Agenda reports pack
Argyll and Bute Council · 20 December 2022
Back to Audit and Scrutiny Committee — 20 December 2022 and its agenda
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Argyll and Bute Council Comhairle Earra-Ghàidheal Agus Bhòid Executive Director: Douglas Hendry Kilmory, Lochgilphead, PA31 8RT Tel: 01546 602127 Fax: 01546 604435 DX 599700 LOCHGILPHEAD 12 December 2022 NOTICE OF MEETING A meeting of the AUDIT AND SCRUTINY COMMITTEE will be held BY MICROSOFT TEAMS on TUESDAY, 20 DECEMBER 2022 at 10:30 AM, which you are requested to attend. Douglas Hendry Executive Director BUSINESS 1. APOLOGIES 2. DECLARATIONS OF INTEREST 3. MINUTES (a) Minute of previous meeting held on 15 September 2022 (Pages 3 - 8) (b) Minute of the Special Meeting held on 22 November 2022 (Pages 9 - 12) AUDIT ITEMS 4. INTERNAL AUDIT AND COUNTER FRAUD SUMMARY OF ACTIVITIES (Pages 13 - 20) Report by Chief Internal Auditor 5. INTERNAL AND EXTERNAL AUDIT REPORT FOLLOW UP 2022-23 (Pages 21 - 50) Report by Chief Internal Auditor 6. INTERNAL AUDIT REPORTS TO AUDIT AND SCRUTINY COMMITTEE 2022/23 (Pages 51 - 162) Report by Chief Internal Auditor Externally Funded Projects Heritage Assets Early Years Private Sector Grants and Housing Adaptations Oban Airport Live Argyll – Campbeltown Aqualibrium Public Document Pack
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Performance Management – HSCP Directions/Covid Inspection – HSCP Commissioning - HSCP SCRUTINY ITEMS 7. VERBAL UPDATE BY CHAIR(S) OF THE SCRUTINY PANEL(S) Verbal update by Martin Caldwell and Councillor Jim Lynch 8. COUNCIL 6-MONTH PERFORMANCE REPORT - APRIL TO SEPTEMBER 2022 (Pages 163 - 178) Report by Executive Director with responsibility for Customer Support Services 9. WORKPLAN (Pages 179 - 182) For noting and updating Audit and Scrutiny Committee Martin Caldwell (Chair) Councillor Daniel Hampsey Councillor Graham Hardie Councillor Mark Irvine Councillor Reeni Kennedy-Boyle Councillor Jim Lynch (Vice-Chair) Councillor Andrew Vennard Shona Barton, Governance Manager Contact: Lynsey Innis, Senior Committee Assistant; Tel: 01546 604338
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MINUTES of MEETING of AUDIT AND SCRUTINY COMMITTEE held BY MICROSOFT TEAMS on THURSDAY, 15 SEPTEMBER 2022 Present: Martin Caldwell (Chair) Councillor Daniel Hampsey Councillor Graham Hardie Councillor Mark Irvine Councillor Reeni Kennedy-Boyle Councillor Jim Lynch Councillor Andrew Vennard Attending: Anne Blue, Head of Financial Services Jim Smith, Head of Roads and Infrastructure Services Paul MacAskill, Chief Internal Auditor Shona Barton, Committee Manager Iain Jackson, Governance and Risk Manager Mhairi Weldon, Senior Accounting Assistant Kyle McAulay, Audit Scotland 1. APOLOGIES The Chair welcomed everyone to the meeting and took the opportunity to acknowledge the death of Her Majesty, Queen Elizabeth II on Thursday, 8 September 2022. The Committee took a short pause for a moment of remembrance. There were no apologies for absence intimated. 2. DECLARATIONS OF INTEREST There were no declarations of interest intimated. 3. MINUTE OF PREVIOUS MEETING HELD ON 23 JUNE 2022 The Minute of the previous meeting of the Audit and Scrutiny Committee, held on 23 June 2022 was approved as a correct record. 4. INTERNAL AUDIT AND COUNTER FRAUD SUMMARY OF ACTIVITIES The Committee gave consideration to a report providing a summary of Internal Audit activity and progress during quarter 2 of 2022/23 against the following areas: Audits Completed Education Maintenance Allowance (EMA) Workforce Planning (HSCP) Audits in Progress Early Years Heritage Assets Performance Management (HSCP) Page 3 Agenda Item 3a
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Externally Funded Projects Management of Debt and Debt Recovery Private Sector Gains and Housing Adaptations Performance Management (HSCP) Directions (HSCP) The report also included information on the work carried out by the Counter Fraud Team (CFT) and provided an update on total billing to date as a direct consequence of their work. Decision The Audit and Scrutiny Committee agreed to note and endorse the Summary of Activities report. (Reference: Report by Chief Internal Auditor, dated 15 September 2022, submitted) 5. INTERNAL AND EXTERNAL AUDIT REPORT FOLLOW UP 2022-23 The Committee gave consideration to a report providing an update on all open actions as at 30 June 2022, including information on actions where