Item 7 d 2024_25_InternalAudit_TradingStandards_Report FINAL
Argyll and Bute Council · 12 June 2025
Back to Audit and Scrutiny Committee — 12 June 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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Argyll and Bute Council Internal Audit Report May 2025 FINAL High Medium Low VFM Number of Findings 0 0 0 0 Trading Standards Audit Opinion: High
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2 Argyll and Bute Council – Internal Audit Report – Trading Standards, May 2025 Contents 1. Executive Summary ........................................................................................................................ 3 Introduction ............................................................................................................................................ 3 Background ............................................................................................................................................. 3 Scope ....................................................................................................................................................... 4 Key Dates ................................................................................................................................................ 4 Risks ........................................................................................................................................................ 4 Audit Opinion ......................................................................................................................................... 4 2. Objectives and Summary Assessment ........................................................................................... 5 3. Detailed Findings ............................................................................................................................ 6 Appendix 2 – Audit Opinion ................................................................................................................. 11 Contact Details Internal Auditor: Annemarie McLean Telephone: 01700 501354 e-mail: Annemarie.mclean@argyll-bute.gov.co.uk www.argyll-bute.gov.uk
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3 Argyll and Bute Council – Internal Audit Report – Trading Standards, May 2025 1. Executive Summary Introduction 1. As part of the 2024/25 internal audit plan, approved by the Audit & Scrutiny Committee in March 2024, we have undertaken an audit of Argyll and Bute Council’s (the Council) system of internal control and governance in relation to Trading Standards. 2. The audit was conducted in accordance with the Public Sector Internal Audit Standards (PSIAS) with our conclusions based on discussions with council officers and the information available at the time the fieldwork was performed. The findings outlined in this report are only those which have come to our attention during the course of our normal audit work and are not necessarily all the issues which may exist. Appendix 1 to this report includes agreed actions to strengthen internal control however it is the responsibility of management to determine the extent of the internal control system appropriate to the Council. 3. The contents of this report have been agreed with the appropriate council officers to confirm factual accuracy and appreciation is due for the cooperation and assistance received from all officers over the course of the audit. Background 4. The Tobacco and Primary Medical Services (Scotland) Act 2010 contains measures aimed specifically at reducing the attractiveness and availability of tobacco to persons under 18. The Act: • bans the sale of tobacco from vending machines; • introduces a tobacco sales registration scheme, which will be free for retailers to join; • makes it an offence for under 18s to attempt to purchase tobacco; • makes it an offence for adults to buy tobacco on behalf of under 18s (known as proxy purchase); • gives trading standards officers powers to issue fixed penalty notices, and ; • gives courts the power to ban retailers from selling tobacco where they have repeatedly broken the law. 5. Since the 1 April 2011, local authorities have had a statutory duty to enforce the tobacco-related provisions of the 2010 Act and related regulations. They have also had a statutory duty to carry out an annual programme of enforcement in their area. 6. From the 1 April 2017, The Health (Tobacco, Nicotine etc and Care) (Scotland) Act 2016 amended the 2010 Act, requiring that tobacco products be extended to include NVPs, commonly known as ‘vapes’. This includes: • making it an offence to sell NVPs to under 18s, • making it an offence to buy for under 18s (‘proxy purchase’), • creating a national register of NVP retailers, • introducing banning orders for NVP retailers who flout the law, and • creating a fixed penalty enforcement regime for offences. 7. At the same time, additional requirements were brought in for both tobacco and NVPs, namely: • a requirement to have an ‘age verification policy’ (AVP), and
