environment”. The council’s governance arrangements are reviewed on an annual basis through the Strategic Governance Framework and throughout the year as part of the Internal Audit programme of audit work. These processes support the council in demonstrating compliance with, and commitment to, the good governance principles as set out in the national Delivering Good Governance in Local Government: Framework (2016). An Internal Audit review in 2021 considered there was a risk that “the council may not be able to adequately demonstrate that it has effective audit committee arrangements and/or arrangements to ensure Elected Members have the skills, knowledge and, where appropriate or required, access to relevant training and resources to effectively undertake their role”. To this end, Internal Audit recommended that the Audit and Scrutiny Panel should, in line with good practice, periodically undertake a self-evaluation of how effectively it is discharging its role. An overview of the evaluation framework, process, and timetable for the self-evaluation of the Audit and Scrutiny Panel was provided to the Panel in September 2023 and Elected Members endorsed the approach that was set out in the report. This comprised a request for current Panel members, as well as those who had been members of the Panel since the local government elections in May 2022, to complete an online survey. This report herewith presents the outcome from the self-evaluation of the Audit and Scrutiny Panel as a synopsis in Appendix 1. The resultant improvement plan is set out in Appendix 3 for members of the Panel to approve and to identify any further developments required in this respect. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Recognise that the outcome from the self-evaluation demonstrates the extent to Item 2 Page 5 of 176
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1. Background 1.1 Members of the Audit and Scrutiny Panel are well versed in the role of the Panel and its statement of purpose to: • Provide independent assurance to the council and those charged with governance on the adequacy of the council’s risk management framework and internal control environment. • Provide independent review of the council’s governance, risk management, performance, and control frameworks and oversee the financial reporting and annual governance processes. • Oversee the council’s internal and external audit arrangements, helping to ensure efficient and effective assurance arrangements are in place. • Undertake the scrutiny function within the council’s governance framework (establishing short life task group reviews, as required) to undertake in-depth examination of particular areas of policy and/or service delivery with a view to making recommendations for improvement. 1.2 The Panel is also a key component of the council’s corporate governance arrangements which are subject to various review and assessment processes. In 2021, an Internal Audit review of Principles E, F, and G from the Delivering Good Governance in Local Government: Framework (2016) considered there was a risk that “the council may not be able to adequately demonstrate that it has effective audit committee arrangements and/or arrangements to ensure Elected Members have the skills, knowledge and, where appropriate or required, access to relevant training and resources to effectively undertake their role”. 1.3 In this respect, Internal Audit recommended that the Audit and Scrutiny Panel should, in line with good practice, periodically undertake a self-evaluation of how effectively it is discharging its role by introducing: a) “A formal process whereby the Audit and Scrutiny Panel periodically undertakes a self-assessment of their performance and activities against CIPFAs Audit Committees: Practical Guidance for Local Authorities (2018), with a report outlining which the Panel is effective in discharging its Audit and Scrutiny roles and, as such, fulfils the Internal Audit recommendations, (2) Approve the implementation of the improvement plan (in Appendix 3) to further strengthen the Panel’s working practices and identify any further developments required in this respect, and (3) Endorse the next steps outlined at paragraphs 2.14 and 2.15 to ensure the Panel remains effective in discharging its Audit and Scrutiny roles in relation to the functions of an Audit Committee as per CIPFAs Audit Committees: Practical Guidance for Local Authorities (2018), and by ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Page 6 of 176
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the results of this review including any improvement actions being presented to the Panel and reported to the Policy and Strategy Committee.” b) “A formal process whereby the Audit and Scrutiny Panel periodically undertakes a separate self- assessment of the effectiveness of the performance and activities of the Panel in discharging the Scrutiny aspect of its role.” 1.4 To implement the Internal Audit recommendations, the self-evaluation exercise was incorporated into the review programme for the council’s Strategic Self-Evaluation Framework. The evaluation framework, process, and timetable for the self-evaluation of the Audit and Scrutiny Panel was subsequently developed in line with the Strategic Self-Evaluation Framework and customised in order to best meet the needs, operating environment, and desired outcomes of the function being evaluated. As part of this process, the Chief Officer (Legal and Democratic) was assigned the role of independent Champion for the self-evaluation exercise. 1.5 While there are two specific Internal Audit recommendations noted in paragraph 1.3, the self-evaluation exercise was combined into one to avoid duplicating the use of both Elected Members’ time and officer resources, and to enable the Audit and Scrutiny Panel to be considered as a single entity. This thereby ensures that any improvement actions identified complement the effective operation of both the Audit and Scrutiny aspects of the Panel and not just one at the expense of the other. 1.6 An overview of the evaluation framework, process, and timetable for the self-evaluation of the Audit and Scrutiny Panel was provided to the Panel in September 2023 and Members endorsed the approach to the self-evaluation exercise that was set out in the report. The approach comprised an online survey (open from 5th to 19th September, with 1:1 support available if requested) with the outcome report and improvement plan scheduled to be submitted back to the Panel in cycle 4 of 2023. 1.7 Given the membership of the Audit and Scrutiny Panel had changed following the Local Government elections in May 2022, implementation of the Internal Audit recommendations was rescheduled to allow time for the new arrangements to become more fully embedded. Considering this, and the recent changes which had been made to the Panel’s membership, it was subsequently agreed at the meeting in September 2023 that both current and former members of the Panel (since May 2022) would take part in the online survey. 1.8 Following completion of work to collate and analyse the responses to the online survey, this report herewith - from the Chief Officer (Legal and Democratic) in his role as Champion for the self-evaluation exercise - presents the outcome from the self- evaluation of the Audit and Scrutiny Panel as a synopsis in Appendix 1. The resultant improvement plan is set out in Appendix 3 for members of the Panel to approve and to identify any further developments required in this respect. 2. Self-Evaluation 2.1 Undertaken in line with the corporate approach set out in the Strategic Self-Evaluation Framework, the self-evaluation of the Audit and Scrutiny Panel aims to answer three simple questions - How well are we doing? How do we know? (i.e. What evidence is there to support the view of how well we are doing?), and How can we do better? (i.e. What are we going to do now?). 2.2 A synopsis of the self-evaluation exercise is set out in Appendix 1; this includes the following: Page 7 of 176
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• An outline in terms of what the self-evaluation of the Audit and Scrutiny Panel aimed to achieve. • The assessment framework - which for the Audit function was based on the key principles set out in CIPFAs Position Statement: Audit Committees in Local Authorities (2018) and the supporting Audit Committees Practical Guidance for Local Authorities (2018) document. For the Scrutiny function relevant assessment statements were incorporated into the evaluation framework from the Best Value Statutory Guidance (2020). • The assessment process, including timescales - from the initial desktop exercise to identify existing evidence against the respective CIPFA and Best Value guidance (referred to above), to the online survey process, and development of the outcome report and improvement plan. • Respondents - in total 11 Elected Members who currently sit on the Audit and Scrutiny Panel, plus 8 who had formerly been members of the Panel (since May 2022) were given the opportunity to respond to the online survey. • Survey results - the aggregated overall RAG status for the self-evaluation exercise as well as for each of the 4 themes and 25 good practice questions which have been compiled from the results of the online survey (where responses were anonymous). 2.3 The online survey contained 25 good practice questions and presented the opportunity for respondents to: • Provide constructive feedback in line with the experience of being a member of the Audit and Scrutiny Panel by answering Yes, No, Partially, or Don’t Know to each of the 25 good practice questions. A No or Partially response in some questions prompted a further question that asked for more details to help understand any further improvements required in this respect. • Highlight where the Panel works well (in line with its approved terms of reference). • Identify anything that could be improved in relation to the Audit and Scrutiny Panel (in line with the Panel’s approved terms of reference). How well are we doing? 2.4 A RAG status was applied to each of the 25 good practice questions based on how respondents answered each question, this is set out in Table 1 below. Description RAG status applied Respondents replied with a Yes to the question in the online survey = this is an area of good practice. Green Respondents replied with a Partially to the question in the online survey = this is an area that requires further investigation. Amber Respondents replied with a No to the question in the online survey = this is an area that requires further investigation. Red Respondents replied with a Don’t Know to the question in the online survey = this is an area that requires further investigation. Grey Table 1: Description of survey responses and RAG status applied 2.5 The online survey received a 58% response rate, with 11 out of 19 participants answering the 25 good practice questions. The aggregated RAG status for the 25 good practice questions combined is set out in Figure 1 below. A high level summary of the results shows that: Page 8 of 176
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• Notwithstanding the response rate, the results still show a relatively positive response across all 25 questions, with 53% of responses having a Yes response. • There is a much smaller proportion of negative responses in terms of Partially (12%) and No (11%). • Of particular note, however, is the proportion of Don’t Knows (24%) which exceed the responses for Partially and No combined. It is however recognised that the proportion of Don’t Knows will have been influenced by the length of time respondents have been a member of the Audit and Scrutiny Panel. 2.6 Following the online survey the good practice questions considered areas of good practice, which received the highest Yes responses, are listed in Table 2 below. Theme Good practice question % responses = Yes Membership and Support Q15. Does the Panel have good working relations with key people and organisations, including external audit, internal audit, and the chief financial officer? 100% Membership and Support Q16. Is the secretariat and administrative support provided to the Panel adequate? 91% Functions of the Panel Q5. Has the Panel maintained its remit as set out in the Terms of Reference in the approved Scheme of Administration? 73% Effectiveness of the Panel Q19. Does the Panel engage with a wide range of leaders and managers, including discussion of audit findings, risks, and action plans with the responsible officers? 73% Functions of the Panel Q4. Are Members of the Panel committed to training and personal development to update and enhance their knowledge, skills, capacity, and capabilities (where appropriate or required) to deliver Best Value and perform their role on the Panel? 70% Table 2: Areas of good practice (i.e. Yes responses) 2.7 The areas of good practice shown in Table 2 above are further substantiated by the feedback provided in terms of where respondents think the Panel works well (in line with its approved terms of reference). A summary of constructive feedback received in this respect includes the following: a) Panel members are generally clear on the purpose of the Panel and its role in ensuring good governance across the council's operations. b) The Panel works well in terms of finding items for scrutiny. c) The Panel works well with Internal Audit. d) The Panel works well in identifying areas of the council's operations that require scrutiny and works closely with officers to ensure that appropriate scrutiny is undertaken. e) I think the Panel operates well in terms of its functions. f) The Panel is excellent at scrutinising all the papers and is prepared to question, ask for a deep dive, and support where necessary. g) I think the Panel provides a good level of overview and scrutiny which has its own value over and above that provided at departmental level. Page 9 of 176
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h) Panel works pretty well with council officers to continue to improve the delivery of public services. i) I think that there is a good relationship between the Panel and council officers. j) Good interaction between member and support. k) An interested and effective group with no political bias. How can we do better? 2.8 Following the online survey, the good practice questions which are considered to require further investigation, and which received the highest combined responses for Partially, No, and Don’t Know are listed in Table 3 below. * Note, for some questions the responses have been aggregated to clearly differentiate between (a) areas of good practice (i.e. Yes responses) and (b) areas requiring further investigation (i.e. Partially, No, and Don’t Know responses combined). This has been applied in questions where the responses showed a significant differentiation one way or the other in order to further support a clear identification of areas for improvement. Theme Good practice question % responses = Partially, No, or Don’t Know combined Membership and Support Q12. Do Members of the Panel have appropriate knowledge and skills? * (a) 27% compared to (b) 73%. 73% No + Partially + Don’t Know Panel Purpose and Governance Q1. Is the role and purpose of the Audit and Scrutiny Panel understood and accepted across the council? * (a) 46% compared to (b) 54% 54% No + Partially Panel Purpose and Governance Q3. Are the arrangements to hold the Panel to account for its performance operating satisfactorily? * (a) 46% compared to (b) 54% 54% Partially + Don’t Know Table 3: Areas requiring further investigation (i.e. Partially, No, and Don’t Know responses combined) 2.9 As noted in paragraph 2.5, overall there are a higher proportion of Don’t Know responses (24%) than Partially (12%) and No (11%) combined. While it is recognised that the proportion of Don’t Knows will have been influenced by the length of time respondents have been a member of the Audit and Scrutiny Panel, this does present an opportunity to highlight specific areas for improvement. The good practice questions which received the highest Don’t Know responses are listed in Table 4 below. Theme Good practice question % responses = Don’t Know Effectiveness of the Panel Q22. Has the Panel evaluated whether and how it is adding value to the organisation? * (a) 18% compared to (b) 82% 46% Functions of the Panel Q8. Has the Audit and Scrutiny Panel considered the wider areas identified in CIPFAs Position Statement: Audit Committees in Local Authorities (2018) and whether it would be appropriate for the Panel to undertake them? * (a) 27% compared to (b) 73% 64% Membership Q14. Are arrangements in place to support the Panel with 36% Page 10 of 176
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and Support briefings and training? * (a) 27% compared to (b) 73% Effectiveness of the Panel Q21. Has the Panel obtained feedback on its performance from those interacting with the Panel or relying on its work? * (a) 27% compared to (b) 73% 46% Functions of the Panel Q6. Is an evaluation undertaken to assess whether the Panel is fulfilling its terms of reference and that adequate consideration has been given to all core areas in the terms of reference? 46% Functions of the Panel Q7. Where coverage of core areas in the terms of reference has been found to be limited, are plans in place to address this? 46% Effectiveness of the Panel Q23 Does the Panel have an action plan to improve any areas of weakness. 46% Effectiveness of the Panel Q24. Does the Panel publish an annual report to account for its performance and explain its work? 46% Table 4: Areas requiring further investigation (i.e. Don’t Know responses) 2.10 The areas requiring further investigation shown in Tables 3 and 4 above are further substantiated by the feedback provided in terms of where respondents think things could be improved (in line with the Panel’s approved terms of reference). A summary of constructive feedback received in this respect includes the following: a) Training of members of the Panel on a regular basis. b) Explanations to ensure everyone is clear in what the purpose of the Panel is, what is expected of them and that they understand the purpose of the Panel. c) There is scope to improve the information presented in reports, responses to questions, and service representation. d) I would like more financial assessments, not just process, in relation to real Best Value. e) Regular reviews and prioritise potential scrutiny topics and evaluate outcomes to demonstrate added value. f) Scope of Internal Audit activities in relation to the work of the Panel. g) More monitoring and evaluation to measure success in terms of outcomes. h) There have recently been significant changes in the composition of Elected Members sitting on the panel. A concern lies that this has diluted the knowledge and skills within the Panel and that further training may be required to ensure that the Panel discharges its duties and responsibilities effectively and in line with terms of reference. i) There is scope to improve participation in the scrutiny of papers. j) Internal Audit and Scrutiny items are effective but need to be expanded on even if this means expanding the remit of the Panel. Improvement plan 2.11 Where the results of the self-evaluation exercise show a high degree of performance against the good practice questions, CIPFA consider this to be an indicator that the Audit and Scrutiny Panel is soundly based and has in place a knowledgeable membership. As well as informing an improvement plan for the Panel, the self- evaluation exercise is also considered an important improvement tool in terms of supporting future planning for the Panel’s work programme, training plan, and annual report. 2.12 As such, the analysis from the detailed survey responses set out in the synopsis in Appendix 1, and the summary overview in paragraphs 2.4 to 2.10 above, show a relatively positive response in terms of the Audit and Scrutiny Panel effectively discharging its duties with a high degree of performance being reflected against the Page 11 of 176
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following good practice questions: Q15. 100% of respondents consider that the Panel has good working relations with key people and organisations, including external audit, internal audit, and the chief financial officer. Q16. 91% of respondents consider that the secretariat and administrative support provided to the Panel is adequate. Q5. 73% of respondents consider that the Panel has maintained its remit as set out in the Terms of Reference in the approved Scheme of Administration. Q19. 73% of respondents consider that the Panel engages with a wide range of leaders and managers, including discussion of audit findings, risks, and action plans with the responsible officers. Q4. 70% of respondents consider that members of the Panel are committed to training and personal development to update and enhance their knowledge, skills, capacity, and capabilities (where appropriate or required) to deliver Best Value and perform their role on the Panel. 2.13 As noted in the synopsis in Appendix 1, and the summary overview in paragraphs 2.4 to 2.10 above, there are also clear areas for improvement for which improvement actions can be identified - these are listed below. For these areas, the improvement plan in Appendix 3 sets out the next steps. Q22. 82% of respondents considered that the Panel had either Partially or had Not evaluated whether and how it is adding value to the organisation, or they Didn’t Know if this was the case. Q12. 73% of respondents considered that members of the Panel either Partially or did Not have appropriate knowledge and skills, or they Didn’t Know if this was the case. Q8. 73% of respondents considered that the Audit and Scrutiny Panel had Not considered the wider areas identified in CIPFAs Position Statement: Audit Committees in Local Authorities (2018) and whether it would be appropriate for the Panel to undertake them, or they Didn’t Know if this was the case. Q14. 73% of respondents considered that either Partially there were (or there were Not) arrangements in place to support the Panel with briefings and training, or they Didn’t Know if this was the case. Q21. 73% of respondents considered that the Panel had either Partially or had Not obtained feedback on its performance from those interacting with the Panel or relying on its work, or they Didn’t Know if this was the case. Q1. 54% of respondents considered that the role and purpose of the Audit and Scrutiny Panel was either Partially or Not understood and accepted across the council. Q3. 54% of respondents considered that Partially there were arrangements in place to hold the Panel to account for its performance operating satisfactorily, or they Didn’t Know if this was the case. Next steps 2.14 From a Scrutiny perspective, actions from the Improvement Plan in Appendix 3 will be incorporated into the Scrutiny Work Programme which is reported to the Panel every six months. This will enable Elected Members on the Panel to monitor the progress and effectiveness of the improvement actions implemented along with the Panel’s routine activity. 2.15 As per the recommendations from the Internal Audit report in 2021 (noted in paragraph 1.3 above), a report outlining the results of the self-evaluation together with the improvement plan which has been approved by the Audit and Scrutiny Panel will be subsequently reported to the Policy and Strategy Committee in cycle 4 of 2023. 3. Measures of success 3.1 Measures of success will be identified in the form of evidence which demonstrates that the council has effective Audit and Scrutiny Panel arrangements. Specifically, that the: Page 12 of 176
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• Panel effectively discharges its duty in line with the council’s Scheme of Administration. • Performance and activities of the Panel are effective in discharging the audit aspect of its role in line with CIPFAs Audit Committees Practical Guidance for Local Authorities (2018). • Performance and activities of the Panel are effective in discharging the scrutiny aspect of its role in line with ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny. 3.2 Further measures of success will reflect the skills and knowledge of the Elected Members on the Audit and Scrutiny Panel, and their commitment to ensuring they have (where appropriate or required) access to relevant training and resources to enhance their knowledge, skills, capacity, and capabilities in order to effectively undertake their role on the Panel. 4. Supporting documentation 4.1 Appendix 1: Synopsis of the self-evaluation of the Audit and Scrutiny Panel. Appendix 2: 25 good practice questions. Appendix 3: Improvement Plan. Archie Aitken Chief Officer (Legal and Democratic) 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 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 ☒ Page 13 of 176
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If Yes, have all relevant HR impacts 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 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? 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? Page 14 of 176
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Implementation of a self-evaluation of the Audit and Scrutiny Panel 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. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 15 of 176
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Appendix 1 SYNOPSIS FOR THE SELF-EVALUATION OF: The Audit and Scrutiny Panel ASSESSMENT FRAMEWORK: The framework used reflects the function being assessed and the context and operating environment of that function. As such, the framework incorporates: • The key principles set out in CIPFAs Position Statement: Audit Committees in Local Authorities (2018) and the supporting Audit Committees Practical Guidance for Local Authorities (2018) document. These are considered to be the essential factors in developing effective Audit aspects for such a committee. • From a Scrutiny perspective, the Audit and Scrutiny Panel has a key role to play in terms of ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny. As such relevant assessment statements have also been incorporated into this evaluation framework from the Best Value Statutory Guidance (2020). ASSESSMENT TEAM: • Council’s Project Team: Archie Aitken - Chief Officer (Legal and Democratic) / CMT Champion, Susan Lawrie (Strategy and Performance Manager). • Respondents: 11 Elected Members currently on the Audit and Scrutiny Panel (as at September 2023) plus 8 who had formerly served on the Panel since the local government elections in May 2022 were given the opportunity to respond to the online survey: Councillors S Watson, HE Dunbar, H Brannan-McVey, A Duffy-Lawson, T Fisher, M Hughes, J Hume, D Johnston, T Johnston, P Kelly, JJ Leckie, G Lennon, H Loughran, A Masterton, B McCulloch, F McNally, G Robinson, K Stevenson, R Sullivan. ASSESSMENT PROCESS: • August 2023 - Desktop exercise to identify existing evidence against the respective CIPFA and Best Value guidance. • 4th September 2023 - Report to the Panel reiterated the Internal Audit recommendations and provided an overview of the evaluation framework, process, and timetable for the self-evaluation which was endorsed by the Panel. • 5th September 2023 - Chief Officer (Legal and Democratic) shared the online survey with the respondents (listed above), offering 1:1 support if requested. • 5th to 19th September 2023 - Online survey open. • 20th to 26th September 2023 - Analysis of survey results and development of outcome and improvement plan which were subsequently reviewed by the council’s Corporate Management Team on 6th October for oversight purposes. • 25th October 2023 - Presentation of outcome report and improvement plan to the Audit and Scrutiny Panel Conveners meeting. • 20th November 2023 - Presentation of outcome report and improvement plan to the Audit and Scrutiny Panel committee meeting for Elected Members on the Panel to discuss and agree implementation of the improvement plan. WHAT THE EVALUATION AIMS TO ACHIEVE: Through the discrete functions of both Audit and Scrutiny, the Audit and Scrutiny Panel provide an independent and high level resource to support good governance and strong public financial management. The Panel’s role in respect of the Audit function reflect the standards set out in the Chartered Institute of Public Finance and Accountancy (CIPFA) Position Statement: Audit Committees in Local Authorities (2018). This role, and the wider Terms of Reference for the Panel which includes the Scrutiny function, is set out in the Scheme of Administration which was most recently approved at the Council meeting in October 2022. The council’s governance arrangements are reviewed on an annual basis through the Strategic Governance Framework and throughout the year through the Internal Audit programme of work. These processes support the council in demonstrating compliance with, and commitment to, the good governance principles as set out in the national Delivering Good Governance in Local Government: Framework (2016). A review of Principles E, F, and G from the national Framework was undertaken by Internal Audit in 2021. This focused on corporate governance that relates to the following principles: • E - Developing the entity’s capacity, including the capability of its leadership and the individuals within it. • F - Managing risks and performance through robust internal control and strong public financial management. • G - Implementing good practices in transparency, reporting, and audit to deliver effective accountability. In relation to the effectiveness of the Audit and Scrutiny Panel, the Internal Audit report (submitted to the Panel in March 2021) considered there was a risk that: “the council may not be able to adequately demonstrate that it has effective audit committee arrangements and/or arrangements to ensure Elected Members have the skills, knowledge and, where appropriate or required, access to relevant training and resources to effectively undertake their role”. In this respect, Internal Audit recommended that the Audit and Scrutiny Panel should, in line with good practice, undertake a self-evaluation of how effectively it is discharging its role by introducing: a) “A formal process whereby the Audit and Scrutiny Panel periodically undertakes a self- assessment of their performance and activities against CIPFAs Audit Committees: Practical Guidance for Local Authorities (2018), with a report outlining the results of this review including any improvement actions being presented to the Panel and reported to the Policy and Strategy Committee.” b) “A formal process whereby the Audit and Scrutiny Panel periodically undertakes a separate self- assessment of the effectiveness of the performance and activities of the Panel in discharging the Scrutiny aspect of its role.” At the Panel meeting in September 2023, members endorsed the approach to the self-evaluation exercise which was set out at that time and agreed that Elected Members currently on the Audit and Scrutiny Panel would take part in the self-evaluation exercise. At this meeting, it was also agreed that the self-evaluation would include those Elected Members who had experience of formerly serving on the Panel since the local government elections in May 2022. Page 16 of 176
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HEADLINE RESULTS: The online survey received a 58% response rate, with 11 out of 19 participants answering the 25 good practice questions. The online survey asked respondents to state how much they agreed with the 25 good practice questions by responding either Yes, Partially, No, or Don’t Know. The aggregated RAG status for the 25 good practice questions combined is set out in Figure 1. A high level summary of the results shows that: • Notwithstanding the response rate, the results still show a relatively positive response across all 25 questions, with 53% of responses having a Yes response. • There is a much smaller proportion of negative responses in terms of Partially (12%) and No (11%). • Of particular note, however, is the proportion of Don’t Knows (24%) which exceed the responses for Partially and No combined. It is however recognised that the proportion of Don’t Knows will have been influenced by the length of time respondents have been a member of the Audit and Scrutiny Panel. The evaluation framework for the self-evaluation of the Audit and Scrutiny Panel covered four themes: A. Panel Purpose and Governance. B. Functions of the Panel. C. Membership and Support. D. Effectiveness of the Panel. Following completion of the online survey, the overall RAG status for each of the 4 themes is show in Figure 2. This shows the differentiation between (a) areas of good practice (i.e. Yes responses) and (b) areas requiring further investigation (i.e. Partially, No, and Don’t Know responses combined). A high level summary of the results shows that: • The theme of Membership and Support received the highest proportion of positive (Yes) responses (60%). • Effectiveness of the Panel received the lowest proportion of positive (Yes) responses (48%). • When responses for Partially, No, and Don’t Know are combined the themes which require further investigation the most are the Effectiveness of the Panel (52%) and the Functions of the Panel (51%). Looking at the Partially, No, and Don’t Know responses in more detail (as depicted in Figure 3), this shows that: • The theme for Panel Purpose and Governance received the highest proportion of negative responses (Partial and No combined) with 35% in this respect. Page 17 of 176
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• The proportion of Don’t Knows are highest in the themes of Functions of the Panel (35%) and Effectiveness of the Panel (31%). • Conversely for the Panel Purpose and Governance theme there is a much lower proportion of Don’t Knows (9%). Page 18 of 176
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FULL RESULTS: Delving deeper into the results from the online survey, the % of respondents who answered either Yes, Partially, No, or Don’t Know for each of the 25 good practice questions is show in Figure 4. This includes a RAG status to provide a visual representative of the results, i.e. • Yes = Green • Partially = Amber • No = Red • Don’t Know = Grey The good practice questions that received the highest positive (Yes) responses are listed below: Membership and Support • Q15 - 100% of respondents said Yes, the Panel has good working relations with key people and organisations, including external audit, internal audit, and the chief financial officer. • Q16 - 91% of respondents said Yes, the secretariat and administrative support provided to the Panel is adequate. Functions of the Panel • Q5 - 73% of respondents said Yes, the Panel has maintained its remit as set out in the Terms of Reference in the approved Scheme of Administration? • Q4 - 70% of respondents said Yes, Members of the Panel are committed to training and personal development to update and enhance their knowledge, skills, capacity, and capabilities (where appropriate or required) to deliver Best Value and perform their role on the Panel. Effectiveness of the Panel • Q19 - 73% of respondents said Yes, the Panel engages with a wide range of leaders and managers, including discussion of audit findings, risks, and action plans with the responsible officers. The good practice questions that received the highest negative responses (Partially and/or No and/or Don’t Know) are listed below: Panel Purpose and Governance • Q1 - 54% of respondents replied to say that the role and purpose of the Audit and Scrutiny Panel was either Partially (27%) or Not (27%) understood and accepted across the council. With Partially and No combined for this question, this is a higher proportion than the 46% who responded to say Yes. • Q3 - 54% of respondents replied to say that the Panel either Partially (27%) provided support to the council in meeting the requirements of good governance or they Didn’t Know (27%) if this was the case. With Partially and Don’t Know combined for this question, this is a higher proportion than the 46% who responded to say Yes. Page 19 of 176
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Membership and Support • Q12 - 45% of respondents replied to say that Members of the Panel either Partially (27%) or did Not (18%) have appropriate knowledge and skills. When the responses to this question are considered overall this shows the differentiation between (a) areas of good practice (i.e. Yes responses) and (b) areas requiring further investigation (i.e. Partially, No, and Don’t Know responses combined) to be (a) 27% compared to (b) 73%. The good practice questions that received the highest individual Don’t Know responses are listed below: Functions of the Panel • Q8 - 64% of respondents Didn’t Know if the Audit and Scrutiny Panel considered the wider areas identified in CIPFAs Position Statement: Audit Committees in Local Authorities (2018) and whether it would be appropriate for the Panel to undertake them. When the responses to this question are considered overall this shows the differentiation between (a) areas of good practice (i.e. Yes responses) and (b) areas requiring further investigation (i.e. Partially, No, and Don’t Know responses combined) to be (a) 27% compared to (b) 73%. • Q6 - 46% Didn’t Know if there was an evaluation undertaken to assess whether the Panel is fulfilling its terms of reference and that adequate consideration has been given to all core areas in the terms of reference. • Q7 - 46% Didn’t Know if coverage of core areas in the terms of reference had been found to be limited, or if plans were in place to address this. Membership and Support • Q14 - 36% Didn’t Know if arrangements were in place to support the Panel with briefings and training. When the responses to this question are considered overall this shows the differentiation between (a) areas of good practice (i.e. Yes responses) and (b) areas requiring further investigation (i.e. Partially, No, and Don’t Know responses combined) to be 27% compared to 73%. Effectiveness of the Panel • Q21 - 46% Didn’t Know if the Panel obtained feedback on its performance from those interacting with the Panel or relying on its work. When the responses to this question are considered overall this shows the differentiation between (a) areas of good practice (i.e. Yes responses) and (b) areas requiring further investigation (i.e. Partially, No, and Don’t Know responses combined) to be (a) 27% compared to (b) 73%. • Q22 - 46% Didn’t Know if the Panel evaluated whether and how it is adding value to the organisation. When the responses to this question are considered overall this shows the differentiation between (a) areas of good practice (i.e. Yes responses) and (b) areas requiring further investigation (i.e. Partially, No, and Don’t Know responses combined) to be (a) 18% compared to (b) 82%. • Q23 - 46% Didn’t Know if the Panel have an action plan to improve any areas of weakness. • Q24 - 46% Didn’t Know if the Panel published an annual report to account for its performance and explain its work. Page 20 of 176
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Context and evidence base. Context is an important first step in a self-evaluation exercise in order to ensure a clear understanding of the operating environment of the function being evaluated. For the self-evaluation of the Audit and Scrutiny Panel, initial desktop work was undertaken to gather evidence to ensure that the results from the self-evaluation exercise can be cross checked from multiple sources in order to increase the reliability and validity of the findings, as well as help to ensure a wider understanding of complex issues and facilitate the identification of more complete and fully informed areas for improvement. The section on the left below reflects the outcome of the initial desktop exercise and contains the pre-populated evidence and context base regarding the operation of the Panel in line with the council’s decision making and committee arrangements as set out in the approved Standing Orders and Scheme of Delegation. This section also reflects updates in terms of the council’s corporate governance arrangements which have been set out in various reports to the Panel over the course of 2022 and 2023. The section on the right below sets out the outputs provided by respondents who replied to the online survey. In relation to the qualitative comments on the right, these have been handled with a significant degree of sensitivity to ensure that responses remain anonymous, and that feedback is clear and constructive in informing future improvements to the Audit and Scrutiny Panel. Panel Purpose and Governance Pre-populated evidence and context base Outputs provided by the respondents who replied to the online survey • Local authorities are corporate bodies created by statute and must make corporate decisions. Legislation allows local authorities to delegate most decision making to committees, sub-committees, or officers. This means that committees only operate within the remits given to them by their council. The council has delegated certain matters to committees, sub- committees and officers, and the Standing Orders set out the rules which apply to the running and operation of council and its committee meetings. The latest version of the Standing Orders is December 2022. • The Scheme of Administration provides the details and different functions of committees and other groups of the council and the delegation of authority to carry out the functions of the council. It sets out the terms of reference for committees, sub-committees, and panels of the council. At its meeting on 6th October 2022, the Council approved new governance arrangements and the Scheme of Administration. • The Audit and Scrutiny Panel was established in its current form in 2017, with Audit / Governance and Scrutiny being separate committees prior to that. The current Audit and Q1. Is the role and purpose of the Audit and Scrutiny Panel understood and accepted across the council? Where respondents replied either Partially or No to this question, further information was requested; the responses provided are therefore noted below: • “I think this is understood by panel members, but I doubt that the role and purpose is fully understood by elected members not on the panel.” • “Unless involved in the panel I don't think people understand the panel.” • “There is a reluctance to provide answers to questions.” • “Some members are not involved. I do not know how much awareness staff have.” Q2. Does the Panel provide support to the council in meeting the requirements of good governance? Where respondents replied either Partially or No to this question, further information was requested; the responses provided are therefore noted below: • “The panel can only provide a level of good governance if officers respond effectively to issues raised by the panel, this is not always the case.” Page 21 of 176
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Scrutiny Panel has two discrete functions - Audit and Scrutiny, with corporate governance a key aspect within both of these functions. • As per the Scheme of Administration approved at the Council meeting in October 2022, the Audit and Scrutiny Panel is a standing committee of North Lanarkshire Council and a Sub- Committee of the Policy and Strategy Committee. • The Audit and Scrutiny Panel’s remit in relation to accountability arrangements is to report to the council’s Policy and Strategy Committee on the Panel’s findings, conclusions, and recommendations concerning the adequacy and effectiveness of the council’s governance, risk management and internal control frameworks, financial reporting arrangements, internal and external audit arrangements, the performance of the council in delivering upon its priorities, and the adequacy and effectiveness of the council's performance and improvement arrangements. It is also required to report to the Policy and Strategy Committee on a regular basis on the Panel’s performance in relation to its Terms of Reference and the effectiveness of the Panel in meeting its purpose. • The Terms of Reference for the Audit and Scrutiny Panel are set out in the Scheme of Administration. Each year the Strategic Governance Framework provides the evidence for production of the Annual Governance Statement to demonstrate that the purpose, activities, and functions of the council’s Audit and Scrutiny Panel reflect the standards set out in CIPFAs Position Statement: Audit Committees in Local Authorities (2018). Q3. Are the arrangements to hold the Panel to account for its performance operating satisfactorily? Where respondents replied either Partially or No to this question, further information was requested; the responses provided are therefore noted below: • “The panel generally operates within its own structure and holds itself to account. Some external assessment is carried out but mostly relates to process.” Q4. Are Members of the Panel committed to training and personal development to update and enhance their knowledge, skills, capacity, and capabilities (where appropriate or required) to deliver Best Value and perform their role on the Panel? Where respondents replied either Partially or No to this question, further information was requested; the responses provided are therefore noted below: • “I was provided with no training for the panel and training offered to elected members at the start of term was a lot to take in and even if undertaken then will be forgotten easily as time passes.” • “I’m not sure on all members.” • “Not all members on the Panel are as committed or interested in updating their knowledge.” Feedback from respondents on the Panel’s Purpose and Governance in terms of where they think the Panel works well (in line with its approved terms of reference): • “By and large it works well, but there are times where answers are not always forthcoming.” • “Excellent input from Ken Adamson and his team and Linda and Susan on Scrutiny, as well as the council officers.” • “Panel members are generally clear on the purpose of the panel and its role in ensuring good governance across the council's operations.” • “The Panel works well with Internal Audit. However, it can only be as effective as the information it is given. The information from officers often has a positive bias.” • “The Panel works well in terms of finding items for scrutiny.” • “I am unsure of this, as a recent member to the Panel I feel I do not know enough about all the details yet.” Feedback from respondents on the Panel’s Purpose and Governance in terms of where they think things could be improved (in line with the Panel’s approved terms of reference): • “Not sure.” • “If questions to be submitted to officers were provided beforehand, there is little point in meeting or following up with further questions for scrutiny.” • “There needs to be better co-ordination between departments. Questions are not always answered if an item involves multiple departments.” • “All potential improvements are discussed with Ken Adamson.” Page 22 of 176
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• “Information needs to be unbiased and reflect the actual full circumstances. Also some officers are poor in responding to issues raised by Internal Audit and members.” • “Training of members of the Panel on a regular basis, explanations to ensure everyone is clear in what the purpose of the Panel is, what is expected of them and that they understand the purpose of the Panel.” Functions of the Panel Pre-populated evidence and context base Outputs provided by the respondents who replied to the online survey • The Terms of Reference for the Audit and Scrutiny Panel explicitly address the following areas from CIPFAs Position Statement: Audit Committees in Local Authorities (2018), i.e. good governance, assurance framework, internal audit, external audit, financial reporting, risk management, value for money, and counter fraud and corruption. • Standing agenda item number 1 on all agendas for Council and Committee meetings is Declarations of Interest in terms of the Ethical Standards in Public Life Etc. (Scotland) Act 2000. Any declarations made are recorded in the minutes. • Good governance enables the council to effectively pursue the ambition set out in The Plan for North Lanarkshire within appropriate controls and the management of risk. It is also central to ensuring effective scrutiny and delivery of statutory Best Value obligations. The changes in the national approach to auditing Best Value were reported to the Audit and Scrutiny Panel in February 2023. • This report also set out the role of Panel members in this respect. These changes move the audit of Best Value from once every five years to an annual occurrence that is undertaken as part of the external auditors Annual Audit Report (AAR) process. • Reflecting the principles in the national Delivering Good Governance in Local Government: Framework, the council’s local code of governance is set out in the Strategic Governance Framework which was initially approved in February 2020 and subsequently refreshed and approved by the Audit and Scrutiny Panel annually thereafter; the most Q5. Has the Panel maintained its remit as set out in the Terms of Reference in the approved Scheme of Administration? Where respondents replied either Partially or No to this question, further information was requested; the responses provided are therefore noted below: • Q6. Is an evaluation undertaken to assess whether the Panel is fulfilling its terms of reference and that adequate consideration has been given to all core areas in the terms of reference? Where respondents replied either Partially or No to this question, further information was requested; the responses provided are therefore noted below: • “I don't recall a meaningful evaluation of the terms of reference.” • “Not sure if evaluations have effectively taken place in core areas.” Q7. Where coverage of core areas in the terms of reference has been found to be limited, are plans in place to address this? Where respondents replied either Partially or No to this question, further information was requested; the responses provided are therefore noted below: • “We rely on officers following up after the meeting. Cross departmental representation would alleviate some of this.” Page 23 of 176
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recent in June 2023. Q8. Has the Audit and Scrutiny Panel considered the wider areas identified in CIPFAs Position Statement: Audit Committees in Local Authorities (2018) and whether it would be appropriate for the Panel to undertake them? Q9. Is the Panel’s role clear in relation to ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny? Q10. Do the scrutiny structures in the council support Members in reviewing and challenging performance? Feedback from respondents on the Functions of the Panel in terms of where they think the Panel works well (in line with its approved terms of reference): • “Not sure.” • “Generally speaking, yes.” • “We have several Panel members who probe deeply into the papers and then question the answers.” • “The Panel works well in identifying areas of the council's operations that require scrutiny and works closely with officers to ensure that appropriate scrutiny is undertaken.” • “The Internal Audit plans and investigations are generally acceptable, and some officers respond well to the findings.” • “I think the Panel operates well in terms of its functions.” • “Scrutiny Panel mainly works well as the Panel and the council’s executive views it in a positive light.” Feedback from respondents on the Functions of the Panel in terms of where they think things could be improved (in line with the Panel’s approved terms of reference): • “It falls on cross departmental representation.” • “Any potential changes are discussed with the Chief Officer Audit and Risk.” • “Officer's response is the main problem. I would like more financial assessments, not just process, in relation to real Best Value. Benchmarking is also an area that would be useful.” Page 24 of 176