the agreed implementation date had been rescheduled. Decision The Audit and Scrutiny Committee agreed to endorse the contents of the report. (Reference: Report by Chief Internal Auditor, dated 15 September 2022, submitted) 6. INTERNAL AUDIT REPORTS TO AUDIT AND SCRUTINY COMMITTEE 2022/23 The Committee gave consideration to a report containing the action plans in relation to the following 2 audits:- Education Maintenance Allowance (EMA) Workforce Planning - HSCP Decision The Audit and Scrutiny Committee agreed to note and endorse the summary report and detail within each individual report. (Reference: Report by Chief Internal Auditor, dated 15 September 2022, submitted) Councillor Daniel Hampsey joined the meeting at 10:51am during consideration of Agenda item 6 (Internal Audit Reports to Audit and Scrutiny Committee 2022/2023). Having recognised the service and commitment of David Sullivan, Internal Auditor, the Chair, on behalf of the Committee, took the opportunity to wish him a long and happy retirement. These sentiments were echoed by the Chief Internal Auditor, who wanted to record his thanks to David for his help and assistance over the last few months. . Page 4
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7. EXTERNAL AUDIT UPDATE Consideration was given to a verbal update from Audit Scotland which outlined the ongoing work in relation to the preparation of the Annual Accounts for both the Council and Charitable Trusts, together with the process for the finalisation of the draft Annual Audit Report. An update was also provided on the process for the handover to Mazars, who would be in place as the new Auditors from the year 2022/23, with it being noted that Audit Scotland would work closely with them to ensure a well-managed transition and smooth handover. Decision The Audit and Scrutiny Committee agreed to note the verbal update provided. (Reference: Verbal Update by Audit Scotland) 8. AUDIT AND SCRUTINY COMMITTEE ANNUAL REPORT 2021/22 Consideration was given to a report providing the Chair of the Audit and Scrutiny Committee’s annual overview of the Committee’s activity during the financial year 2021/22 and a summary of key developments since the commencement of 2022/23. The report also set out how the Committee had fulfilled its remit and provided assurances to the Council. Decision The Audit and Scrutiny Committee:- 1. Noted and endorsed the Chair’s Annual Report; and 2. Agreed that the Chair present the report to the Council at its meeting on 25 November 2022. (Reference: Report by Chair of the Audit and Scrutiny Committee, dated 15 September 2022, submitted) 9. COUNTER FRAUD TEAM (CFT) ANNUAL REPORT AND UPDATE 2022 Consideration was given to a report that provided an update on the progress of the two year pilot Counter Fraud Team (CFT) established in September 2020. Decision The Audit and Scrutiny Committee:- 1. Endorsed the contents of the Annual Report and progress of the Counter Fraud Team since its inception in September 2020; 2. Noted that the Executive Leadership Team (ELT) have agreed to make the posts permanent; and Page 5
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3. Noted that the future annual reporting relating to counter fraud will be included within the Internal Audit Annual Report. (Reference: Report by Chief Internal Auditor, dated 15 September 2022, submitted) 10. STRATEGIC RISK ASSURANCE MAPPING Consideration was given to a report which set out Internal Audit’s assessment of the sources of assurance for the Committee on the management of the Council’s strategic risks. Decision The Audit and Scrutiny Committee:- 1. Noted the risk assurance map at appendix 1 of the report; 2. Considered the implications for audit and scrutiny coverage in the respective audit and scrutiny annual plans, in particular the potential scrutiny review focusing on waste management in 2023/24. (Reference: Report by Chief Internal Auditor, dated 15 September 2022, submitted) As a result of technical difficulties, the Committee Manager advised that a short break would be taken from 11:20am. The meeting reconvened at 11:30am, with all those present as per the sederunt. . 11. STRATEGIC RISK REGISTER Consideration was given to a report which provided an update on the Council’s Strategic Risk Register (SRR). Decision The Audit and Scrutiny Committee agreed to endorse the updated Strategic Risk Register (SRR), at appendix 1 to the report. (Reference: Report by Chief Executive, dated 15 September 2022, submitted) 12. CORPORATE COMPLAINTS ANNUAL REPORT 2021/22 The Committee gave consideration to a report which provided information on how the Council has dealt with complaints during the period between 1 April 2021 and 31 March 2022 and performed against the statutory indicators, which have been agreed between the Scottish Public Services Ombudsman (SPSO) and the Local Authorities Complaint Handlers Network. Decision The Audit and Scrutiny Committee considered and noted the content of this report. Page 6