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4 Argyll and Bute Council – Internal Audit Report – Trading Standards, May 2025 • a requirement for under 18s to have authorisation from a responsible person to sell these products. 8. Trading Standards Officers work in partnership with the Scottish Government to monitor and support sellers, who need to comply with regulations associated with the retail sale of both tobacco and vaping products. Officers work with young (under-18) people locally and in tightly controlled test purchase situations to check that sellers are abiding by the law by asking for proof of age where appropriate and refusing to sell to children. Those found to be selling to under-18s can be issued with fixed penalty notices or even be banned from selling these products. 9. Enforcement is critical to ensuring that tobacco and vaping products are sold legally. All retailers have a responsibility to ensure that they are complying with the law. Scope 10. The scope of the audit was to review and assess the duties relating to age restrictions on tobacco and vapes (NVP), together with how such restrictions are monitored and enforced by the Council as outlined in the Terms of Reference agreed with the Head of Legal and Regulatory Services. Key Dates 11. The Terms of Reference provided provisional timescales for the review to take place, the actual dates are noted below. Exhibit 1 – Key Dates Stage Actual Date Terms of Reference agreed 20 March 2025 Fieldwork Commencement 20 March 2025 Draft Report issued 14 April 2025 Management Comments received 17 April 2025 Final Report issued 02 May 2025 Audit and Scrutiny Committee 12 June 2025 Risks 12. The risks considered throughout the audit were: • Audit Risk 1 - Failure to comply with tobacco related Legislation Audit Opinion 13. We provide an overall audit opinion for all the audits we conduct. This is based on our judgement on the level of assurance which we can take over the established internal controls, governance and management of risk as evidenced by our audit work. Full details of the five possible categories of audit opinion is provided in Appendix 2 to this report. 14. Our overall audit opinion for this audit is that we can take a high level of assurance. This means that internal control, governance and the management of risk are at a high standard. Only
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5 Argyll and Bute Council – Internal Audit Report – Trading Standards, May 2025 marginal elements of residual risk have been identified with these either being accepted or dealt with. A sound system of control designed to achieve the system objectives is in place and being applied consistently. 2. Objectives and Summary Assessment 15. Exhibit 1 sets out the control objectives identified during the planning phase of the audit and our assessment against each objective. Exhibit 1 – Summary Assessment of Control Objectives Control Objective Link to Risk Assessment Summary Conclusion 1 The Council has processes and procedures in place to ensure compliance with its duties relating to age restrictions on tobacco and vapes (NVP) Audit Risk 1 High • The Council’s Constitution, Scheme of Authorisations and Delegations allows for the nomination and authorisation of officers to carry put the duties pertaining to the enforcement of the various public protection legislation, which includes consumer protection, fair trading and trading standards. • Staff are issued with warrant cards to act in accordance with, and to enforce, certain legislation based on the professional qualifications they hold. • The Trading Standards team follow guidance and protocols relating to testing and enforcement of age restrictions on tobacco and vapes (NVP), issued by the Scottish Government and the Society of Chief Officers of Trading Standards in Scotland (SCOTSS). 2 The Councils monitors adherence to age related restrictions on tobacco and vapes (NVP) and enforces compliance when breaches are identified. Audit Risk 1 High • The Council has a duty to prepare and carry out an annual programme of enforcement. • The annual Trading Standards Service Plan details the tasks and actions team will take to meet the required standards and priorities for that year. • Observation of Test Purchase visits confirm that staff follow the guidance issued by the Scottish Government and SCOTSS. • Performance is reported internally to Legal and Regulatory Support - Governance, Risk and Safety Managers meeting, Department Team Meetings (DMT) and Senior
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6 Argyll and Bute Council – Internal Audit Report – Trading Standards, May 2025 Management Team (SMT) meetings and externally to SCOTSS. • The Trading Standards team exceeded the statutory performance for advice visits and test purchase visits in the financial year 2024/25. • Two breaches were identified in relation to the sale of tobacco products to someone under the age of 18. Fixed Penalty notices were issued and promptly paid. 16. Further details of our conclusions against each control objective can be found in Section 3 of this report. 3. Detailed Findings The Council has processes and procedures in place to ensure compliance with its duties relating to age restrictions on tobacco and vapes (NVP) 17. The Council’s Constitution Part C- Scheme of Authorisation and Delegations allows for the nomination/authorisation of officers to carry out the duties pertaining to the enforcement of the various public protection legislation, which includes consumer protection, fair trading and trading standards. 18. Staff within the Trading Standards are authorised to act in accordance with, and to enforce, over 200 pieces of current legislation on behalf of Argyll and Bute Council. Authorisation for warrant cards to enforce certain elements of legislation, e.g. Weights and Measures, Animal Health and Welfare, and Under Age sales (UAS), is dependent upon the professional qualifications held by staff. 19. Professional training teaches staff to interpret legislation and this judgement/professional knowledge is what is used by staff when carrying out their role. Individual officers maintain records of their own Continuing Professional Development (CPD), this is used by Chartered Trading Standards Professionals to maintain their chartered status and ensures they enhance the knowledge, skills, and competencies for their roles throughout their careers. 20. The Council’s Trading Standards team follow guidance and protocols relating to testing and enforcement of age restrictions on tobacco and vapes (NVP), issued by the Scottish Government and the Society of Chief Officers of Trading Standards in Scotland (SCOTSS). Given the volume and breadth of legislation covered by the Trading Standards and Money Advice team, we are advised that it is not practicable to develop separate Council procedure notes for each of these pieces of legislation. 21. The key documents are: • The Scottish Governments’: Tobacco and Nicotine Vapour Product Sales Guidance for Local Authorities – Enforcement Guidance & Protocols document (the Enforcement Guidance);