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Membership and support Pre-populated evidence and context base Outputs provided by the respondents who replied to the online survey • 11 Elected Members sit on the Audit and Scrutiny Panel. Membership is in line with appointments to all committees and other bodies and these places are decided upon at a meeting of the Council. • Panel meetings are held quarterly in line with the council’s arrangements for committee meetings which support the implementation of the Scheme of Administration. At its meeting on 6th October 2022, the Council approved new governance arrangements - including the membership of committees, sub-committees, panels, and outside bodies and the timetable of meetings for 2022-27. • The Convener and Vice Convener for all council’s committees, sub-committees and panels were approved at the Council meeting in August 2022. • The latest membership changes to the Audit and Scrutiny Panel were approved at the Council meeting in June 2023. • The Committee Services team within Legal and Democratic provide secretariat and administrative support to all of the council’s committees, including the Audit and Scrutiny Panel. • The Chief Officer (Audit and Risk) supports the Panel on matters relating to internal audit, external audit, and risk management. • The Chief Officer (Business and Digital) supports the Panel on matters relating to scrutiny, Best Value, and Arm’s Length External Organisation (ALEO) assurance reporting. Matters in relation to corporate governance can be covered by either of these two Chief Officers, depending on the particular subject matter. • The Chief Officer (Finance) supports the Panel on matters relating to financial reporting. • Any Chief Officer can be called in by the Panel to provide further support, where appropriate, on service specific queries matters. • LearnNL provides an online portal for all Elected Members training and development needs, as well as an induction Q11. Does the Convener of the Panel have appropriate knowledge and skills? Q12. Do Members of the Panel have appropriate knowledge and skills? Q13. Do Members of the Panel receive sufficient support to perform their role on the Panel? Where respondents replied either Partially or No to this question, further information was requested; the responses provided are therefore noted below: • “CIPFA and Best Value information and requirements should be reviewed and discussed more often particularly when new members are involved.” • “I think training for new members of the Panel and a refresh for existing members would be a good idea.” • As a recent member to the Panel, I was not provided with any details.” Q14. Are arrangements in place to support the Panel with briefings and training? Where respondents replied either Partially or No to this question, further information was requested; the responses provided are therefore noted below: • “New members - training required.” • “Some arrangements are in place and used, but could be increased in scope, again particularly for new members.” • “Positively moving forward where appropriate, and if required, more training and briefings would be beneficial.” Page 25 of 176
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programme for new Elected Members: https://learnnl.learningpool.com/login/index.php Q15. Does the Panel have good working relations with key people and organisations, including external audit, internal audit, and the chief financial officer? Where respondents replied either Partially or No to this question, further information was requested; the responses provided are therefore noted below: • Q16. Is the secretariat and administrative support provided to the Panel adequate? Where respondents replied either Partially or No to this question, further information was requested; the responses provided are therefore noted below: • Q17. Does the Panel have access to clear, timely, and sufficiently detailed information that allows them to carry out their governance and scrutiny role? Where respondents replied either Partially or No to this question, further information was requested; the responses provided are therefore noted below: • “It would be occasionally helpful if papers could be available earlier.” • “Officer's information and responses to issued raised by Internal audit audits should be better.” Feedback from respondents on the Panel’s Membership and Support in terms of where they think the Panel works well (in line with its approved terms of reference): • “Good interaction between member and support.” • “An interested and effective group with no political bias.” • “Internal Audit reports are good.” • “I think that there is a good relationship between the Panel and council officers.” • “Panel works pretty well with council officers to continue to improve the delivery of public services.” Feedback from respondents on the Panel’s Membership and Support in terms of where they think things could be improved (in line with the Panel’s approved terms of reference): • “There have recently been significant changes in the composition of elected members sitting on the panel. A concern lies that this has diluted the knowledge and skills within the Panel and that further training may be required to ensure that the Panel discharges its duties and responsibilities effectively and in line with terms of reference.” • “Earlier papers and better cross departmental representation.” • “There has been a turnover of members, so a meeting has been arranged with the Chief Officer Audit to organise a Page 26 of 176
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training session.” • “Training for new members.” • “Officer's information and responses to issues raised.” • “Scope of Internal Audit activities.” • “Further training as outlined above.” • “Regular reviews and prioritise potential scrutiny topics and evaluate outcomes to demonstrate added value.” Effectiveness of the Panel Pre-populated evidence and context base Outputs provided by the respondents who replied to the online survey • Internal Audit undertakes a programme of work which is approved by the Audit and Scrutiny Panel on an annual basis; this is based on the Internal Audit Annual Plan. This plan is risk based and is periodically updated to reflect evolving issues and changes. The most recent was approved in May 2023. • A log is maintained of Audit and Risk related items to allow Elected Members to track implementation of outstanding requests and recommendations made by the Panel; log as at September 2023. • An update to the assessment and prioritisation process (previously approved in 2018 to establish a work programme for the scrutiny function of the Panel) was reported to the Panel in September 2022. Through this process members of the Panel are able to submit items, functions, or activities requiring scrutiny which are then assessed and prioritised in line with the approved framework. This process was further updated in September 2022 to ensure scrutiny activity is framed within the context of The Plan for North Lanarkshire. • A further report in February 2023 combined the previous twofold approach to the scrutiny function of the Panel - which comprises (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 - into the one composite Scrutiny Work Programme. This composite programme listed all scrutiny related reports scheduled to be presented to the Panel during each cycle of 2023/24. Q18. Are meetings effective with a good level of discussion and engagement from all Panel members? Where respondents replied either Partially or No to this question, further information was requested; the responses provided are therefore noted below: • “Some members are not engaged.” • “Not all members contribute.” • “I think it needs to be clear that the Panel is apolitical and that we all share a duty to scrutinise the papers in front of us regardless of party politics.” Q19. Does the Panel engage with a wide range of leaders and managers, including discussion of audit findings, risks, and action plans with the responsible officers? Q20. Does the Panel make recommendations for the improvement of governance, risk, control, and performance and are these acted on? Page 27 of 176
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Q21. Has the Panel obtained feedback on its performance from those interacting with the Panel or relying on its work? Q22. Has the Panel evaluated whether and how it is adding value to the organisation? Q23. Does the Panel have an action plan to improve any areas of weakness? Q24. Does the Panel publish an annual report to account for its performance and explain its work? Q25. Is the Panel assured that its scrutiny of council performance adds value to the scrutiny activity which already takes place at Service Committee level and does not duplicate efforts? Where respondents replied either Partially or No to this question, further information was requested; the responses provided are therefore noted below: • Feedback from respondents on the Effectiveness of the Panel in terms of where they think the Panel works well (in line with its approved terms of reference): • “The Panel is excellent at scrutinising all the papers and is prepared to question, ask for a deep dive, and support Page 28 of 176
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where necessary.” • “Internal Audit and scrutiny items are effective but need to be expanded on even if this means expanding the remit of Audit/Scrutiny.” • "I think the Panel provides a good level of overview and scrutiny which has its own value over and above that provided at departmental level.” • “Effective meetings and positive communication with council executive, officers and Panel members.” Feedback from respondents on the Effectiveness of the Panel in terms of where they think things could be improved (in line with the Panel’s approved terms of reference): • “More training.” • “Nothing comes to mind at this point.” • “Officer's information and responses in dealing with issues raised.” • “There is scope to improve participation in the scrutiny of papers.” • “The Panel should be more transparent and inclusive in its dealings with members and stakeholders.” • “More monitoring and evaluation to measure success in terms of outcomes.” Page 29 of 176
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Appendix 2 Self-evaluation of the Audit and Scrutiny Panel: Good practice questions used in the online survey. Panel Purpose and Governance Q1. Is the role and purpose of the Audit and Scrutiny Panel understood and accepted across the council? Q2. Does the Panel provide support to the council in meeting the requirements of good governance? Q3. Are the arrangements to hold the Panel to account for its performance operating satisfactorily? Q4. Are Members of the Panel committed to training and personal development to update and enhance their knowledge, skills, capacity, and capabilities (where appropriate or required) to deliver Best Value and perform their role on the Panel? Functions of the Panel Q5. Has the Panel maintained its remit as set out in the Terms of Reference in the approved Scheme of Administration? Q6. Is an evaluation undertaken to assess whether the Panel is fulfilling its terms of reference and that adequate consideration has been given to all core areas in the terms of reference? Q7. Where coverage of core areas in the terms of reference has been found to be limited, are plans in place to address this? Q8. Has the Audit and Scrutiny Panel considered the wider areas identified in CIPFAs Position Statement: Audit Committees in Local Authorities (2018) and whether it would be appropriate for the Panel to undertake them? Q9. Is the Panel’s role clear in relation to ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny? Q10. Do the scrutiny structures in the council support Members in reviewing and challenging performance? Membership and Support Q11. Does the Convener of the Panel have appropriate knowledge and skills? Q12. Do Members of the Panel have appropriate knowledge and skills? Q13. Do Members of the Panel receive sufficient support to perform their role on the Panel? Q14. Are arrangements in place to support the Panel with briefings and training? Q15. Does the Panel have good working relations with key people and organisations, including external audit, internal audit, and the chief financial officer? Q16. Is the secretariat and administrative support provided to the Panel adequate? Q17. Does the Panel have access to clear, timely, and sufficiently detailed information that allows them to carry out their governance and scrutiny role? Effectiveness of the Panel Q18. Are meetings effective with a good level of discussion and engagement from all Panel members? Q19. Does the Panel engage with a wide range of leaders and managers, including discussion of audit findings, risks, and action plans with the responsible officers? Q20. Does the Panel make recommendations for the improvement of governance, risk, control, and performance and are these acted on? Q21. Has the Panel obtained feedback on its performance from those interacting with the Panel or relying on its work? Q22. Has the Panel evaluated whether and how it is adding value to the organisation? Q23. Does the Panel have an action plan to improve any areas of weakness? Q24. Does the Panel publish an annual report to account for its performance and explain its work? Q25. Is the Panel assured that its scrutiny of council performance adds value to the scrutiny activity which already takes place at Service Committee level and does not duplicate efforts? Page 30 of 176
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Appendix 3 Self-evaluation of the Audit and Scrutiny Panel: Improvement Plan. Improvement actions Lead Target date Measures of success Outcomes (1) Formally establish a regular face to face learning and development programme for the Audit and Scrutiny Panel to ensure members of the Panel have the appropriate skills and knowledge and (where required) access to relevant training and resources to effectively undertake their role. 1.1 Develop and deliver a training programme that includes all relevant aspects of Audit and Risk, and covers the role of Audit in line with the key principles set out in CIPFAs Position Statement: Audit Committees in Local Authorities (2018) and the supporting Audit Committees Practical Guidance for Local Authorities (2018) document. Chief Officer (Audit and Risk) By the end of 2023/24. All members of the Audit and Scrutiny Panel attend the annual session. Members of the Audit and Scrutiny Panel are informed and able to fulfil their roles and responsibilities in line with the terms of reference as set out in the Scheme of Administration. The purpose of the Audit and Scrutiny Panel is clear as well as the role of members and the expectations of them. All members of the Audit and Scrutiny Panel have a good and consistent level of awareness and understanding of the purpose of the Audit and Scrutiny Panel, its role in relation to the council’s governance arrangements - including the approach and assessment and prioritisation process for scrutiny led by Panel members - and there is an appreciation of the role they have to play in scrutinising all information presented to the Panel. Areas for improvement arising from the self-evaluation exercise will be addressed, in particular the following: Q12. 73% of respondents considered that members of the Panel either Partially or did Not have appropriate knowledge and skills, or they Didn’t Know if this was the case. Q8. 73% of respondents considered that the Audit and Scrutiny Panel had Not considered the wider areas identified in CIPFAs Position Statement: Audit Committees in Local Authorities (2018) and whether it would be appropriate for the Panel to undertake them, or they Didn’t Know if this was the case. Q14. 73% of respondents considered that either Partially there were (or there were Not) arrangements in place to support the Panel with briefings and training, or they Didn’t Know if this was the case. 1.2 Develop and deliver a training programme that includes all relevant aspects of Scrutiny and covers (a) the role of Scrutiny in terms of ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny, and (b) the approach to scrutiny led by members of the Panel and the supporting assessment and prioritisation process. Chief Officer (Business and Digital) By the end of 2023/24. All members of the Audit and Scrutiny Panel attend the annual session. 1.3 As part of the programme for the sessions at 1.1 and 1.2 above, further discussions to be held with members of the Audit and Scrutiny Panel to identify potential areas for briefings and further training requirements. Chief Officer (Audit and Risk) / Chief Officer (Business and Digital) By the end of 2023/24. All members of the Audit and Scrutiny Panel attend the annual sessions for (i) Audit and Risk and (ii) Scrutiny to participate in the discussions. 1.4 Develop an online e-learning module for LearnNL to provide a means to raise awareness of the work of the Audit and Scrutiny Panel for new members prior to undergoing the face-to-face training on an annual basis. This would also serve as a refresher and information resource Chief Officer (Audit and Risk) / Chief Officer (Business and Digital) / Leader and Talent Development Manager Module developed by the end of 2023/24. Completed annually thereafter from 2024/25 onwards. All members of the Audit and Scrutiny Panel complete the e- learning module on LearnNL on an annual basis. Page 31 of 176
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Improvement actions Lead Target date Measures of success Outcomes which members of the Panel would be able to dip in and out of as required. (2) Ensure the Audit and Scrutiny Panel continues to effectively discharge its duties and can demonstrate that it adds value to the organisation. 2.1 Produce an annual report that summarises all Audit and Risk elements considered by the Audit and Scrutiny Panel during the year and highlights the impact of the work of the Panel. Chief Officer (Audit and Risk) Annual report for 2023/24 to be submitted in cycle 4 of 2024. Annual report to committee. Annual reports will raise awareness of the work of Audit and Scrutiny Panel across the organisation. Areas for improvement arising from the self-evaluation exercise will be addressed, in particular the following: Q22. 82% of respondents considered that the Panel had either Partially or had Not evaluated whether and how it is adding value to the organisation, or they Didn’t Know if this was the case. Q21. 73% of respondents considered that the Panel had either Partially or had Not obtained feedback on its performance from those interacting with the Panel or relying on its work, or they Didn’t Know if this was the case. Q1. 54% of respondents considered that the role and purpose of the Audit and Scrutiny Panel was either Partially or Not understood and accepted across the council. 2.2 Produce an annual report that summarises all Scrutiny elements considered by the Audit and Scrutiny Panel during the year and highlights the impact of the work of the Panel. Chief Officer (Business and Digital) Annual report for 2023/24 to be submitted in cycle 2 of 2024. Annual report to committee. 2.3 Continue to evaluate the effectiveness of the Panel in discharging its duties - initially through an annual check in and self-evaluation in line with the principles set out in CIPFAs Position Statement: Audit Committees in Local Authorities (2018), the supporting Audit Committees Practical Guidance for Local Authorities (2018) document, and the Best Value Guidance (2020). The frequency of follow up self- evaluations will be determined by the extent of improvements required following the 2024 self-evaluation exercise. Chief Officer (Legal and Democratic) September 2024. All members of the Audit and Scrutiny Panel engage in the evaluation process. Outcome report and improvement plan from self-evaluation concluded and submitted to the Panel for approval and implementation. An ongoing evaluation will ensure the Audit and Scrutiny Panel remains effective in providing “independent assurance to the council and those charged with governance on the adequacy of the council’s risk management framework and internal control environment”. Areas for improvement arising from the self-evaluation exercise will be addressed, in particular the following: Q3. 54% of respondents considered that Partially there were arrangements in place to hold the Panel to account for its performance operating satisfactorily, or they Didn’t Know if this was the case. 2.4 Continue to seek to improve the effectiveness of the Panel by asking Council to amend current governance Chief Officer (Audit and Risk) / Chief By the end of 2023/24. Members attending Panel meetings have appropriate training, Page 32 of 176
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Improvement actions Lead Target date Measures of success Outcomes arrangements and remove the scope for substitute members to attend Audit and Scrutiny Panel meetings given the importance of Panel members having appropriate training, knowledge, and understanding and recognising the role that consistency in involvement has in terms of ensuring ongoing Panel effectiveness. Officer (Legal and Democratic) knowledge, and understanding of the work of the Panel and this is enhanced over time through ongoing and consistent involvement in the Panel’s business. Page 33 of 176
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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 20/11/23 Strategic frameworks annual position statement From Katrina Hassell, Chief Officer (Business and Digital) E-mail HassellK@northlan.gov.uk Telephone 07903 096 121 Executive Summary The Audit and Scrutiny Panel are aware of the inter-related strategic frameworks that focus on ensuring a corporate one council approach in respect of Policy, Governance, Performance, Self-Evaluation, Project Management, and Demonstrating Improved Outcomes for Communities. These frameworks are key to assessing the success of The Plan for North Lanarkshire and ensuring its delivery through the Programme of Work is appropriately aligned, planned, guided, implemented, and governed. To ensure these frameworks remain aligned to The Plan for North Lanarkshire, and support delivery of the Programme of Work, each is on a schedule to undergo a regular review and refresh exercise. Since 2020, an annual position statement has been presented to the Audit and Scrutiny Panel to support their role in terms of providing an independent review of the council’s governance, risk management, performance, and control frameworks. Various reports in respect of these Frameworks have been considered by the Audit and Scrutiny Panel during the last year; this composite annual position statement report aims to provide a high level summary and up to date position by setting out the background, current position, and next steps for each Framework. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Acknowledge the annual position statement for each Framework and the next steps to ensure each remains aligned to The Plan for North Lanarkshire and that delivery towards achieving the overall vision is appropriately aligned, planned, guided, implemented, governed, and monitored. (2) Are aware that a corresponding Review Programme supports each Framework which ensures that all relevant matters are kept under review, updated as required, and reported to the relevant committee for Elected Member oversight and scrutiny. Item 3 Page 35 of 176
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1. Background 1.1 The Plan for North Lanarkshire is well established as the long-term strategic direction not just for the council and partners, but for North Lanarkshire as a place. It outlines the shared ambition to make North Lanarkshire the place to Live, Learn, Work, Invest, and Visit. 1.2 The long-term vision in The Plan for North Lanarkshire provides a very clear focus and compelling narrative in terms of what the council is working towards. This vision of inclusive growth and prosperity for all aims to bring equal benefits to all North Lanarkshire’s communities and ensure a fairer distribution of wealth. 1.3 This narrative has become embedded consistently throughout all policy statements agreed by the council, as well as all strategic management, strategy development, service delivery, and corporate governance approaches. As such, it has been the constant basis to enable the Programme of Work to bring together strategic planning and community investment in a cohesive manner and establish solid foundations for the place based approach. 1.4 As the delivery vehicle for The Plan for North Lanarkshire, the purpose of the Programme of Work is to translate the vision into priorities for action. To date an annual review process has supported the development of the Programme of Work to ensure the priorities for delivery remain framed within the most up to date demographic, social, and economic context that exists for the place that is North Lanarkshire, as well as the latest national policy developments and priorities. The latest Programme of Work, for 2023 to 2028, was approved at the Policy and Strategy Committee in March 2023. 1.5 Supporting the council’s strategic planning process is a range of inter-related frameworks which are key to assessing the success of The Plan for North Lanarkshire and ensuring a corporate one council approach. They are also key to monitoring delivery towards achieving the overall vision and ensuring each stage is appropriately aligned, planned, guided, implemented, and governed: • Strategic Policy Framework • Strategic Governance Framework • Strategic Performance Framework • Strategic Self-Evaluation Framework • Project Management Framework • Framework for Demonstrating Improved Outcomes for Communities 1.6 To ensure these frameworks continue to align to The Plan for North Lanarkshire, and support delivery of the Programme of Work, all are on a schedule to undergo a regular review and refresh exercise. 1.7 This report herewith follows on from the annual update on the Frameworks most recently presented to the Audit and Scrutiny Panel in November 2022. It sets out the current position statement for each Framework to provide a composite update in The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Page 36 of 176
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support of the Audit and Scrutiny Panel’s strategic oversight and governance role. 1.8 Following approval of the report at the Policy and Strategy Committee in September 2023 (The Plan for North Lanarkshire - Delivering the Programme of Work 2023-28), a seventh framework in respect of Change Management is under development. This report herewith sets out the context in this respect. 2. Update 1. Strategic Policy Framework Background 2.1 Initially approved in September 2018, the Strategic Policy Framework aims to ensure that strategies, policies, and plans supporting delivery of The Plan for North Lanarkshire are formulated, developed, implemented, monitored, and reviewed in a consistent and transparent manner across the council. The Framework therefore sets out the high- level strategies, policies, and plans which are subject to a formal review process to ensure they remain fit for purpose and continue to align to the strategy of the council. 2.2 Since implementation many strategies, policies, and plans have been developed, reviewed and updated, approved, and implemented to support achievement of the long- term vision. This was acknowledged in the Audit Scotland interim management report in June 2021 which concluded by categorising the related recommendation from the 2019 Best Value Assurance Report (BVAR) as complete given the “robust process in place to ensure policies and strategies are kept up to date and regularly reviewed to ensure they are aligned to The Plan and any laws and regulations”. 2.3 The role of the Strategic Policy Framework in supporting the council’s overall strategy (as well as maintaining a consistent approach in the development, implementation, and monitoring of strategies, policies, and plans and providing an annual review process) was also (more recently) recognised positively in the Audit Scotland Best Value thematic report for 2022/23 on the council’s leadership of the development of new strategic priorities. Presented to the Audit and Scrutiny Panel in October 2023, this report is a key element of the new national approach to auditing Best Value where the Accounts Commission require the external auditors for all 32 councils in Scotland to cover specific Best Value thematic work each year. This aims to provide assurance on areas of risk / interest across Scotland as at a defined point in time. Current position 2.4 The Strategic Policy Framework has undergone various updates since initially approved. The 2022 annual review process represented the outcome of a significant review exercise undertaken at that time. The outcome from the 2023 review was therefore more lite touch and the main changes are noted below: • The Review Programme was updated with indicative timescales of when updates are expected to ensure all strategies, policies, and plans continue to be kept under review, are updated as required, and are reported to the relevant committee. • Strategies, policies, and plans were reviewed in line with the five priorities set out in The Plan for North Lanarkshire in order to identify any gaps. • The supporting guidance was reviewed and updated to ensure strategies, policies, and plans continue to be developed in a standardised manner, consistently use a common format, and roles and responsibilities are clear. • Additional impacts (similar to those on the committee report template) were Page 37 of 176
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incorporated, and the requirement to consider trauma informed practices was added to the guidance for developing strategies, policies, and plans. • Reiterating the role that Elected Members and officers have at the heart of local government policy and delivery - with Members determining policy at the start of the process, officers managing and implementing policy in the middle, and Members scrutinising delivery at the end. This included re-emphasising the need for the owner of a strategy, policy, or plan to therefore ensure ongoing engagement with Elected Members, as appropriate. 2.5 Following the 2023 review and refresh, the Strategic Policy Framework and accompanying Review Programme were approved at the Policy and Strategy Committee in March 2023. Since then, the Review Programme has continued throughout 2023 with new (or updated) strategies, policies, and plans approved at committee in respect of the following: • Economic Regeneration Delivery Plan (ERDP) 2023-28 - February 2023 • Risk Management Strategy 2023-26 - March 2023 • Environment Pathway (replaces the previous Environment Strategy) - May 2023 • Health and Social Care Strategic Commissioning Plan 2023-26 - June 2023 • Tackling Poverty Strategy 2023-26 - September 2023 • North Lanarkshire Children’s Services Plan 2023-26 - September 2023 Next steps 2.6 The Strategic Policy Framework and its accompanying Review Programme is scheduled to continue to undergo an annual review and update process with a view to reporting the most up to date position to the Policy and Strategy Committee in March 2024. This latest review process will include due consideration of the new Programme of Work for 2023 to 2028 in order to ensure ongoing alignment, as appropriate. 2. Strategic Governance Framework Background 2.7 The Strategic Governance Framework brings the principles of good governance together with legislative requirements and management processes by which the council is directed and controlled and through which it is accountable to, engages with, and leads the local community. It sets out the council’s local code of governance in line with the national Delivering Good Governance in Local Government: Framework (2016). 2.8 The Strategic Governance Framework recognises the importance of good governance in terms of meeting statutory Best Value obligations and ensuring the council is able to effectively pursue the long-term ambition set out in The Plan for North Lanarkshire, while ensuring this is underpinned with control and the management of risk, and: • Resources are directed in accordance with agreed policies and according to priorities, and in line with corporate Project Management procedures. • There is sound and inclusive decision making. • There is clear accountability for the use of those resources in achieving defined outcomes for service users and local communities. 2.9 More specifically, the Strategic Governance Framework outlines the list of elements and mechanisms that demonstrate the council’s compliance with the 7 principles, 21 sub principles, and 91 behaviours and actions contained within the national Delivering Page 38 of 176
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Good Governance in Local Government: Framework. It should be noted that the list of elements and mechanisms does not aim to introduce new items of governance to the council, rather its purpose is to collate all existing items (produced by the respective Chief Officer) into the one local code for annual review, assessment, assurance, and reporting purposes. 2.10 Initially approved in February 2020, the Strategic Governance Framework went through a substantial review and update process in June 2021 which was endorsed by the Corporate Management Team and approved by the Audit and Scrutiny Panel in September 2021. A review and refresh process has subsequently been undertaken annually thereafter, and an updated Strategic Governance Framework approved by the Audit and Scrutiny Panel each year as part of the evidence used to inform the development of the Annual Governance Statement. 2.11 In the past, the nature of some of the elements and mechanisms in the Strategic Governance Framework meant there had been, in some instances, overlap with the governance and strategic oversight and accountability aspects of the Programme of Work (i.e. prior to 2022/23). As reported to the Audit and Scrutiny Panel in November 2022, these items are now fully integrated within the Strategic Governance Framework Review Programme for completeness and to avoid duplication. 2.12 The annual assessment process in place through the Strategic Governance Framework and its accompanying Review Programme has been recognised as an area of good practice in the latest two annual Internal Audits on corporate governance. In May 2023 the Internal Audit report submitted to the Audit and Scrutiny Panel cited that there are “formal and generally robust arrangements in place to ensure that such reviews are undertaken on an annual basis”. Current position 2.13 Chief Officers and Elected Members are responsible for determining and implementing the council’s governance arrangements and ensuring the local code is assessed on an annual basis to ensure ongoing effectiveness and compliance. The Corporate Management Team also have a role to play in terms of identifying any improvement actions and/or future planned developments in relation to key governance arrangements and continuous improvement activity and this annual evaluation role was carried out at their meeting on 16th June 2023. The updated Framework was subsequently approved by the Audit and Scrutiny Panel in June 2023. 2.14 Using a RAG status, each of the elements and mechanisms within the Review Programme can be assessed to ensure they remain timely and effective in supporting delivery of The Plan for North Lanarkshire. This process provides a method by which to identify and prioritise items requiring to be reviewed and updated further. The latest position as at June 2023 identified no Red elements or mechanisms, three Amber, and the rest were Green. For all three assessed as Amber (i.e. Corporate Anti- Fraud Policy and Response Plan, Scheme of Delegation to Officers, and the Employee Code of Conduct), there is a commitment by the respective Chief Officer to ensure an update is undertaken during 2023/24. Next steps 2.15 Moving forward, the Strategic Governance Framework and its accompanying Review Programme will remain on a formal annual review process that will take place each year in order to inform development of the Annual Governance Statement. Page 39 of 176
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2.16 Reported to the Panel in May 2023, findings from an Internal Audit review of corporate governance principles C and D recommended that further work be undertaken on the Annual Assurance Checklists (that form part of the evidence base for the Annual Governance Statement) in order to consider how improvement actions are captured and reported. The need to review and update the Chief Officers Annual Assurance Checklists had already been identified when the formal responsibility for the content of this document transferred from the Chief Officer (Audit and Risk) to the Chief Officer (Business and Digital) in March 2023. As such, with the Annual Assurance Checklist process having been in place for a number of years with minimal changes, a substantial review is scheduled to be undertaken by the end of 2023 with a view to implementing the updated Checklist for the 2023/24 year end process. The outcome from this review will be reflected in the Strategic Governance Framework / Annual Governance Statement reports scheduled to be submitted to the Panel in June 2024. 3. Strategic Performance Framework Background 2.17 The Strategic Performance Framework, approved in September 2019, 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. 2.18 The Strategic Performance Framework is aligned to the Accounts Commission’s Statutory Direction which places a requirement on councils to report a range of information in terms of improving local services, improving outcomes, and demonstrating Best Value. Ensuring compliance with the requirements of Best Value, good governance, and the Statutory Direction shaped the development of the Strategic Performance Framework. 2.19 Implementation of the “Strategic Performance Framework and its reporting schedule to support the delivery of The Plan for North Lanarkshire and its scrutiny by members” was identified as an improvement action in the council’s 2019 Best Value Assurance Report (BVAR). The extent of the work that was undertaken in this respect (notwithstanding the significant impact of the pandemic on availability of resources and performance information) - as reported to the Audit and Scrutiny Panel in October 2022 - was recognised by Audit Scotland in their Annual Audit Report for 2021/22. This reported on the implementation of the BVAR recommendation and concluded that “good progress has been made”. 2.20 More recently, the Audit Scotland Best Value thematic report for 2022/23 (as noted in paragraph 2.3 above and reported to the Panel in October 2023) acknowledged the revised approach to performance reporting which has been implemented by the council and concluded that “the council now has a Performance Reporting Schedule in place which includes Chief Officer reviews at service committees, corporate reporting, and service specific reporting”. Current position 2.21 A report submitted to the Audit and Scrutiny Panel in February 2023 outlined the Page 40 of 176
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Strategic Performance Framework Performance Reporting Schedule for 2023 to 2024. This aims to support the timely submission of a range of performance information that enables Elected Members to undertake regular performance reviews that support the council’s challenge and scrutiny processes. 2.22 The Performance Reporting Schedule shows there is a significant volume of performance information timetabled to be reported to various council committees in each cycle from 2023 to 2024 in line with the three aspects noted below. (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. 2.23 Chief Officers performance reports are also reviewed by the council’s senior management team to ensure the relevant assurances can be provided - in line with the council’s Best Value duty - in terms of performance management arrangements that promote effective use of the council’s resources, performance information that is scrutinised at a senior management level, and performance monitoring arrangements that effectively address areas of underperformance, identify the scope for improvement, and agree remedial action. 2.24 Throughout each committee cycle of 2023, Chief Officers have ensured that a wide range of performance have been reported to the respective service committee (in line with the Performance Reporting Schedule) for scrutiny by Elected Members. In addition, a new quarterly process provides further assurances in this respect and supports the Audit and Scrutiny Panel to maintain strategic oversight of the council’s performance in line with the Panel’s 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, specifically performance in improving services and outcomes and in demonstrating Best Value”. In bringing together a summary of council performance, this approach provides a composite (but easily digestible) overview that 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. 2.25 Each Chief Officer’s performance report produced in line with the Strategic Performance Framework follows a standard template and (a) sets out 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. This approach reflects key requisites of the Statutory Direction, such as ensuring performance reporting that is balanced and in context. 2.26 Additional activities undertaken during 2023 to support the council’s Best Value duties in relation to performance management include the following: • An update to the level 1 health check indicators was reported to the Policy and Strategy Committee in March 2023. Collectively these indicators provide the North Lanarkshire context and the local demographic, social, and economic profile and were key to shaping the long-term vision set out in The Plan for North Lanarkshire Page 41 of 176
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when it was approved in 2019. They have continued to provide a robust, consistent, and independent way of assessing progress since then. The suite of indicators has also played an important role in terms in informing the council’s strategic planning process through the new Programme of Work for 2023 to 2028. • Reporting of the Local Government Benchmarking Framework (LGBF) measures was aligned to The Plan for North Lanarkshire and integrated into the Strategic Performance Framework reports to service committees alongside the wider suite of measures within each Chief Officers’ area of responsibility. As a single performance indicator in isolation rarely provides a complete picture of performance, this approach now ensures that reports to service committees and the Audit and Scrutiny Panel contain all performance indicators within each Chief Officers’ portfolio in order to provide a complete North Lanarkshire picture. • The council’s website hosts a new online dashboard for all LGBF measures which was launched by the Improvement Service in 2023. This now provides an easy way to view a live picture of the most up to date performance for a benchmarking measure as at a point in time. It also enables North Lanarkshire’s performance to be compared with other local authorities and the national average. https://www.improvementservice.org.uk/benchmarking/explore-the-data • Chief Officers six monthly performance reports are supported by a substantial bank of data that is made available to Elected Members on service committees through a hyperlink to a spreadsheet in the covering reports. These spreadsheets are maintained by nominated officers in services in line with documented indicator definitions with data accuracy and completeness checks undertaken through an annual verification process. 2.27 Following a 2022 Internal Audit review of performance management which made several recommendations for improvement, an update was reported to the Panel in May 2023. In this respect the Internal Audit comment acknowledged 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.” Next steps 2.28 Following development of a new approach to performance reporting for complaints indicators which was built up within the Business Intelligence (BI) Hub (in line with the Scottish Public Services Ombudsman (SPSO) Local Authority Complaints Handling Procedure), a range of data visuals now enable live complaints performance information to be viewed, segmented, and analysed in order to identify aspects of complaints handling which require further investigation. This supports the move away from performance reporting to actively using performance information to identify areas for improvement. An annual report on the council’s performance in complaints handling is scheduled to be available for Audit and Scrutiny Panel oversight in cycle 1 of 2024. 2.29 As noted in the annual position statement reported to the Audit and Scrutiny Panel in November 2022, the work to establish regular performance reporting in line with the Strategic Performance Framework was being undertaken at a time when work was simultaneously being carried out to set up the Framework in the BI Hub to improve not only the presentation of performance information in the future, but also the ability to more effectively analyse the information in order to identify areas for improvement. This will be rolled out further during 2024/25. 2.30 At the same time as establishing the Chief Officer six monthly Strategic Performance Page 42 of 176
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Framework reports to service committees during 2023, level 3 indicators and targets (which allow the quality, efficiency, and effectiveness of day-to-day operations to be assessed in terms of improving local services (in line with the Statutory Direction)) have been reviewed and updated to ensure they remain fit for purpose. An updated suite of measures and targets was made available for oversight by the Corporate Management Team in October 2023 in advance of final update to the Strategic Performance Framework (as noted in paragraph 2.31 below). 2.31 Following approval of the new Programme of Work for 2023 to 2028 at the Policy and Strategy Committee in March 2023, and the subsequent approval of the supporting high level Single Integrated Delivery Plan in September 2023, developments are underway to establish strategic portfolio monitoring and performance management arrangements to support oversight of the Programme of Work in line with each audience’s respective role. This includes final developments to complete the review of the Strategic Performance Framework indicators to ensure appropriately aligned and relevant performance measures are in place that will demonstrate progress in delivering the Programme of Work and achieving the vision set out in The Plan for North Lanarkshire, and that will fulfil the remaining Internal Audit recommendation. During November 2023, a series of development sessions are scheduled to be held with the respective Programme of Work Senior Responsible Officer as well as the officers responsible for delivering the supporting range of programmes, projects, and activities. The Strategic Performance Framework is expected to be able to be fully updated following these sessions and subsequently available for Audit and Scrutiny Panel oversight in cycle 2 of 2024. 2.32 Development of a public performance reporting schedule and communications plan is underway. This will be framed within the context of what The Plan for North Lanarkshire aims to achieve and what the Programme of Work for 2023 to 2028 is delivering and what performance in this respect means locally. It is expected that this will be available for Audit and Scrutiny Panel oversight in cycle 2 of 2024 as part of the Strategic Performance Framework. 4. Strategic Self-Evaluation Framework Background 2.33 Initially approved in 2018, the Strategic Self-Evaluation Framework asks the questions How well are we doing? How do we know? and How can we do better? to ensure the council has a way of regularly assessing practices, recognising strengths, and identifying areas for improvement. 2.34 This supports the council’s Best Value duty that aims to secure continuous improvement in performance. Being self-aware and undertaking a structured programme of self-evaluation underpins the duty to secure continuous improvement, and good practice suggests local authorities adopt a single strategy for improvement when implementing self-evaluation. 2.35 A single strategy for improvement is in place through the Strategic Self-Evaluation Framework and rolling Review Programme, which was initially endorsed by the Corporate Management Team in July 2021 and approved by the Audit and Scrutiny Panel in September 2021. A subsequent review and refresh process has been undertaken annually and reported to the Audit and Scrutiny Panel thereafter. 2.36 The report to the Panel in November 2022 updated on the achievements from the Strategic Self-Evaluation Framework rolling Review Programme for 2022 and Page 43 of 176
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presented the refreshed Framework rolling Review Programme for 2023. As a mechanism that also helps the council to provide assurances that services provided represent value for money, are efficient and effective, and able to demonstrate Best Value, a corporate approach to Options Appraisal was also incorporated into the Framework at that time. 2.37 The council’s commitment to self-evaluation and implementing the recommendation from the 2019 Best Value Assurance Report (BVAR) - i.e. improvement plans arising from self-evaluation exercises should include measurable actions and clear deadlines - was recognised by Audit Scotland in their Annual Audit Report for 2021/22 (reported to the Panel in October 2022). This external assessment concludes that this BVAR recommendation is now considered complete. 2.38 More recently, the Audit Scotland Best Value 2022/23 thematic report on the council’s leadership of the development of new strategic priorities (reported to the Panel in October 2023) further acknowledged that “the council has a well-established self- evaluation framework in place which supports continuous improvement”. Current position 2.39 As reported to the Panel in June 2023, through the Annual Governance Statement 2022/23, various self-evaluation exercises have been undertaken as part of the council’s governance, performance management, and continuous improvement arrangements. During 2022 two self-evaluation exercises were completed: • A self-evaluation of project management, which supported the review and refresh of the corporate project management model to ensure the council’s arrangements remain fit for purpose and able to effectively support delivery of The Plan for North Lanarkshire. This followed recommendations arising from Internal Audit reports on managing strategic change and the governance of capital projects, but was also considered necessary in light of the changes in the council’s operating environment since the initial introduction of the Model in 2018. • A self-evaluation of the risk governance arrangements in respect of DigitalNL, which supported the annual review of the existing risk management arrangements and risks for both the DigitalNL programme and Business and Digital service. In light of the fast evolving environment and many moving parts within which the service’s wide range of programmes and projects operate - programmes and projects which often call upon the same resources - it was considered essential that the Business and Digital risk profile be considered as a composite in order to continue to facilitate good governance and proactively support delivery of the actions that will enable achievement of the digital ambition. 2.40 During 2023, two further self-evaluations have been completed: • A self-evaluation of Partnership / Community Board effectiveness in line with their role in improving outcomes for local people and communities. This followed a corporate governance review undertaken by Internal Audit in 2021 which recommended that “a formal review (or self-assessment) of the effectiveness of the Community Boards should be undertaken once these relatively new arrangements have become more established”. Further information in this respect is set out in paragraphs 2.58 and 2.59 below. • A self-evaluation of the Audit and Scrutiny Panel. This followed a corporate governance review undertaken by Internal Audit in 2021 which considered there was a risk that: “the council may not be able to adequately demonstrate that it has effective audit committee arrangements and/or arrangements to ensure Elected Page 44 of 176
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Members have the skills, knowledge and, where appropriate or required, access to relevant training and resources to effectively undertake their role”. The findings from this exercise are set out in a separate report on the Panel’s agenda today. Next steps 2.41 Following the annual review and refresh process, an update to the Strategic Self- Evaluation Framework and the rolling Review Programme for 2024 to 2025 is scheduled to be provided to the Audit and Scrutiny Panel in cycle 1 of 2024. This will ensure the council continues to ensure a mechanism is in place to assess its functions and activities and identify areas for improvement within the context of fulfilling the vision set out in The Plan for North Lanarkshire. 2.42 As the Panel will recall, the council was in year three of the six-year national Best Value Assurance Report (BVAR) review programme which concluded with publication of a positive report for North Lanarkshire in May 2019. Information on the new national approach to auditing Best Value came into effect from 2022/23 onwards. As reported to the Panel in February 2023, this approach will not see a repeat of the BVAR process for all councils, rather the focus has moved to (a) the integration of auditing Best Value within each individual council’s external auditors Annual Audit Report (AAR) process and (b) an annual Best Value thematic report. 2022/23 reports in this respect were presented for the Panel’s consideration at the meeting in October 2023. 2.43 The council has maintained a dedicated page on the website for a number of years now in order to provide a central location for reporting on findings and recommendations from all national audits and inspections. This will continue to be kept up to date as and when new reports become available nationally. https://www.northlanarkshire.gov.uk/your-council/performance-of-the-council/best- value. 5. Project Management Framework Background 2.44 Following an extensive review exercise, the council’s Project Management Framework was updated and launched in December 2022. The review and refresh exercise followed recommendations arising from Internal Audit reports on the governance of capital projects and managing strategic change, but was also considered necessary in light of the changes in the council’s operating environment since the introduction of the Model in 2018. These changes had led to a rapid evolution of programmes and projects across the council, as well as increasing complexities in the delivery of many of these, and a growing need for good governance and good project management to set up and deliver a wider range of projects at pace and scale, and ensure these are well-directed, delivered to time, cost, and quality targets, and provide the expected benefits and improved local outcomes. 2.45 The overarching purpose of the Project Management Framework document is to provide a comprehensive Framework that outlines the processes and techniques which aim to help to scope and manage a project, meet agreed milestones, fulfil appropriate reporting and assurance requirements, involve the right people at the right time, implement each stage of delivery from start to finish, and achieve the expected benefits or improved outcomes of each project. It is designed to promote and encourage best practice in the management and delivery of capital and non-capital programme as well as construction and non-construction projects across the council. It aims to provide support and guidance for all employees involved in project management regardless of Page 45 of 176