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(Reference: Report by Executive Director with responsibility for Legal and Regulatory Support, dated 15 September 2022, submitted) 13. FREEDOM OF INFORMATION - ANNUAL REPORT 2021-22 Consideration was given to a report which provided an update on the position regarding the recording, responding to, monitoring and reporting of requests for information under the Freedom of Information (Scotland) Act 2002 (FOISA) and the Environmental Information (Scotland) Regulations 2004 (EIR’s) for the period between 1 April 2021 and 31 March 2022. Decision The Audit and Scrutiny Committee considered and noted the terms of the report. (Reference: Report by Executive Director with responsibility for Legal and Regulatory Support, dated 15 September 2022, submitted) 14. SCRUTINY - IDENTIFICATION AND ASSESSMENT OF TOPICS 2022-23 Consideration was given to a report which provided a summary of potential areas/topics identified by Members in context of the Scrutiny Manual and Framework in order to take forward as part of the Committee’s scrutiny role for 2022-23. Decision The Audit and Scrutiny Committee:- 1. Considered the suggested topics identified in accordance with the agreed process of assessment which is detailed in the Scrutiny Framework and Manual; 2. Approved the commencement of a Scrutiny Review Panel in relation to Public Consultations, to be led by the Chair, Martin Caldwell and the re-commencement of a Scrutiny Review Panel to further consider Fly Tipping, to be led by Councillor Lynch; 3. Agreed that Members should confirm to the Chief Internal Auditor within two weeks, their preferences in relation to participation on the Scrutiny Review Panels identified; 4. Agreed to obtain a further update in 2023/24 in relation to Waste Management to ascertain how discussions and planned responses to risk have been taken forward by the Council as discussions progress at a national level; and 5. Noted that the Chief Internal Auditor would assist in finalising a ‘scope’ for the topics with the Members leading the review once further discussion with relevant Senior Managers takes place in order that resources be focused efficiently and effectively. (Reference: Report by Chief Internal Auditor, dated 15 September 2022, submitted) 15. WORKPLAN In order to facilitate forward planning of reports to the Audit and Scrutiny Committee, Members considered the outline Audit and Scrutiny Committee workplan. Page 7
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Decision The Audit and Scrutiny Committee agreed to note the outline workplan. (Reference: Audit and Scrutiny Committee workplan, dated 15 September 2022, submitted) . The Committee resolved in terms of Section 50(A)(4) of the Local Government (Scotland) Act 1973 to exclude the press and public for the following item of business on the grounds that it was likely to involve the disclosure of exempt information as defined in Paragraph 6 of Part 1 of Schedule 7A to the Local Government (Scotland) Act 1973. . 16. WASTE STRATEGY UPDATE The Committee gave consideration to a report which provided an update on the work relating to the Waste PPP contract and the progress on the options appraisal workstreams being taken forward by Caledonian Economics. The report also set out updates on Barr Environmental Limited, Renewi, the Scottish Deposit Scheme (DRS), the Scottish Government’s Circular Economy Proposals and the Scottish Government’s Energy from Waste Review. Decision The Audit and Scrutiny Committee:- 1. Noted and considered the report and the approach being taken to determine the most appropriate option for the Council regarding waste disposal; 2. Noted the good progress being made in relation to the options appraisal; 3. Noted that a further report detailing the full appraisal and proposed next steps will come forward to the December EDI Committee, providing information on the preferred option and outlining any capital and revenue cost implications. (Reference: Report by Executive Director with responsibility for Roads and Infrastructure Services, dated 15 September 2022, submitted) Page 8