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7 Argyll and Bute Council – Internal Audit Report – Trading Standards, May 2025 • SCOTTS: Guidance for Local authorities on Test Purchasing Age Restricted Products (Testing Guidance); 22. SCOTSS works with a wide range of government, regulatory, consumer, business, and third sector organisations, mixing operational and technical expertise with policy work, in order to ensure the effectiveness of consumer protection services in Scotland and provide a source of knowledge and support for trading standards staff. 23. SCOTSS also maintains the Approved Trader database which is an online portal to all of Scotland's trading standards functions who run assured trader schemes. 24. The Enforcement Guidance document was developed by the Scottish Government in consultation with key stakeholders, including SCOTSS, to help local authorities and individual officers carry out enforcement of the Tobacco and NVP related provisions of the 2010 Act including the changes brought in by the 2016 Act, and ensure the legislation is implemented effectively, fairly and consistently across Scotland. 25. Information relating to age restrictions on tobacco and vapes (NVP) is published on the Trading Standards Sale of age restricted goods, of the Council’s website, it is up to date and easily available to the public. 26. The web page provides information and links to quick guides for business, regarding the sale, supply or offer to supply, tobacco products and nicotine vapour products, (NPV’s). It clearly states the age restrictions applicable (minimum age of 18) and that traders should always ask young people to produce proof of their age prior to selling, as “Challenge 25” is a legal requirement in Scotland. 27. Within the scope of this review, the key tasks relate to the provision of advice, responding to complaints, test purchase (TP) visits and enforcing compliance with relevant legislation. There are currently two staff who can be the Lead Officer when carrying out the test purchases. Staff within the wider team have been involved in test purchases and are aware of the roles and requirements of each staff member involved, but are currently not authorised to be the Lead Officer. 28. Discussions with the Trading Standards & Advice Services Manager confirm that within the confines of the resources available, there is an ongoing plan, utilising ‘grow our own’ where skills and training are developed for current staff in order to try and support business continuity in the future. There are currently two Trading Standards Officers, one Regulatory Servicers Officer, a Trainee Trading Standards Officer, and the Enforcement Officer post is in the process of being filled. Both the Trainee Trading Standards Officer and the Enforcement Officer are/will be undertaking professional training at differing levels. 29. Currently there is not an excessive over reliance on one member of staff, however, operations and business continuity, would be restricted due to authorisation levels linked to professional qualifications held by staff.
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8 Argyll and Bute Council – Internal Audit Report – Trading Standards, May 2025 The Councils monitors adherence to age related restrictions on tobacco and vapes (NVP) and enforces compliance when breaches are identified. 30. Local Authorities have a statutory duty to enforce the provisions within the 2010 Act and related regulations and are required to prepare and carry out an annual programme of enforcement in their area, as part of the Enhanced Tobacco Sales Enforcement Programme (ETSEP) and the Enhanced Nicotine Vapour Product Sales enforcement programme (ENSEP). To enable this programme, the Scottish Government provide funding which is embedded within the Local Authorities annual budget allocation. 31. The Trading Standards team have arrangements in place to monitor adherence to age related restrictions on tobacco and vapes (NVP), including how to enforce breaches. 32. The annual Trading Standards Service Plan, is based on the resources available and details the tasks and actions team will take to meet the required standards and priorities for that year. Performance is recorded and monitored using a spreadsheet which has a breakdown of the actions of required to complete each task. 33. There are 2 specific tasks for the annual enforcement plan for age related restrictions on tobacco and vapes (NVP) and enforcement of breaches. • TP 5 – Tobacco and Related Products (TARP) Programme of test purchased and advice visits. • TP 19 - Consider Civil Enterprise Act Action (Fair Trading) or Tobacco Banning Orders (TARP). 34. The statutory targets are percentages so vary from year and are based upon the number of registered retailers/supplier within the Council area, as detailed in the Scottish Tobacco Retailers Register. 