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their role and previous experience, and it recognises that project management is something that is becoming common practice in the workplace and more prevalent across many operational roles. 2.46 As reported to the Panel in February 2023, the Project Management Framework does not attempt to set out all the complexities of project management - or say there is only one way to manage a project - or define which methodology a particular project should use. The flexibility set out therein is intentional to allow each Senior Responsible Officer (SRO) and Project Manager the ability to identify the approaches that best suit the requirements of a particular project and will most effectively support the delivery of the expected benefits and outcomes to cost, time, and quality - but to do so within the fundamentals of good project management and good governance. Current position 2.47 Following a successful pilot, Project Management training was rolled out across the organisation from February 2023. This comprises a programme of half and full day training sessions for which Chief Officers identified the employees who had to undergo the training; to date attendance has reached 96% with 186 employees taking part in 18 sessions overall. To date feedback has been very positive and the trainer has made these very informative and engaging sessions. To ensure all staff involved in projects attend the training, 11 more sessions have been scheduled for the remainder of 2023 and further dates are being identified for 2024. Ongoing support is also available through a range of materials on LearnNL and through 1:1 sessions where requested. 2.48 As reported to the Panel in September 2023, a corporate Project Register has been produced to (a) assist with the appropriate implementation of the Project Management Framework, (b) serve as a mechanism to provide evidence in respect of the council’s governance arrangements, and (c) inform a regular Review Programme by which projects will be assessed for quality assurance purposes and for appropriate compliance with the Project Management Framework. To date, this has also supported the development of the high level Single Integrated Programme of Work Delivery Plan which was approved at Policy and Strategy Committee in September 2023, and is continuing to support further development of the detailed Delivery Plans for each of the seven Programme of Work priorities which require to be in place for 2024/25 onwards. Next steps 2.49 In line with Internal Audit recommendations in relation to managing strategic change and the governance of capital projects (which were reported to the Panel in May and September 2023 respectively), a Quality Assurance process has been developed. Approved by the Corporate Management Team in October 2023, this process sets out the Quality Assurance arrangements for the Project Management Framework and Programme of Work which comprise three distinct, but inter-related, aspects (as noted below). These arrangements are in the process of being implemented in line with the Project Registers compiled by Chief Officers. • Quality Assurance Compliance Assessment - process to assess project compliance with the Project Management Framework. • Quality Assurance Delivery Assessment - process to monitor delivery of projects and activities supporting the Programme of Work. • Quality Assurance Compliance / Delivery Matrix to support the escalation process and inform exceptions-based reporting. 2.50 Elected Member oversight of the Quality Assurance process and Review Programme Page 46 of 176
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for the Project Management Framework is already listed on the Panel’s Scrutiny Work Programme for cycle 1 of 2024 (as per the report to the Panel in September 2023). This is in line with project management good practice which recommends that a council's audit and scrutiny committee has an important role to play in providing independent assurances about the delivery of major programmes and projects. 2.51 The Project Management Framework will undergo an annual lite touch review process to ensure it continues to remain fit for purpose. This will also take into account any significant feedback arising from the aforementioned training programme or any developments arising, such as the new Programme of Work for 2023 to 2028 and its associated governance arrangements. The outcome of the 2023 review is scheduled to be concluded by the end of 2023/24. 6. Framework for Demonstrating Improved Outcomes for Communities Background 2.52 As the public spending watchdog for local government in Scotland, the Accounts Commission aim to ensure their work (a) helps provide assurance to the public on the performance of each Scottish council, and (b) reflects councils’ responsibilities to deliver high quality services to the public. 2.53 These assurances are provided through a range of audit activity that is set out in the Accounts Commission’s programme of work; this includes setting a Statutory Direction that directs local authorities on the publication of performance information relating to their activities that allows for comparisons over time and with other local authorities. 2.54 In operation since implementation of the Local Government Act 1992, the Statutory Direction has recently been reviewed and refreshed every three years. The update to the Statutory Direction in November 2021 (covering reporting for the three financial years from 2022/23 to 2024/25) had a focus on a descriptive (rather than prescriptive) approach, with specific revisions centred on a number of key areas which included community engagement and empowerment. In this respect, the emphasis is on evidencing that the council is carrying out community planning for the “improvement in the achievement of outcomes”. In addition, the Accounts Commission expects councils (in agreeing outcomes with partners and communities) to report on how they have engaged with, responded to and helped to empower their communities, including those who require greater support. 2.55 For this reason, and in line with the focus of the Statutory Direction set out in paragraph 2.54, a Demonstrating Improved Outcomes for Communities Framework was established to ensure the evidence is in place to formally fulfil this aspect. Current position 2.56 Approved by the North Lanarkshire Partnership Strategic Leadership Board in June 2022, the Framework for Demonstrating Improved Outcomes for Communities sets out the model which the North Lanarkshire Partnership use to assess progress and performance in terms of delivering upon priorities and plans and ensuring that partnership activities can demonstrate improved outcomes that make a real difference for local people and local communities. The Framework also includes a number of case studies to highlight just some of the improved outcomes in local communities. 2.57 An annual oversight and outcome report supports the council’s requirements to report publicly on progress including where outcomes have been improved through joint Page 47 of 176
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planning, collaboration, and partnership working. In this respect, the latest report to the Communities Committee in February 2023 highlighted where community planning in North Lanarkshire is making a positive impact in strengthening partnership working and improving outcomes in line with The Plan for North Lanarkshire’s shared ambition. 2.58 As noted in paragraph 2.40, a self-evaluation has been undertaken of Partnership / Community Board effectiveness in line with their role in improving outcomes for local people and communities. This followed a corporate governance review undertaken by Internal Audit in 2021 which recommended that “a formal review (or self-assessment) of the effectiveness of the Community Boards should be undertaken once these relatively new arrangements have become more established”. This was considered important in order to ensure that the Community Boards are able to discharge their roles and responsibilities adequately and effectively and have a positive impact on achieving the shared ambition set out in The Plan for North Lanarkshire. 2.59 The outcome from this self-evaluation exercise was considered by the North Lanarkshire Partnership Strategic Leadership Board in April 2023, with an improvement plan developed thereafter and subsequently approved in September 2023. The Audit Scotland Best Value 2022/23 thematic report on the council’s leadership of the development of new strategic priorities (reported to the Panel in October 2023) recognised the council’s commitment to reviewing the effectiveness of Community Board arrangements through the self-evaluation exercise. Next steps 2.60 At a development session in March 2023, the North Lanarkshire Partnership Strategic Leadership Board endorsed the seven priorities in the Programme of Work for 2023 to 2028 as the delivery vehicle to realise the long-term vision set out in The Plan for North Lanarkshire. This was further ratified at the Strategic Leadership Board meeting in September 2023. Following this, work will be undertaken to review and refresh the Framework for Demonstrating Improved Outcomes for Communities in line with the new Programme of Work for 2023 to 2028 and with due consideration of the improvement plan arising from the aforementioned self-evaluation exercise. 7. Change Management Framework 2.61 As reported to the Policy and Strategy Committee in September 2023 (in The Plan for North Lanarkshire - Delivering the Programme of Work 2023-28 report), it is inevitable that change will become even more prevalent across the organisation if the Programme of Work is to be delivered successfully within the ongoing challenges of the local government environment. This could involve change to reduce costs, improve productivity, fund investment in alternative ways of working (e.g. prevention), achieve more for less, or to secure Best Value in terms of more efficient, effective, economic, or sustainable ways of working. 2.62 For this reason, a Change Management Framework is under development to ensure a one council approach through a structured (but flexible) framework that recognises the need for effective change management throughout the lifecycle of an initiative and considers the impact of change on people. This is critical so the people most affected are supported to transition smoothly and embrace, adopt, and use the solution associated with the change and there is no gap between intentions and results. This is scheduled to be in place for 2024/25. 3. Measures of success Page 48 of 176
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3.1 Regular scrutiny of the council’s performance and governance arrangements supports the council to efficiently and effectively deliver on the long-term vision set out in The Plan for North Lanarkshire, while ensuring this is underpinned with the relevant controls as set out in the national Delivering Good Governance in Local Government: Framework (2016) and the Best Value Guidance (2020). 3.2 Regular oversight and scrutiny by the Audit and Scrutiny Panel aims to ensure there is effective use of council resources and 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. 4. Supporting documentation None 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 ☒ If Yes, have all relevant financial impacts 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 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 been discussed and agreed with Legal and Page 49 of 176
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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? 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? Work to ensure an annual review and refresh programme for the set of inter- connected strategic frameworks ensures the council continues to support the Best Value duty and comply with the principles set out within the Delivering Good Governance in Local Government: Framework (2016). This contributes towards the mitigation of the risks on the Corporate Risk Register for (a) Governance, Leadership, and Decision Making and (b) Managing Strategic Change. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. Page 50 of 176
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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. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 51 of 176
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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 20/11/23 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, a subsequent report in May 2023 set out the first performance assurance review that had been undertaken of performance reports which had been submitted to council committees during the previous cycle. The report in May 2023 also advised that performance assurance reviews would thereafter be reported to the Audit and Scrutiny Panel on a quarterly basis. In bringing together a summary of the council’s performance reports in one composite assurance overview in this way, this approach 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. This report herewith provides the Panel with the outcome from the latest performance assurance review that has been undertaken of performance reports submitted to council committees during cycle 3 of 2023 (in line with the Performance Reporting Schedule). Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Review the composite overview of performance reporting provided in Appendices 1 and 2 to maintain an awareness of each report within the Performance Reporting Schedule for 2023 to 2024, and (2) Identify whether there are any significant issues arising, from the composite performance overview presented in the attached Appendices, that the Panel considers requiring additional scrutiny and a further report to be submitted from the respective Chief Officer to a future meeting of the Panel (following review through the Scrutiny Assessment and Prioritisation Process). Item 4 Page 53 of 176
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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 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 The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Page 54 of 176
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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 3 reports were reviewed by the Business Management Team in September 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 3 reports has also been reviewed and summarised further in Appendices 1 and 2 attached. It should be noted that the performance information within Appendices 1 and 2 has already been reviewed by Service Committees during cycle 3. The purpose of the information presented herewith is therefore to provide Audit and Scrutiny Panel members with a composite, but easily digestible, overview for governance and assurance purposes in line with the specific scrutiny role of the Panel. 1.7 Should the Panel consider there are any significant issues arising from the composite performance overview which require additional scrutiny, these matters will be reviewed through the Scrutiny Assessment and Prioritisation Process (updated and approved by the Panel in September 2022 and further endorsed in September 2023), prior to being added to the Scrutiny Work Programme for a further report to be submitted from the respective Chief Officer to a future meeting of the Panel. 1.8 A number of performance measures were identified as requiring additional scrutiny at the Panel meeting in September 2023, these have subsequently been analysed to identify any improvement in trends since the last reported position and are currently undergoing review through the Scrutiny Assessment and Prioritisation Process with a view to being added to the Scrutiny Work Programme scheduled to be reported to the Panel in cycle 1 of 2024. 2. Quarterly performance assurance review 2.1 The Strategic Performance Framework - Performance Reporting Schedule sets out three aspects of performance reporting which are noted below. Paragraphs 2.2 to 2.7 itemise the performance reports submitted to cycle 3 committees in line with these aspects and in accordance with the timetable set out within the 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 3 of 2023 are Page 55 of 176
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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 Education Link to report Education, Children, and Families Committee 12 September 2023 Strategic Performance Framework - latest performance results for Business and Digital Link to report Finance and Resources Committee 13 September 2023 Strategic Performance Framework - latest performance results for Finance Link to report Finance and Resources Committee 13 September 2023 Strategic Performance Framework - latest performance results for Legal and Democratic Link to report Finance and Resources Committee 13 September 2023 Strategic Performance Framework - latest performance results for Assets and Procurement Link to report Finance and Resources Committee 13 September 2023 Strategic Performance Framework - latest performance results for People Resources Link to report Finance and Resources Committee 13 September 2023 Strategic Performance Framework - latest performance results for Strategic Communication and Engagement Link to report Communities Committee 21 August 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 Scrutiny Work Programme for the scrutiny element of the Audit and Scrutiny Panel which was endorsed by the Panel in February 2023. • Other than the quarterly performance assurance review report itself, there were no items scheduled for reporting within this category in cycle 3 of 2023. (3) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. 2.6 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 the council’s performance reporting arrangements are captured in the one Page 56 of 176
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place and the Schedule reflects a one council approach to performance reporting. 2.7 The 16 reports scheduled to be submitted to the relevant committee in cycle 3 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. While this summary is set out against the five non-negotiable standards it recognises there may also be statutory specific approaches or standards which require to be adhered to. Table 2 Report title Committee Date Scottish Housing Regulator - Annual Assurance Statement 2022/23 Link to report Housing Committee 30 August 2023 Economic Regeneration Delivery Plan (ERDP) performance framework - annual update 2022/23 Link to report Enterprise and Fair Work Committee 1 September 2023 Tackling poverty - annual report 2022/23 Link to report Wellbeing and Tackling Poverty Committee 18 August 2023 Procurement - annual report 2022/23 Link to report Finance and Resources Committee 13 September 2023 Scottish Roadworks Commissioner - annual performance 2022/23 Link to report Environment and Climate Change Committee 23 August 2023 Business regulation/food law - annual plan and performance Link to report Environment and Climate Change Committee 23 August 2023 Community Asset Transfer and Participation Requests - annual report 2022/23 Link to report Communities Committee 21 August 2023 Community Learning and Development - activity for 2022/23 Link to report Education, Children and Families Committee 12 September 2023 ALEOs six monthly governance and risk management oversight and assurance report Link to report Audit and Scrutiny Panel 4 September 2023 LOIP performance report - October 2022 to March 2023 Link to report Communities Committee 21 August 2023 Social Work - annual quality assurance report 2022/23 Link to report Adult Care and Social Work Committee 5 September 2023 Treasury Management - annual activity report 2022/23 Link to report Finance and Resources Committee 13 September 2023 Revenue and Benefits update Link to report Finance and Resources Committee 13 September 2023 Financial monitoring report - council summary (revenue) Link to report Finance and Resources Committee 13 September 2023 Financial monitoring report - council summary (capital) Link to report Finance and Resources Committee 13 September 2023 Page 57 of 176
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Financial monitoring - savings Link to report Finance and Resources Committee 13 September 2023 Next steps 2.8 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 The Plan for North Lanarkshire underpinned with corporate governance, risk management, and financial management controls. 2.9 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. 2.10 The Annual Performance Reporting Schedule for 2024 to 2025 is under development and is scheduled to be reported to the Audit and Scrutiny Panel in cycle 1 of 2024. 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) 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? Page 58 of 176
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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 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 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 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 Page 59 of 176
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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 ☒ 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. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 60 of 176
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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 Strategic Performance Framework - latest performance results for Education September 2023 Education has 32 indicators in the Strategic Performance Framework. These largely comprise 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 in terms of inspection reports and parental feedback. 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: 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. • 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. 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. Page 61 of 176
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• 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. • Exclusions from school, all pupils - exclusion rate per 1,000 pupils. • Exclusions from school, looked after children - exclusion rate per 1,000 pupils. In context • The routine programme of HMIe inspections resumed in session 2022/23. Establishments were asked to provide some contextual information around the impact of the pandemic within their specific context, and how they had adapted to meet the challenges, to allow inspectors to fully understand the impact of the pandemic on individual establishments. • In the 2022/23 session, there was significant investment in additional teaching staffing to support recovery and improved attainment and health and wellbeing. • A cluster attainment teacher (CAT), funded through the Scottish Attainment Fund (SAC), was aligned to every cluster, with a specific remit of supporting identified learners with literacy and numeracy interventions. Despite challenges around deployment of CATs to cover emergency staffing vacancies, this approach proved successful in improving outcomes for learners. • Piloting of refreshed quality assurance processes has increased consistency in establishment self-evaluation for improvement processes. With further implementation it is anticipated this will improve the rigour and accuracy of self-evaluation processes, strengthening the system. Balanced Recent performance highlights • Since the report in February 2023, five establishments have been inspected. In summary, a total of twelve establishments were inspected during 2022/23. Of the twelve establishments inspected, five included early years provision. 100% received a positive report, using the current criteria which categorises a grading of satisfactory or above as positive. As previously reported, from 2022/23 the criteria underpinning the performance indicator (% positive HMIE reports) had been adapted by only categorising establishments graded good or above as positive. This will have obvious implications on comparing trends over time but reflects increased expectations and drive to improve outcomes for children and families. • Using the new criteria, an analysis of all inspection gradings awarded to schools over the five year improvement cycle shows the following: pre-covid 61% good+ inspection gradings (106 grades awarded), and in 2022/23 83% good+ inspection gradings (54 grades awarded). More detailed analysis of the results by specific quality indicators has enabled further strengths and areas for development to be identified. • Results for the performance indicator (parent satisfaction - % parents agree or strongly agree that overall they are satisfied with the school) has improved from 90.8% to 91.5%, since last reported. Areas of performance requiring improvement • Results for the performance indicator (parent satisfaction - % parents agree or strongly agree that they receive helpful, regular feedback about how their child is learning and developing) has increased since last reported from 83.5% to 84.5%, although this is still below the target of 93% and thresholds and will continue to be monitored and compared with wider local datasets. Work underway to develop a new parental engagement strategy will allow for focused feedback from parents/carers. This feedback will be used to inform future planning. • Results for the performance indicator (parent satisfaction - % parents agree or strongly agree that the school is well led and managed) has risen from 67.5% in 2020/21 to 88.8% in 2022/23. Although this is still below the target of 94%, it is the highest score recorded since 2016/17. • Targets for the three indicators derived from the HMIe inspection questionnaires were set prior to the pandemic and as such have since been reviewed and updated to reflect actual performance trends more accurately. • As previously reported, improving attendance continues to be a key priority across the service. Current data indicates that attendance has improved from 87.9% in session 2021/22 to 88.6% in session 2022/23 (based on provisional data for 2022/23). 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 allows teams to provide targeted support to young people and families to help to improve attendance levels. Deployment of additional family engagement workers aims to further strengthen this approach. Report title Summary Page 62 of 176
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SPF - Latest performance results for Business and Digital September 2023 Business and Digital have 12 indicators in the Strategic Performance Framework covering two areas of activity (technology strategy solutions and business strategy) that work corporately across the council. 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. • Fibre - % of residential premises in North Lanarkshire with full fibre availability In context The service’s operating environment has changed significantly in recent years and, as such, the report recognises the context within which the performance information requires to be considered: • The extent to which the service supported the council in responding to and recovering from the pandemic, while resuming business as usual activities at pace. • The 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 awarded 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. Moving forward, the roadmap for Digital North Lanarkshire is contained within the Programme of Work for 2023 to 2028 (approved at the Policy and Strategy Committee in March 2023) and the subsequent high level deliverables report in this respect (approved at Committee in September 2023). • An Integrated Programme Plan is now in place for Business and Digital which aims to capture all areas of activity across the service and serve as a guide to support resource planning and operational delivery, as well as the relevant project management and governance controls. Balanced Performance highlights: • According to the Ofcom Connected Nations update, 98.6% of properties in North Lanarkshire receive superfast broadband - the 3rd highest of all 32 local authority areas in Scotland. Ofcom define superfast broadband as supporting download speeds of at least 30Mbit/s. Fibre connectivity - which requires fibre Page 63 of 176
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optic cabling which supports higher speeds than the copper cables used in traditional networks - is sitting at 30% across North Lanarkshire. The Connectivity contract currently being delivered aims to transform the area’s digital infrastructure and aim (by the summer of 2024) to ensure that 85% of homes across North Lanarkshire have access to gigabit capable broadband earlier than planned; to date 250 of the planned 340 kilometres of ultrafast, full fibre digital network has been laid. Areas of performance requiring improvement: • An area of activity under review has been that in relation to service desk incidents resolved within target. Following the insourcing of Wipro, this indicator was changed to capture all severity level 3 tickets in order to provide a more complete picture of all incidents that require to be resourced by the service. This has increased the volume of incidents recorded within this indicator and required a closer analysis of demand in order to fully understand the asks of the service and manage these in a way that takes into consideration all the related component parts of the service to be delivered as well as improvements required in the longer term (which can often result in an initial backlog of issues which require to be resolved in order to ensure a successful transition to a new approach). This analysis has helped to build up a picture to help understand demand and support resource allocation and the outcome from this analysis has been balanced against the need to prioritise workloads across the whole service, as opposed to the previous contractually driven model. This is essential in order to achieve a more agile and responsive approach that balances development, maintenance, and operational activities moving forward. The decision has therefore been taken to set a more realistic target moving forward (of 85%) that is based on recent trends and service capacity. • A system upgrade has temporarily impacted on the master citizen record (MCR) figures as at the 2022/23 year-end. The MCR is a list of citizens that the council has a relationship with, it identifies these customers across back-office systems to ensure that citizens get access to their own unique contact record when accessing digital services. This process is supported through a MyAccount verification. MyAccount is a free and secure sign-in service, providing a username and password to allow access to online digital services in North Lanarkshire and across Scotland. The work required to upgrade Multivue (which is the system that provides a single view of the citizen, i.e. the MCR, which is often known as the golden record) meant the connections to CRM Dynamics (the system which creates the contact record when MyAccounts are set up) had to be temporarily suspended to update configurations between the systems. This has temporarily impacted on the work that is undertaken between CRM Dynamics and Multivue routinely throughout the year in order to verify existing, and new, citizen records and ensure the golden record remains up to date and all personal data is accurate, current, and complies with data protection legislation. Once the connections between the systems are switched back on and the verification work can be brought up to date, the performance figures for the master citizen record (MCR) will be able to be updated accordingly. • The complaints handling ratio has been under review to ensure that the council remains 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. However, the implementation of the new Dynamics complaints system, combined with a significant increase in the volume of complaints recorded, had impacted on the figures shown for 2021/22 when the ratio had dropped to 8 out of every 10 complaints. To delve deeper into the way complaints were being handled and the impact this was having on the ratio, a workshop with the cross council Complaints Working Group (which involves those responsible for co-ordinating complaints within their service) considered performance of complaints handling, as well as what was working well in terms of the process, what was not working well, and possible solutions. A number of areas for improvement were identified (such as training and awareness raising, maintaining consistency in complaints handling, and ensuring a common understanding of implementing the local authority model Complaints Handling Procedure in practice and the use of the Dynamics system) and an improvement plan has been developed for implementation by the Complaints Working Group during 2023/24. Report title Summary SPF - Latest performance results for Finance September 2023 Finance has 27 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. 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. Page 64 of 176
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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. • Reserves - total useable reserves as a % of council annual budgeted net revenue. • Reserves - uncommitted General Fund Balance as a % of council annual budgeted net revenue. • Affordability - ratio of Financing Costs to Net Revenue Stream. • Affordability - ratio of Financing Costs to Net Revenue Stream, Housing Revenue Account. • Annual budget - actual outturn as a percentage of budgeted expenditure. In context The Finance restructure implemented from April 2022 aimed to support greater resilience and effectiveness which has helped the service improve performance across a number of areas. However, during 2023/24 the service continues to experience increasing demand for services such as Scottish Welfare Fund and other benefit applications as the cost of living crisis continues. Balanced Performance highlights: • The service continues to demonstrate positive trends across several cost measures, including improvements in the cost of the closure of the annual accounts, the cost of collecting council tax, and cost per case for housing benefits and council tax reduction. These improvements are largely as a result of the service’s ability to absorb additional demand. • For council tax collection, 2022/23 witnessed the highest percentage of income collection in year across the five-year period. However, this can largely be attributable to the Scottish Government’s Cost of Living Award payment during 2022/23. Areas of performance requiring improvement: • The % of invoices paid within 30 calendar days of receipt shows a 2022/23 figure of 76% compared to 84.2% in the prior financial year. The service area has seen a significant surge in demand following the insourcing of Culture and Leisure NL and had to commit resources to support improvements to purchase to pay processes, electronic invoicing, and payment cards. During the early part of 2023/24 the Creditors function is processing invoices received within three working days. This follows the service restructure in April 2022 which provided greater capacity and resilience within the team. The service continues to work with administrators and authorisers across the council to reduce the time taken for invoices to reach the Creditors team for processing. Report title Summary Page 65 of 176
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SPF - Latest performance results for Legal and Democratic September 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. 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. In context The service continues to review and implement efficiencies in service delivery, for example, in front-facing areas such as Licensing and Registration where there is a requirement to deal expeditiously and effectively in appropriately managing customer expectations. Balanced Performance highlights: • Notwithstanding the continuing high performance in the processing of Freedom of Information requests and in the work undertaken by the Registration Service, which are both assessed by national regulators in terms of the quality of service provision, and reported to committee on an annual basis, these will continue to be monitored so as to ensure that each service area achieves the best possible performance outcomes. • Where service (in areas such as the administration of placing request appeal hearings) continue to achieve their optimum target year on year then consideration will be given as to whether these indicators should continue to be reported, in terms of the provision of meaningful performance information. Areas of performance requiring improvement: • The reason for the red status in respect of the increased cost per hour for legal services is due to a combination of increased staffing costs (due to national collective bargaining) together with the associated on-costs and the filling of a number of vacancies leading to an increase in the number of chargeable hours. • With regards to the hours spent providing legal services, this figure was revised following a reduction in sickness absence leading to an increase in the overall staff time recorded. As these are factors outwith the control of the service, consideration will need to be given to an adjustment of the targets so that these are reflective of the actual position going forward. Report title Summary SPF - Latest performance results for Assets and Procurement September 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. Page 66 of 176
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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. 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: Inspection indicators: • Procurement assessment score - procurement and commercial improvement programme (PCIP). In context • Assets and Procurement continue to streamline office accommodation and support management teams as they continue to adopt more agile and hybrid modes of operation. • The hub programme continues to experience significant cost increases linked to global and national influences and, given the size and scale of spend linked to this programme, any increases are significant. • The service continues to lead on the implementation of a number of national policy initiatives including full roll out of universal free school meals, for P6/P7, ensuring compliance with The Nutritional Standards for Food and Drink in Schools (Scotland) Regulations (2020) for school meals, and climate change duties and prepare for the potential deposit return scheme which has been delayed at a national level. • The council has a largely decentralised procurement model, in which the Corporate Procurement Team (CPT) provide the strategic governance through GCSOs (General Contract Standing Orders) and provide professional expertise through officers that lead or support Regulated procurement activity. The CPT continue to be responsible for consolidating the council’s Annual Procurement Report (which is a legislative requirement), managing the council’s contract register of external expenditure, and providing organisational procurement reporting. The overall procurement function of the council is assessed every couple of years by a third party agency through procurement capability assessments (known as the PCIP) for which the CPT is leading an internal procurement improvement plan. The next PCIP is anticipated in 2024. Balanced Performance highlights: • Within the area of corporate procurement, the service continues to ensure 100% performance in areas such as ensuring those contracts which exceed £1m include community benefit requirements, and ensuring all qualifying contracts are awarded to those who meet fair work criteria. In addition, the service is exceeding targets around the percentage of contracts that are awarded to SMEs. • Since the last report, Newmains and St Brigid’s Community Hub was signed off on 6th February 2023 and opened on 20th February 2023. The Hub has been awarded the following: Scottish Design Awards - Best Education Building 2023, and Scottish Design Awards - Grand Prix Best Architecture Project 2023. It is Page 67 of 176
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also currently shortlisted for the following: Herald Property Awards - Best Commercial Project 2023, Learning Places Scotland Awards - Inspiring Learning Spaces, and Learning Places Scotland Awards - Pupil/Student Experience. • Riverbank Community Hub was signed off on 11th August 2023 and opened on 18th August 2023. Areas of performance requiring improvement: • Within procurement two measures have fallen short of the expected target range: firstly the performance was below target in spend made through collaborative established agreements, and secondly below target in the percentage of procurement spend with SMEs. It should be noted that there will always be natural fluctuation in year on year percentages across measures due to the council’s contracting profile with situational needs. It is anticipated the measures will have improvement in future years and track back towards a stable position, particularly in the post pandemic environment as supply chains recover and stabilise. • The two indicators linked to occupancy levels in schools were reported in the last update in March 2023. As these are annual indicators, the results linked to these and the associated commentary have not changed since the last update - in essence, while the service continues to look for other uses for under occupied schools, it is preferred that any given school is under capacity than over capacity. • In relation to free school meal update, performance is lower than the agreed target. There are various factors which influence this, including the slow transition back to a new normal following the pandemic (where pupils were operating bubbles in the school meal service), and the changes to The Nutritional Standards for Food and Drink in Schools (Scotland) Regulations (2020), which has impacted on the frequency of what would be considered children’s favourite dishes being served on the menu due to the stricter changes in the nutritional elements with the new regulations. Report title Summary SPF - Latest performance results for People Resources September 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. 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. In context The council continues to operate in a challenging context with respect to absence rates in terms of the continued impact of the pandemic on both short-term absence rates and long-term absence due to delays in medical treatment. Balanced Performance highlights: • Despite the fact that the council’s overall absence is lower than the Scottish average and very favourable in terms of comparator local authorities, there has been significant deterioration in rates of short-term absence over the last two quarters of 2022/23. Page 68 of 176
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• It is understood that this trend has been seen elsewhere (for example with NHS Lanarkshire reporting a similar trend in absence in the first half of 2022/23). • It is thought that there is a clear link with reported spikes in coronavirus rates, with many individuals no longer testing and an associated increase in staff reporting short-term sick with flu like and other abdominal and gastric ailments. This effect has been so pronounced that abdominal and gastric has now become the third most frequent reason for short-term absence. • Despite ongoing concern, the council has seen a slightly improving trend for teacher absence in the last 12 months, with the council’s relative positioning in the Local Government Benchmarking Framework (LGBF) improving to the highest level seen for the last 3 years. Despite this, the council remains well below the Scottish average and poor in comparison to peer local authorities. Areas of performance requiring improvement: • Due to the increased short-term sickness issues highlighted above, all performance indicators for sickness absence currently remain above the council’s target of 9.86 days for 2022/23. Work will continue across the services to bring this level back to target in the next quarter. • Teachers’ absence remains of concern and a specific action plan to significantly improve absence in this area has been agreed between the Education and Families service and People Resources. This will include the implementation of a revised teachers absence policy and approach which is more aligned to the approach implemented for non-teaching employees, which has been very successful in reducing overall rates of absence. Report title Summary SPF - Latest performance results for Strategic Communication and Engagement August 2023 Strategic Communication and Engagement has 7 indicators in the Strategic Performance Framework in relation to its three primary divisions (Corporate Communications, Community Partnership, and the Customer Service Hub). With respect to the remit of the Communities Committee, performance is reported for measures around improving engagement with, and improving capacity of, communities, as well as community involvement in decision-making and helping to facilitate a North Lanarkshire-wide approach to asset rationalisation. Aligned Priority: • All priorities. Ambition statement: • All ambition statements. 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: Community engagement indicators: • Community engagement - number of groups engaged with outwith the CAT process. • Local services - % of adults agreeing that they can influence decisions affecting their local area. • Local services - % of adults who wish greater involvement in decisions affecting their local area. • MyAccount - average number of active users. In context The service continues to develop as an integrated service which came together in its current form in 2022. Some challenges, such as unanticipated work within Community Partnership to play a significant role in the council’s cost of living response and the reprofiling of the Digital NL programme, have impacted on planned operations. Balanced Performance highlights: • A significant part of the council's strategy relies on the ability of residents to self-serve online, accessing a range of services through the council website. A MyAccount is required to do so effectively, and the latest data shows a continued increase in the number of people with a MyAccount due to more services being made available online and the success of the It’s Quicker to Click campaign. Page 69 of 176
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Areas of performance requiring improvement: • The number of active community asset transfers is below the target and is lower than in previous years. However, it should be noted that discussions with community groups about community use of assets often lead to other positive outcomes for use of assets where community asset transfer is not always the most appropriate outcome for a group. It is considered likely that the council’s continued rationalisation of its assets will result in more requests for community asset transfer over the medium term. Notwithstanding this, the community partnership team will continue to engage with community groups to encourage community use of assets and will run further community asset transfer awareness sessions with elected members and community boards during 2023/24 to encourage more dialogue about the process. Page 70 of 176
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Appendix 2 (2) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. Report title Summary Scottish Housing Regulator - Annual Assurance Statement 2022/23 August 2023 The Scottish Housing Regulator was empowered by the Housing Scotland Act 2010 and has, since April 2013, possessed statutory powers to monitor, assess, report, and intervene (as appropriate) based on the performance of any Social Landlord in Scotland. Since April 2019, Social Landlords in Scotland have a statutory annual obligation to produce an Annual Assurance Statement relating to the previous financial year (by 31 October each year). The council has adopted a process whereby the statement requires to be presented to Committee and is signed by the Convener of Housing prior to submission to the Regulator. These statements are published for each landlord making them readily available to all tenants. Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 1. Ensure a housing mix that supports social inclusion and economic growth. Consistent The service requires to comply with the regulatory requirements set out in Chapters 3 and 5 of the Scottish Housing Regulator Framework. To ensure that compliance is met the service has appropriate and effective mechanisms in place to support the signing of the Annual Assurance Statement each year. These processes and actions continue to be maintained, monitored, reviewed, and updated if required on a regular and ongoing basis. Transparent The full Annual Assurance Statement is attached to the report. To fulfil Scottish Housing Regulator requirements, the service manage and monitor a comprehensive portfolio of control checks and review mechanisms. In addition, an evidence base is held (including items such as base and formulated performance data (with full worked examples of performance measures), procedural guides, process maps, completed audit reports, and copies of reports submitted to council committees) - this comprehensive evidence base is set out in the August 2023 report to the Housing Committee. In context The North Lanarkshire Council Annual Assurance Statement for 2023 advises that the council: • Complies with all the regulatory requirements set out in section 3 of the Regulatory Framework. • Achieve all the standards and outcomes in the Scottish Social Housing Charter for tenants, people who are homeless, and others who use council services. • Complies with all legal obligations relating to housing and homelessness, equality and human rights, and tenant and resident safety. Balanced The Scottish Housing Regulator has advised that legally the council must notify them during the year of any material changes to the assurance in the Annual Assurance Statement, including any areas of non-compliance. The report to the Housing Committee in August 2023 advises there are no areas of non-compliance to report for 2022/23. Report title Summary Economic Regeneration Delivery Plan (ERDP) performance framework - annual update 2022/23 September 2023 This report provides an update on the progress being made towards the implementation and delivery of North Lanarkshire’s Economic Regeneration Delivery Plan (ERDP) and associated Action Plan. The Economic Regeneration Delivery Plan (ERDP) was initially approved at Committee in August 2019, covering the period 2019-23. A light- touch refreshed ERDP, covering the period 2023-28, was then approved at Committee in February 2023. The Action Plan is updated annually, and the progress report details activity as at the 2022/23 year end. The report also presents the latest ERDP Performance Framework update which is used to monitor wider ERDP performance over the short, medium, and longer term (through to 2035). Unlike the ERDP Action Plan, figures within the Performance Framework are reported on a cumulative basis to show the progress against the longer-term ambitions of the ERDP. Page 71 of 176