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MINUTES of the SPECIAL MEETING of the AUDIT AND SCRUTINY COMMITTEE held BY MICROSOFT TEAMS on TUESDAY, 22 NOVEMBER 2022 Present: Martin Caldwell (Chair) Councillor Daniel Hampsey Councillor Graham Hardie Councillor Mark Irvine Councillor Reeni Kennedy-Boyle Councillor Jim Lynch Councillor Andrew Vennard Attending: Kirsty Flanagan, Section 95 Officer/Executive Director Anne Blue, Head of Finance Paul MacAskill, Chief Internal Auditor Shona Barton, Governance Manager Mhairi Weldon, Senior Audit Assistant Pauline Gillen, Audit Director, Audit Scotland Kyle McAulay, Senior Audit Manager, Audit Scotland 1. APOLOGIES FOR ABSENCE There were no apologies for absence intimated. 2. DECLARATIONS OF INTEREST There were no declarations of interest intimated. 3. 2021-22 PROPOSED INDEPENDENT AUDITORS REPORT The Committee gave consideration to a report outlining the unqualified opinion of the External Auditors, Audit Scotland, on the audit of the financial statements. The Chair took the opportunity to thank Audit Scotland for their help and support over recent years. Decision The Audit and Scrutiny Committee agreed to note the findings of the report. (Reference: Report by Audit Scotland, dated 22 November 2022, submitted) 4. 2021-22 ARGYLL AND BUTE COUNCIL - ISA 580 LETTER OF REPRESENTATION Consideration was given to the ISA 580 letter of representation on the audit of the annual accounts of Argyll and Bute Council for the year ended 31 March 2022. Decision The Audit and Scrutiny Committee:- Page 9 Agenda Item 3b
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1. noted the contents of the ISA 580 letter of representation; and 2. agreed to recommend to Council that the ISA 580 letter of representation be approved for signing. (Reference: ISA 580 Letter of Representation by Section 95 Officer, dated 24 November 2022, submitted) 5. 2021-22 ARGYLL AND BUTE COUNCIL TRUST FUNDS - ISA 580 LETTER OF REPRESENTATION The Committee gave consideration to the ISA 580 letter of representation in respect of the registered charitable trusts, named below, for the year ended 31 March 2022. McCaig Trust Marquess of Bute Silver Wedding Dowry Baillie Gillies Bequest Kidston Park Trust Miss Annie Dickson Bequest Logie Baird Prize Fund County of Argyll Educational Trust Scheme 1960 Oban Common Good Fund Decision The Audit and Scrutiny Committee:- 1. noted the contents of the ISA 580 letter of representation in respect of the registered charitable trusts; and 2. agreed to recommend to Council that the ISA 580 letter of representation in respect of the registered charitable trusts be approved for signing. (Reference: ISA 580 Letter of Representation in relation to Registered Charitable Trusts by Section 95 Officer, dated 24 November 2022, submitted) 6. 2021-22 AUDITED ANNUAL ACCOUNTS The Committee gave consideration to a report presenting the Audited Annual Accounts of the Council and Charitable Trusts for the year to 31 March 2022. The Head of Financial Services provided an update in relation to the need for a slight adjustment to the figures reported for the Oban Common Good Fund and outlined a number of presentational adjustments that had been made, specifically in relation to the Statement of Movement in Reserves. Discussion was had in respect of the need to incorporate the rate of inflation into the budget outlook specifically in relation to insurance costs. The Chair took the opportunity to thank the Finance team for the provision of highly informative management commentary and for their continued hard work in the provision of the annual accounts. Page 10
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Decision The Audit and Scrutiny Committee agreed to recommend to Council that the Audited Annual Accounts of the Council and Charitable Trusts for the year to 31 March 2022 are approved. (Reference: Report by Section 95 Officer, dated 22 November 2022, submitted) Page 11