35. The Enforcement Guidance states that all test purchasing operations: • should be carried out in accordance with the SCOTSS document ‘Guidance for Local authorities on Test Purchasing Age Restricted Products’ ; and • may lead to formal action being taken against the staff member and the owner of the business, for non-compliance with the Age Verification/Challenge 25 Guidance. 36. Observations of the Testing of premises by the Auditor, confirm that: • Staff follow the guidelines/best practice issued by the Scottish Government and SCOTTS; • There are pre Test Purchase risk assessments and discussions; • Staff involved in the operation were all aware of and familiar with the requirements of the legislation and guidance. • There are established processes for the collection and storage of documentation, information and evidence relating to age restrictions on tobacco and vapes (NVP) and Under Age Sales (UAS). • No breaches were identified during any of the observed visits. 37. When breaches occur Fixed Penalty Notices (FPN) must be issued to the person committing the offence within 7 days. Details on how to pay these are provided on the back of the notice. When
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9 Argyll and Bute Council – Internal Audit Report – Trading Standards, May 2025 a FPN is issued, Trading Standards staff notify the cash receipting team who monitor the income and advise when payment is received. 38. During Test Purchase visits, not attended by internal audit, two breaches were identified in relation to the sale of tobacco products to someone under the age of 18. Fixed Penalty notices were issued and promptly paid. 39. Performance towards meeting the statutory targets is reported: • Internally – monthly and quarterly, at the Legal and Regulatory Support - Governance, Risk and Safety Managers meeting and to Departmental Management Team; • Internally quarterly to Senior Management Team (SMT); • Externally, quarterly returns to SCOTSS who record performance for the Scottish Government. 40. Single Use Vapes (SUV) are due to be banned in 2025/26. In preparation for this, to support and educate retailers and suppliers, the decision was taken to focus resources towards this, increasing the number of both advice visits and vapes (NVP) Test Purchases. 41. This has been a success and in the financial year 2024/25 the Trading Standards team exceeded the statutory performance for advice visits and test purchase visits and achieved the undernoted results: Vape (NVP) Tobacco Retailers given advice 236% 108% Retailers test purchase visits 110% 114% Under Age Sales (UAS) breaches 0 2 Fixed Penalty Notices Issued 0 2 Fixed Penalty Notices Paid 0 2
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In order to assist management in using our reports a system of grading audit findings has been adopted to allow the significance of findings to be ascertained. The definitions of each classification are as follows: Grading Definition High A major observation on high level controls and other important internal controls or a significant matter relating to the critical success of the objectives of the system. The weakness may therefore give rise to loss or error. Medium Observations on less significant internal controls and/or improvements to the efficiency and effectiveness of controls which will assist in meeting the objectives of the system. The weakness is not necessarily substantial however the risk of error would be significantly reduced if corrective action was taken. Low Minor recommendations to improve the efficiency and effectiveness of controls or an isolated issue subsequently corrected. The weakness does not appear to significantly affect the ability of the system to meet its objectives. VFM An observation which does not highlight an issue relating to internal controls but represents a possible opportunity for the council to achieve better value for money (VFM).
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11 Argyll and Bute Council – Internal Audit Report – Trading Standards, May 2025 Appendix 2 – Audit Opinion Level of Assurance Definition High Internal control, governance and the management of risk are at a high standard. Only marginal elements of residual risk have been identified with these either being accepted or dealt with. A sound system of control designed to achieve the system objectives is in place and being applied consistently. Substantial Internal control, governance and the management of risk is sound. However, there are minor areas of weakness which put some system objectives at risk and specific elements of residual risk that are slightly above an acceptable level and need to be addressed within a reasonable timescale. Reasonable Internal control, governance and the management of risk are broadly reliable. However, whilst not displaying a general trend, there are areas of concern which have been identified where elements of residual risk or weakness may put some of the system objectives at risk. Limited Internal control, governance and the management of risk are displaying a general trend of unacceptable residual risk above an acceptable level and placing system objectives are at risk. Weakness must be addressed with a reasonable timescale with management allocating appropriate resources to the issues raised. No Assurance Internal control, governance and the management of risk is poor. Significant residual risk and/or significant non-compliance with basic controls exists leaving the system open to error, loss or abuse. Residual risk must be addressed immediately with management allocating appropriate resources to the issues.