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Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 1. Ensure a housing mix that supports social inclusion and economic growth. 2. Refocus our town centres and communities to be multi-functional connected places which maximise social, economic, and environmental opportunities. 3. Maximise the use of our marketable land and assets through improved development in business and industrial infrastructure. 4. Market and promote North Lanarkshire as the place to live, learn, work, invest, and visit. 5. Grow and improve the sustainability and diversity of North Lanarkshire’s economy. Consistent • Since 2019, an Action Plan to support the delivery of the ERDP through a range of key measures and investment programmes has been produced and approved each year by committee. The Action Plan sets the priorities for the financial year ahead, reflecting progress made to date and the evolving priorities of the council. • The 2022/23 Action Plan was approved at Committee in February 2022 and the current 2023/24 ERDP Action Plan was approved in February 2023. • An accompanying ERDP Performance Framework was approved at Committee in February 2021. Transparent • The report has a dedicated section that summarises the performance review that has been undertaken on the latest data and highlights recent achievements. • An appendix to the report provides an update on all ERDP Action Plan objectives and targets achieved during 2022/23. In context • The ERDP Performance Framework sets out the context within which it operates in that it comprises a set of performance indicators at three levels. • These indicators aim to collectively provide an overview of performance that helps the council to understand the impact of its work on improving economic opportunities and outcomes for all. It also enables performance issues against the ERDPs key priorities to be identified and addressed, mitigating the risk of delivery failure. • Given the shared ambition set out within The Plan for North Lanarkshire, the ERDP Performance Framework is closely aligned to the corporate Strategic Performance Framework. • The ERDP Performance Framework is kept under regular review to ensure arrangements remain effective and aligned to future versions of the ERDP and The Plan for North Lanarkshire. Balanced The report advises that good progress continues to be made against the ERDPs key objectives with highlights during 2022/23 including: • The delivery of an additional 152 new affordable homes via the New Supply Programme, taking completions to 1,646 by 31 March 2023. • 11 low carbon (net zero) homes at Dykehead Road, Airdrie which were completed and handed over to the council to support the ambition to ensure local homes are sustainable and fit for purpose. • Town Action Plans have been subject to public consultation and are nearing completion for the towns of Airdrie, Motherwell, and Wishaw. • £9.225m was secured from the UK Government’s Levelling Up Fund to support the delivery of the Town Vision for Cumbernauld, including the acquisition of The Centre Cumbernauld (completed in June 2023). • Registered Social Landlords (RSLs) delivered 291 units at town centre developments (including edge of town). • Fusion Assets enabled the delivery of 47,500 square feet new business and industrial workspace at Link Park, Newhouse (plot A2) through a development agreement. • Significant progress was made on the delivery of City Deal projects, such as the Ravenscraig Access infrastructure and the West Coast Mainline crossing (the rail bridge was installed at Ravenscraig in April 2023). • Commsworld has delivered 162,000 metres of fibre infrastructure and will complete the fibre rollout by November 2023. The report also highlights significant progress in improving economic opportunities and outcomes for North Lanarkshire’s residents and businesses. Highlights achieved under the first ERDP included: • 630 homes brought into council ownership via the Open Market Purchase Scheme, including some homes previously sold under the Right to Buy. • Over £73m invested in town centre (including edge of town) developments, of which around £32m was secured via external funding sources. • Town Visions created for all eight North Lanarkshire towns, with each town scheduled to have an accompanying Town Action Plan in place by early Page 72 of 176
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2024/25. • 1,663 new affordable town centre homes completed (including edge of town sites) by the council and housing associations. This includes developments across most towns with completed sites including Caledonian Avenue (Bellshill), Berryhill Road (Cumbernauld), 95 Main Street (Kilsyth), and Roberts Street (Wishaw) amongst others. • 117,410 square feet of business and industrial workspace created or refurbished as a result of investment by the council, Fusion Assets, and North Lanarkshire Properties. • £42.34m invested in key road infrastructure projects funded via the council and the Glasgow City Region City Deal. Report title Summary Tackling poverty - annual report 2022/23 August 2023 This report provides details of the income maximisation work carried out by the Tackling Poverty Team and council services during 2022/23 as well as the additional benefit income for the residents of North Lanarkshire. It also highlights the activity of the external services commissioned by the council under the commissioning model which started in April 2018. The report also focuses in particular on the key area of income from welfare benefits and therefore updates on the continued programme of welfare reform and its impact, including on the introduction of benefits devolved and now provided through Social Security Scotland as well as the challenges which the council, partners, and local communities are predicted to face over the next three to four years. Aligned Priority: • Improve the health and wellbeing of our communities. Ambition statement: 11. Increase economic opportunities for adults by understanding, identifying, and addressing the causes of poverty and deprivation and barriers to financial inclusion. Consistent • The council is the largest local authority landlord in Scotland with circa 36,315 houses. In addition, the local Registered Social Landlord sector owns and manages approximately 9,000 properties. • The report estimates that around 58.5% of social tenants are in receipt of Housing Benefit (57.3% in the council housing sector). Early intervention with income maximisation assists in the prevention of rent arrears and the sustainability of tenancies. Housing advisors provide basic information and advice to vulnerable tenants and homeless people, concentrating on housing benefit to ensure people can pay their rent. They receive welfare rights training and are supported by Welfare Rights Officers from the Tackling Poverty Team. Transparent • The report provides a very detailed overview of performance in all the key areas of service delivery - income maximisation, appeals, debt advice, training, external services, the impact of legislative / policy changes, and information in terms of the Scottish Social Security Agency and devolved benefits and assistance in terms of the cost of living. In context • The report sets out the context in terms of legacy issues from the pandemic alongside the impact of the cost-of-living crisis which are considered to have impacted disproportionately on the most vulnerable in driving poverty and inequalities in communities and bringing the importance of income maximisation and wider work to tackle poverty into sharp focus, highlighting the impact of low paid and insecure work in particular. • The report also sets out the context in terms of local approaches to tackling poverty and reducing inequality in North Lanarkshire, which continue to be driven by the Towards a Fairer North Lanarkshire Tackling Poverty Strategy with activity focused on the key drivers of poverty. Balanced The report lists the key highlights for 2022/23 which include the following: • Housing services generating £15,041,770 in benefits for 4,007 new and existing tenants, making 6,663 claims for benefits of which 4,542 were claims for Housing Benefit (including Supported Accommodation), Discretionary Housing Benefit, and Council Tax Reduction Scheme (which is a direct income for the council and in the longer term contributes to the sustainability of tenancies). • The Tackling Poverty Team, together with Social Work, completing 18,521 Benefit Checks and generating income to local residents of £17,930,624, with additional financial gains of £97,294, (benefits, charities, and energy suppliers, etc.) generated via council Debt Advisors. • An update on the MacMillan Lanarkshire Advice Service which is provided by the council and provides home visits, telephone interviews, office visits, Page 73 of 176
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and surgeries in local hospitals. During 2022/23, there were 700 referrals to the service, of which 387 were for DS1500/BASRiS cases (relating to those coping with terminal illness). It should be noted that this is a reduction from previous years, due mainly to cancer services pausing due to the impact of the pandemic, nonetheless £2,410,332 of income was generated for those residents referred affected by cancer. Report title Summary Procurement - annual report 2022/23 September 2023 As per the Procurement Reform (Scotland) Act 2014, the council is required to prepare an Annual Procurement Report on all regulated procurement activity as soon as reasonably practicable after the end of each financial year. The latest report to Committee in September 2023, provides the Annual Procurement Report covering the council’s procurement activity during financial year 2022/23. The Annual Procurement Report also provides a summary of performance against the council’s Procurement Strategy 2022/23, which was approved at Committee in November 2021. The legislation requires that the council publish the Annual Procurement Report on the Internet (https://www.northlanarkshire.gov.uk/business/procurement/key-procurement-documents) and share it with Scottish Ministers. Aligned Priority: • All priorities. Ambition statement: • All ambition statements. Consistent The Annual Procurement Report is required to be produced in accordance with legislation and specific guidance. The report specifically specifies the areas which the legislation requires the council to report on: • As legislated through the Procurement Reform (Scotland) Act 2014, the council is required to prepare an annual procurement report on all regulated procurement activity as soon as reasonably practicable after the end of that financial year. Regulated Procurements are those above £50,000 for supplies or services, and above £2,000,000 for works. • The legislation requires the council to ensure that its regulated procurements are carried out in accordance with its procurement strategy. • The Act requires the council’s annual procurement report to include: - A summary of the regulated procurements that have been completed in the previous financial year. - A review of whether those procurements complied with the council’s procurement strategy. - Where any regulated procurements did not comply, a statement of how the council intends to ensure that future regulated procurements do comply. - A summary of any community benefits fulfilled from regulated procurements. - A summary of any steps taken to facilitate the involvement of supported businesses in regulated procurements. - A summary of the regulated procurements the council expects to commence in the next two financial years. - Such other information as the Scottish Ministers may by order specify. • National guidance in the form of a procurement policy note, SPPN 2/2023, was published in May 2023; this provides an Annual Procurement Report template designed to assist public bodies meet their reporting obligations from the Act and to gather data in a consistent way; this guidance applies to the annual procurement reports for 2022/23 and 2023/24. Transparent • The legislation requires that the council publish the annual procurement report and notifies Scottish Ministers. This is important as Scottish Ministers must prepare a report on procurement activity in Scotland, based on information contained in annual procurement reports. • Scottish Ministers are required to publish their report and lay a copy before the Scottish Parliament. • The legislation also requires Scottish Ministers to publish guidance for the consistent data gathering and preparation of annual procurement reports and procurement strategies. In context • The introduction in the appendix to the annual report sets the context in that the council: - Is responsible for the delivery of a wide and diverse range of statutory and discretionary public services. - Delivers services through a mixed economy acting as both a provider, through direct provision of services using its own workforce and assets, and an enabler with services delivered through private contractors, the third sector and supported businesses. - Spent £547m during 2022/23 (excluding VAT) on goods, services and works to carry out council operations and delivery of public services. Page 74 of 176
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Balanced • The appendix to the report provides a detailed account of the council’s procurement activities for 2022/23 in line with the national guidance. It provides a summary in terms of regulated procurement activity for 2022/23, compliance with procurement strategy, community benefits, supported businesses, and regulated procurements expected in 2023/24 and 2024/25. • It also sets out the procurement outcomes in detail for the year; these are articulated through a large bank of performance indicators which clearly identify the outcome for the year. • Two additional annexes to the report provide detailed information on regulated procurements completed and planned. Report title Summary Scottish Roadworks Commissioner - annual performance 2022/23 August 2023 The Scottish Road Works Commissioner oversees improvements to the planning, coordination, and quality of road works by both local authorities and statutory undertakers in Scotland. The Council has a duty, under section 118(1) of the New Roads and Street Works Act 1991, to co-ordinate the execution of works of all kinds in roads for which it is responsible. This report presents details of the Scottish Road Works Commissioner’s Performance Review in relation to road works undertaken by the council during 2022/23. Aligned Priority: • Improve the health and wellbeing of our communities. Ambition statement: 17. Ensure we keep our environment clean, safe, and attractive. Consistent The report is produced in line with the requirements of the Commissioner who monitors performance and promotes and encourages good practice across both utility companies and all roads’ authorities. The Commissioner also has powers to impose financial penalties on roads authorities who systematically fail in their duty to co-ordinate, and upon statutory undertakers who systematically fail to co-operate when undertaking road works. Transparent The report sets out the requirement that all works undertaken within the Public Road in Scotland require to be noticed in accordance with the conditions and timescales as set out in the New Roads and Street Works Act 1991 and associated Codes of Practice. All works must be recorded on the Scottish Road Works Register (Aurora). Any proposed works entered onto the Aurora system without the requisite information, or outwith the prescribed timescales (both prior to and after the works are undertaken) will incur a noticing failure. The report also notes that the Office of the Scottish Roadworks Commissioner issues annual performance review letters to all works promoters in Scotland. Any organisation that fails to meet the identified performance figures may be required to meet with representatives from the Commissioner’s office to discuss the figures in greater detail. In context The report sets out the context in terms of the responsibility for the day-to-day management and co-ordination of works undertaken on roads which is as follows: • North Lanarkshire Council, as the roads authority, has a duty to co-ordinate all road works carried out on any road for which they are responsible. • The reinstatement of road surfaces remains the responsibility of the party undertaking the works. The roads authority has powers to inspect road works to ensure that statutory undertakers (typically utility companies) fulfil their obligations. • Traffic management at road works (cones, signs, and barriers) is the responsibility of the party undertaking the works. • The roads authority is responsible for any decisions related to the repair and maintenance of their roads. Balanced • The report advises that performance levels in recent years have generally been to a high standard. In 2019/20 the Commissioners report stated that in relation to works planning and operational functions, “North Lanarkshire’s performance sets an example to other roads authorities”. • The Commissioners 2020/21 report took cognisance of the disruption across the industry caused by the onset of the pandemic. North Lanarkshire’s general performance was recorded as satisfactory with a requirement to deliver greater consistency and focus. It was noted that there was an administrative failure in following the Commissioner’s guidance to undertake emergency works only at the onset of the pandemic. While the council complied with the spirit of this guidance and focused on the wellbeing of staff, the service failed to update a descriptive field in the notices for around 50% of the emergency works that were undertaken. This has subsequently been addressed. Page 75 of 176
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• Performance in 2021/22 was recorded as well managed with no improvement action identified. • Performance in 2022/23 is summarised as “overall, the road works performance of North Lanarkshire Council was well-managed during 2022/23. This continues the good management from the 2021/22 reporting year and I acknowledge your continuing commitment.” • One minor improvement action was highlighted in 2022/23 in relation to the consistency of submission of quarterly updates to the National Street Gazetteer. This is required to ensure that the most current and accurate information is available to stakeholders using the Scottish Road Works Register. This will be addressed going forward. • The report also contains an in-depth analysis of the council’s performance in terms of noticing failures, works stated and completed, overrunning works, fixed penalty notices issued to statutory undertakers, and sample inspections undertaken on statutory undertakers works. • The Commissioner introduced further minor changes to the defect noticing regime on 1 April 2023, aimed at enabling more effective monitoring and governance of remedial works on reinstatements and apparatus. Internal training has been undertaken to enable compliance. • The report also highlights the council’s role in public utility works. Report title Summary Business regulation/food law - annual plan and performance August 2023 All local authority regulators of food law and occupational health and safety law must plan their enforcement and advisory activities and, in accordance with independent auditor preference, present that plan before a relevant committee for its approval. The report provides a summary of the service plan for the council’s Business Regulation service which fulfils the council’s obligations relevant to food and health and safety law. Aligned Priority: • Improve the health and wellbeing of our communities. Ambition statement: 14. Ensure the highest standards of public protection. Consistent The service is required, in accordance with legislation, to prepare an annual plan which clearly maps out specific aims and objectives for the financial year. Transparent • Food Standards Scotland advocates that transparency is best achieved by seeking and obtaining the approval of elected members; this is achieved through due consideration of the annual report at a committee of the council each year. • Food Standards Scotland is independent of national government and has the primary objective of protecting the health and other interests of consumers in relation to all food issues. • The Health and Safety Executive’s (HSEs) National Local Authority Enforcement Code requires the council to be accountable to the public and businesses for their actions; this is achieved by publication of the annual Service Plan. In context • The report sets out the context within which the service operates in North Lanarkshire - in this respect the Business Regulation Service is a subset of Protective Services and is responsible for the delivery of the statutory enforcement and advisory service for: - Food law in all food establishments within North Lanarkshire. - Occupational health and safety law in those premises within North Lanarkshire for which they have an enforcement role (health and safety enforcement within premises being split between local authorities and the Health and Safety Executive (HSE) depending on the nature of the business. Balanced • The report sets out the performance targets for the year and the Service Plan in the accompanying appendix details resources and targets for inspections and interventions in respect of food law, including: - Achieving a target of at least 75% of all programmed food law inspections within agreed timeframes. This is an increase on last years’ target which was set at 70%. - Ensuring at least 80% of food business operators’ premises achieve a Pass status in accordance with the national Food Hygiene Information Scheme (FHIS). This is an increase on last years’ target which was set at 70%. Page 76 of 176
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- Commence investigation of 90% of food complaints within 2 working days of receipt. - Maintain a target of at least 94% of infectious disease cases being responded to in accordance with the NHS Lanarkshire Epidemiological Investigation Protocol. - Respond to at least 93% of high-risk requests for assistance/advice within 2 working days of receipt. - Respond to at least 93% of low-risk requests for assistance/advice within 5 working days of receipt. • The annual Service Plan in the accompanying appendix, sets out the detailed delivery aspects of the service as well as latest demand volumes and performance. Report title Summary Community Learning and Development - activity for 2022/23 September 2023 This report provides an overview on progress in relation to community learning and development activity for the year 2022/23. This includes both universal and targeted work with an emphasis on engagement with vulnerable people living in the lowest 20% data zones in Scotland and other vulnerable groups as reflected within the revised national self-evaluation framework for community learning and development. 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. Consistent • The report sets out the role of community learning and development activity in relation to the council’s new Programme of Work for 2023 to 2028 as it will be key to delivery of many of the actions. • The annual activity report also reflects the Community Learning and Development Action Plan for 2022-25 (https://www.northlanarkshire.gov.uk/sites/default/files/2023-04/CLD%20action%20plan%202022%20-%2025%20%28Accessible%29.pdf) and provides further details on the local objectives and actions that support both the Programme of Work and work with community learning and development partners through the North Lanarkshire Partnership Plan 2021-24 (https://www.northlanarkshire.gov.uk/sites/default/files/2022- 04/North%20Lanarkshire%20CLD%20Partnership%20Plan%202021-24_.pdf) . • The new Community Learning and Development Action Plan for 2022-25 has merged the previous Adult Learning, Family Learning, Youth Work ,and Recovery plans into one community learning and development action plan to ensure a connected and cohesive approach to delivery. Transparent The report clearly highlights the outcomes for the year 2022/23 against a specified list of community learning and development reportable indicators. In context • The report provides the context the service is operating in following the impact of the pandemic. It reports that the pandemic had a significant impact on individuals, families, communities, and local services across North Lanarkshire. Community learning and development staff responded to these issues quickly by targeting resources at those most in need and developing alternative personalised support where traditional centre-based provision was affected by pandemic restrictions. - Since the relaxation of pandemic regulations, the number of unique learners engaging with community learning and development has continued to increase for the past two years in a row. - The reintroduction of traditional learning activities alongside newly established methods of working (such as virtual group sessions and online learning) has seen yet another increase of distinct young people (aged 8-15) and adults (aged 16 and over) being supported by community learning and development. - Although the performance indicator for children (0-7 years) has only recently been introduced, this too shows a large increase from the initial baseline set last year. Balanced • The covering report provides an extensive volume of performance information in relation to key areas of service - engagement in community learning and development programmes, adult learning and resettlement, family learning, youth work, and health and wellbeing. The published annual report in the appendix provides an even more substantial volume of performance information, together with feedback from service users, an update on the action Page 77 of 176
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plan, and achievements from cross cutting areas of work. • A wide range of indicators used by the service assist in assessing impact alongside qualitative information such as feedback from learners and partners. In addition to this process of self-evaluation, community learning and development provision is also subject to The Requirements for Community Learning and Development (Scotland) Regulations 2013 and associated guidance for local authorities. The improvement of outcomes and the demonstration of positive impact is captured through the How Good Is Our Community Learning & Development? (4th Version) evaluation framework from Education Scotland. HM Inspectors evaluate and report on the quality of community learning and development provision across all local authorities in Scotland through local inspection and progress visits. The next round of visits by HM inspectors is due to take place from September 2023 onwards. Report title Summary Community Asset Transfer and Participation Requests - annual report 2022/23 August 2023 This report provides an annual progress update regarding Community Asset Transfer (CAT) and Participation Requests (PR) in North Lanarkshire. This demonstrates the council’s compliance with the Community Empowerment (Scotland) Act 2015 which came into force in July 2015. The Act requires local authorities to engage with communities and the voluntary sector to deliver effective services in partnership to meet local need. Community Asset Transfer is covered under part 5 of the Act and Participation Request requests are covered under Part 3 of the Act. Aligned Priority: • Enhance participation, capacity, and empowerment across our communities. Ambition statement: 19. Improve engagement with communities and develop their capacity to help themselves. Consistent The report has been prepared in line with the legislative requirements set out in Parts 3 and 5 of the Community Empowerment (Scotland) Act 2015, requiring relevant authorities to publish an annual report setting out the number of requests received and the outcome of these. Transparent A summary of this report is published and made available online to communities (https://www.northlanarkshire.gov.uk/your-community/working- communities/community-asset-transfer-and-participation-requests/community-asset-transfer). In context • The report sets out the context within which the service is required to operate in relation to legislation. • The council’s corporate Community Ownership and Management working group oversees delivery of the processes and is responsible for setting implementation priorities for this part of council business. • To date there has been a focus on ensuring that the council’s processes reflect the requirement to: - Empower community bodies through the ownership of land and buildings and strengthening their voices in the decisions that matter to them. - Focus on achieving outcomes and improving the process of community planning through community participation. - Implement, and continue to review, the Community Asset Transfer and Participation Requests policy and process approved by Committee in April 2020 reflecting The Plan for North Lanarkshire and other national guidance. • The focus for all enquiries is to secure the best outcome for all parties. It is important to note that some enquiries will be withdrawn, some will lead to formal CAT applications being submitted, and some enquiries will be resolved through other means, such as commercial leases or alternative management agreements. It should also be noted that discussions with community groups about community use of assets often lead to other positive outcomes for use of assets where community asset transfer is not always the most appropriate outcome for a group. • The report also sets the context in terms of participation requests which are a way for people to have their say about what improvements they would like to see made to public services they use. This is outlined in Part 3 of the Community Empowerment (Scotland) Act (2015). By making a participation request, a community body, or a group of people can start a discussion with the council about how to improve services. This may be as simple as a focused discussion or may be about negotiating and agreeing for the community body to assume responsibility for making improvements within their local community. • The council must agree to the request or give a good reason why not. If the request is granted, the community body will be invited to participate in an outcome improvement process. This formal process will determine the finer details of any involvement or improvement work. It is envisaged that the Page 78 of 176
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process will lead to an improvement in the way a service is delivered or improve outcomes for local communities and local people. Balanced • The report provides an update on Community Asset Transfers, including in relation to the volume of enquiries and submissions as well as engagement and support to organisations and groups at the different stages of the process. It also sets out the key highlights since the last annual report. • The report also provides an update on Participation Requests, including in relation to the volume of enquiries and requests. It also sets out the key highlights since the last annual report. • Information is also provided in terms of community capacity building to provide support and ensure that organisations understand the empowerment focussed processes and they are able to access vital information, guidance, and advice at the same time, as well as corresponding promotional activities to raise awareness of the various participation and empowerment tools and approaches linked to Community Asset Transfers and Participation Requests. Report title Summary ALEOs six monthly governance and risk management oversight and assurance report September 2023 This report provides an overview of the arm’s length external organisations (ALEOs) landscape and the performance and financial monitoring safeguards that are in place to provide such assurance. The report confirms that ALEO Boards and Management Committees continue to demonstrate effective stewardship, financial governance, and risk management. Aligned Priority: • Improve North Lanarkshire's resource base. Ambition statement: 22. Facilitate a North Lanarkshire wide approach to asset rationalisation, including with communities and partners. 25. Ensure intelligent use of data and information to support fully evidence based decision making and future planning. Consistent This six-monthly report is a key component of the ALEO governance arrangements, providing Audit and Scrutiny Panel members with a status update on the current ALEO landscape and oversight of existing monitoring arrangements to ensure that these remain proportionate and sufficiently robust. Transparent The report highlights that the council has long-standing experience in service delivery via ALEOs and the associated review, performance monitoring, and oversight arrangements have developed over time to reflect accounting standards and Accounts Commission guidance, recommendations, and best practice. In context • The report sets out the context in terms of the council delivering a number of services through arm’s length external organisations (ALEOs) which have been developed over the past 20 years to provide services in new ways that are innovative, responsive, or more commercially driven. The council must have confidence in the quality of service delivery and obtain assurances (through robust monitoring, scrutiny, and oversight) that the public purse continues to secure best value and the externalised delivery arrangements are not exposing the council to potential operational, financial, or reputational risks. • In recent years the number of council owned ALEOs has reduced following service review activity, or external factors, which highlighted that service provision via the externalised delivery vehicles no longer represented best value for the council. As such, the council has taken separate decisions to either insource service delivery or cease provision and this report provides an update on the status of current dissolution activity within Culture and Leisure NL Ltd, NL Leisure Ltd, and North Lanarkshire Municipal Bank Ltd. • The report also summarises current refinancing activity within North Lanarkshire Properties LLP to secure future borrowing on the most advantageous terms for the company and outlines potential changes that may be brought forward to the Articles of Association in both Routes to Work Ltd and Fusion Assets Ltd. Balanced • The report summarises the current ALEO landscape and provides further information on each ALEO, including council officers and members appointed to the various Boards and Management Committees. It also updates on ALEO review activity, as well as Statutory Bodies, Associates, and Joint Page 79 of 176
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Ventures. • The report has sections dedicated to providing an update in terms of performance monitoring and financial monitoring, as well as an overall assurance assessment. Report title Summary LOIP performance report - October 2022 to March 2023 August 2023 This report provides a snapshot of progress linked to key priorities for each of the nine Local Outcome Improvement Plans (LOIPs) for the period from 1st October 2022 to 31st March 2023. The report also provides an overview of progress with implementation of the Management and Monitoring Framework and work to develop the role of the Local Partnership Teams. Aligned Priority: • Enhance participation, capacity, and empowerment across our communities. Ambition statement: 19. Improve engagement with communities and develop their capacity to help themselves. Consistent • The report advises that the LOIP Management and Monitoring Framework was launched in June 2022 as a tool for partners to highlight and report on progress with local action linked to LOIP priorities. The tool also aims to assist with reporting progress and outcomes around LOIP priorities to a range of audiences including the Community Boards, the Communities Committee, the North Lanarkshire Partnership Strategic Leadership Board, and individual partnership agency leadership teams as appropriate. • The Framework is intended to streamline reporting, ensure consistency, and allow partners to focus on critical issues or significant developments. • The success of the Management and Monitoring Framework does not rest with one agency or an individual officer. All Local Partnership Team members share a collective responsibility for ensuring that the Framework is regularly updated and that there is adequate monitoring and scrutiny of progress and performance at each Local Partnership Team meeting. Transparent The report advises that a detailed annual report, which provided updated progress on each of the LOIP priorities for each area, was presented to the nine Community Boards at their May/June 2023 meetings and covered the full year from April 2022 to March 2023. In context • The report sets out the context within which the Management and Monitoring Framework was developed, i.e. in support of the North Lanarkshire Partnership Strategic Leadership Board’s Framework for Demonstrating Improved Outcomes for Communities, a LOIP Management and Monitoring Framework was developed and implemented to ensure effective management, oversight, and reporting of progress on LOIP priorities by Community Planning Partners through the Local Partnership Teams. • Local Partnership Teams were established to drive and embed delivery of the LOIPs across the Community Planning Partnership and ensure effective monitoring and management of progress. Balanced • The report is accompanied by nine appendices which set out detailed information for each LOIP in terms of priorities, progress and highlights, and planned actions and developments; this information is based on input from partner organisations. • The report notes that Community Planning Partners are committed to the approach outlined and significant progress has been made, but it recognises that individual priorities are at different stages of development and delivery reflecting the needs and diversity of different Community Board areas. In this respect, it is anticipated that the quality of information and reports generated will evolve over time as the reporting systems mature. Officers and communities are encouraged to ensure that the approach evolves to reflect local need and circumstances. • The report also notes some emerging themes as a focus for development across all the nine LOIPs including, this includes: - Reviewing and refining some actions and reporting associated with LOIP priorities to reflect current need. - Updating the scope for specific priorities in some areas that originally focused on recovery from the pandemic and town and community visions. - Widening and strengthening membership and participation of communities, and community and voluntary organisations, in delivery of LOIP priorities through subgroups and other mechanisms. - Continuing work to align local and strategic priorities and ensure that local delivery reflects the wider strategic direction but can be delivered in a way Page 80 of 176
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that responds to local need (i.e. mental health, tackling poverty, community safety). - Continuing to develop the role of Community Boards as a key catalyst and the local governance for delivery of LOIP priorities, and ensuring agendas and associated activity reflects the local and strategic priorities and ambitions for North Lanarkshire. Report title Summary Social Work - annual quality assurance report 2022/23 September 2023 The role of quality assurance in social work covers a range of functions and facilitates the delivery of high-quality services through effective business planning, maintaining quality standards, and quality monitoring information. Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 24. Review and design services around people, communities, and shared resources. Consistent A commitment is in place to provide an annual report on activity carried out in the preceding year. Transparent The activities reported in the annual report reflects the commitment to a creative and dynamic approach that helps reduce resource barriers and promotes good outcomes for people. Priorities are directed towards the Scottish Government’s nine national health and wellbeing outcomes, and the ambitions of The Plan for North Lanarkshire and the Strategic Commissioning Plan. In context • The report comprises the detailed annual report in the appendix which provides the context within which quality assurance operates in social work. This recognises that quality assurance has a wide and varied function including monitoring and evaluating key aspects of social work practice and performance. A central activity is the ongoing contract monitoring of external social care providers. • The current operating environment is complex and sharing of best practice and solution focused ideas are integral to ensure the people of North Lanarkshire receive good quality support to help meet their outcomes. The Quality Assurance team work collaboratively with internal Health and Social Care Partnership colleagues and with external stakeholders to ensure the delivery of services that are underpinned by human rights, inclusion, achieving potential, choice, and control. Balanced • The report updates on all areas of work including contracts and contract management, regulatory activity, procurement, complaints, duty of candour, information governance, communications, adult support and protection, in house monitoring, participation and engagement, carer developments, and risk management. • The report contains a significant volume of data to support the performance update and highlights areas of good practice as well as areas requiring improvement and remedial action implemented. Report title Summary Treasury Management - annual activity report 2022/23 September 2023 This report fulfils the key requirements of the council’s reporting procedures for Treasury Management in accordance with the CIPFA Code of Practice on Treasury Management and the CIPFA Prudential Code for Capital Finance in Local Authorities in that it: • Outlines the treasury management activity undertaken during 2022/23 and the resulting impact on the council’s borrowing and investment strategy. • Reports on the council’s performance in complying with the mandatory prudential indicators. • Provides a detailed summary of the council’s performance, making reference to those targets and prudential indicators set at the start of the year within the approved strategy. Aligned Priority: • Improve North Lanarkshire's resource base. Page 81 of 176
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Ambition statement: 25. Ensure intelligent use of data and information to support fully evidence based decision making and future planning. Consistent The council’s treasury activities are strictly regulated by statutory requirements and a professional code of practice. Revised editions of the CIPFA Prudential Code and CIPFA Treasury Management Code of Practice were issued in December 2021. In accordance with the council’s financial regulations, the council adopts the fully revised CIPFA Treasury Management in the Public Services Code of Practice including the key principles and the Treasury Management Policy statement. Transparent • Within the council, the Audit and Scrutiny Panel ensures the effective scrutiny of the treasury management strategy and policies, while the Finance and Resources Committee remains responsible for the development of the Strategy, its implementation and monitoring. The council also promotes Elected Members’ responsibility in this area, requiring greater member scrutiny of treasury management activity. • The Code of Practice requires the council to produce reports on its Treasury Management policies, practices, and activities, including (as a minimum) an annual strategic plan at the beginning of the financial year, a mid-year review, followed by an annual report on the measurement of success at the year-end. To ensure compliance with the Code of Practice, Treasury Management procedures are continually reviewed with any amendments reported to Committee as appropriate. • Prudential arrangements and treasury management performance information is also submitted to Committee on a quarterly basis. In context The context is set out in the detailed annual activity report in the appendix, this advises that Treasury Management deals with the borrowing and investment activity of the council and is an integral part of the council’s Financial Strategy. It seeks to ensure that both capital borrowing requirements and day to day revenue transactions are fully funded. Its importance has increased as a result of the additional freedoms provided by the Prudential Code. Balanced • The report advises that the council has adopted the CIPFA Code of Practice in Treasury Management and operates its treasury services to mitigate the effect of possible risk in this function, while undertaking borrowing and investment activities that are prudent, affordable and sustainable. • The Code of Practice requires the council to produce reports on its Treasury Management policies, practices, and activities on a regular and ongoing basis. This includes the preparation of an annual activity report providing a detailed summary of the council’s performance, making reference to those targets, limits and indicators set at the start of the year within the approved strategy. • In accordance with the council’s Treasury Management policy, the report focuses on activities undertaken during the year in the following key areas - external borrowing, interest rates, interest payments, debt maturity profile, sources of borrowing, debt rescheduling, temporary investments, leasing, compliance with the Prudential Code, regulatory framework, risk, and performance. Report title Summary Revenue and benefits update September 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. 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 Page 82 of 176
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the qualifying conditions for receipt of such. Balanced The report provides a high level summary of the highlights which include: • As at 30 June 2023, 28.89% of council tax due for 2023/24 had been collected. This is a decrease of 5.34% on the same period last financial year linked to the cost of living award of £150 received by many households during 2022/23. • Non-Domestic Rates collection has shown a year-on-year increase from 16.32% to 30 June 2022 to 20.65% to 30 June 2023. • The service continues to meet statutory timescales for administering benefits applications and changes of circumstance. 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) September 2023 This report presents the council’s revenue monitoring position for the General Fund Account, Housing Revenue Account, and Adult Health and Social Care. 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 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 September 2023 report states that the current economic climate and pay and non- pay inflation continuing at historically high levels are some of the key factors that have the potential to impact on 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) September 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. 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. Page 83 of 176
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The September 2023 report provides an update on the 2023/24 resources and expenditure for the council's Strategic Capital Investment Programme. The report also shows the 2023/24 projected outturn position and the resultant variances. 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 2023/24 to 2025/26 approved in March 2023. 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 September 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 2023/24 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 September 2023 This report provides an update on the achievement of the three-year financial savings targets and progress in implementing one-off investment priorities. 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 This report provides an update on the achievement of the three-year financial savings total of £15.143m approved as part of the 2023/24 budget setting process (£7.486m 2023/24, £4.047m 2024/25 and £3.610m 2025/26) and advises savings projected to be delivered within the financial year with replacement savings identified to fully address the shortfall. A summary of the approved savings 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 service 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 84 of 176
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref KA/ASP/Nov23 Date 20/11/23 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. Ken Adamson, Chief Officer (Audit and Risk) The Plan for North Lanarkshire Priority: All priorities Ambition statement: All ambition statements Programme of Work: Statutory / corporate / service requirement Item 5 Page 85 of 176
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Appendix 1 Audit and risk related items: Outstanding action log. Meeting Requests or agreed action Status September 2023 1. Request further clarification from the Chief Officer (Audit and Risk) of the impact on the completion of the 23-24 Internal Audit Plan of higher- than-expected sickness absence within the Internal Audit team. Complete – Relevant commentary, including details of how planned audit assignments will be prioritised in line with available resources is included in the Internal Audit progress report tabled as a separate agenda item for this meeting. 2. Request a further report be brought back by management to a future meeting on progress implementing outstanding actions identified by Internal Audit follow-up work in relation to finalisation of risk documentation for corporate risk – Target Operating Model. Complete – Relevant commentary is included in the Risk Management update report and the Internal Audit follow-up report tabled as separate agenda items for this meeting. 3. Request a further report be brought back by management to a future meeting on progress implementing outstanding actions identified by Internal Audit follow-up work in relation to the implementation of quality assurance processes to monitor compliance with Project Management framework. In progress – Relevant commentary is included in the Internal Audit report following up on previously agreed actions. A recent report to CMT set out detailed timelines for the actions necessary to implement outstanding actions. Agreed actions will be reported on, as they fall due, in line with Internal Audit’s arrangements for reporting on follow-up. May 2023 4. Request a report be brought back by management to a future meeting on progress implementing agreed actions in relation to audit recommendations in the Internal Audit reports ‘Payments to staff - overtime and travel and subsistence’. Not yet due – whilst some actions are now complete other 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. 5. Request a further report be brought back by management to a future meeting on progress implementing outstanding actions identified by Internal Audit follow-up work in relation to risk management. Superseded - subsequent commentary included in previous Internal Audit follow-up reports and outstanding action addressed at Point 2 above. 6. Request a further report be brought back by management to a future meeting on outstanding actions identified by Internal Audit follow-up work in relation to managing strategic change. Not yet due – revised 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. 7. Request a further report be brought back by management to a future meeting on outstanding actions identified by Internal Audit follow-up work in relation to ‘Employee Service Centre – key controls’. Not yet due – revised 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. An interim update will be obtained by Internal Audit in Spring 2024 and reported to the Panel. Page 86 of 176
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Appendix 1 Audit and risk related items: Outstanding action log. Meeting Requests or agreed action Status September 2022 8. 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 – revised timescales for agreed actions have been agreed with the Service to reflect significant staffing changes within the corporate resilience team; 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. Page 87 of 176
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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/Nov23 Date 20/11/23 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 August 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 paper in line with best professional practice and the approved Internal Audit Charter and associated reporting protocol. The 2023-24 Annual Plan was approved by the Audit and Scrutiny Panel in May 2023. 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 Programme of Work Statutory / corporate / service requirement Item 6 Page 89 of 176
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1. Background 1.1 The 2023-24 Annual Plan was approved by the Audit and Scrutiny Panel in May 2023. 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 August. These outputs were included in the 2022-2023 Internal Audit Plan. Work is currently underway on other assignments included in the 2023-24 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 (regularity): Additional or non- standard payments Reasonable assurance (Green-Amber) 2. Petty cash imprests Reasonable assurance (Green-Amber) 3 School excursions Limited assurance (Amber-Red) 4 Investigation: School C – School Fund N/A 5 Climate change Reasonable assurance (Green-Amber) 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 Enterprise Project, management of the housing capital programme, treasury management and council tax . Once finalised, these reports will be submitted to future meetings 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 90 of 176