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ARGYLL AND BUTE COUNCIL AUDIT & SCRUTINY COMMITTEE FINANCIAL SERVICES 20 DECEMBER 2022 INTERNAL AUDIT AND COUNTER FRAUD SUMMARY OF ACTIVITIES 1. SUMMARY 1.1 The objective of the report is to provide the Audit and Scrutiny Committee (the Committee) with a summary of Internal Audit activity and progress during quarter three of 2022/23. 1.2 Core activities together with a progress update statement are shown below: 2022/23 Audit Plan progress: On track subject to available resources being in place for the full period of the approved plan and that two reviews are postponed until 2023-24 for organisational reasons. Individual Audits undertaken: Nine audits have been completed during the period. Two audit has been assessed as providing high assurance, seven as substantial assurance, none reasonable assurance and none as limited assurance. (HSCP Audits provided for information only). Counter Fraud: The Counter Fraud team is continuing to rebill council tax accounts and recovery of funds is underway. All other aspects and referrals are being considered, investigated and evaluated and the Counter Fraud Team remain vigilant to protect our public purse. Continuous Monitoring Programme Testing: A number of auditable units are subject to continuous testing. Two issues have been identified in quarter two and management have responded to previous quarter notifications. Performance indicators: Current status is green / on track. 2. RECOMMENDATIONS 2.1 To review and endorse the Summary of Activities report. 3. DETAIL 3.1 Nine audits have been completed since the previous Committee in September 2022. Three audits are currently in progress and will be to follow. Audits Completed Performance Management (HSCP) – For Information Only Directions (HSCP) - For Information Only Commissioning (HSCP) - For Information Only Heritage Assets Externally Funded Projects Page 13 Agenda Item 4
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Early Years – Covid Funding Private Sector Grants & Housing Adaptations Oban Airport Campbeltown Aqualibrium Audits in Progress reported to a future meeting of the Committee Procurement Events Management Management of Debt & Debt Recovery Client Funds 3.2 In addition to those already in progress indicative audits planned for Quarter 4 2022/23 are: 3.3 2022/23 Audit Plan Customer Service Centre Payroll Building Standards Cyber Security Burial Records Counselling in Schools Equality and Socio-Economic Impact Assessment 3.4 The audit of Learning and Physical Disability Care Packages has been postponed until April 2023, this review will be now cover a much wider remit and include governance and management and will be included in the 2023- 24 internal audit plan. This approach has been deemed appropriate by the relevant service and internal audit. Scrutiny 3.5 Work has been completed on the 2021/22 scrutiny plan. Scrutiny topics for the 2022/23 plan will cover consultations and a draft Terms of Reference has been produced and the review team identified, the first meeting has been scheduled in order to progress the review. This report will be reported back to a future meeting of the Committee once it has been completed. Progress will also shortly commence on residual follow up on the previous review on ‘Fly Tipping’. Counter Fraud 3.6 The CFT is progressing well with both team members fully CIPFA accredited fraud investigators. Continued routine work is required to be able to accurately track the full income recovered from the team’s work, however, based on the amount of additional billing, even accounting for a degree of non-recovery, the indications are that they are easily exceeding target. In addition they are raising awareness of the Council’s zero tolerance to fraud and this will act as a deterrent to fraud being perpetrated in the first place. Crucially, if no Counter Fraud team had been in place then the reported instances of fraud would still be taking place at a cost to the Council and public purse. Page 14
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3.7 The CFT have spent time on preparing ‘data uploads’ from the Council which feed into the National Fraud Initiative (NFI) matching service, it is anticipated that any matches will be provided to the team in January 2023 to allow work to commence on following these up locally. Additional Updates from Quarter Two 3.8 Staff continue to work from home and this has proved to be successful; where on-site visits have been required due to the specific nature of the audit work to be undertaken, these visits have occurred in accordance with any guidance that was in place. 