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2.6 One of the four substantive non-investigation reports being reported in the period is assessed as providing only limited assurance, while the remaining three reports provided more positive levels of assurance. All four reports contain a range of improvement actions and audit recommendations. 2.7 Our report, Payments to staff (regularity): Additional or non-standard payments, was designed to provide assurance on whether additional non-standard payments (additional payments made outwith basic pay) to employees are correctly calculated, in accordance with contractual entitlement, supported by adequate documentation and properly authorised. 2.8 Based on the results of our work, we were satisfied that current controls are generally operating effectively and that claims for additional non-standard payments appeared legitimate and were generally correctly calculated, supported by adequate documentation and appropriately reviewed and authorised. 2.9 We have therefore, categorised this audit as providing ‘reasonable assurance’ meaning that there is generally a sound system of governance, risk management and control in place, although some errors and/or areas for improvement have been identified. This included a need to review the element codes within iTrent to ensure that they remain valid and that users clearly understand their purpose, and scope to improve the recording of current employees who also undertake additional casual roles and the processing of casual worker payments. Management has responded positively to the report and satisfactory management responses and commitments to planned actions have been received. 2.10 Our report on Petty cash imprests was designed to provide assurance on the adequacy and effectiveness of the Council’s management arrangements for ensuring that petty cash imprest accounts are managed in accordance with the Council’s Imprest Guidance and that relevant expenditure/claims are correctly calculated, supported by adequate documentation and are properly authorised. 2.11 Based on the results of our work, we were pleased to note that staff responsible for operating imprest accounts were generally aware of the guidance notes and claims were generally correctly calculated and properly authorised. However, we consider that some imprest accounts are open to risk, given the value of imprest amounts, the type of expenses being claimed and, in some instances, the lack of adequate, legible documentation to support some of the expenses incurred. 2.12 We have categorised this audit as offering ‘reasonable assurance’ as overall the operational arrangements are considered satisfactory, however, there is scope for improvement, particularly in the monitoring and review of expenses. We have made several recommendations including a need to undertake a review of whether imprest accounts and cash floats held by Services are required and/or appropriate and action to address some significant requirements detailed in the Imprest Guidance Notes which are not being fully complied with. Management has responded positively to the report and satisfactory management responses and commitments to planned actions have been received. 2.13 Our work on School excursions was designed to seek to provide assurance that the Council has adequate, robust and effective arrangements in place for the management and oversight of school trips/excursions. This followed on from a request from Education and Families to formally review the circumstances surrounding the arrangements for a specific school trip at School C. A review of the adequacy and effectiveness of the administration and use of school funds at School C was the subject of a separate exercise undertaken by Internal Audit for which a report was issued in August 2023 (see paras 2.23-2.28 below). Page 91 of 176
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2.14 Based on the results of our work, we are satisfied that there appears generally good awareness of the current policy and the need to comply with it. Although no significant issues were encountered in respect of the conduct of the trips reviewed by Internal Audit, the areas of non-compliance identified could potentially expose such trips to the risk of significant and detrimental impacts if all relevant required aspects are not fully considered, addressed and appropriately authorised before a trip commences. We have therefore categorised this audit as offering ‘limited assurance’. 2.15 We identified several areas for improvement including that current guidance/procedures are significantly out-of-date, are not always being fully complied with and management needs to ensure that these are reviewed and updated, clearly setting out expected practice. There is thereafter a need for a mechanism to be implemented to enable Education and Families HQ to monitor the extent of the schools’ compliance with expected arrangements surrounding school trips/excursions. We also highlighted significant deviations from recognised good practice in the financial management of school trips at two schools. Satisfactory management responses and commitments to planned actions have been received in response to the audit recommendations. 2.16 Our work on Climate Change was designed to review progress made by the Council in reducing carbon emissions and to assess the adequacy and effectiveness of current management arrangements relating to climate change. This report is currently in draft format awaiting management comments and responses to audit recommendations and will be finalised accordingly prior to this report being submitted to the Panel. 2.17 Based on the results of our work, we have assessed this audit as offering ‘reasonable assurance’. We last audited this issue in 2020, when we raised some issues and recommendations around the Council’s governance arrangements for responding to climate change, including on target setting and performance reporting. We are pleased to note that the Council can demonstrate ongoing satisfactory actions in response to these previous recommendations. We are also satisfied that the Council’s ACT 2030 Climate Plan is aligned with the Council’s Plan for North Lanarkshire and the Council has continued to progress actions to reduce carbon emissions and to comply with its statutory responsibility to complete and submit an annual Climate report. 2.18 The Council continues to reduce its’ emissions from the baseline year of 2015/16. A recent report to the Environment and Climate Change committee in February 2023, highlighted 2021/22 emissions had been reduced to 46.4% of 2015/16 levels. Further expected reductions to 52.2% are expected by 2025/26. Significant actions will however still be required to deliver the required further reductions if the Council’s commitment to net zero is to be realised and there is a recognition that many of the ‘quick wins’ have already been taken. 2.19 Notwithstanding this progress to date however, it is clear that the commitment to net zero by 2030 was, and remains, hugely ambitious and that delivering this appears to Internal Audit unachievable given a number of relevant challenges facing the Council. Most significantly these include the difficulty of identifying, planning, financing and progressing in such a short timescale the range of actions likely to be required to achieve net zero by 2030. There remain significant challenges around the cost and affordability of any such actions and their inclusion in relevant financial revenue and capital plans at a time where the Council’s overall finances are under significant pressure. 2.20 We have therefore raised a number of issues which we consider management require to address. These are detailed at Section 3 of the report and include that the current Climate Plan (ACT 2030) needs to be supported by a detailed route map of planned actions designed to achieve net zero/deliver the Council’s climate change commitments. This should include realistic overall targets/milestones for the journey to net zero. The detailed route-map should be regularly updated and include information on expected individual project/action timescales, costs and other resource requirements. Page 92 of 176
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2.21 We have also commented that the recently revised governance arrangements for climate change need to be kept under review to ensure they are effective in progressing the delivery of actions designed to achieve the Council’s climate change commitments and allowing effective oversight of progress by senior management and elected members. 2.22 Finally we commented that climate change needs to be more effectively embedded into the Council’s decision-making processes. Given the challenge presented by delivering net zero, the Council needs to be consistently considering the potential carbon impacts of all decisions more explicitly as part of its decision-making processes. Satisfactory management responses and commitments to planned actions have been received in response to the audit recommendations contained within the report. Commentary on completed unplanned ‘non-core’ Internal Audit work 2.23 There is one investigation report arising from areas of unplanned or ‘non-core’ work undertaken by Internal Audit in the period that requires to be reported to the Panel in accordance with the Internal Audit reporting protocol. This report was prepared in response to a request from Education and Families for a formal review of the circumstances surrounding the arrangements for a school trip at School C following receipt of a request for a large cash withdrawal to facilitate the payment of various expenditure items for a school trip which suggested that expected practice for school trips may not being complied with. 2.24 There have been a number of previous instances where Internal Audit have been requested by the Service to review the use and management of school funds following concerns raised and/or suspected potential irregularities. Following these reviews, recommendations were made to the Service with a view to improving the current arrangements within education establishments and introducing regular reviews/spot checks on school funds by Education and Families HQ to obtain confirmation that the school funds were being operated in line with expected procedures. These recommendations are actively being taken forward by the Service and, consequently, similar relevant issues have not been raised in this report. 2.25 Internal Audit visited the school 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, how school trips/excursions are organised and the record keeping arrangements in place for both the school fund and school trips/excursions. 2.26 We have concluded that the school was not following the Council’s Educational Establishment Fund Procedures and did not have adequate processes in place for recording or reconciling income and expenditure pertaining to the school fund. There was also a lack of oversight and involvement in the management of the school fund by the Senior Management Team at the school. We did not identify any instance of misappropriation of school funds but concluded that current arrangements within the school were significantly deficient and that immediate actions were required to urgently improve the control environment to safeguard both relevant monies and the staff involved in administering them. We are pleased to note, however, that immediately following our visit and prior to the publication of the audit report, senior management at the school took steps to improve the administration and oversight of the school fund. 2.27 We also identified that, while the necessary records and documentation have been completed and retained for the specific school trip that was the subject of our review, the financial arrangements for this trip differed significantly from expected practice. Although all relevant income and expenditure had been fully accounted for, the payment mechanisms used for this trip deviated from what would normally be expected which created an increased risk of monies being lost, stolen, or misappropriated. 2.28 Subsequent to this report, a separate exercise was undertaken by Internal Audit on wider compliance with the Council’s Educational Excursions and Outdoor Activities Policy across the school estate and was the subject of the separate report referred to above. Page 93 of 176
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Other Matters – Internal Audit Performance 2.29 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. 2.30 The first is about the implementation of agreed actions arising from Internal Audit reports by the implementation date. Progress in implementing agreed actions is monitored and reported separately to the Panel each cycle. 36% of agreed actions have been implemented by the agreed implementation date in the period to September 2023 (was 38% in the previous update). Following concerns expressed by the Panel at the September meeting about this relatively low percentage, all Chief Officers have been informed of the Panel’s concerns and reminded of the need to ensure that agreed actions are progressed in line with agreed timescales. More commentary in respect of this issue is included in the ‘Follow-up’ report included as a separate agenda item. 2.31 The second performance indicator is about client satisfaction and reflects provides the results of four key questions we ask audit clients at the conclusion of each audit assignment. Results presented in the Annual Internal Audit report to the June meeting of the Panel showed generally positive feedback on the work of Internal Audit with most respondents agreeing that Internal Audit added value by assisting in providing assurance, and that reports were relevant and constructive with findings clearly and accurately communicated. As only a small number of responses have been received in this period, this data will be carried forward and reported in more detail in the next update. 2.32 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. 2.33 Finally, the Panel will be aware that one of the key annual performance indicators for the function is the percentage of the Internal Audit Plan (the Plan) completed each year, with a target of 90% set for this indicator. 2.34 In my last update to the Panel in August I informed the Panel that performance against this indicator was likely to be impacted in 2023-24 by some current long-term sickness absence within the team and that consequently, some planned work would require to be delayed, postponed or cancelled. I committed then to update the Panel more fully on the impacts and decisions about how audits within the Plan will be prioritised as part of the next progress report in November. 2.35 The long-term sickness absence has continued during the period covered by this report and the cumulative impact of higher-than-expected staff absences is that a number of planned audit assignments will no longer be able to be undertaken. In determining which audit assignments to progress and which may require to be cancelled or postponed, priority will be given to those assignments which provide core support for the annual opinion I am required to provide, and those planned audits in areas of greatest perceived risk and/or where there are external requirements and/or expectations that specific work will be undertaken. We will also consider the extent to which alternative sources of assurance are available for areas of planned audit coverage. 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 94 of 176
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4. Supporting documentation Appendix 1 Summary of Internal Audit assignments completed in the period Appendix 2 Audit gradings Ken Adamson, Chief Officer (Audit and Risk) Page 95 of 176
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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 ☒ 5.11 Childrens rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ Page 96 of 176
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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 (regularity): Additional or non-standard payments Internal Audit Opinion: Reasonable assurance (Green-Amber) Audit recommendations: High 0 Medium 2 Low 1 This audit was a regularity review designed to provide independent assurance on whether additional non-standard payments (additional payments made outwith basic pay) to employees are correctly calculated, in accordance with contractual entitlement, supported by adequate documentation and properly authorised. Substantive testing was undertaken on a sample of additional non-standard payments made to 56 employees from across all Council Services. Based on the results of our work, we are satisfied that current controls are generally operating effectively and that claims for additional non-standard payments appeared legitimate and were generally correctly calculated, supported by adequate documentation and appropriately reviewed and authorised. We have therefore, categorised this audit as providing ‘reasonable assurance’ meaning that there is generally a sound system of governance, risk management and control in place, although some errors and/or areas for improvement have been identified. The issues which we consider management require to address are detailed in section 3 of this report and include: • there is a need to review the element codes within iTrent to ensure that they remain valid and that users clearly understand their purpose; and • there is scope to improve the recording of current employees who also undertake additional casual roles and the processing of casual worker payments. It is important to note that although a positive audit opinion has been provided for the objectives reviewed in this exercise, we have in recent years, raised a number of issues where controls in relation to different aspects of payments to staff were deemed inadequate or were not operating as intended. Management have responded positively to previous audit reports on these issues and have committed to progressing relevant actions in response to audit recommendations, with work to implement these currently ongoing. Progress against previous audit recommendations is followed-up and reported quarterly to the Audit and Scrutiny Panel. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 97 of 176
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 2 Petty cash imprests Internal Audit Opinion: Reasonable assurance (Green-Amber) Audit recommendations: High 0 Medium 3 Low 0 The purpose of this audit was to provide assurance on the adequacy and effectiveness of the Council’s management arrangements for ensuring that petty cash imprest accounts are managed in accordance with the Council’s Imprest Guidance and that expenditure/claims are correctly calculated, supported by adequate documentation and are properly authorised. An imprest account, also known as a petty cash account, is a fixed amount of money which is advanced to a location for the purchase of low value and/or ad hoc expenses. This arrangement is designed to supplement, but not replace, the Council’s standard method of making purchases or claiming expenses. Examples of relevant expenditure includes reimbursement for postages, fares for pupils/clients, ad hoc provisions such as food for Breakfast Clubs, and where immediate payments are required for other miscellaneous small expenses. At the end 2022/23, the Council had 68 education establishments operating imprest accounts with imprests totalling £14,650, 56 non-education establishments with imprest amounts totalling £96,125 and 31 establishments with cash floats totalling £13,330. During 2022/23, imprest claims totalling £287,086 were submitted and reimbursed. Based on the results of our work, we were pleased to note that staff responsible for operating imprest accounts were generally aware of the guidance notes and claims were generally correctly calculated and properly authorised. However, we consider that some imprest accounts are open to risk, given the value of imprest amounts, the type of expenses being claimed and, in some instances, the lack of adequate, legible documentation to support some of the expenses incurred. We have therefore, categorised this audit as offering ‘reasonable assurance’ as the operational arrangements are considered satisfactory, however, there is scope for improvement, particularly in the monitoring and review of expenses. As such, we have made a number of recommendations for management consideration. These are detailed in section 3 of this report and include: • there is a need to review and update Individual pupil’s school meals accounts to reflect refunds made; • There is a need to undertake a review of whether imprest accounts and cash floats held by Services are required and/or appropriate; and • Some significant requirements detailed in the Imprest Guidance Notes are not being fully complied with. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 98 of 176
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 3 School excursions Internal Audit Opinion: Limited assurance (Amber-Red) Audit recommendations: High 2 Medium 0 Low 0 The purpose of this audit was to seek to provide assurance that the Council has adequate, robust and effective arrangements in place for the management and oversight of school trips/excursions. This followed on from a request from Education and Families to formally review the circumstances surrounding the arrangements for a specific school trip at School C. A review of the adequacy and effectiveness of the administration and use of school funds at School C was the subject of a separate exercise undertaken by Internal Audit for which a report was issued in August 2023. This review involved assessing the adequacy and reasonableness of the Council’s existing school excursion/trip policy and how the Service obtain assurance that schools are complying with this. Our work included a review of the existing policy against current good practice contained in ‘Going Out There’, the Scottish Government framework for educational excursions. We also undertook a range of checks on a sample of school trips across the school estate to assess the extent of compliance with the current policy. Based on the results of our work, we are satisfied that there appears generally good awareness of the current policy and the need to comply with it. Although no significant issues were encountered in respect of the conduct of the trips reviewed by Internal Audit, the areas of non- compliance identified could however potentially expose such trips to the risk of significant detrimental impacts if all relevant required aspects are not fully considered, actioned and appropriately authorised before a trip commences. We have therefore categorised this audit as offering ‘limited assurance’ meaning we consider that there are significant gaps, weaknesses and/or non-compliance in the control environment which need to be addressed. As such, we have identified several areas for improvement which are detailed at Section 3 of this report, and which include: • Current guidance/procedures are significantly out-of-date, are not always being fully complied with and management needs to ensure that these are reviewed and updated, clearly setting out expected practice. There is thereafter a need for a mechanism to be implemented to enable Education and Families HQ to monitor the extent of the schools’ compliance with expected arrangements surrounding school trips/excursions; and • Significant deviations from recognised good practice in the financial management of school trips were identified at two schools. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 99 of 176
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 4 Investigation - School C school fund Internal Audit Opinion: N/A Audit recommendations: High 1 Medium 1 Low 0 The purpose of this audit was to respond to a request from Education and Families for a formal review of the circumstances surrounding the arrangements for a school trip at School C following receipt of a request for a large cash withdrawal to facilitate the payment of various expenditure items for a school trip which suggested that expected practice for school trips may not being complied with. As part of this exercise, a review of the adequacy and effectiveness of the administration and use of school funds at School C was also undertaken. A separate exercise is being undertaken by Internal Audit on wider compliance with the Council’s Educational Excursions and Outdoor Activities Policy across the school estate and is the subject of a separate report. There have been a number of recent previous instances where Internal Audit have been requested by the Service to review the use and management of school funds following concerns raised and/or suspected potential irregularities. Following these reviews, recommendations were made to the Service with a view to improving the current arrangements within education establishments and introducing regular reviews/spot checks on school funds by Education and Families HQ to obtain confirmation that the school funds were being operated in line with expected procedures. These recommendations are currently being taken forward by the Service and, as such, similar relevant issues have not been raised in this report. Internal Audit visited the school on several occasions and met with the Acting Head Teacher and Depute Head Teacher 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, how school trips/excursions are organised and the record keeping arrangements in place for both the school fund and school trips/excursions. Our findings and conclusions arising from this work are detailed in Sections 3 and 4 of this report. We have concluded that the school was not following the Council’s Educational Establishment Fund Procedures and did not have adequate processes in place for recording or reconciling income and expenditure pertaining to the school fund. There was also a lack of oversight and involvement in the management of the school fund by the Senior Management Team at the school. We consider the current arrangements within the school to be significantly deficient and that immediate actions were required to urgently improve the control environment to safeguard both relevant monies and the staff involved in administering them. Recommendations are detailed at Section 5. Although we did not identify any instance of misappropriation of school funds, given the issues identified, we were unable to give positive assurance that there has not been any such misappropriation. We were pleased to note, however, that following our visits, school senior management at the school have already taken steps to improve the administration and oversight of the school fund. We also identified that, while the necessary records and documentation have been completed and retained for the specific school trip that was the subject of our review, the financial arrangements for this trip differed significantly from expected practice. From a review of the records for this trip, we confirmed that the relevant income and expenditure has been fully accounted for. However, we consider the payment mechanisms used for this trip deviated from what would normally be expected and to have created an increased risk of monies being lost, stolen, or misappropriated. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 100 of 176
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 5 Climate Change Internal Audit Opinion: Reasonable assurance (Green-Amber) Audit recommendations: High 1 Medium 2 Low 1 The purpose of this audit was to review progress made by the Council in reducing carbon emissions and to assess the adequacy and effectiveness of current management arrangements relating to climate change. The Council continues to reduce its’ emissions from the baseline year of 2015/16. A recent report to the Environment and Climate Change committee in February 2023, highlighted 2021/22 emissions had been reduced to 46.4% of 2015/16 levels. Further expected reductions to 52.2% are expected by 2025/26. Significant actions will however still be required to deliver the required further reductions if the Council’s commitment to net zero is to be realised and there is a recognition that many of the ‘quick wins’ have already been taken. Based on the results of our work, we have assessed this audit as offering ‘reasonable assurance’. We last audited this issue in 2020, when we raised some issues and recommendations around the Council’s governance arrangements for responding to climate change, including on target setting and performance reporting. We are pleased to note that the Council can demonstrate ongoing satisfactory actions in response to these previous recommendations. We are also satisfied that the Council’s ACT 2030 Climate Plan is aligned with the Council’s Plan for North Lanarkshire and the Council has continued to progress actions to reduce carbon emissions and to comply with its statutory responsibility to complete and submit an annual Climate report. Notwithstanding this progress to date however, it is clear that the commitment to net zero by 2030 was, and remains, hugely ambitious and that delivering this appears to Internal Audit unachievable given a number of relevant challenges facing the Council. Most significantly these include the difficulty of identifying, planning, financing and progressing in such a short timescale the range of actions likely to be required to achieve net zero by 2030. There remain significant challenges around the cost and affordability of any such actions and their inclusion in relevant financial revenue and capital plans at a time where the Council’s overall finances are under significant pressure. We have therefore raised a number of issues which we consider management require to address. These are detailed at Section 3 of the report and include: • The current Climate Plan (ACT 2030) needs to be supported by a detailed route map of planned actions designed to achieve net zero/deliver the Council’s climate change commitments. This should include realistic overall targets/milestones for the journey to net zero. The detailed route-map should be regularly updated and include information on expected individual project/action timescales, costs and other resource requirements. • The recently revised governance arrangements for climate change need to be kept under review to ensure they are effective in progressing the delivery of actions designed to achieve the Council’s climate change commitments and allowing effective oversight of progress by senior management and elected members. • Climate change needs to be more effectively embedded into the Council’s decision- making processes. Given the challenge presented by delivering net zero, the Council needs to be consistently considering the potential carbon impacts of all decisions more explicitly as part of its decision-making processes. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 101 of 176
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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 102 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0350.2024.001 - Payments to Staff Regularity - Additional Non-Standard Payments/A - FINDINGS AND REPORT/A6a 20231011 Non-Standard Payments Final Report v1.0 as issued.docx 1 INTERNAL AUDIT REPORT PAYMENTS TO STAFF (REGULARITY): ADDITIONAL NON-STANDARD PAYMENTS Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Appendix 2: Payment codes included in testing Appendix 3: Errors identified during substantive testing Issued to: Chief Officer (People Resources) and Chief Officer (Education - South) (point 2(1) only) Copied to: Chief Executive and Depute Chief Executive Headlines This audit was a regularity review designed to provide independent assurance on whether additional non- standard payments (additional payments made outwith basic pay) to employees are correctly calculated, in accordance with contractual entitlement, supported by adequate documentation and properly authorised. Substantive testing was undertaken on a sample of additional non-standard payments (see Appendix 2) made to 56 employees from across all Council Services. Based on the results of our work, we are satisfied that current controls are generally operating effectively and that claims for additional non-standard payments appeared legitimate and were generally correctly calculated, supported by adequate documentation and appropriately reviewed and authorised. We have therefore, categorised this audit as providing ‘reasonable assurance’ meaning that there is generally a sound system of governance, risk management and control in place, although some errors and/or areas for improvement have been identified. The issues which we consider management require to address are detailed in section 3 of this report and include: • there is a need to review the element codes within iTrent to ensure that they remain valid and that users clearly understand their purpose; and • there is scope to improve the recording of current employees who also undertake additional casual roles and the processing of casual worker payments. It is important to note that although a positive audit opinion has been provided for the objectives reviewed in this exercise, we have in recent years, raised a number of issues where controls in relation to different aspects of payments to staff were deemed inadequate or were not operating as intended. Management have responded positively to previous audit reports on these issues and have committed to progressing relevant actions in response to audit recommendations, with work to implement these currently ongoing. Progress against previous audit recommendations is followed-up and reported quarterly to the Audit and Scrutiny Panel. 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 0350/2024/001 Date issued 11/10/23 Audit Team Lesley Armstrong, Paula Hendry and Hugh Shevlin Page 104 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0350.2024.001 - Payments to Staff Regularity - Additional Non-Standard Payments/A - FINDINGS AND REPORT/A6a 20231011 Non-Standard Payments Final Report v1.0 as issued.docx 2 1. Executive Summary Objectives This audit was a regularity review designed to provide independent assurance that non-standard payments to employees are correctly calculated, in accordance with contractual entitlement and supported by adequate and properly authorised documentation. The audit involved substantive testing of relevant controls based on a sample of additional or non-standard payments made to 56 employees (51 payments and five deductions), from across all Council Services, during the period October 2022 to April 2023. Non-standard payments relate to any payment code that is not basic or sick pay. In addition, as specific audit exercises regarding supply teacher payments, overtime and travel and subsistence have recently been completed these were excluded from this review. We also excluded standing non-core hours payments that staff are contractually entitled to based on their work pattern, as we have previously undertaken work and identified a specific issue with these payments that is now being progressed by People Resources in conjunction with Legal Services. The types of payments included in this review are detailed at Appendix 2 for information. 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 2 1 Key areas requiring management action (High) No areas requiring urgent management action has been identified. Good practice identified We noted the following areas of good practice during the audit: • the Council has well-established rules and guidance covering both entitlement to, and the processing of, additional non-standard payments to staff; • proforma templates for claiming additional non-standard payments are held on mySelf, providing a standardised approach to submitting claim information; • payment rates for most non-standard payments are contained within iTrent system parameters and are automatically calculated by the system; and • the Council operates a comprehensive system of delegated control through an authorised signatory database which clearly outlines the types/categories and values of transactions which authorised signatories may approve. Other areas for improvement (Medium) Some other areas for improvement were also identified: • there is a need to review the element codes within iTrent to ensure that they remain valid and that users clearly understand their purpose; and • there is scope to improve the recording of current employees in casual roles and processing of casual worker payments. Page 105 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0350.2024.001 - Payments to Staff Regularity - Additional Non-Standard Payments/A - FINDINGS AND REPORT/A6a 20231011 Non-Standard Payments Final Report v1.0 as issued.docx 3 3. Action Plan Payments to Staff Regularity – Additional Non-Standard Payments 0350/2024/001 Ref Finding 1 There is a need to review the element codes within iTrent to ensure that they remain valid and that users clearly understand their purpose. Non-core payments can either be claimed by way of a manual paper-based process through completion and authorisation of a timesheet which is thereafter input to iTrent by an admin support team or completion of an electronic claim form directly by employees on the Employee Self Service Portal ‘mySelf’ with subsequent authorisation by managers on the iTrent system (via the ‘myTeam’ portal accessible by Managers). When inputting claims directly into mySelf, employees are required to select, from a drop-down menu, the claim template which is relevant to their role and an element code, which describes the type of payment and determines how the payment will be calculated, and record, the date, reason for the claim, start and finish time, cost code and number of hours. After claims which have been directly input into mySelf have been authorised, iTrent uses system parameters to calculate the payment due based on the element code selected and the hours/value claimed. Given the diverse nature of the Council’s workforce and the comprehensive and often complex terms and conditions that the Council has, there are many different element codes used by different services for different reasons. To assist with the sample selection for substantive testing, we obtained a report detailing the element codes available on iTrent which contained 286 payment codes, of which less than half (133) had been used in the latest payrun (at the time of testing). Whilst different claim templates generally contain different element codes for selection, we noted that some templates contain a large number of element codes, many of which may not necessarily be relevant to every employee’s role. We also noted that whilst most codes are self-explanatory, some codes do not clearly indicate/explain their purpose. (e.g. SLGLW is for sleep in allowance and personal training is for undertaking personal training duties and not for employees undertaking training). Our testing of a sample of 50 non-core payments identified eight (16%) payments where the incorrect element code had been used in the claim (see Appendix 3 for further details). Whilst it is the employees’ responsibility to select the correct code and the managers’ responsibility to ensure that the claim is accurate prior to authorisation, we consider that the number of different element codes available to employees and the lack of clear explanation and understanding by employees and managers of the purpose of each code, increases the likelihood of employees selecting and managers authorising the incorrect code and therefore, the potential for it to be paid incorrectly. Implication Recommendation Priority Management response Implementation Month/Year If there are too many element codes and the description of each code is unclear, staff and managers may not understand the purpose of each code which could result in an increased likelihood that the incorrect code is selected and the incorrect rate is paid leading to under and/or overpayments. The Chief Officer (People Resources) should undertake a review of current element codes to: (1) determine the need for each code based on the Council’s terms and conditions, removing any which are unnecessary and provide a clear explanation of each code remaining to ensure that staff and managers understand the purpose of each code; and (2) restrict the codes available to individual employees so that they are only able to select codes which are relevant to their post. Medium Agree Jennifer Hardy, HR Operations and Workforce Manager (1) A review of all codes will be undertaken, and action taken to amend this as necessary with clear explanation of each code being defined. (2) We will investigation the option to restrict codes to individual employees and implement if feasible. January 2024 Page 106 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0350.2024.001 - Payments to Staff Regularity - Additional Non-Standard Payments/A - FINDINGS AND REPORT/A6a 20231011 Non-Standard Payments Final Report v1.0 as issued.docx 4 3. Action Plan (continued) Payments to Staff Regularity – Additional Non-Standard Payments 0350/2024/001 Ref Finding 2 There is scope to improve the recording of current employees who also undertake additional casual roles and the processing of casual worker payments. Some Services within the Council are unable to predict the staffing levels required to deliver services due to fluctuating levels of demand and therefore, require casual workers to assist during periods of higher demand and/or at specific events. Casual workers are provided with a Casual Worker Agreement which sets out the terms and conditions of their engagement, stating that the Council has no obligation to provide work and that any work undertaken will be on a flexible, “as required”, basis. Section 9 of the Agreement details the casual worker’s hourly rate and states that they will receive an additional 12.1% of the hourly rate for every hour worked in total to recompense for annual leave. During our audit, as a result of our review of casual worker payments made between October 2022 and April 2023 as well as substantive testing on a sample of non-core payments to employees, we noted that Active and Creative Communities has a high level of casual worker payments. Whilst payments made to casual workers were generally accurate, we identified instances where employees holding a separate and substantive post (with a corresponding formal contract) were also undertaking casual work and claiming casual worker payments. We noted a number of issues in relation to these employees, as follows: • a separate casual worker post (in addition to the main substantive post) was not always set up on iTrent and a Casual Worker Agreement not always issued, therefore employees were processing their casual worker payments through their contacted post; and • some employees who had a separate casual worker post set up on iTrent had selected the incorrect (contractual) post when processing their casual worker payments. Given that there is generally a difference in the hourly rates between the employee’s substantive post and the casual worker post, the allocation of a casual worker payment to the contractual post often resulted in the incorrect hourly rate being paid. Additionally, due to a mismatch between the type of payment made (casual) and the post the payment was allocated to (contractual), iTrent did not automatically recognise the requirement to allocate holiday pay, therefore no holiday payment for the casual hours claimed was made. Additionally, some employees had selected the casual worker payment element code in error, instead of the additional basic and/or overtime plain element codes when claiming for additional payments for their substantive post. Although our testing concentrated on payments made to casual workers in Active and Creative Communities, we recognise that other Services have casual workers, therefore consideration needs to be given as to whether the issues highlighted above also impacts on other Services. Implication Recommendation Priority Payments may be allocated to the incorrect post which could result in incorrect payments and additional costs to the Council. (1) The Chief Officer (Education - South), in conjunction with the Chief Officer (People Resources) should undertake a review to identify staff who regularly receive casual worker payments to ensure that they have an appropriate casual worker post set up on iTrent and a current Casual Worker Agreement in place. Where no post and/or agreement exists, appropriate action should be taken to correct this. (2) The Chief Officer (People Resources) should: • consider whether the review recommended at (1) above needs to be extended to other Service areas, facilitating this as appropriate; • consider whether an exception report can be devised to capture instances where casual worker payments are being made to staff without a casual worker post set up in iTrent and/or a Casual Worker Agreement in place to enable monitoring, identification and prompt action to correct this; and • remind casual workers, and managers authorising claims, of the requirement to ensure that casual worker payments are only allocated to their casual worker post. Medium Page 107 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0350.2024.001 - Payments to Staff Regularity - Additional Non-Standard Payments/A - FINDINGS AND REPORT/A6a 20231011 Non-Standard Payments Final Report v1.0 as issued.docx 5 3. Action Plan (continued) Payments to Staff Regularity – Additional Non-Standard Payments 0350/2024/001 Management response Implementation Month/Year Agree Jennifer Hardy (HR Operations and Workforce Manager), Kirsty Carr (HR Business Parter) and Heather Liddle (Active and Creative Communities Manager) (1) ESC will establish a report from the iTrent system to enable comparison between casual worker payments and the existence of casual worker positions for these staff. This information will be passed to the Service to review and take appropriate action (create casual positions, confirm casual worker agreements in place and/or notify managers staff should not be used). In addition reminder to be issued to Managers that staff can only be utilised in casual roles which they have been vetted for and for which they have a current casual agreement and post recorded on iTrent in place. Reminders will also be issued to all staff of the need to ensure that when more than one post is held, the correct post is selected when submitting casual worker claims via myself. (2) The majority of casual posts are in the service area mentioned at (1). However, consideration will be given to any other areas that may be affected and review undertaken thereafter as per the process referenced above. January 2024 Page 108 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0350.2024.001 - Payments to Staff Regularity - Additional Non-Standard Payments/A - FINDINGS AND REPORT/A6a 20231011 Non-Standard Payments Final Report v1.0 as issued.docx 6 3. Action Plan (continued) Payments to Staff Regularity – Additional Non-Standard Payments 0350/2024/001 Ref Finding 3 We identified some instances where claims submitted and subsequently paid were not compliant with expected practice. Our substantive testing on a sample of 56 employees claiming non-core payments identified the following issues/errors: • Section 1.3 of Schedule A and section 7 of the mySelf Mileage, Expenses and Overtime Guide states that there will be a meal break of at least 30 minutes in workdays of 6 hours or more duration, except where a paid meal break applies. Claims through mySelf require the employee to record the date, start and finish time and hours worked. Based on this information, we identified a number of claims for non-core payments where the hours claimed covered the full duration of time worked, without any deduction for unpaid breaks; • Section 8.1(c) of Schedule A states that core working hours are 7.00am to 8.00pm Monday to Friday. Our sample included some sessional social work staff undertaking work outwith core hours who were therefore entitled to an enhanced payment for the non-core hours worked. We noted that, for these employees, despite the shift covering core and non-core hours, the enhanced payment was often claimed for the full shift and not restricted to the non-core hours worked; and • We identified a small number of errors in the spreadsheets used for processing higher duties for Active and Creative Communities staff, which resulted in incorrect payments to employees. A detailed list of the errors identified is contained at Appendix 3. Implication Recommendation Priority Management response Implementation Month/Year There may be inconsistency across the Council and Services in how payments are claimed and applied, which could result in incorrect payments and additional costs to the Council. The Chief Officer (People Resources) should: (1) investigate options to enhance the iTrent electronic timesheet process to automatically calculate the hours claimed based on start and finish times and other conditions of service such as the requirement to deduct breaks and core hours; and (2) remind managers, and employees submitting claims, of the importance of ensuring that records input and processed on iTrent (either through mySelf or manually) are accurate prior to authorisation with specific reference to the issues highlighted in the finding above. Low Agree Jennifer Hardy, HR Operations and Workforce Manager (1) People Resources management will discuss with iTrent provider (MHR) the provision of additional timesheet functionality and thereafter consider the costs/benefits of any additional functionality that may be available. (2) Communication to this effect is already produced on a regular basis and this will continue with specific focus on the issues identified above. January 2024 Page 109 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0350.2024.001 - Payments to Staff Regularity - Additional Non-Standard Payments/A - FINDINGS AND REPORT/A6a 20231011 Non-Standard Payments Final Report v1.0 as issued.docx 7 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 110 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0350.2024.001 - Payments to Staff Regularity - Additional Non-Standard Payments/A - FINDINGS AND REPORT/A6a 20231011 Non-Standard Payments Final Report v1.0 as issued.docx 8 Appendix 2 – Payment codes included in testing Element Number of transactions (Oct 22 – April 23) Value of transactions (£) (Oct 22 – April 23) Sample tested Casual Worker Payment 60,632 2,239,713.83 5 Night Shift Allowance 10,776 721,651.87 5 Statutory Maternity Pay 8,629 1,646,909.50 3 Public Holiday Enhancement 8,435 632,563.42 4 Personal Training 7,294 124,602.00 5 Hourly Difference 4,799 55,854.17 3 Alternative Duty 2,565 309,646.55 4 Higher Duties Pensionable 2,254 585,446.66 6 Lets 2,112 78,261.42 3 Standby Allowance 1,077 92,823.19 8 Keyholder 914 31,061.06 3 SLGLW 143 7,037.25 2 Page 111 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0350.2024.001 - Payments to Staff Regularity - Additional Non-Standard Payments/A - FINDINGS AND REPORT/A6a 20231011 Non-Standard Payments Final Report v1.0 as issued.docx 9 Appendix 3 – Errors identified during substantive testing Service Employee reference Pay date reviewed Details of issue 1. Active and Creative Communities 5014617 04/04/23 Casual worker payment allocated to contractual full-time post resulting in incorrect hourly rate and no inclusion of the additional payment to reflect the holiday pay entitlement for the casual worker element of pay. 2. Active and Creative Communities 5014396 07/02/23 Casual worker payment allocated to contractual full-time post resulting in incorrect hourly rate and no inclusion of the additional payment to reflect the holiday pay entitlement for the casual worker element of pay. 3. Community Learning and Development (CLD) 4476922 07/03/23 Incorrect element code used – additional basic hours claimed as public holiday plain time. 4. Housing Management 5015413 16/02/23 Incorrect element code used – casual worker hours claimed as public holiday plain time resulting in no inclusion of the additional payment to reflect the holiday pay entitlement for the casual worker element of pay. 5. Facility Support Services 5019501 07/03/23 Incorrect element code used – additional basic hours claimed as personal training resulting in incorrect hourly rate and no inclusion of the additional payment to reflect the holiday pay entitlement for the additional hours worked. 6. Active and Creative Communities 5018644 13/12/22 Incorrect element code used – additional basic hours claimed as personal training resulting in incorrect hourly rate and no inclusion of the additional payment to reflect the holiday pay entitlement for the additional hours worked. 7. Active and Creative Communities 5016130 10/11/22 Incorrect element code used – additional basic hours claimed as personal training resulting in incorrect hourly rate and no inclusion of the additional payment to reflect the holiday pay entitlement for the additional hours worked. 8. Active and Creative Communities 5014360 07/02/23 Higher duties hourly rate omitted from higher duties spreadsheet resulting in the incorrect hourly difference being paid (£2 instead of £0.99 for 7.5 hours). 9. Active and Creative Communities 5014377 18/10/22 Higher duties spreadsheet contained incorrect hourly rate resulting in incorrect hourly difference being paid. 10. Adult Health and Social Care 4776799 04/04/23 Timesheet containing casual worker and non-core hours (NCH) claims not processed and paid (24/12/22 to 19/01/23). This includes a claim for 11/01/23 which was recorded on a separate timesheet which was processed. 11. Facility Support Services 5012317 07/03/23 Incorrect element code used – let claimed as key holder. Timesheet processed for 2.45 hours when times only total 2 hours. 12. Facility Support Services 4958582 19/01/23 Incorrect element code used – let claimed as key holder (no impact on pay). 13. Community Operations 5017535 04/04/23 Incorrect element code used – standby allowance claimed as alternative duty culture. (no impact on pay). Page 112 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0900.2024.004 Petty Cash Imprests/A - FINDINGS AND REPORT/A09a 20231013 Petty Cash final report as issued.docx 1 INTERNAL AUDIT REPORT REVIEW OF PETTY CASH IMPRESTS Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Appendix 2: Establishments selected for testing Issued to: Chief Officer (Asset and Procurement) (point 1 only), Chief Officer (Finance) (points 2 and 3) Copied to: Business Manager (Facility Support Services), Chief Executive and Depute Chief Executive Headlines The purpose of this audit was to provide assurance on the adequacy and effectiveness of the Council’s management arrangements for ensuring that petty cash imprest accounts are managed in accordance with the Council’s Imprest Guidance and that expenditure/claims are correctly calculated, supported by adequate documentation and are properly authorised. An imprest account, also known as a petty cash account, is a fixed amount of money which is advanced to a location for the purchase of low value and/or ad hoc expenses. This arrangement is designed to supplement, but not replace, the Council’s standard method of making purchases or claiming expenses. Examples of relevant expenditure includes reimbursement for postages, fares for pupils/clients, ad hoc provisions such as food for Breakfast Clubs, and where immediate payments are required for other miscellaneous small expenses. At the end 2022/23, the Council had 68 education establishments operating imprest accounts with imprests totalling £14,650, 56 non-education establishments with imprest amounts totalling £96,125 and 31 establishments with cash floats totalling £13,330. During 2022/23, imprest claims totalling £287,086 were submitted and reimbursed. Based on the results of our work, we were pleased to note that staff responsible for operating imprest accounts were generally aware of the guidance notes and claims were generally correctly calculated and properly authorised. However, we consider that some imprest accounts are open to risk, given the value of imprest amounts, the type of expenses being claimed and, in some instances, the lack of adequate, legible documentation to support some of the expenses incurred. We have therefore, categorised this audit as offering ‘reasonable assurance’ as the operational arrangements are considered satisfactory, however, there is scope for improvement, particularly in the monitoring and review of expenses. As such, we have made a number of recommendations for management consideration. These are detailed in section 3 of this report and include: • there is a need to review and update Individual pupil’s school meals accounts to reflect refunds made; • There is a need to undertake a review of whether imprest accounts and cash floats held by Services are required and/or appropriate; and • Some significant requirements detailed in the Imprest Guidance Notes are not being fully complied with. Internal Audit Opinion (see definition at Appendix 1) Reasonable assurance (Green-Amber) Organisational impact (see definition at Appendix 1) Minor Report status FINAL Audit ref 0900/2024/004 Date issued 13/10/23 Audit Team Lesley Armstrong, Paula Hendry and Elizabeth Sweeney Page 113 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0900.2024.004 Petty Cash Imprests/A - FINDINGS AND REPORT/A09a 20231013 Petty Cash final report as issued.docx 2 1. Executive Summary Objectives The purpose of this audit was to provide assurance on the adequacy and effectiveness of the Council’s management arrangements for ensuring that imprest accounts are managed in accordance with the Council’s Imprest Guidance and that expenditure/claims are correctly calculated, supported by adequate documentation and are properly authorised. The audit involved an analysis of the imprest account records held by Treasury and substantive testing of relevant controls based on a sample of nine establishments (six non-education and three education) which had made imprest claims during 2022/23. Details of the establishments selected for testing are included at Appendix 2 for information. 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 3 0 Key areas requiring management action (High) The following key areas requiring urgent management action have been identified: • there is a need to review and update Individual pupil’s school meals accounts to reflect refunds made. Good practice identified We noted the following areas of good practice during the audit: • the Council has well-established rules and guidance covering the responsibilities of imprest holders and the processes for opening and closing imprest accounts, claiming reimbursements and year-end requirements; • Creditors only process claims for reimbursement upon receipt of a standard certification email from an authorised signatory; and • petty cash floats are generally held securely within establishments, usually within a locked cash box and a locked safe. Other areas for improvement (Medium) A number of other areas for improvement were also identified: • There is a need to undertake a review of whether imprest accounts and cash floats held by Services are required and/or appropriate; and • Some significant requirements detailed in the Imprest Guidance Notes are not being fully complied with. Page 114 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0900.2024.004 Petty Cash Imprests/A - FINDINGS AND REPORT/A09a 20231013 Petty Cash final report as issued.docx 3 3. Action Plan Petty Cash Imprests 0900/2024/004 Ref Finding 1 There is a need to review and update Individual pupil’s school meals accounts to reflect refunds made. Our review of the ‘Catering DSO’ imprest account, which is operated by Facility Support Services, identified that it was not being operated for petty cash purposes but was being used to refund parents who had paid money into their child’s online school meals account in error. The Council operates a cashless school meals system whereby parents add funds to their child’s school meals account in iPay Impact electronically via the parent portal. iPay Impact contains a number of sub-accounts for different areas of spend within schools, e.g. school meals, uniforms, trips and parents occasionally allocate payments to the incorrect sub-account. Prior to August 2023, payments made to the school meals sub-account in error were refunded by issuing a cheque from the ‘Catering DSO’ imprest account and we understand that when a refund was requested, the Catering Manager was advised to update the school meals system to deduct the value of the refund from the pupil’s account. From August 2023, parents can now request a refund directly from iPay Impact, therefore refund cheques are no longer issued. Total refunds of £3,131 were made between April 2022 and July 2023. We selected a sample of 13 refunds (ranging from £15 to £350) and confirmed that there was appropriate documentation to support the request for each cheque raised. We noted, however, that the relevant pupil’s school meals accounts for 10 of the 13 refunds selected (including four refunds over £100) had not been debited to reflect the amount refunded. We understand that some of these have now been updated, however, we consider that, given the high incidence of accounts not being updated, all accounts should be checked and, where they have not been debited to reflect the refund, appropriate actions should be taken to resolve this. Implication Recommendation Priority Management response Implementation Month/Year School meals accounts may contain incorrect balances which could be utilised by pupils prior to being debited, leading to lost income for the Council. The Chief Officer (Asset and Procurement) should review school meals accounts for all pupils who have received a manual refund to confirm that the account balances were debited to reflect the refund made, taking remedial action to update accounts, as appropriate, where they have not previously been debited. Medium Agree Anne Hanlon, Facility Support Services Manager A review of school meals accounts for all pupils who have received a manual refund in 2023/24 will be undertaken to confirm that the account balances were debited to reflect the refund made. Where any have been found not to have been debited, this will be undertaken immediately. December 2023 Page 115 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0900.2024.004 Petty Cash Imprests/A - FINDINGS AND REPORT/A09a 20231013 Petty Cash final report as issued.docx 4 3. Action Plan (continued) Petty Cash Imprests 0900/2024/004 Ref Finding 2 There is a need to undertake a review of whether imprest accounts and cash floats held by Services are required and/or appropriate. We were advised by Treasury that bank accounts, imprest levels and cash floats held by establishments have not been reviewed for a number of years to determine whether their requirement and value remains valid and appropriate. We were informed, however, that Education is currently reviewing imprests held at Education establishments, as part of a wider review of all bank accounts, with a view to limiting cash transactions and better utilising digital solutions and online bank payments. Our substantive testing identified two establishments which no longer have a requirement for an imprest account (one closed (Muirpark House) and one using an alternative method to process refunds (Catering DSO)). We obtained reports detailing the establishments which held imprest accounts at the end of 2022/23 and the imprest amounts reimbursed during the year. Our analysis of these reports and the outcome of our substantive testing identified the following: • 35 education establishments, with imprest amounts totalling £5,240 and five non-education establishments, with imprest amounts totalling £2,750 for which no petty cash claims/reimbursements had been made during the year; • the value of imprest amounts varies considerably between establishments and there is often no correlation between the imprest amount and number/value of claims made during the year (see Appendix 2), with the imprest amounts for some establishments being considerably higher than required (e.g. Cumbernauld Social Work Locality has an imprest amount of £7,800 and in 2022/23 made seven imprest claims with a total value of £1,801, averaging £257 per claim); • the value of cash held in the safe for one establishment at the time of our visit was in excess of £3,000 and out review of recent claims confirmed that it was in excess of £5,000 at one point. We consider that the cash held in the safe is excessive as the total reimbursed for 2022/23 was £15,390, which is approximately £1,300 per month (and five claims per year). Additionally, there is no record of the safe held by the Insurance section, therefore the value of cash held may not be fully insured; and • 31 non-education establishments, generally sports and leisure venues, operating cash floats (totalling £13,330) which had been inherited from CLNL. We were advised that the level of each float had not been reviewed since CLNL establishments had come back in-house to determine whether they remain at a valid level. Given the reduction in the use of cash in recent years, and the findings arising from our analysis of imprest reports and substantive testing, we consider that there is a need to formally review the requirement for bank accounts held by establishments and the value of imprest amounts and cash floats held to determine whether these remain valid. Implication Recommendation Priority Management response Implementation Month/Year A lack of review of the ongoing need for cash being held by establishments could lead to a greater amount of cash being held than is necessary and the increased likelihood of fraudulent activity and misappropriation occurring. The Chief Officer (Finance) should: (1) undertake a review of imprest accounts and cash floats held by Services and establishments to determine whether there is a continued need for each and, where still required, whether their value remains valid and appropriate. Appropriate action should be taken to implement any findings arising from the review; (2) contact the imprest holders of the two imprest accounts identified as no longer being required (Muirpark House and Catering DSO) with a view to commencing processes to close the relevant imprest accounts; and (3) remind all establishments holding cash of the need to provide the Insurance section with details of any safes at their location to enable/ensure appropriate insurance cover to be established. Medium Agree Kathleen Shearer, Business Finance Manager (1) A full review will be carried out and appropriate action taken to implement any findings. (2) The Treasury Management Team will contact the two imprest holders to arrange advance to be returned and thereafter, bank accounts to be closed. (3) Imprest Guidance Notes will be updated to advise imprest holders of the cash limit for money not contained in a safe or strong room and the need to advise the Insurance section of details of any safes at their location for the appropriate insurance cover to be established. March 2024 October 2023 January 2024 Page 116 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0900.2024.004 Petty Cash Imprests/A - FINDINGS AND REPORT/A09a 20231013 Petty Cash final report as issued.docx 5 3. Action Plan (continued) Petty Cash Imprests 0900/2024/004 Ref Finding 3 Some significant requirements detailed in the Imprest Guidance Notes are not being fully complied with. The Council has prepared Imprest Guidance Notes which detail the procedures for operating imprest accounts and the responsibilities of the imprest holder. Although these guidance notes were last updated in 2021, our review has identified some sections which appear out of date and some where we consider that the expectations of, and responsibilities for, operating an imprest account could be more clearly and explicitly stated. We visited nine establishments with imprest accounts to confirm whether the arrangements for operating their imprest accounts were in accordance with the Imprest Guidance Notes. Our checks included assessing the security of cash held; reviewing a sample of claims to ensure that they were correctly calculated, supported by adequate documentation and appropriately authorised; and confirming that reconciliations were carried out regularly. Our testing identified several issues in relation to the claim forms and supporting documentation as follows: • claims were not always made on the official claim form which resulted in the value of one claim being incorrect, and claim forms were not always fully completed (to reflect bank transactions) or signed and dated by the officers completing and checking the claim; • for one establishment, no separate log of petty cash expenditure as it was incurred was maintained – receipts were held loosely in a cash tin until a claim was made, therefore making it difficult to undertake reconciliations of cash held and increasing the risk of paying a receipt more than once; • the description provided on some claims and supporting petty cash vouchers were vague and did not always clearly confirm the type of expenses (e.g. miscellaneous expenses, essentials); • for one establishment, receipts to support expenses incurred for one claim could not be located and receipts provided by a second establishment had been scanned but the documents provided were of a poor quality and difficult to read; • VAT receipts were not always obtained and, where they were, the VAT element was not always reflected in the claim; • receipts and petty cash vouchers were not always consecutively numbered; • receipts for similar types of expenditure were grouped together and recorded on the claim as a single transaction (e.g. postages, supplies, resources) rather than having a single transactions for each receipt/cash reimbursement; • for one establishment, all expenses were allocated to a single account code despite the type of expenses incurred being more suited to other account codes; • the imprest account for a school was being used to bank income and raise cheques for fundraising rather than via the school fund account; • regular independent spot checks on petty cash and postage stamps were not always undertaken; • reconciliations between the cash/postage records and bank statement were not always undertaken and, where they were undertaken, these were not always regular; and • some claims submitted to, and reimbursed by Creditors, exceeded the certifying officer’s authorisation limit for imprest. The Imprest Guidance Notes state that the imprest holder is responsible for ensuring that receipts are available for each transaction and that, in the unusual event that a receipt is not obtained when expenditure is incurred, an imprest voucher should be prepared by the imprest holder and signed by the recipient. Our testing identified that petty cash vouchers were used regularly to substitute receipts, despite the guidance stating that this should be seen as the exception. Whilst we understand that receipts cannot be always be obtained, we identified a large number of transactions which were not supported by a legible receipt and we noted that the petty cash vouchers did not always clearly state whether a receipt had been received, the type of expenses incurred or who had received the cash. Section 1.1 of the Imprest Guidance Notes state that an imprest account should be used for the purchase of low value, ad hoc expenses, with Appendix 4 of the guidance providing examples of acceptable (e.g. petty outlays such as postages, travel expenses for clients/pupils, and immediate payments for small expenses such as batteries and key cutting) and unacceptable (e.g. purchases which create an invoice such as equipment and vehicle repairs, employee costs, and refreshments for staff) expenditure. Our review of the type of expenses reimbursed through imprest accounts for the sample reviewed identified some items claimed by establishments (e.g. car seats, tyre repair, fuel) which, based on the guidance, are not petty expenses and therefore circumvented other expected payment methods available, such as Pecos, mySelf and pool car expenses. Page 117 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0900.2024.004 Petty Cash Imprests/A - FINDINGS AND REPORT/A09a 20231013 Petty Cash final report as issued.docx 6 3. Action Plan (continued) Petty Cash Imprests 0900/2024/004 Implication Recommendation Priority Management response Implementation Month/Year Without a clear statement of expected practice and oversight arrangements, there is an increased risk of inadequate control over the administration of imprest accounts and expenditure incurred, which may be inappropriate/fraudulent and/or not appropriately monitored. The Chief Officer (Finance) should: (1) undertake a review and refresh of the Imprest Guidance Notes to clearly and adequately reflect the expectations of, and responsibilities for, operating an imprest account; (2) re-issue the current and/or updated guidance notes to all establishments operating an imprest account, reminding and reinforcing the need to fully adhere to the procedures and only use imprest accounts for petty/ad hoc items of expenditure; (3) remind the Creditors team that claims for reimbursement of imprest amounts should only be processed for payment when made on the appropriate forms and properly authorised by officers, within their authorisation limits for petty cash; and (4) consider amending the claim for reimbursement of petty cash expenditure form so that it requires positive confirmation from an appropriate officer that relevant checks have been undertaken regarding the legitimacy of expenditure incurred and presence of appropriate receipts to support the claim, with the revised Imprest Guidance Notes updated accordingly to reflect this requirement. Medium Agree Kathleen Shearer, Business Finance Manager (1) Imprest Guidance Notes will be reviewed and updated. (2) The updated Imprest Guidance Notes will be emailed to all imprest holders, reminding and reinforcing the need to fully adhere to the procedures therein. (3) Treasury Management will remind the Creditors team of the process for reimbursements and the need to ensure compliance with the arrangements. (4) The claim for reimbursement of petty cash will be amended accordingly and the revised Imprest Guidance Notes updated to reflect. imprest holders will be advised of the change when reissuing the guidance. January 2024 January 2024 October 2023 January 2024 Page 118 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0900.2024.004 Petty Cash Imprests/A - FINDINGS AND REPORT/A09a 20231013 Petty Cash final report as issued.docx 7 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 119 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0900.2024.004 Petty Cash Imprests/A - FINDINGS AND REPORT/A09a 20231013 Petty Cash final report as issued.docx 8 Appendix 2 – Establishments selected for testing Establishment Imprest Amount (£) Reimbursements Made During 2022/23 Number Amount (£) Average claim (£) NLC Catering DSO Imprest 1,000 3 2,673.85 891.28 NLC Cumbernauld SW Locality Imprest 7,800 7 1,801.10 257.30 NLC Coatbridge SW Locality Imprest 7,500 92 15,389.58 167.28 NLC Forrest St Childrens House Imprest 3,000 66 21,647.58 327.99 Protective Services 750 23 2,577.86 112.08 NLC Muirpark House Imprest (Note 1) 1,000 2 1,353.64 676.82 NLC First Stop Shops Imprest 1,000 2 960.56 480.28 NLC Willowbank School Imprest 1,100 12 5,761.19 480.10 NLC Condorrat Primary Imprest 80 11 808.03 73.46 NLC Virtual School Imprest 500 5 1,624.31 324.86 Note 1 – Muirpark House closed on 31/07/23, therefore no testing was undertaken on this establishment. Page 120 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0450.2024.001 - School Excursions/A - Findings and Report/Excursions/A08.01(c) 20231025 School Excursions Final Report V1.0 as issued (REDACTED).docx 1 INTERNAL AUDIT REPORT SCHOOL EXCURSIONS Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Appendix 2: Identified areas for improvement Issued to: Chief Officer of Education and Families (North) and Chief Officer of Education and Families (South) Copied to: Senior Education and Families Manager, Chief Executive and Depute Chief Executive Headlines The purpose of this audit was to seek to provide assurance that the Council has adequate, robust and effective arrangements in place for the management and oversight of school trips/excursions. This followed on from a request from Education and Families to formally review the circumstances surrounding the arrangements for a specific school trip at School C. A review of the adequacy and effectiveness of the administration and use of school funds at School C was the subject of a separate exercise undertaken by Internal Audit for which a report was issued in August 2023. This review involved assessing the adequacy and reasonableness of the Council’s existing school excursion/trip policy and how the Service obtain assurance that schools are complying with this. Our work included a review of the existing policy against current good practice contained in ‘Going Out There’, the Scottish Government framework for educational excursions. We also undertook a range of checks on a sample of school trips across the school estate to assess the extent of compliance with the current policy. Based on the results of our work, we are satisfied that there appears generally good awareness of the current policy and the need to comply with it. Although no significant issues were encountered in respect of the conduct of the trips reviewed by Internal Audit, the areas of non-compliance identified could potentially expose such trips to the risk of significant and detrimental impacts if all relevant required aspects are not fully considered, actioned and appropriately authorised before a trip commences. We have therefore categorised this audit as offering ‘limited assurance’ meaning we consider that there are significant gaps, weaknesses and/or non-compliance in the control environment which need to be addressed. As such, we have identified several areas for improvement which are detailed at Section 3 of this report, and which include: • Current guidance/procedures are significantly out-of-date, are not always being fully complied with and management needs to ensure that these are reviewed and updated, clearly setting out expected practice. There is thereafter a need for a mechanism to be implemented to enable Education and Families HQ to monitor the extent of the schools’ compliance with expected arrangements surrounding school trips/excursions; and • Significant deviations from recognised good practice in the financial management of school trips were identified at two schools. 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 0450/2024/001 Date issued 25/10/2023 Audit Team Lynn McCrum (Lead Auditor), Paula Hendry, Hugh Shevlin and Elizabeth Sweeney Page 121 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0450.2024.001 - School Excursions/A - Findings and Report/Excursions/A08.01(c) 20231025 School Excursions Final Report V1.0 as issued (REDACTED).docx 2 1. Executive Summary Objectives The purpose of this audit was to seek to provide assurance that the Council has adequate, robust and effective arrangements in place for the management and oversight of school trips/excursions. The key control objectives reviewed and tested during the audit considered: • the adequacy and reasonableness of the existing school excursion/trip policy; and • compliance with current excursion/trip policy and how the Service gains assurance on this. We reviewed the adequacy and reasonableness of the Council’s current Educational Excursions and Outdoor Activities Policy against the Scottish Government approved framework. Testing was also carried out on a sample of 13 separate trips across five secondary schools using a checklist based on both the Council policy and expected good practice to determine compliance with the existing policy. A separate exercise was carried out on the adequacy and effectiveness of the administration and use of school funds at School C and was the subject of a separate report issued to service management in August 2023. 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 0 0 Key areas requiring management action (High) The following key areas requiring urgent management action have been identified: • Current guidance/procedures are significantly out-of-date, are not always being fully complied with and management needs to ensure that these are reviewed and updated, clearly setting out expected practice. There is thereafter a need for a mechanism to be implemented to enable Education and Families HQ to monitor the extent of the schools’ compliance with expected arrangements surrounding school trips/excursions; and • Significant deviations from recognised good practice in the financial management of school trips were identified at two schools. Good practice identified We noted the following areas of good practice during the audit: • The Council has an Educational Excursions and Outdoor Activities policy which outlines expected practices which the education establishments should follow when arranging trips and excursions. • Risk assessments are being carried out for every trip/excursion prior to it taking place. • Full insurance cover is provided by the Council for all trips and excursions subject to terms and conditions of the policy. • All educational trips and excursions are approved by the Head of Establishment or their delegate, prior to them taking place. Other areas for improvement (Medium) No other area for improvement was identified. Page 122 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0450.2024.001 - School Excursions/A - Findings and Report/Excursions/A08.01(c) 20231025 School Excursions Final Report V1.0 as issued (REDACTED).docx 3 3. Action Plan School Excursions 0450/2024/001 Ref Finding 1 Current guidance/procedures are significantly out-of-date, are not always being fully complied with and management needs to ensure that these are reviewed and updated, clearly setting out expected practice. There is thereafter a need for a mechanism to be implemented to enable Education and Families HQ to monitor the extent of the schools’ compliance with expected arrangements surrounding school trips/excursions. Providing educational excursions for children and young people outside the classroom encourages positive learning and provides invaluable life experiences. Such excursions can take the form of day trips, residential or overseas visits, including outdoor activities and give participants the opportunity to undergo experiences which may not otherwise be available to them whilst also developing their confidence and self-esteem. The guidance/procedures detailing the procedures which must be adopted in the management and organisation of trips and excursions are outlined in the Educational Excursions and Outdoor Activities policy (last updated in 2019) and supplemented by the Risk Assessment Guidance on Educational Excursions and Outdoor Activities (last updated in 2010). As these documents have not been updated for several years, they contain out-of-date references to documents, systems and contact details. In addition, they do not fully reflect expected practice or indeed the current environment. The Scottish Government (SG) has published a ‘Going Out There’ framework for educational excursions and off-site visits relevant to everyone who provides planned learning for children and young people in Scotland. While the Council’s Educational Excursions and Outdoor Activities Policy references this document, these references are to an earlier version of the SG framework and thus the content of the Council’s policy does not fully reflect additions made in the most recent version of the framework and nor does it make use of the toolkits contained within the updated framework. Our assessment of the current policy against this good practice has identified several areas where which we consider would benefit from additional and/or more detailed guidance. Details are provided at Appendix 2. The Council’s current policy requires that all trips/excursions are formally approved by the Head of Establishment. It also sets out expectations for other relevant Service areas (Safety and Wellbeing and Insurance sections) to be informed and relevant documentation submitted to them for review and/or approval. At present there is no expectation for Education and Families HQ to be notified of any such trips/excursions. As such there is no central database/record, held by Education and Families HQ, which records the details of all school trips (e.g. dates of travel, location, cost, number of pupils etc.), or mechanism for monitoring compliance, including whether approval has been granted by the Head of Establishment and, where required, the Council’s Safety and Wellbeing section and confirmation that there is adequate insurance cover in place. Education and Families HQ personnel confirmed that they do not have oversight, or undertake any routine monitoring, of schools’ compliance with the Council’s expected arrangements for school trips and excursions. We understand that several of the other Scottish Local Authorities use an online system (EVOLVE) for the planning, approval and management of educational visits, trips and excursions. We reviewed a sample of 13 trips across 5 secondary schools to determine the extent of compliance with the Council’s Educational Excursions and Outdoor Activities Policy. This review highlighted that there are several aspects around the planning and execution of trips which are not being carried out, either fully or partly, in line with the Council’s guidance/procedures relating to educational excursions including: • 10 of 13 trips where there was no evidence to demonstrate that the necessary documentation pertaining to the trip/excursion had been submitted timeously to Safety and Wellbeing and for 4 trips no documentation had been submitted to the Safety and Wellbeing section at all; • 9 of 13 trips where there was no evidence that a detailed costing of the trip had been undertaken to determine the charge per pupil and in the 4 cases where there was a detailed costing there was no evidence that this had been approved by the Head Teacher; • 3 of 13 trips where there was no evidence that the appropriate documentation had been completed and submitted timeously to the Head Teacher for approval; • 2 of 13 trips where the ratio of staff to pupils did not meet the minimum requirements as outlined in the Council’s Policy; • 2 of 8 trips where the Council’s insurance was relied upon, the Insurance Section did not receive notification of schools’ trips/excursions; • one trip, where due to a miscommunication between the school and the Council’s Insurance section, the Group Leader requested parents to take out individual travel insurance for the trip as it was thought that the trip was not covered by the Council’s insurance policy; and • the risk assessments completed did not always provide coverage of all key risks such as the tour operator, financial loss, etc and consideration/identification of any actions required to mitigate these. 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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0450.2024.001 - School Excursions/A - Findings and Report/Excursions/A08.01(c) 20231025 School Excursions Final Report V1.0 as issued (REDACTED).docx 4 3. Action Plan (continued) School Excursions 0450/2024/001 Implication Recommendation Priority Management response Implementation Month/Year Inadequate oversight/monitoring by Education and Families HQ of school trips/excursions and compliance with expected arrangements may result in areas of non-compliance arising leading to issues not being identified which could consequently impact on the safety of children and on the wider reputation of both the school and the Council. Policies, procedures and associated guidance may be inadequate, resulting in a failure to effectively plan and manage trips which has the potential to compromise the safety of children and staff and negatively impact on the wider reputation of both the school and the Council. The Chief Officers of Education and Families (North and South) should ensure that: (1) a comprehensive formal review of both the Council’s Educational Excursions and Outdoor Activities Policy and the Risk Assessment Guidance on Educational Excursions and Outdoor Activities is undertaken to revisit and refresh all aspects of these documents with a view to improving the robustness of the Council’s arrangements associated with school trips and excursions. This should take account of, but not limited to, the information contained in Appendix 2 and the need for roles and responsibilities of all relevant parties, including those within other Council services to be clearly documented in the revised guidance; (2) any revised arrangements are fully communicated to all Council Services with a role in the process; (3) they explore how best to gather/record details of all school trips and excursions and thereafter monitor compliance with the Council’s expected arrangements associated with such trips and excursions; and (4) in the interim, all educational establishments are reminded of the need to comply with all aspects of the current policy and associated guidance including the documentation which requires to be completed and submitted to relevant parties and the timescales for doing so. High Agree Gary Lambie, Senior Education and Families Manager The Service will establish a Task and Finish Group to review the existing policy, revise in accordance with the audit recommendations and agree proposals for communication, including any associated training resource. Membership will include school-based and central officers to ensure that key links are developed and maintained, and that effective compliance checks and measures are adopted. Establishments will be advised, via the Service newsletter, that a revised policy is under development. Establishments will also be provided with links to the current policy and instructed to follow this guidance in the interim. April 2024 April 2024 December 2023 Page 124 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0450.2024.001 - School Excursions/A - Findings and Report/Excursions/A08.01(c) 20231025 School Excursions Final Report V1.0 as issued (REDACTED).docx 5 3. Action Plan (continued) School Excursions 0450/2024/001 Ref Finding 2 Significant deviations from recognised good practice in the financial management of school trips was identified at two schools. A sample of 13 trips across 5 secondary schools were reviewed by Internal Audit to determine the extent of compliance with the Council’s Educational Excursions and Outdoor Activities Policy, including a review of the financial aspects associated with these trips. Whilst our sample testing demonstrated that schools generally complied with financial expectations, we identified a number of issues at two specific schools where the arrangements significantly differed from recognised good practice, and which have raised concerns. For School C, the following financial management issues were identified: • the Modern Languages Department offer a series of overseas trips which are organised independently by the Group Leader, a Class Teacher within the department, as opposed to using a travel company. The Group Leader books and pays for flights, baggage fees etc. using his personal credit card and is reimbursed via cheque from the school fund. • For a recent trip, initially the Group Leader requested £16,500 in cash be withdrawn from the bank, to take on the trip to pay for transport, accommodation, and planned activities. To identify how to minimise the risks of monies being lost, stolen or misappropriated, discussions between the Service and Financial Solutions determined that the Group Leader should be given this advance but as a mixture of cheque (£10,000 in sterling for depositing in his personal bank account to minimise the level of physical cash held) and £6,500 cash converted into Euros. As this request was made in such close proximity to the trip taking place, Internal Audit has concluded that the action taken by the Service to minimise the risks involved appears reasonable, however the level of risk remaining was still significant, and it is our view that such arrangements should not be used again. • Whilst there was documentation to substantiate all the payments made/advance monies given, this was not always deemed to be sufficient (e.g., credit card statement). • Having reviewed the documentation pertaining to the trip, it is Internal Audit’s view that a large proportion of this expenditure could have been paid prior to the trip taking place (e.g. accommodation costs) negating the need for any such advances to have been made to the Group Leader. • The Group Leader referenced above also organised overseas trips in 2020 which were subsequently cancelled due to the Covid-19 pandemic. The Group Leader had used his own credit card to pay for these flights and was reimbursed via a cheque from the school fund. On cancellation of the trip, the airline refunded the flight costs to the Group Leader’s credit card. We understand that the Group Leader advised the school management team that he was restricted in the monies he could withdraw from his credit card and, as cash withdrawals incurred a fee, it was agreed with the then Head Teacher that the pupils would be refunded from the school fund and the Group Leader would repay the sum into the school fund when he had the monies. The school were unable to provide any written confirmation of the agreement with the Group Leader. While these monies were eventually paid back in full by the Group Leader in November 2022, we consider this arrangement, the lack of documentation pertaining to it and the length of time taken to repay the monies to be unacceptable. For School D, the following financial management issues were identified: • The initial letter issued to parents, stated that the charge for the trip would be £775 per pupil. There was no detailed costing prepared as to how this charge was arrived at. As there were 40 pupils attending the trip, based on the charge per pupil, the total monies to be received equated to £31,000. • A review of the financial records held confirmed that £29,100 was banked, which equates to £727.50 per pupil and the school fund documentation provided supported this. The source records which documented the amounts paid per pupil had not been retained. It is assumed that the difference of £1,900 was collected but not banked. • Internal Audit then asked the Group Leader to confirm what the actual cost charged per pupil was. The Group Leader advised that each pupil had indeed been charged £775 and that rather than sending all monies received from pupils to the school office for recording in the school fund and subsequent banking she had, of her own accord, retained monies for a ‘kitty’ to cover the cost of breakfast and dinner for pupils on the ferry; monies for lunch whilst on an outing during the trip and for incidentals such as juice and crisps, etc. • The Head Teacher was unaware of this action taken by the Group Leader and as such has not approved the retention of these monies and their subsequent spend. • The Group Leader further explained to Internal Audit that while there were receipts for the incidentals, the price of the trip included the cost of breakfast and dinner on the ferry and as such the pupils were each refunded £30, which was placed in individual envelopes and returned to them at the end of the trip. There is no record of monies having been returned to the pupils or their parents. However, discussions with other staff on the trip and a selection of parents confirmed this to be the case albeit we have been unable to verify with any certainty the value of monies in the envelopes. • Although some of expenditure can be verified, due to the absence of records retained, we have been unable to fully determine whether there has been any misappropriation of these monies. However, we consider that there have been several breaches of Council policy and procedure by the Group Leader associated with this trip. These policies and procedures are in place to safeguard monies, pupils and employees of the Council. Although no specific issues were identified, we noted that, for a number of the other trips reviewed, varying levels of cash were taken abroad and the record keeping for this was on occasions somewhat lacking. The current policy is silent on these aspects. Page 125 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0450.2024.001 - School Excursions/A - Findings and Report/Excursions/A08.01(c) 20231025 School Excursions Final Report V1.0 as issued (REDACTED).docx 6 3. Action Plan (continued) School Excursions 0450/2024/001 Implication Recommendation Priority Management response Implementation Month/Year Not using a travel company/tour operator to book a trip/excursion could potentially lead to financial loss or impact on the safety of the participants should part of the arrangements fail or not go according to plan. Increased risk of loss, theft or misappropriation of monies where any level of cash is held. The Chief Officers of Education and Families (North and South) should (1) as part of the formal review referenced at Action Plan point 1 above, ensure that this includes the creation of a dedicated section within the policy and/or associated procedures which outlines clear expectations around the financial aspects associated with the organisation and execution of trips. This should include, but not be limited to: • a clear and detailed protocol for booking trips where a travel company/tour operator is not going to be used ensuring arrangements minimise the risks associated with such payments and ensure that the use of personal credit cards to book trips is prohibited; • consideration to promoting iPay Impact as the primary means for collecting monies in schools thus reducing cash payments and the subsequent flow of physical cash in the school; • determining the additional checks/monitoring that need to be carried out at establishment level to ensure all monies due are received and duly banked in line with Council policy; and • clear guidance on the levels of physical cash that can/should be taken on a trip/excursion, the required records to be completed and documentary evidence required/expected to support any such spend. (2) instruct the Head Teacher at School D to consider whether the actions of the Group Leader of the trip requires management action in line with the Council’s Discipline Policy. High Agree Gary Lambie, Senior Education and Families Manager (1) The Service Task and Finish Group will ensure that financial protocols and risks are clear and easily understood. This will include cash handling and processing via establishment fund guidelines. The group will review existing insurance arrangements and link with officers currently involved in the promotion of cashless payment options for schools. The group will present options for recording and monitoring within the central support function. (2) The Education and Families Manager for School D will discuss audit outcomes with the Head Teacher to determine if any further action is required in relation to staff conduct around the management of excursions. April 2024 December 2023 Page 126 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0450.2024.001 - School Excursions/A - Findings and Report/Excursions/A08.01(c) 20231025 School Excursions Final Report V1.0 as issued (REDACTED).docx 7 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 127 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0450.2024.001 - School Excursions/A - Findings and Report/Excursions/A08.01(c) 20231025 School Excursions Final Report V1.0 as issued (REDACTED).docx 8 Appendix 2 – Identified areas for improvement in Excursion Policy Policy Section Ref Non-compliance with expected practice/area for improvement/out-of-date references 1 N/A The guidance would benefit from: • A glossary of terms defining the terminology used throughout the document; and • an aide memoir such as a summary or flow-chart, which summarises the key roles and responsibilities, documentation to be completed and associated timescales. 2 1.5 References that all Heads of Establishment are encouraged to use the Scottish Government ‘Going Out There’ document alongside the Council’s policy when planning any excursion activities but does not provide a link to this document or where it can be located. Links to documents referenced within the guidance/policy should be clearly sign-posted. 3 Various Reference is made to trips to Kilbowie Outdoor Centre. Any such references should be removed as the Centre is no longer in use. 4 3.1.1 (8) 3.2 3.4 Appendices 3, 3A, 4, 5 & 7 References that a checklist of responsibilities is included but does not specifically state that this should be marked as completed. No requirement for the checklist to be signed and dated by relevant personnel. The revised procedures should clearly detail such and consideration should be given to clearly detailing the expected roles and responsibilities of all relevant parties involved in the planning and delivery of trips/excursions. This should include: the Head of Establishment and Group Leader in addition to relevant personnel from Education and Families HQ and the Council’s Insurance and Safety and Wellbeing Teams. 5 3.4 4.12 – 4.15 Brief guidance/detail is provided in respect of the information required to be passed to the home-based contact and the emergency procedures, consideration should be given to including further relevant detail as per Section 14 of the ‘Going Out There’ framework (2021) adopted by the Scottish Government. 6 3.6 Appendices 3A & 8 Brief guidance/detail is provided in respect of providing parents with sufficient information, consideration should be given to including relevant detail as per Sections 9.5, 10.6 and 11.6 of the ‘Going Out There’ framework (2021). 7 4.1 The ‘Going Out There’ framework (2021) references that a visit plan should be prepared and this should set out the aims, objectives and benefits of the trip. There is no such reference in the Council’s policy at present and consideration should be given to incorporating this into the revised policy/guidance. 8 4.2 References MSF/24 which is ‘Risk Assessment Guidance on Educational Excursions and Outdoor Activities’ and provides details as to how to access this document via the First- Class system. This system has been decommissioned and thus the reference should be updated. Consideration should be given to having all guidance and documentation pertaining to school trips/excursions housed in the same area with links to documents referenced within the guidance/policy clearly sign-posted. 9 4.3.1 – 4.3.5 Appendix 5 Guidance/detail is provided in respect of accommodation for residential and overseas visits in both the Council’s policy and the Risk Assessment Guidance on Educational Excursions and Outdoor Activities. However, consideration should be given to including further relevant detail as per Sections 10.9 and 11.1 of the ‘Going Out There’ framework (2021). 10 4.4 References providing parents with information about the costs of the excursion but does not reference that there should be a cost analysis undertaken at the outset, with a full breakdown of costs, and the resultant charge per pupil approved by the Head of Establishment. The revised procedures should clearly detail such. Page 128 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0450.2024.001 - School Excursions/A - Findings and Report/Excursions/A08.01(c) 20231025 School Excursions Final Report V1.0 as issued (REDACTED).docx 9 Appendix 2 (continued) – Identified areas for improvement in Excursion Policy Policy Section Ref Non-compliance with expected practice/area for improvement/out-of-date references 11 N/A There is no detail within the guidance in respect of what financial records require to be retained, nor is there a link, or reference made, to the Council’s Establishment Fund Procedures. The revised procedures should include such detail and clearly outline the additional checks/monitoring that need to be carried out at establishment level to ensure all monies due are received and duly banked in line with Council policy. 12 4.5 Appendices 3A, 6 & 8 Brief guidance/detail is provided in respect of preparing participants, but consideration should be given to including relevant detail as per Sections 4.6, 10.8 and 11.9 of the ‘Going Out There’ framework (2021). 13 4.9 Guidance/detail is provided in respect of planning transport, but consideration should be given to including further relevant detail as per Sections 6 and 11.10 of the ‘Going Out There’ framework (2021). 14 4.10.5 References that the Group Leader should have attended the in-service child protection course, delivered by the Continuous Improvement Service. Is this course still run and, if so, is there still a requirement for the Group Leader to attend? The revised procedures should clearly detail current expected practice. 15 4.11 Throughout this section, reference is made to the Risk and Insurance Team. Such references require to be updated to reflect the current organisation structure and should thus be amended to read ‘Insurance Team’. 16 4.11 Section 4.11.1 references that a travel declaration form should be completed at the time of booking, but it is unclear as to whether the Insurance Team require to be notified and the form completed for all trips or just for those trips which are going overseas. The revised procedures should clearly detail expected practice. References that the travel declaration form can be found on Connect. This reference needs to be updated as Connect has now been decommissioned. 17 4.11 Section 4.11.2 references Management Circular D4 outlining the insurance policies held by the Council and provides contact details for the Insurance Team. These references and contact details should be reviewed to ensure that they are current, with links to documents referenced within the guidance/policy clearly signposted. 18 4.11 Guidance/detail is provided in respect of insurance, but further coverage should be considered for the following areas (as included in Section 7 of the ‘Going Out There’ framework (2021): • the necessity to check the level of insurance cover and note any exclusions (e.g. terrorism, pandemic, civil unrest and natural disaster); • determining whether additional insurance is required when using an external provider; • providing examples of points to consider when there is a need to arrange insurance; and • clearly communicating to/providing participants and parents/carers with details of the level of insurance cover/arrangements and potential financial risks involved and advising them about any specific additional cover they may want to arrange such as loss of personal belongings or cancellation. 19 4.12.4 References the European Health Insurance Card (EHIC). This reference needs to be updated to reflect that the EHIC has been replaced by the UK Global Health Insurance Card (GHIC) and details should be provide on how/where to apply for this. 20 4.13.2 Appendix 1 Includes contact details for Corporate Communications, the Resilience Development Unit, School Trip Travel Agents and other useful contacts. The accuracy of these details requires to be checked and updated as appropriate. Page 129 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Unplanned Work/2023-24/0450.2024.001 - School Excursions/A - Findings and Report/Excursions/A08.01(c) 20231025 School Excursions Final Report V1.0 as issued (REDACTED).docx 10 Appendix 2 (continued) – Identified areas for improvement in Excursion Policy Policy Section Ref Non-compliance with expected practice/area for improvement/out-of-date references 21 4.15.2 References that further guidance on the management of incidents and a copy of the Internal Incident Report Form are included in MSF 11. This document does not provide a link to this guidance or where it can be located. The revised procedures should clearly detail such. 22 Appendix 2 Although detailed in the forms themselves, the summary on Appendix 2 does not provide detail with regards to; who should complete each of these forms; who should approve them (including Safety and Wellbeing section); timescales for when they should be completed/approved and, where appropriate, who else should have sight of the forms once approved. The revised procedures should provide clear detail of such. 23 Appendices 2A, 2B & 2C The application forms for the approval of excursions and/or adventure activities do not include the cost of the trip/activity and nor do they require the forms to be signed by the Group Leader. The application forms should be updated to include this information/requirement, and this should be reflected in the revised procedures. 24 Appendices 2B & 2C Reference is made to Education, Youth and Communities. This is no longer a Service within the Council and references should be updated to Education and Families. 25 Appendix 3A References that the Group Leader should follow North Lanarkshire Council’s regulations, guidance and policies but does not provide detail as to what these are or where they can be located. The revised procedures should provide clear detail of such. 26 Appendices 3 & 3A References that the local authority policy on the administration of medicines has been followed but does not provide a link to this policy or where it can be located. The revised procedures should provide clear detail of such. 27 Appendices 3A & 7 Consideration should be given to adding a point re checking of passports/visas to the Group Leaders checklist and/or Planning Memoir. 28 Appendix 6 If retaining, consideration should be given as to whether this section would be better displayed in checklist format. 29 Appendix 6 Section headed ‘general information for overseas visits’: references that a Head of Establishment or Group Leader may decide to organise a package abroad without the help pf an outside body. However, no further detail or guidance is provided with regards to this. Consideration should be given to devising a detailed protocol for booking trips if a travel company/tour operator is not going to be used, ensuring arrangements minimise the risks associated with payments made in respect of the trip and that the use of personal credit cards to book trips is strictly prohibited. 30 Appendix 6 There is currently no guidance/detail provided on the levels of physical cash that can be taken on a trip/excursion, the required records to be completed and documentary evidence to support any such spend. 31 Appendix 6 Guidance/detail is provided in respect of overseas visits, but consideration should be given to including relevant detail as per Section 11 of the ‘Going Out There’ framework (2021), including but not limited to: financial liability; hazards; transport issues such as baggage and customs allowances; consideration of safe-keeping of spending money/contingency funds and specifying protocol for communication during the trip. 32 N/A Consideration should be given as to whether the revised procedures would benefit from detail/guidance included in the series of Toolkits which form part of the ‘Going Out There’ framework published in 2021. Page 130 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.010 - Climate Change/A - Findings and Reports/A06a 20231106 CLIMATE CHANGE Final report v1.0 as issued.docx 1 INTERNAL AUDIT REPORT CLIMATE CHANGE Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Appendix 2: Leaders’ Climate Emergency Checklist Issued to: Depute Chief Executive and Chief Officer (Asset and Procurement) Copied to: Climate Change Lead Officer and Chief Executive Headlines The purpose of this audit was to review progress made by the Council in reducing carbon emissions and to assess the adequacy and effectiveness of current management arrangements relating to climate change. This audit has made use of a range of reports and guidance published on climate change as a benchmark against which to assess the Council’s progress in this area including Audit Scotland’s report ‘Addressing Climate Change in Scotland’ (March 2022) and the Leaders’ Climate Emergency Checklist, (see extract at appendix 2) produced by the Sustainable Scotland Network. The UK Climate Change Committee has stated that the 2020s will be critical across society and the economy for the transition to greater sustainability and net zero, requiring a decisive shift from planning to action, implementation, and rapid progress. The Scottish Government has set a legally binding target of Scotland becoming net zero by 2045, five years earlier than the UK, with all public bodies having a responsibility to contribute to the achievement of this target. The Council recognises that it must act and has declared a climate emergency, previously committing itself and the area of North Lanarkshire to achieving net-zero by 2030. The Council continues to reduce its’ emissions from the baseline year of 2015/16. A recent report to the Environment and Climate Change committee in February 2023, highlighted 2021/22 emissions had been reduced to 46.4% of 2015/16 levels. Further expected reductions to 52.2% are expected by 2025/26. Significant actions will however still be required to deliver the required further reductions if the Council’s commitment to net zero is to be realised and there is a recognition that many of the ‘quick wins’ have already been taken. In 2021, members approved an updated Climate Plan – Action on Climate Together 2030 (ACT 2030) which forms part of a range of strategies, policies and plans grouped under a refreshed Environment Pathway (previously the Environment Strategy) approved in 2023. The recently refreshed Programme of Work (PoW) to support delivery of the ‘Plan for North Lanarkshire’ has led to the formation of a Sustainable Futures Thematic Board (replacing the Climate Change Board) whose purpose is to provide strategic leadership and management of all aspects of the Council’s climate change duties including a focus on the Council's commitments to net-zero and the associated actions required to make this a reality. Based on the results of our work, we have assessed this audit as offering ‘reasonable assurance’. We last audited this issue in 2020, when we raised some issues and recommendations around the Council’s governance arrangements for responding to climate change, including on target setting and performance reporting. We are pleased to note that the Council can demonstrate ongoing satisfactory actions in response to these previous recommendations. We are also satisfied that the Council’s ACT 2030 Climate Plan is aligned with the Council’s Plan for North Lanarkshire and the Council has continued to progress actions to reduce carbon emissions and to comply with its statutory responsibility to complete and submit an annual Climate report. (continued overleaf) 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 0900/2023/010 Date issued 06/11/23 Audit Team Elaine MacDonald and Paula Hendry Page 131 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.010 - Climate Change/A - Findings and Reports/A06a 20231106 CLIMATE CHANGE Final report v1.0 as issued.docx 2 Headlines (continued) (Continued from overleaf) Notwithstanding this progress to date however, it is clear that the commitment to net zero by 2030 was, and remains, hugely ambitious and that delivering this appears to Internal Audit unachievable given a number of relevant challenges facing the Council. Most significantly these include the difficulty of identifying, planning, financing and progressing in such a short timescale the range of actions likely to be required to achieve net zero by 2030. There remain significant challenges around the cost and affordability of any such actions and their inclusion in relevant financial revenue and capital plans at a time where the Council’s overall finances are under significant pressure. We have therefore raised a number of issues which we consider management require to address. These are detailed at Section 3 of the report and include: • The current Climate Plan (ACT 2030) needs to be supported by a detailed route map of planned actions designed to achieve net zero/deliver the Council’s climate change commitments. This should include realistic overall targets/milestones for the journey to net zero. The detailed route-map should be regularly updated and include information on expected individual project/action timescales, costs and other resource requirements. • The recently revised governance arrangements for climate change need to be kept under review to ensure they are effective in progressing the delivery of actions designed to achieve the Council’s climate change commitments and allowing effective oversight of progress by senior management and elected members. • Climate change needs to be more effectively embedded into the Council’s decision-making processes. Given the challenge presented by delivering net zero, the Council needs to be consistently considering the potential carbon impacts of all decisions more explicitly as part of its decision-making processes. Page 132 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.010 - Climate Change/A - Findings and Reports/A06a 20231106 CLIMATE CHANGE Final report v1.0 as issued.docx 3 1. Executive Summary Objectives This was a short, focused review designed to review the progress made by the Council in reducing carbon emissions and assessing the adequacy and effectiveness of current management arrangements. It also reviewed how well management has addressed weakness or areas for improvement identified in previous audit reports on this topic. The audit considered: • whether the Council has established clear plans linked to available resources to deliver further reductions in carbon emissions in line with climate change commitments the Council is expected to deliver against; • whether plans contain clear milestones and targets against which performance can be tracked and whether performance is routinely monitored and reported to key stakeholders • whether governance arrangements surrounding climate change activities are appropriate and operating effectively; and • whether carbon impacts are routinely incorporated into the Council’s decision-making processes. 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 2 1 Key areas requiring management action (High) The following key area requiring urgent management action has been identified: • The current Climate Plan (ACT 2030) needs to be supported by a detailed route map of planned actions designed to achieve net zero/deliver the Council’s climate change commitments. This should include realistic overall targets/milestones for the journey to net zero. The detailed route-map should be regularly updated and include information on expected individual project/action timescales, costs and other resource requirements. Good practice identified We noted the following areas of good practice during the audit: • The Council's Climate Plan ‘Action on Climate Together 2030’ (ACT 2030) covers the period 2021 to 2030. It sets out the Council’s recognition of the climate and biodiversity emergency and in response to this makes a commitment to act; • The Council’s Climate change agenda is managed under the remit of the recently established Sustainable Futures PoW Board; • Services have systems and processes in place for data collection and the collation of the data into carbon emission information that is used in the annual Climate Report; • The Council has produced and submitted its Annual Public Sector Climate Change Duties Report to the Sustainable Scotland Network in a timely manner; and • The Council is on track to produce its Local Heat and Energy Efficiency Strategy by the statutory deadline of December 2023. Other areas for improvement (Medium) A few other areas for improvement were also identified: • The recently revised governance arrangements for climate change need to be kept under review to ensure they are effective in progressing the delivery of actions designed to achieve the Council’s climate change commitments and allowing effective oversight of progress by senior management and elected members. • Climate change needs to be more effectively embedded into the Council’s decision-making processes. Given the challenge presented by delivering net zero, the Council needs to be consistently considering the potential carbon impacts of all decisions more explicitly as part of its decision-making processes. Page 133 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.010 - Climate Change/A - Findings and Reports/A06a 20231106 CLIMATE CHANGE Final report v1.0 as issued.docx 4 3. Action Plan Climate Change 0900/2023/010 Ref Finding 1 The current Climate Plan (ACT 2030) needs to be supported by a detailed route map of planned actions designed to achieve net zero/deliver the Council’s climate change commitments. This should include realistic overall targets/milestones for the journey to net zero. The detailed route-map should be regularly updated and include information on expected individual project/action timescales, costs and other resource requirements. In response to the Scottish Government’s target to achieve net zero by 2045, the Council declared a climate emergency in June 2019, committing to achieving net-zero within North Lanarkshire by 2030. As a result, the Council created a climate plan - Action on Climate Together 2030 (ACT 2030) which sets out the Council’s recognition of the climate and biodiversity emergency. This plan highlights that against a baseline of 2015/16, the council’s footprint and performance as at 2020/21 has been reduced by approximately 48% and sets a target to increase this to 52% by 2025/26. Given that there are only a further four years to 2030, during which time a further 48% reduction is required to reach net- zero, we consider achievement of this commitment to be very ambitious in such a relatively short timescale particularly in the absence of identification of the detailed and resourced plans necessary to deliver the commitment. The plan concludes by setting out that the next phase is to produce and publish a detailed climate action plan and build a planned route map to 2030. A report was presented to the Environment and Place Committee in August 2022, which provided an update on the Council’s journey to net-zero and contained a consolidated list of Services’ climate actions currently underway to assist in tackling the climate challenges. The report acknowledges that the actions identified to date are not sufficient to achieve the climate target set for 2030 and an acceleration and upscaling of deliberate action is required to achieve net-zero greenhouse gas emissions. The report also highlights that the ability to define the optimum course of action for North Lanarkshire to achieve net-zero emissions sits out with the normal skillset of the Council and proposes that external professional advice is sought. Whilst the list of Services’ actions contained in the Committee report provides a good foundation, our review identified that these have not been translated into a comprehensive action plan which provides actions in SMART terms with responsible officer, timescales, and mechanisms for tracking, monitoring and reporting on progress. The Sustainable Scotland Network guidance on public sector leadership on this global emergency states that climate change must be integrated into financial planning and reporting, including aligning investments and programmes with the priorities of the updated Climate Change Plan to support a just transition to net zero and a green recovery. There is a need to ensure expenditure and financial plans are aligned with emission targets, resources from external sources are accessed, and opportunities to engage in cost effective collaboration exercises are pursued. Presently, the Council’s understanding of cost pressures, direct impacts of climate change and planning for net zero are not mature enough to enable them to be accurately quantified and reflected in the Council’s Medium-Term Financial Plan. As part the revised programme of work and associated governance arrangements to support the Plan for North Lanarkshire, responsibility for climate change now falls under the remit of the Sustainable Futures Programme of Work (PoW) Strategic Board. The delivery plan for the Sustainable Futures PoW theme includes the need to develop a route map/action plan to provide an outline strategy as to how the Council will move to net zero (including outline costs, timeframe and review periods), with an indicative range of actions with timeline across 2024/25 and 2025/26. We understand that appointment of a partner/consultant referenced above will also be taken forward. Notwithstanding progress to date however, it is clear that the commitment to net zero by 2030 was, and remains, hugely ambitious but that delivering this presents, what to Internal Audit appear insurmountable challenges for the Council. Most significantly these include the difficulty of identifying, planning and progressing in such a short timescale the range of actions likely to be required to achieve net zero and challenges around the affordability of such actions and their inclusion in relevant financial plans at a time where the Council’s overall finances are under significant pressure. Implication Recommendation Priority If the ACT 2030 does not clearly set out an up-to-date route map and action plan to net zero, the Council may fail to effectively progress towards/achieve its own net zero commitments and/or be timeously alerted to any shortfall that requires remedial action(s) and/or communication to stakeholders. The Depute Chief Executive (as SRO for the Sustainable Futures Thematic Board) should, as a matter of priority: (1) create a formal detailed action plan/route map setting out in SMART terms planned actions designed to achieve net zero/deliver the Council’s climate change commitments. This should be regularly updated and include information on responsible officers/expected timescales, costs and other resource requirements and include a mechanism for tracking, monitoring and reporting on progress against key milestones/targets to relevant key stakeholders; and (2) as part of the preparation of a detailed route-map, review whether the current timescale for reaching net zero by 2030 remains realistic/achievable, reporting the outcome of this review, along with any revised target dates/milestones, to relevant stakeholders. High Page 134 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.010 - Climate Change/A - Findings and Reports/A06a 20231106 CLIMATE CHANGE Final report v1.0 as issued.docx 5 3. Action Plan (continued) Climate Change 0900/2023/010 Management response Implementation Month/Year Agree James McKinstry, Chief Officer (Asset and Procurement) As the lead for Climate Change, many actions are currently being taken forward by Asset and Procurement in relation to climate change, including but not limited to completion and submission of the Council’s annual public sector climate change duties report, completion of the current phase of the LHEES strategy and delivery plan, participating in the Sustainable Futures Board and ongoing delivery of phase 3 of the non-domestic energy efficiency projects. A ‘manageable chunks’ approach will be adopted in response to these audit recommendations as net-zero will be a long, unsettled journey with obstacles (such as funding) that will influence the possible direction/path the Council should take. A route map will be developed which will contain what is achievable, however this will not guarantee delivery and it should be noted that at this time it is unclear whether the focus will be on reducing emissions or energy due to the latter being a priority of the Sustainable Futures Board. As such we will seek clarity from the Sustainable Futures Board on their prioritisation of these two linked, by essentially different themes. The findings and recommendations of the LHEES and its delivery plan provide a list of initial steps for the Council to take to progress the decarbonisation of heat and improve energy efficiency and as such contain therein the beginnings to building a pathway to zero by North Lanarkshire. The LHEES Delivery Plan will be updated on an annual basis. With regards to the wider (or all encompassing) pathway to net-zero/local energy plan, once the scope is clarified by the SRO for the Sustainable Futures Thematic Board work will commence, subject to acquiring funding/resource to undertake the following: • Baselining North Lanarkshire; • Agreeing final scope of work; • Identify internal and external resource requirements; and • Commence work including engagement with relevant stakeholders to develop an action plan for North Lanarkshire. December 2025 Page 135 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.010 - Climate Change/A - Findings and Reports/A06a 20231106 CLIMATE CHANGE Final report v1.0 as issued.docx 6 3. Action Plan (continued) Climate Change 0900/2023/010 Ref Finding 2 The recently revised governance arrangements for climate change need to be kept under review to ensure they are effective in progressing the delivery of actions designed to achieve the Council’s climate change commitments and allowing effective oversight of progress by senior management and elected members. Our previous audit (issued May 2020) recommended that the governance arrangements for climate change required to be reviewed to ensure they reflected best practice and incorporated the wide range of actions likely to be required to address the changing expectations and climate change commitments the Council was expected to deliver against. As a result of this recommendation management undertook a review of the governance arrangements for climate change which resulted in the then Climate Change Group being replaced with a Board responsible for monitoring and reviewing all climate related issues and decisions. However, subsequent governance changes were introduced this year as a result of the refreshed Programme of Work which led to the Climate Change Board being dissolved and a newly established Sustainable Futures Programme of Work (PoW) Thematic Board being created which, amongst other responsibilities, has oversight of all aspects of the Council’s climate change duties. The aim of this theme is to ‘focus commitments to net zero carbon and the associated actions (including energy solutions and investments) required to make it a reality’. We were pleased to note the climate change corporate risk has been reviewed and updated resulting in an increased residual risk score from 16 to 20, due to the increased uncertainty following the recent governance changes and that it is too early to evidence this new Board’s reliability/effectiveness in progressing/delivering necessary actions. Internal Audit considers it important that the governance arrangements in this area are kept under review to ensure that the strategic Sustainable Futures Thematic Board is able to effectively discharge this responsibility and/or whether there is a need for a climate change board/steering group or similar to be re-established at a more operational level to develop and progress detailed plans/actions and report progress to the Thematic Board. Implication Recommendation Priority Management response Implementation Month/Year The work of the Sustainable Futures PoW Board may fail to adequately address the full obligations placed on the Council by its climate change responsibilities. The Depute Chief Executive (as SRO for the Sustainable Futures Thematic Board) should ensure that governance arrangements in this area are kept under review to ensure that the Sustainable Futures Thematic Board is effective and able to monitor and progress the delivery of actions designed to achieve the Council’s climate change commitments and allow effective oversight of progress by senior management and elected members. Medium Agree Andrew McPherson, Depute Chief Executive (SRO for Sustainable Figures Board) A review of the Sustainable Futures Thematic Board will be undertaken against public leadership guidance and compliance with the public bodies climate change duties to determine whether it provides effective oversight of climate change commitments or if there is a need to re- establish the former Climate Change Board. April 2024 Page 136 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.010 - Climate Change/A - Findings and Reports/A06a 20231106 CLIMATE CHANGE Final report v1.0 as issued.docx 7 3. Action Plan (continued) Climate Change 0900/2023/010 Ref Finding 3 Climate change needs to be more effectively embedded into the Council’s decision-making processes. Given the challenge presented by delivering net zero, the Council needs to be consistently considering the potential carbon impacts of all decisions more explicitly as part of its decision- making processes. Moving to net zero carbon represents a significant challenge for all organisations and requires a full understanding and transparency over the impact on carbon emissions of policy choices and day-to-day operational decisions. This is particularly important for decision-makers in situations where there may be significant tensions between achieving net zero/planned carbon emission reductions and other corporate ambitions. Integrating climate change effectively into decision making across all areas of the Council’s diverse activities and policies/strategies is understandably complex, will take time and in itself presents both challenges and opportunities. These include financial constraints, access to data required to support decision making processes and relevant skills and capacity. There are clear examples of the Council bringing consideration of climate change issues into decision making as follows: • Position Risk Assessment template within the project management framework requires consideration to be given as to whether the project fully aligns with carbon/net zero objectives; • Capital Programme bid process makes provision for consideration of climate implications in the methodology for prioritising bids; • Specific impacts section within all reports to Committee allows report authors to document the environment/carbon impacts and corresponding guidance including a process for undertaking carbon impact assessments to help inform this process; and • initial work underway to incorporate more formally climate change/net zero ambitions into procurement procedures to embed sustainable procurement practice into regular procurement activity as a means of contributing towards decarbonising public sector procurement. A brief review of the impacts section of a sample of Committee reports indicates that it is not always clear that due consideration has been given to the carbon impacts with often limited information on the potential carbon impacts conveyed to those tasked with making decisions. It is also unclear the extent to which carbon impact assessments are being undertaken for incorporation into reports. We understand that at present there is no formal scrutiny process in place to ensure that carbon impact assessments are being completed in accordance with corporate procedures, to check the accuracy/completeness of any such assessments and/or to ensure that appropriate documentation is being retained by services to support these assessments. Given the statutory requirement and the Council’s own commitment to achieve net-zero, consideration of the carbon impacts of all decisions needs to be given greater attention so that processes and mechanisms can be put in place to more effectively inform decisions being made across the organisation. Implication Recommendation Priority Management response Implementation Month/Year If climate change/carbon impacts are not incorporated as a key part of all council decision making processes, there is a risk that decisions may be made which run counter to or impact the Council’s ability to deliver its net zero obligations and/or commitments. The Depute Chief Executive (as SRO for the Sustainable Futures Thematic Board) should: (1) review how the climate change/net-zero carbon agenda can be more effectively incorporated into the Council’s decision-making processes with appropriate guidance and/or training for staff developed as necessary; (2) review how environmental impact consideration can be better and/or more consistently reflected in committee reports to ensure climate change/net zero implications are given appropriate recognition as part of the Council’s decision-making process; (3) periodically reviews the effectiveness of decision-making processes in considering climate change/net zero issues. Amber Agree Andrew McPherson, Depute Chief Executive (SRO for Sustainable Figures Board) A review of the Council’s existing arrangements for incorporating climate change/net-zero carbon agenda into decision-making processes will be undertaken as well as consideration of other approaches/best practice. A report will thereafter be presented to the Sustainable Futures Board for determining how climate change (mitigation, adaptation and sustainability) will be prioritised and embedded within the organisation. This will include ensuring climate impacts are fully considered in all decision making and reviews to confirm effectiveness of resulting arrangements. December 2024 Page 137 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.010 - Climate Change/A - Findings and Reports/A06a 20231106 CLIMATE CHANGE Final report v1.0 as issued.docx 8 3. Action Plan Climate Change 0900/2023/010 Ref Finding 4 The completeness and accuracy of data gathering processes needs to be periodically reviewed. Public bodies should carry out an assurance and verification process on greenhouse gas measures. The Public Sector Leadership on the Global Emergency Guidance produced by the Sustainable Scotland Network (SSN) advises that formal internal assurance processes should be signed off by a senior leader. The Council has established robust data collection arrangements in place for waste and fleet fuel. Recent resourcing changes have impacted on the information gathering arrangements for energy however progress with the business stream database via a third party, Inspired Energy, to collate information on energy usage from all utility bills has strengthened this going forward. Information is monitored within Services on an ongoing basis and provided annually for reporting in the annual climate report against targets. There is a need to carry out periodic reviews of the completeness and robustness of these data sources to ensure the information produced from them (on carbon emission tonnes) is accurate and reliable. We understand that recently, work has commenced to introduce indicator definition templates that will more formally set out the scope of relevant data sources, how these will be collated into meaningful information for reporting, by whom and how frequently. Implication Recommendation Priority Management response Implementation Month/Year Data sources used to calculate emission information may be incomplete and/or inaccurate and fail to accurately reflect the performance and progress across North Lanarkshire to reduce emissions and move towards net zero. The Depute Chief Executive (as SRO for the Sustainable Futures PoW Board) should ensure that the creation of indicator definition templates for each emission source is completed and shared with relevant service areas. Thereafter arrangements should be put in place to ensure that periodic reviews of the completeness and accuracy of each carbon emission data source is undertaken to confirm that information reported continues to be accurate and complete. Low Agree Lynda Stevenson, Climate Change Lead Officer This work has previously been undertaken; however, an update is currently required. Once complete periodic reviews will be undertaken and will align with the annual data collection exercise. December 2023 Page 138 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.010 - Climate Change/A - Findings and Reports/A06a 20231106 CLIMATE CHANGE 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 139 of 176
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.010 - Climate Change/A - Findings and Reports/A06a 20231106 CLIMATE CHANGE Final report v1.0 as issued.docx 10 Appendix 2 – Extract from the Leaders’ Climate Emergency Checklist (Sustainable Scotland Network) Theme Foundation (Structured and Focused) Advanced (Comprehensive and Professional) Exemplary (Innovative and Transformational) Strategy Action on climate change is a strategic corporate priority. Key areas for action have robust strategies in place to inform delivery. Climate change is embedded in all organisational strategies and plans, and shapes decision making and resource allocation. Targets Targets set with clear baselines, boundaries, inventories and interim targets, supported by delivery pathways and aligned with national policy objectives. Targets/outcomes set for key functions of the body, including procurement/supply chains, upstream and downstream impacts of the body's functions. Targets/outcomes go beyond net zero, aimed at regenerative and holistic sustainability transformations. Governance Structures are in place to ensure oversight, accountability and transparency in climate- related decision making. Climate change embedded into decision making at all levels, with evidence reported of how this influences decisions on plans, projects and resources. The body is proactively influencing partners, citizens and stakeholders to drive change at scale, locally, regionally and nationally. Delivery Climate action incorporated in policy development and service design, with policies and projects in place and actively managed Coordination of delivery across service areas and projects to maximise benefits and avoid unintended consequences. Working collaboratively to align and scale policies, projects and partnerships on climate action Finance Investigating how to align spend with targets and steps being taken to progress. Understanding of how to align spend with targets. Finance gaps identified and work underway to secure resources. Resource and spend clearly aligned with targets, climate impact of investments being managed, and collaborations in place to leverage in resources. Performance Mandatory climate change reporting used to inform delivery and communicate progress Progress on climate change is part of regular performance monitoring and accounts and corrective actions taken. Monitoring is above and beyond mandatory requirements and reporting is shared and reviewed with stakeholders. Skills Key staff aware of how climate change is part of their roles and responsibilities. All staff understand how climate change fits into their activity and key staff taking action to embed climate change. All staff empowered to act and contribute to climate targets and outcomes. Page 140 of 176
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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/November 2023 Date 20/11/23 Internal Audit: Follow up of actions previously agreed by management in response to audit recommendations From Ken Adamson 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 September 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, three are partially implemented and two are no longer relevant. 10 of the 29 actions agreed in response to relevant Internal Audit recommendations due in the period have been fully completed and 19 have been assessed as partially implemented. Recommendations It is recommended that the Panel: (1) note the contents of this report; (2) note the planned review of current processes for monitoring follow-up actions, including further discussions with Corporate Management Team and request a report on the outcome of that review be submitted to the next meeting of the Panel; and (3) 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 Programme of Work All Programmes of Work Item 7 Page 141 of 176
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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 September 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 (July to September 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 September 2023. Overall, 10 of the agreed actions have been completed and 19 have been assessed as partially implemented. Table 1 Complete Partially implemented No longer relevant Total Chief Officer Area Asset and Procurement 0 1 0 1 Audit and Risk 1 0 0 1 Business and Digital 0 1 0 1 Community Operations 1 4 0 5 Education 0 3 0 3 Finance 1 0 0 1 Housing Management 1 1 0 2 Legal and Democratic 1 0 0 1 People Resources 5 7 0 12 Place 0 1 0 1 Social Work 0 1 0 1 TOTAL 10 19 0 29 Page 142 of 176
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2.2 Internal Audit has reviewed the management updates and agreed with relevant management revised implementation dates for all 19 recommendations listed as partially implemented at Table 1. These recommendations will now be monitored in line with agreed revised dates and will be reported back to the Panel in accordance with these revised timescales, 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 because 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. Update on previously reported ‘High’ residual risk actions 2.4 At the Panel meeting in September 2023, there were two outstanding Internal Audit recommendations that had a residual risk assessment of ‘High’ and for which the Panel requested a specific update on progress with such actions. One action related to audit work on the Governance of Capital Projects and the other on audit work on Risk Management. 2.5 The Governance of Capital Projects action related specifically to the introduction of a Quality Assurance Framework and since the last update to the Panel, a report regarding this was presented to CMT in October 2023. This report sets out the proposed Quality Assurance arrangements for CMT input prior to there being further engagement and roll-out across the Programme of Work Strategic Boards and associated project boards. The report highlights that there are a series of actions required to implement the Quality Assurance arrangements and set out details of these actions, responsible officers and expected timescale for completion (March 2024). Although outstanding for a significant period of time, we are pleased to note that clear actions and timescales have now been proposed and Internal Audit considers that delivery within these timescales should mitigate the original risk identified. We suggest the Panel note this positive direction of travel and that this action will be followed-up in line with the revised timescales in due course. 2.6 The outstanding action from the Risk Management audit referenced here relates to the need to finalise and move to ‘live’ status the ‘Target Operating Model’ corporate risk. The Chief Officer (Audit and Risk) has confirmed that the risk documentation for this corporate risk is now complete having been updated to reflect current actions planned by the relevant project board and the One Service Thematic Board. Internal Audit are satisfied that sufficient action has now been taken and this recommendation is now fully implemented. Outstanding Internal Audit Recommendations 2.7 Following concerns expressed by the Panel at the September meeting about the level of recommendations which remain outstanding and the relatively low percentage of agreed actions implemented by the agreed implementation date, the Chief Officer (Audit and Risk) conveyed the Panel’s concerns to all Chief Officers and reminded them of the need to ensure that agreed actions are progressed in line with agreed timescales. 2.8 Internal Audit have now undertaken a high-level review of all Internal Audit recommendations made since April 2021. During this period there were 179 relevant audit recommendations made where the original agreed implementation date is either due or has passed; of these, 75% have been implemented by Services, albeit in several instances after the original implementation date agreed by management. Page 143 of 176
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2.9 This means that 44 (or 25%) audit recommendations made since April 2021 remain outstanding (see Appendix 3). Many of these have had more than one extension to the original agreed timescale for implementation. As can be seen from Appendix 3, many of the extensions requested have resulted in revised implementation dates which are then themselves subsequently not achieved by relevant management. Failure to implement agreed actions means the risks identified during the original audit will not have been appropriately mitigated. 2.10 Given these observations and the Panel’s ongoing and understandable concerns about this issue, Internal Audit will undertake a review of our current processes for monitoring follow-up actions including further discussions with Corporate Management Team. Internal Audit considers that the results arising from the current process suggests strongly that some Services are not proactively progressing and/or monitoring the progress of agreed actions on a continual and ongoing basis. We will report on the outcome of our review and discussions with the Corporate Management Team to the next meeting of the Panel. It should be noted, however, that ultimately improved outcomes will be dependent on buy-in and appropriate action from Services and senior management. Actions previously agreed by management – External Audit recommendations 2.11 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, three have been partially implemented and the remaining two actions are 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 3 0 1 5 TOTAL 7 3 0 2 12 2.12 The External Audit actions assessed as ‘no longer relevant’ relate to issues on which External Audit have made a similar recommendation in a subsequent audit report. 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. Page 144 of 176
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4. Supporting documentation Appendix 1 Internal Audit recommendations: Management actions assessed as ‘not yet complete’ in this cycle Appendix 2 Residual risk rating definition Appendix 3 Outstanding audit recommendations at November cycle where original implementation date due Ken Adamson, Chief Officer (Audit and Risk) Page 145 of 176
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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 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? 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 ☒ 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ Page 146 of 176
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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 (Asset and Procurement) Enterprise Project (May 2022) Risk: Without a robust and realistic contingency plan in place the Council may not be able to ensure continuity of service delivery and achievement of ambitions. Recommendation: The Enterprise Board should ensure that the key tasks required to fully document a contingency plan, including key milestones and lead times/critical path, is included in the project plan and thereafter monitor development of the contingency plan to ensure that an alternative ‘Plan B’ is available, and lead times/critical path are clearly understood should the project not be able to be progressed as currently envisaged. Category: Medium The Project Board set out the actions required to be taken to mitigate the identified risks in a report to the Policy and Strategy Committee in December 2022 and the options revalidation exercise (ORE) approved at this meeting is now complete. The ORE confirmed the current approach as the preferred option and identified the creation of a Council owned ALEO as the emerging contingency option. The Project Board agreed that the recommendations contained in the ORE should be supported and these decisions were subsequently incorporated in a report to the Council on 17 August 2023, with the Council approving the recommendations contained in that report, including the timing of the development of a full business case in relation to the potential creation of an ALEO. Phase 1 of the Enterprise Project comprise two major public procurements, both are now at an advanced stage and bidders continue to engage positively in the procurement process, and this provides a high degree of confidence that both procurements can be progressed to a successful conclusion. Further updates on progress of aspects of the Enterprise Project will be provided to the Policy and Strategy Committee in December 2023. In addition, there is an expectation that the consideration of contract award recommendations in relation to the two phase 1 public procurements will be incorporated in a report to the Council in February 2024. Original timescale: July 2022 Revised timescale: September 2023 Further revised timescale: February 2024 Whilst we acknowledge that there has been some activity undertaken to address the recommendations, we note that, as recognised by the Service, significant action is still required to progress and fully action the recommendations made. 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. Although, we would normally have suggested that the Panel may wish to consider requesting a further update from relevant senior management at the next meeting of the Panel, given the proposed timing of the next report on this issue to Council in 2024, no further action is proposed at this time. Page 147 of 176
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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 Head of Service 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 Finalisation of work to refresh the Strategic Performance Framework was waiting on development of the new Programme of Work for 2023 to 2028 to be clear on what progress and performance was to be assessed against. The Programme of Work was approved in March 2023. However, it was only when further work was undertaken to develop the Single Integrated Programme of Work High Level Delivery Plan that the deliverables became available to enable the review of the indicators contained within the Strategic Performance Framework and ensure they remained aligned to the Council’s ambitions and Programme of Work. A report was submitted to both CMT and the Policy and Strategy Committee clearly outlining the next steps to be taken to enable the review of the Strategic Performance Framework indicators to be completed. The report to CMT clearly set out an implementation timeline for the governance, monitoring and performance management arrangements for the new Programme of Work 2023 to 2028. Part (2) of the recommendation has been completed and the list of Calculating Officers and Verification Officers clearly shows the corresponding service for each indicator in the Framework. Original timescale: December 2022 Revised timescale: September 2023 Further revised timescale: April 2024 We acknowledge the action that has been taken to date to address the recommendations made and note that delay in implementation was largely due to the development of the new Programme of Work and the Single Integrated Programme of Work High Level Delivery Plan. Given that there is still considerable action required to finalise the implementation of the recommendations we have assessed the residual risk as ‘Medium’ and consider it important that the outstanding actions are progressed and fully implemented in line with the revised timescale of April 2024. Accordingly, we would suggest that the Panel may wish to consider agreeing to note the progress made and the revised timescale for completion and to monitor progress made as part of a future follow- up report. Members may also wish to note that Internal Audit will shortly commence work on Performance Management, as part of the approved 2023-24 Internal Audit Plan, the results of which will be reported to the Panel when complete. Page 148 of 176
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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 (Community Operations) Business Continuity Planning (July 2022) Risk: Without, appropriate and detailed guidance, the documented business continuity arrangements may not fully consider the impact of potential emergency situations on all critical services and the necessary steps to minimise disruption to these services. Resulting plans may be incomplete and/or not adequate resulting in services not being capable of being restored in line with Service and/or corporate expectations. Recommendation: Management should: (1) undertake a formal review of the current framework, including consideration of the specific issues raised above, to ensure that relevant guidance supports the production of robust and comprehensive Service business continuity plans; and (2) ensure the timely implementation of the results of the above review including establishing clear timescales for how individual service areas should revisit their BCP/DRPs to comply with any revised guidance. Category: High Attempts have been made to start work on addressing the audit recommendations, however due to staff resourcing issues the focus has had to shift to sustaining business as usual activities and limited work has thus been undertaken to address these recommendations. The post of Resilience Planning Officer is now occupied by a person who has Business Continuity experience, and this will provide the capacity and skill set to allow the actions to be progressed, with a view to implementation. Original timescale: September 2023 Revised timescale: March 2024 The then Chief Officer (Community Operations) recognised that due to resourcing issues within the Resilience Team the previously revised timescale was unachievable and approached Internal Audit in advance of the original agreed timescale to request an extension, which we duly agreed. We note that the Resilience Planning Officer post has now been occupied and through discussions with the Resilience Team, we acknowledge the work that has been planned and is being undertaken to address the recommendations made. We have therefore assessed the residual risk as ‘Medium’ and consider it imperative that the outstanding actions are progressed and fully implemented in line with the revised timescale of March 2024. Accordingly, we would suggest that the Panel may wish to consider agreeing to note the progress made and the revised timescale for completion and to monitor progress made as part of a future follow-up report. Page 149 of 176
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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 (Community Operations) Business Continuity Planning (July 2022) Risk: A lack of, or Inadequate, oversight, scrutiny and challenge of BC and DR plans may impact on the quality and robustness of such plans. Recommendation: Management should introduce a formalised review process which subjects proposed business continuity and disaster recovery plans to effective review and/or challenge. This should include ensuring that these arrangements sufficiently detail the methodology and processes which will enable critical activities to be maintained or resumed in the event of an incident which could impact on service delivery and that all functions/service areas of the Council are included in these plans. Category: Medium Attempts have been made to start work on addressing the audit recommendations, however due to staff resourcing issues the focus has had to shift to sustaining Business as Usual and limited work has thus been undertaken to address these recommendations. The post of Resilience Planning Officer is now occupied by a person who has Business Continuity experience, and this will provide the capacity and skill set to allow the actions to be progressed, with a view to implementation. Original timescale: September 2023 Revised timescale: March 2024 The then Chief Officer (Community Operations) recognised that due to resourcing issues within the Resilience Team the previously revised timescale was unachievable and approached Internal Audit in advance of the original agreed timescale to request an extension, which we duly agreed. We note that the Resilience Planning Officer post has now been occupied and through discussions with the Resilience Team, we acknowledge the work that has been planned and is being undertaken to address the recommendations made. We have therefore assessed the residual risk as ‘Medium’ and consider it imperative that the outstanding actions are progressed and fully implemented in line with the revised timescale of March 2024. Accordingly, we would suggest that the Panel may wish to consider agreeing to note the progress made and the revised timescale for completion and to monitor progress made as part of a future follow-up report. Risk: The absence of regular testing of planned business continuity and disaster recovery arrangements may lead to an increased risk that these arrangements are ineffective and/or inadequate in the event of an emergency. Recommendation: Management should ensure that: (1) a formal programme of future planned tests is prepared and implemented across all Services to ensure appropriate testing of all business continuity and disaster recovery arrangements. Testing should be risk-based, proportionate and include table-top exercises, structured walkthroughs and disaster simulation testing as appropriate; (2) testing and review templates, as referenced in the guidance, are completed by all service areas recording details of all such testing undertaken including: the outcomes of testing; lessons learned and improvement actions identified; (3) once completed, testing and review templates referenced at (2) above are reviewed by the Resilience Development Unit for each service area and lessons learned collated into a document for sharing across Services; and (4) Annual Assurance Returns are reviewed and a summary thereafter prepared, detailing testing undertaken in the year and the subsequent outcomes of such testing, for inclusion in the annual report on resilience planning submitted to CMT and elected members. Category: Medium Page 150 of 176
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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 (Community Operations) Follow Up of Investigation of Staffing Issues within Waste and Fleet Resources (July 2023) Risk: A lack of documentation to clearly support the reasons for staff undertaking higher duties, claims for higher duties payments may be authorised inappropriately and staff could receive payments which they are not entitled to and this could lead to increased costs for the Council. Failure to apply conditions of service appropriately could lead to inconsistency of employee payments across both the Service and the Council. If errors are not stopped immediately when they are first identified, any overpayments arising from the error could continue to increase and the likelihood of recovery could be reduced. Delays in employees agreeing and signing repayments schedules for overpayments could lead to a delay in recovery and increase the risk of the overpayment not being recovered if the employee were to leave the Council’s employment. Recommendation: Management should review the ‘project management model review programme’, particularly in relation to: he Chief Officer (Community Operations), in conjunction with the Chief Officer (People Resources), should: (1) ensure that HR Business Partners, prior to authorising and passing higher duties claims for payment, properly scrutinise and understand the appropriateness of such claims, confirm that claims have been agreed and authorised by the Chief Officer or senior management and ensure that documentation accurately reflects the reason for such payments; (2) review, and take appropriate action, to resolve the issues and errors in contractual and non-contractual payments identified by Internal Audit and outlined in the document which has been provided under separate cover; (3) identify other employees who may be affected by the issues identified in the finding above, with a view to review and taking appropriate action to resolve any subsequent issues/errors identified; and (4) ensure that where overpayments arise from these reviews, prompt action is taken to ensure that appropriate repayment schedules, with reasonable terms, are promptly agreed with relevant employees and that recovery commences as soon as possible. Category: High Requests for higher duties claims are authorised by the Business Manager, Chief Officer and HR Business Partner to ensure all such claims have been properly scrutinised and appropriately authorised. A review of the contractual and non-contractual payments has been completed and appropriate action is being and/or will be taken to resolve the issues and errors in these payments as identified both by Internal Audit and during the aforementioned review. This includes taking prompt action to recovery and overpayments identified. As part of the review undertaken, the Service are implementing biometric scanners for clocking in and out and this will be trialled over the next three months. Original timescale: September 2023 Revised timescale: December 2023 We acknowledge that while there has been some action taken to address the points made in the recommendation, there is still further action required to resolve the issues and errors identified during both the review undertaken by Internal Audit and that undertaken by the Service, including taking appropriate action to recover any identified overpayments. We have assessed the residual risk for this recommendation as ‘Medium’ and consider it important that the agreed extension date of December 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 151 of 176
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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 Officers (Education and Families – North and South) Education: Quality Assurance Arrangements (January 2023) Risk: The service may fail to adequately review school performance and/or improvement progress in a timely and ongoing manner, resulting in a failure to identify and then progress appropriate actions to secure improvement. Recommendation: Education and Families should ensure that: (1) the refreshed quality assurance framework is fully implemented in a timely manner across all primary and secondary schools; (2) regular monitoring is undertaken to ensure that all planned quality assurance activities are undertaken in a timely manner consistent with an updated quality improvement framework calendar; and (3) a formal review of the adequacy and effectiveness of recently revised/updated processes (particularly VSE and SIDS) is undertaken, after a sufficient period, to assess how well they are operating, identifying and taking any necessary adjustments and/or improvement actions as appropriate. Category: High The Service continues to implement the refreshed quality assurance framework and further training is scheduled for delivery in session 2023-24 focusing on writing effective outcomes and measures to support robust evaluations. The Quality Improvement Framework Calendar was distributed and used to outline and monitor key planning and reporting activity. While a formal review of the adequacy and effectiveness of agreed processes for Validated Self-Evaluation (VSE) has been undertaken, further time is required to fully embed the Self- Evaluation for Improvement Discussion (SID) processes to enable all 4 Quality Indicators to be evaluated in a full school cycle. This will be completed on receipt of all Annual Improvement Reports which are completed using the SID process. Original timescale: June 2023 Revised timescale: September 2023 Further revised timescale: July 2024 We acknowledge that there has been considerable action taken to date and that delay in implementation is due to the need to fully review and refine the Self- Evaluation for Improvement Discussion (SID) processes once the Annual Improvement Reports have been completed and assessed. 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 152 of 176
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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 (Education) Education: Quality Assurance Arrangements (January 2023) Risk: The service may fail to demonstrate that it has addressed and achieved adequate improvement in education performance. Recommendation: Management should ensure that actions included in the annual Service Improvement Plan are, wherever possible, framed in line with SMART principles (Specific, measurable, achievable, relevant and timely), and that the nature/extent of expected improvements is set out, including how this will be measured. Category: Medium The Service Improvement Plan is currently being drafted and the Service are linking in with the Scottish Government Attainment Advisor with regards to the setting of measures and outcomes with the view that this will enhance the quality of overall measures and outcomes identified, which will in turn strengthen reporting processes. Original timescale: September 2023 Revised timescale: November 2023 We acknowledge that there has been significant action taken to address the recommendation and that full implementation has been delayed due to the need to evaluate the Service Improvement Plan when finalised. 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. Contract Management (April 2023) Risk: Without robust overarching review/monitoring arrangements, management would not be able to determine whether effective Contract and Supplier Management activities were being undertaken in accordance with corporate expectations. Contract and Supplier Management performance issues may not be appropriately managed, and lessons learned/good practice may not be adequately shared across the council. Recommendation: The Chief Officers of Education (North and South) should, as a matter of priority, ensure that 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. Category: High The Service has created a new Education Project Team which will lead on the existing project management and co-ordination of procurement and finance related activity, including the project management of Commercial Pipeline Activity (Routes 2 & 3). The Service has identified and will embed the Council’s recognised Contract Supplier Management process within each action outlined in Appendix 1 of an update report presented to the Service’s Resource Group in October 2023. This Appendix details the issue, action detail and impact for each of the identified actions together with target dates. Contract Managers/Owners have been identified for the two specific contracts referenced in the Audit report and awareness training has been undertaken around Contract Supplier Management protocols and procedures. The Service has recently developed a procurement/contract register. Original timescale: September 2023 Revised timescale: March 2024 We acknowledge that there has been some progress made in this area and that planned actions have been detailed. We consider, however, that there is still significant action which requires to be taken before the recommendation can be assessed as fully implemented. We have therefore assessed the residual risk as ‘Medium’ and consider it important that the proposed actions are progressed and fully implemented in line with the revised timescale. Accordingly, we would suggest that the Panel may wish to consider agreeing to note the progress made and the revised timescale for completion and to monitor progress made as part of a future follow-up report. Page 153 of 176
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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 (Housing Management) Housing Allocations (August 2023) Risk: Offers of housing may be made which are not in line with the approved policy and without sufficient evidence to support the decisions made. As such it may be difficult to demonstrate how decisions were made in the event of any claims of bias by other applicants. Recommendation: The Chief Officer (Housing Management) should introduce a mechanism for periodic oversight and analysis of the bypass reasons used and undertake regular analysis/monitoring to ensure that the policy, and exceptions to it, are being applied in an appropriate and consistent manner across localities, and the rationale for allocations outwith the top of the list are adequately and sufficiently documented. Category: Medium A review of the pre-set bypass reasons used is ongoing with locality staff and it is expected that a final list will be agreed in the coming weeks. Guidance notes on the use of the free text box already within the system will be issued to staff along with information on the updated list of bypass reasons. An exception report has been developed to address the recommendation made. Monthly reporting on the bypass reasons used is being prepared for inclusion in the forthcoming Measuring the Charter Outcomes. Original timescale: September 2023 Revised timescale: November 2023 We acknowledge that there has been considerable work undertaken in this area to address the recommendations made and that the Service are close to finalising this work. As such we have assessed the residual risk as ‘Low’. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Chief Officer (People Resources) Corporate Governance - Principles A & B (February 2022) Risk: Without effective workforce planning, there is a risk the Council may not have in place (or identified the actions it needs to progress to ensure it has in place) the staff and skills it needs to enable it to deliver services and achieve planned outcomes. Recommendation: The Head of People and Organisational Development should ensure that the service workforce plans are completed and reported in accordance with the revised timescales to inform future workforce planning activity. Category: Medium Chief Officers have completed service workforce plans. The key highlights from these plans will be included in the One Workforce report. This was due to go to Policy and Strategy Committee in September 2023 but has been delayed until the December 2023, to allow for the Hybrid policy and other elements of the new One Workforce plan to be encompassed. Original timescale: June 2022 Revised timescale: September 2023 Further revised timescale: December 2023 The workforce plans have been completed by Chief Officers and will be included in the One Workforce report scheduled to be submitted to the Policy and Strategy Committee in December 2023. As such we have assessed the residual risk as ‘Low’. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 154 of 176
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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) Payroll – Selected Key Controls (June 2021) Risk: Overtime is currently being paid which has been authorised but is not being authorised (and paid) in accordance with employees’ agreed terms and conditions. Recommendation: The Head of People and Organisational Development should undertake a review to determine whether Section 7.2 of Schedule A remains appropriate and take steps to amend or remove it from the Council’s terms and conditions. Category: Medium A report was presented to the Joint Consultative Committee in June 2023 advising on the proposal changes to the approval process for overtime as outlined with the Council’s Core Conditions of Service. It was proposed to change the detail within the Core Conditions of Service to be more reflective of the current practices and structure within the Council. This would mean the removal of any authorisation requirements from an Executive Director, moving to the Line Manager and Service Manager as appropriate and allowing employees to earn beyond the earnings ceiling of SCP35 if their substantive salary is below SPC35. Those with a salary at SCP35 or above, will be able to work overtime as appropriate but will receive this overtime based on SCP35. The Trade Unions have agreed the proposed changes and they will now be presented to the BMT and thereafter implemented. Arrangements will be made to amend the Core Conditions of Service with a revised version thereafter being made available to employees through MyNL. Original timescale: December 2021 Revised timescale: September 2023 Further revised timescale: November 2023 We acknowledge that there has been significant progress made in addressing the recommendation and recognise that prior to the recommendation being assessed as fully implemented, approval needs to be sought from the BMT and the changes incorporated into the Core Conditions. We have therefore assessed the residual risk as ‘Low’ and consider it important that the revised timescale for implementation is adhered to. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 155 of 176
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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) Supporting Attendance (August 2022) Risk: Without a formal review of the Policy, it would be difficult to determine if the new policy is effective. Without a formal action plan. it would be difficult to monitor and track identified improvement actions and the progress and resultant impact of those actions. Management may not be able to take appropriate action to address issues identified. Management may lack assurance on the extent to which key expectations/requirements contained in the policy are being complied with. Without formal documented processes outlining how performance information should be prepared, staff may not be aware of how to calculate the performance measures which may result in inaccurate performance data being reported by stakeholders. Recommendation: People and Organisational Development should: (1) undertake a formal review of the effectiveness and impact of the new Supporting Attendance Policy; (2) capture any agreed improvement actions for sickness absence in a corporate action plan, progress against which is then tracked and monitored; and (3) undertake periodic compliance reviews on a sample of services and/or service areas and/or individual absence cases to determine the extent to which the revised Supporting Attendance Policy is being implemented across the Council in line with corporate expectations. Category: Medium The Service met with the Trade Unions to review the Supporting Attendance Policy and Toolkits. Following this review and subsequent discussions, changes have been made to the Supporting Attendance toolkits with no changes required to the Policy itself. An action plan for absence has been developed and a series of compliance checks have been scheduled. These will commence in November 2023. Original timescale: December 2022 Revised timescale: September 2023 Further revised timescale: December 2023 We acknowledge that there has been significant action taken to address the recommendation made and, in particular that the impact and effectiveness of the Supporting Attendance Policy has been reviewed and an action plan devised. We note, however, while compliance checks have been devised to determine the extent to which the revised Supporting Attendance Policy is being implemented across the Council in line with corporate expectations, these have not yet been carried out and are scheduled to commence in November 2023. We have assessed the residual risk as ‘Low’ and consider it important that the agreed timescale for implementation is adhered to. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 156 of 176
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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: Equality Impact Assessments (EQIAs) may not be completed in accordance with corporate expectations and/or the Council’s equality duty. EQIAs may not be fully and/or accurately completed leading to decisions being made without potential equalities impacts being considered. Without appropriate or sufficient evidence that the Council is complying with its legal responsibilities, it risks legal challenges and/or reputational damage. Recommendation: The Head of People and Organisational Development should (1) review, and refresh as necessary, the arrangements for EQIAs including ensuring that relevant corporate guidance and supporting documentation is up-to-date and fit for purpose; (2) thereafter, seek to raise awareness/understanding of corporate expectations. This should include reviewing current equalities training, including formalising what training, if any, requires to be made mandatory and ensure that arrangements are put in place to monitor uptake of these courses by relevant staff as appropriate; and (3) periodically review compliance with corporate expectations regarding the completion of EQIAs. Category: High The Council’s equality impact assessment guidance has been subject of both an internal and external review. While there were no suggestions on how to improve the process some helpful comments were received, and these have now been incorporated into the overall review. Actions have been undertaken to ensure that it is now mandatory for any staff member who is completing an EQIA to complete the necessary training before doing so. The Talent and Organisational Team will monitor the uptake of the e-learning module. Additional training is also in development, and this will include the use of case studies to ensure that managers and staff understand the importance of effectively completing an EQIA. This training will be rolled out once complete. The Equality Board Service Leads have undertaken a workshop on equality impact assessments in September 2023 to ensure that they have the competence to support the undertaking of assessments within their respective service. Support is also being provided to Service Leads to build capacity within services. The Equalities Manager has committed to undertaking a six-monthly review of compliance with corporate expectations regarding the completion of EQIAs with a report on the review findings thereafter provided to the Equality Board. Original timescale: August 2023 Revised timescale: April 2024: We acknowledge that significant action has been taken to address these recommendations and delay in full implementation relates largely to the review of compliance regarding completion of the Equality Impact Assessments which are scheduled for April 2024. We have therefore assessed the residual risk as ‘Low’ and consider it important that the revised timescale for implementation is adhered to. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 157 of 176
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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) Controls – Use of Teaching Supply Staff (January 2023) Risk: A lack of appropriate guidance in relation to supply teachers could lead to confusion over definitions, uncertainty around the expectations and responsibilities of Headteachers and the HRBP team not being made aware of all short-term supply teachers undertaking long-term engagements which could further lead to supply teachers not being provided with appropriate contracts of employment and the Council not complying with SNCT guidelines. If a supply register detailing short-term supply teacher availability is not maintained and provided to Headteachers, they may have difficulty identifying an appropriate resource to undertake their supply needs which could lead to Headteachers not notifying the HRBP team where a resource is found or an increased risk of teachers being employed who have not been subjected to the Council’s recruitment process and pre-employment verification checks. Recommendation: People Resources, in conjunction with Education and Families, should (1) prepare and issue documented guidance providing clear definitions of short and long-term supply teachers and outlining the responsibilities and required actions of Headteachers in relation to supply teachers; and (2) finalise and implement the proposed processes for the management of short-term supply teachers as highlighted in the finding (i.e. notification of engagements and the Supply Register) and ensure that a formal review of the adequacy and effectiveness of these processes is undertaken, after a sufficient period of time, to assess how well they are operating, identifying and taking any necessary improvement actions as appropriate. Category: High The Supply Teacher Register has now been refreshed to demonstrate availability of staff. Full Guidance and a process map have been developed for approval via the JNCT mechanism and will form part of a JNCT local policy agreement. All of this has been discussed with the Head Teachers ahead of use. The policy will confirm process, parameters and categories of work, including roles and responsibilities of all stakeholders. Confirmation of the use of the MySelf functionality will be included with links to MyNL guidance. Ongoing consultation with the JNCT Trade Unions is taking place and it is anticipated that agreement will be reached in December 2023, with implementation of the new processes thereafter. A formal review of the adequacy and effectiveness of these processes will be undertaken once they have had sufficient time to be embedded. Original timescale: August 2023 Revised timescale: June 2024 We acknowledge that there has been considerable action taken to address the recommendations made which demonstrates a positive direction of travel and have thus assessed the residual risk as ‘Low’. We consider that it is important that approval of the new processes is obtained via the JNCT mechanism, thereafter, implemented and, after a sufficient period of time to allow the new processes to be embedded, subsequently subject to a formal review to assess the adequacy and effectiveness of these processes. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 158 of 176
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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) Payroll Key Controls – Overtime and Travel & Subsistence Claims (April 2023) Risk: 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. Recommendation: 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. Category: High Initial discussion has taken place between Finance and People Resources regarding the current arrangements for the authorised signatory database and it was agreed that in-built controls in the iTrent system would provide a more effective solution than the existing arrangements. Further work is required and is ongoing to develop options within the iTrent system and this will be progressed when resource becomes available. In the interim, Finance has implemented as much change as is reasonably possible in the existing operating environment, in order to manage and mitigate the risk of the database and/or iTrent not being current and accurate. Such changes include: weekly update reports being issued by People Resources to Finance to ensure any vacancies/transfer of position is actioned and the database updated. Finance also prepare a weekly report of additions/ changes which is passed to People Resources with a view to ensuring iTrent is kept up to date. Original timescale: September 2023 Revised timescale: September 2024 We acknowledge that the decision has been taken to move the authorised signatory to the iTrent system and that interim measures have been identified and put in place to mitigate the risk of the current database and/or iTrent not being up to date. We have therefore assessed the residual risk as ‘Medium’ and consider it important that the outstanding actions are progressed and fully implemented in line with the revised timescale. Accordingly, we would suggest that the Panel may wish to consider agreeing to note the progress made and the revised timescale for completion and to monitor progress made as part of the next follow-up report. Page 159 of 176
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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) Corporate Governance – Principles C & D (May 2023) Risk: 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. Recommendation: 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. Category: Medium All HR policies are regularly reviewed on a rolling cycle. The Chief Officers Code of Conduct has been reviewed and updated and was approved by the Policy and Strategy Committee in June 2023. The Employee Code of Conduct is currently under review and once concluded will be updated and submitted to the Policy and Strategy Committee for approval. The PRD process has been reviewed and implemented. A report was presented to BMT in May 2023 to agree the full roll out and launch of the new process and the new system approach was promoted as part of the ‘learning at work’ week in June 2023. Original timescale: September 2023 Revised timescale: December 2023 We acknowledge that there has been considerable action taken to date to address the recommendations made. We have thus assessed the residual risk as ‘Low’ and consider that it is important that the revised timescale for the outstanding actions is adhered to. Page 160 of 176
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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 As previously reported, town visions have been finalised and were approved by the Policy and Strategy Committee in September 2021. The next stage was to develop action plans for each of the town centres and consultation has been completed with updated Town Action Plans being produced for Airdrie, Motherwell and Wishaw. These are schedule to be reported to the Enterprise and Fair Work Committee in Cycle 4. Consultation is planned for the remaining Town Action Plans during October and November 2023, and these will be reported to a future meeting of the Enterprise and Fair Work Committee. An update on Town Centres was included in the Annual ERDP Performance Report submitted to the Enterprise and Fair Work Committee in September 2023. In addition, work on the Business and Industry Strategy is ongoing with a brief being prepared for assessment of all current business and industry sites as part of preparation for the next Local Development Plan. Original timescale: March 2022 Revised timescale: September 2023 Further revised timescale: April 2024 We acknowledge the progress made to date in addressing these recommendations. However, there is still considerable action to be taken before the recommendations can be assessed as fully implemented and as such, we have assessed the residual risk as ‘Medium’. We consider it important that the outstanding actions are progressed and fully implemented in line with the agreed revised timescale of April 2024. Accordingly, we would suggest that the Panel may wish to consider agreeing to note the progress made and the revised timescale for completion and to monitor progress made as part of the next follow-up report. Page 161 of 176
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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 actions 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 proforma 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 and a RAGG (Red, Amber, Green, Grey) rating has been introduced to track key milestones, targets, tasks completed and those requiring further development. Discussions have been ongoing regarding the format and content of the reports but these have still to be agreed. The Tackling Poverty Team will recommend to the TPAOG that data use will be qualitative and quantitative. The TPOAG will need to agree what local poverty indicators to measure, and this will require a baseline and uniformed methods of recording across the services which will be a major challenge. This will be discussed and agreed at the next TPOAG meeting in October 2023. (2) The Tackling Poverty Manager and the Risk Management Team have largely completed this task. The Corporate Tackling Poverty Risk has been reviewed and updated in accordance with the Corporate Risk Management Strategy. However, following approval of the new Tackling Poverty strategy at September meeting of Policy and Strategy Committee, the corporate risk will be reviewed. Original timescale: March 2023 Revised timescale: September 2023 Further revised timescale: December 2023 Whilst the narrative provided by the Service highlights that there has been significant progress made to date in implementing the recommendations made, it is recognised that there is still further action which needs to be taken before the recommendation can be assessed as fully implemented. We have therefore assessed the residual risk as ‘Low’ and consider it important that the revised timescale of December 2023 is adhered to. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 162 of 176
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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 163 of 176
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Appendix 3 Outstanding audit recommendations at November cycle where original implementation date due Item No Chief Officer Area Report details Action Plan Ref Risk Rating Original due date Extensions 1 Asset and Procurement Enterprise Project June 2022 1 Medium July 2022 February 2024 September 2023 April 2023 2 Creditors March 2022 2 Low December 2022 December 2023 March 2023 3 Contract Management Arrangements April 2023 3 Low June 2023 October 2023 4 Audit and Risk Risk Management July 2022 3 Medium October 2022 October 2023 June 2023 5 2 Medium December 2022 March 2024 April 2023 6 Business and Digital Governance of Capital Projects December 2019 4 Medium June 2020 March 2024 June 2023 December 2022 August 2022 April 2022 7 Managing Strategic Change June 2021 2 Medium September 2021 March 2024 August 2022 April 2022 8 Digital NL November 2021 3 Medium April 2022 March 2024 March 2023 September 2022 9 Performance Management October 2022 2 Medium December 2022 April 2024 September 2023 March 2023 10 Performance Management October 2022 5 Low March 2023 Ongoing 11 Cyber Security January 2023 2 Medium June 2023 December 2023 12 Housing Management Housing Allocations August 2023 2(1) Medium September 2023 November 2023 13 5 Low September 2023 November 2023 14 Legal and Democratic Corporate Governance Principles C & D May 2023 1(1) Medium June 2023 October 2023 Page 164 of 176
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Appendix 3 (continued) Outstanding audit recommendations at November cycle where original implementation date due Item No Chief Officer Area Report details Action Plan Ref Risk Rating Original due date Extensions 15 Community Operations Business Continuity Planning July 2022 4 Low November 2022 March 2024 September 2023 16 Business Continuity Planning July 2022 1 High September 2023 March 2024 17 2 Medium 18 3 Medium 19 Follow up of staffing issues (Waste & Fleet) July 2023 2 High September 2023 December 2023 20 Education and Families Cash Collection (Leisure) January 2023 1 High April 2023 March 2024 21 Cash Collection (Leisure) January 2023 4 Low April 2023 June 2024 22 Education: Quality Assurance Arrangements January 2023 2 Medium May 2023 June 2024 23 Investigation: School B April 2023 1 N/A May 2023 November 2023 September 2023 24 Education: Quality Assurance Arrangements January 2023 1 High June 2023 July 2024 September 2023 25 Investigation: School B April 2023 2 N/A June 2023 December 2023 26 Investigation: School B April 2023 4 N/A June 2023 November 2023 September 2023 27 Contract Management Arrangements April 2023 1(2) High September 2023 March 2024 28 Education: Quality Assurance Arrangements January 2023 3 Medium September 2023 November 2023 Page 165 of 176
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Appendix 3 (continued) Outstanding audit recommendations at November cycle where original implementation date due Item No Chief Officer Area Report details Action Plan Ref Risk Rating Original due date Extensions 29 People Resources Payroll - Selected Key Controls June 2021 2 Medium December 2021 December 2023 September 2023 April 2023 30 Corporate Governance Principles A & B February 2022 2 Medium June 2022 December 2023 September 2023 June 2023 December 2022 31 ESC Testing of Selected Key Controls March 2022 4 Medium December 2022 December 2024 March 2023 32 Supporting Attendance August 2022 1 Medium December 2022 December 2023 September 2023 33 Supporting Attendance August 2022 3 Low March 2023 December 2023 34 Supporting Attendance August 2022 4 Low March 2023 December 2023 35 Supporting Attendance August 2022 2(2) Medium April 2023 December 2023 36 Equalities November 2022 3 Medium April 2023 March 2024 37 Equalities November 2022 2 High August 2023 April 2024 38 Supply Teachers January 2023 1 High August 2023 June 2024 39 Corporate Governance Principles C & D May 2023 1(2) Medium September 2023 December 2023 40 Investigation: School A January 2023 7.3 N/A September 2023 April 2024 41 Payroll - Overtime and Travel & Subsistence April 2023 2 High September 2023 September 2024 Page 166 of 176
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Appendix 3 (continued) Outstanding audit recommendations at November cycle where original implementation date due Item No Chief Officer Area Report details Action Plan Ref Risk Rating Original due date Extensions 42 Place Economic Regeneration Development Plan March 2022 3 Medium March 2022 April 2024 September 2023 March 2023 43 Social Work Tackling Poverty November 2021 1 High November 2022 November 2023 44 2 Medium March 2023 December 2023 September 2023 Note: Extensions to timescales for previously agreed actions can arise for a number of different, and often legitimate or sensible, reasons and the Panel should not automatically assume that the need to amend a previously agreed timescale represents a failure by relevant management. Nevertheless, non-implementation by the agreed timescale does often mean that the risk exposure arising from the control weakness identified in an audit finding remains outstanding for longer than originally planned. Page 167 of 176
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref: KA/ASP/November 2023 Date 20/11/23 Risk management update From Ken Adamson, Chief Officer (Audit and Risk) E-mail adamsonk@northlan.gov.uk Telephone 07939 280602 This report provides members with an update on developments and changes in relation to the corporate risk register and other key risk management developments since the last update to the Panel in September with a particular focus on changes to corporate risk scores and new or emerging risk issues. The corporate risk register is formally reviewed annually to ensure completeness and continuing alignment to the council’s strategic objectives, The Plan for North Lanarkshire and the associated Programme of Work and the approved corporate risk register for 2023-24 was presented to the Panel in September. Members should note that all corporate 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 CMT and the Audit and Scrutiny Panel in line with their respective governance roles There have been no additions to the corporate risk register since the last update, although active consideration is being given to including the issue of reinforced autoclaved aerated concrete (RAAC) in the Council’s property estate (see paras 2.12 to 2.17). Two changes to residual risk scores since the last update to the Panel (relating to School Transport and Climate Change) are also highlighted in the report. Executive Summary Recommendations The Panel is asked to consider the contents of the report and to: (1) note the current scoring for risks on the corporate risk register for 2023/24 at Appendix 1; and (2) note the information contained within the report in respect of risk management arrangements in relation to corporate risks and risks within Services. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Item 8 Page 169 of 176
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1. Background 1.1 The Risk Management Strategy requires that the corporate risk register is formally reviewed 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. In addition, each Service is required to maintain its own risk register in respect of the operational risks within their areas of responsibility. 1.2 In addition to considering the wider environment within which the council operates, each year the corporate risk register is reviewed for completeness and continuing alignment with the council’s strategic objectives, The Plan for North Lanarkshire and the associated Programme of Work. 1.4 The outcome from this year’s review was reported to the Panel in September and the approved corporate risk register for 2023-24 is at Appendix 1. 1.5 All corporate risks identified and agreed as meriting inclusion in the corporate risk register are subject to regular monitoring and review by relevant senior management, while service risk registers and associated risk information is considered regularly at Service Management Team meetings. 2. Report 2.1. The current corporate risk register approved for 2023-24 is at Appendix 1. Risks contained within the register have been subject to ongoing monitoring and review throughout the year. 2.2. Service risk registers are required to be reviewed and monitored by Service Management Teams to ensure that service risk registers are complete and up-to-date and that any new and emerging risks are identified, assessed and managed effectively. 2.3. Risks and issues relating to projects are managed in accordance with the Council’s approved project management methodology and are recorded and monitored via project risk registers which are required to be reviewed and monitored by the relevant Project Board. 2023-24 Corporate Risk Register 2.4. No risks have been added or deleted from the corporate risk register since the last update to the Panel in August, although current issues around the known and potential presence of reinforced autoclaved aerated concrete (RAAC) in the Council’s property estate means that this issue is currently being actively considered for inclusion (see paras 2.12 to 2.17 for more detail). 2.5. One of the new risks recently added to the corporate risk register has now been scored, while one risk score has changed since the last update to Panel. 2.6. The new risk which has now been scored is Home to School Transport Delivery/Sustainability (RIS0000622) with the residual risk assessed as 20 (High). This reflects the fact that despite actions already taken to improve contingency planning, increasing in-house provision to reduce reliance on external contractors and closer monitoring and improved contract management arrangements designed to provide early warning of the risk potentially crystallising, these actions do not reduce the likelihood of the risk occurring. In the current economic climate, ongoing market capacity and volatility combined with inflationary pressures and the high level of demand from the Council means the assessed likelihood of occurrence remains very high and there are likely to be significant impacts if the risk occurs. Page 170 of 176
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2.7. The risk score which has changed relates to Climate Change (RIS0000257), where the residual risk score has increased from 16 (High) to 20 (High). This is expected to be a temporary increase and reflects increased uncertainty following recent governance changes in relation to this issue. Whilst the newly formed Sustainable Futures Board will oversee all aspects of the Council’s climate change duties, it is too early to evidence its reliability to progress/deliver necessary actions. There also remain significant challenges around previous commitments to ambitious targets creating pressure in terms of what it is reasonable to achieve within tight timescales and this could be exacerbated if there is inconsistency with other Council policies, strategies and actions. The cost and affordability of progressing toward and/or achieving net-zero also remains uncertain. 2.8. The newly established Sustainable Futures Board will now oversee aspects of climate action as defined within its remit and risk scores are expected to reduce through the maturing of these governance arrangements, the delivery of planned actions and the realisation of positive outcomes, although some of these are potentially achievable only in the medium-longer-term. 2.9. There have been no other substantive changes to the scoring of any of the corporate risks since the last update to the Panel, although recent decisions and increased political volatility in relation to the Council agreeing and then reversing potential savings arising from the review of the Active and Creative Communities estate, has led me to recommend that relevant risk owners carefully consider whether the current assessment and scoring of the ‘Financial Sustainability’ ‘Governance, Leadership and Decision-making’ and ‘Managing Strategic Change’ risks and/or current mitigating controls and future actions require to be revisited. 2.10. In respect of corporate risks, risk documentation is complete and agreed on all but 3 risks which remain in draft status. Although each is substantively complete they await final agreement and sign off from relevant Chief Officers. They are: • Target Operating Model • Impact of changes to SFRS operating arrangements • Digital Adoption 2.11. Ongoing monitoring and review of corporate risks ensures that the ongoing effectiveness of current controls in managing the relevant risk is assessed and future actions to mitigate risks are planned and monitored. Further detail on the management of each risk is available within the accompanying deep dive risk assessment documentation via the Council’s Figtree risk management system. New risks added or being considered for addition to the corporate risk register 2.12. Members will be aware of widely reported issues in relation to concerns over the resilience and safety in buildings associated with the potential failure of reinforced autoclaved aerated concrete (RAAC), a material used in roof and wall panels in buildings constructed prior to the 1990’s. This issue has been recognised since 2019, with recent decisions made by the UK Government in relation to significantly revised advice to schools in England giving the issue a significantly higher profile in recent weeks. 2.13. The Council has a diverse corporate property estate and in order to assess the Council’s potential risk exposure detailed work has been required to identify where RAAC may be present and then to assess a number of specific factors to arrive at an objective assessment of the robustness of each plank in terms of its potential risk of future failure. Over 400 such property assessments were required and whilst this process is substantively complete, periodic revisits will be undertaken. Four properties were identified as having RAAC, two sites (Pivot Centre, Cumbernauld and Ravenswood Primary School, Cumbernauld) remain in full operational use with appropriate mitigation in place; one site (Motherwell Theatre and Concert Hall) has had to be closed and the last (124 Main Street, Coatbridge) is currently unoccupied and will now remain so. In addition to this, most recently Scott House in Motherwell was Page 171 of 176
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identified as having RAAC. Although this property is not under Council ownership, as a precautionary measure, a decision has been taken to remove any Council employee from the building and relocate within other Council facilities. 2.14. In order to be open and transparent, a dedicated web page has been created with information on RAAC and the impact on any council buildings affected. Any public enquiries are signposted to this web page: www.northlanarkshire.gov.uk/RAAC. Letters have also been sent to parents/carers at Ravenswood Primary School and to users of the Pivot Community Facility to provide reassurance. Full communication has also been distributed to all employees, customers and performers associated with the Concert Hall to advise that all events scheduled for the facility have now been cancelled for the foreseeable future, and attempts made to move performances to other Council facilities where possible. 2.15. Work in relation to the Council’s housing property has to-date, in the absence of national guidance, involved a desktop review. This exercise has suggested that RAAC may be present in a number of blocks and work to clarify this, and any subsequent actions which may be required, is continuing. 2.16. A short life working group has been established to oversee the RAAC issue from an organisational perspective under the direction of the Depute Chief Executive with representation from all relevant operational services and supported by relevant professional support services including Audit and Risk. The Council also continues to take cognisance of all relevant Scottish Government and professional best-practice guidance in relation to this matter. 2.17. Key risks associated with RAAC within the corporate and housing property estates have been recorded within relevant service risk registers. These will be monitored and used to support decision making and enable effective oversight and monitoring of associated planned actions. Active consideration is, and will continue to be, given to whether this issue should be formally added to the corporate risk register. Service risk registers 2.18. Members will recall that in September, for the first time, we reported information on service risks from service risk registers to enable members to have sight of those service risks with the highest residual risk scores. This information will next be presented to the panel in Cycle 1 of 2024. 2.19. Good progress has been made across services in the embedding of risk management practice, however it is important to recognise that there continues to be differing levels of maturity within services. Steps will continue to be taken to support services to ensure that the risk management processes are fully adopted and that risk registers are comprehensive and up to date and subject to regular review and scrutiny meaning risk information will become more and more reliable and robust. 2.20. Of particular importance will be providing continual challenge and stimulus towards ensuring that registers have captured and properly articulated the key risks which they face, indeed services’ review activity so far has already identified some gaps which service risk champions and facilitators will be following up with Senior Management teams to develop and include new risks in registers. 2.18 It is particularly worth noting however, since the review of senior management arrangements at the beginning of 2023, and specifically the inclusion of risk management oversight responsibilities in SMT Terms of Reference, there is renewed focus and momentum underway across all services. This, coupled with the introduction of the newly formed service risk forums means there is now more regular input, an opportunity to share best practice and to discuss risks, with a clear level of management support targeted to help facilitate improved risk management activities and oversight. Page 172 of 176
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2.19 Whilst all of this enables positive steps to be made, it is important to recognise that these arrangements are relatively new and will require some time to fully bed in and become established. The skills, experience and capacity of members of the risk network across the service will continue to evolve, and risk information and discussions will mature with each cycle of reporting. 2.20 The Corporate Risk Management Team will continue to assist Services in assessing training needs and delivering appropriate training. In addition, during the remainder of 2023-24, a particular focus for the Corporate Risk Management Team will be on work to evidence and assess compliance with the new Risk Management Strategy including arrangements within Services. A formal approach to compliance has now been approved by the Council’s Business Management Team and the results of this compliance work will be included in future update reports to senior management and the Panel. Progress on this aspect will be dependent on the successful completion of the recruitment exercise now underway to fill the recent vacancy arising of Corporate Risk Manager. Other risk management developments 2.24 The Corporate Risk Team continues to actively support the application of risk management in a number of key corporate projects. 2.25 The Corporate Risk Team is also providing support to the newly formed Programme of Work Thematic Boards, to assist in ensuring that appropriate risk management arrangements are embedded within these new governance arrangements. Specifically working with the Senior Responsible Officers (SROs) for each theme, there is support ongoing in the development of an appropriate risk assessment methodology to enable Boards to identify high level risks which could impede their successful operation. 3. Measures of success 3.1 The corporate risk management team will continue to report quarterly to CMT and the Audit and Scrutiny 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 Audit and Scrutiny 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: 2023-24 corporate risk register Ken Adamson Chief Officer (Audit and Risk) Page 173 of 176
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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 ☐ 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 will enable the Council to manage its risks more effectively, increasing the likelihood of the Council achieving its plans and ambitions by minimising or mitigating potential threats to planned outcomes. A robust Risk Management strategy lays out the framework and underpins all risk management activity across the organisation. 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 ☒ 5.11 Childrens rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ Page 174 of 176
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Appendix 1 Corporate Risk Register 2023-24 CORPORATE RISKS (Operational) Likelihood Impact Rating Evaluation 1. Impact of proposal to create a National Care Service 5 5 25 Very High 2. Home Support Service Delivery/Sustainability 5 5 25 Very High 3. Information Security and Information Governance 5 4 20 High 4. Home to School Transport Delivery/Sustainability 4 5 20 High 5. ICT operational capability 4 4 16 High 6. Public Protection 4 4 16 High 7. Human Resources 4 4 16 High 8. Governance, Leadership and Decision- Making 4 4 16 High 9. Supply Chain risk 4 4 16 High 10. Scottish Child Abuse Inquiry 4 4 16 High 11. Health and Safety 5 3 15 Medium 12. Business continuity planning 5 3 15 Medium 13. Terrorism 3 5 15 Medium 14. Procurement risk 3 4 12 Medium 15. Resilience planning 2 5 10 Medium 16. Serious organised crime, fraud and corruption 3 3 9 Medium 17. Impact of changes to SFRS operating arrangements To be confirmed To be confirmed To be confirmed To be confirmed CORPORATE RISKS (Strategic) Likelihood Impact Rating Proximity 18. Tackling Poverty 5 4 20 High 19. Power Resilience (Black Start) 5 4 20 High 20. Climate Change 4 4 20 High 21. Financial Sustainability 3 5 15 Medium 22. Enterprise Project 3 4 12 Medium 23. Managing strategic change 3 4 12 Medium 24. Digital and IT strategy 4 3 12 Medium 25. Engagement and consultation 3 3 9 Medium 26. Improving Educational Outcomes 3 3 9 Medium 27. Target Operating Model To be confirmed To be confirmed To be confirmed To be confirmed 28. Digital adoption To be confirmed To be confirmed To be confirmed To be confirmed Page 175 of 176
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