3.9 The Public Sector Internal Audit Standards (PSIAS) require the Council’s Chief Internal Auditor (CIA) to develop a Quality Assurance and Improvement Programme (QAIP). The purpose of the QAIP is to enable the evaluation of internal audit’s conformance to the PSIAS. The QAIP must include annual internal self-assessments with a five yearly external assessment, carried out by an independent assessor. A programme of five yearly reviews has been prepared by the Scottish Local Authorities Chief Internal Auditors Group (SLACIAG) and these will be conducted by peer review, Argyll and Bute Council has been scheduled for review in September 2022 by East Dunbartonshire Council. This review has commenced and a report will be submitted to a future meeting of this committee. The annual self-assessment is not required due to the external assessment taking place and will resume in 2023 with a report submitted to this committee in September 2023. Continuous Monitoring 3.10 Our continuous monitoring programme is generally focused on transactional type activity. Standard audit tests are applied which are relevant to each auditable unit. Control design tests look at whether the controls in place adequately address the potential risk event. There have been two new findings within the quarter that require to be reported. Table 2: Continuous Monitoring Findings Auditable Area Areas Tested Issues Identified Management comment / action Payroll Expenses Expenses are appropriately supported by receipts Claims are still being approved without the appropriate paperwork. This has been highlighted to Creditors and HR who have then passed onto Payroll. Payroll Expenses Claims for expenses incurred greater than 6 months are authorised by Executive Director Claims over 6 months old are still being approved without appropriate authorisation. As above Page 15
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3.11 A follow up process is in place whereby management are advised of continuous monitoring findings and, where appropriate, requested to take remedial action. There are currently no outstanding follow-up points arising from previous testing. Due to the volume of continuous monitoring tests carried out the decision was made to report by exception only. National Reports 3.12 A follow up process for national reports is in place whereby management are advised of national reports published and asked to confirm what, if any, action is planned as a result of the report. Table 2 details the national reports issued during quarter one 2022/23. Table 3: National Reports National Report Issued To Detail Management response/ Action taken The National Fraud Initiative in Scotland 2022 Counter Fraud Team The overall level of identified public sector fraud and error in Scotland has fallen slightly, according to the results of a national counter-fraud exercise. The Council continues to demonstrate commitment to counter fraud including investment of time and effort into the NFI by participating in the 2023/24 exercise. High-risk matches will continue to be prioritised in accordance with the guidance provided, however, matches provided as a result of the NFI exercise have often been identified and resolved by officers prior to being made available for review on the NFI application. The Audit and Scrutiny Committee continue to be updated on counter fraud activities including progress with the NFI exercise by way of quarterly reports and an annual report. The self-appraisal checklist has been completed and is submitted as a separate paper to this Committee for review. The Council’s Counter Fraud Team have had a very successful first two years and as a result no specific areas for improvement have been identified by local auditors. Page 16
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Best Value Assurance Report Shetland Islands Council Chief Executive Shetland Islands’ leaders need to increase their pace and focus to deliver urgent change. The Accounts Commission is not confident the Council is able to show it is financially sustainable. This report was considered by SMT 27 September where it was agreed that no actions are required. Scotland’s councils’ approach to addressing climate change Executive Director Douglas Hendry Scotland’s councils must put tackling climate change at the heart of decision- making. Councils have a critical role in helping Scotland achieve its national climate change goals, in particular reducing CO2 emissions and adapting and transforming services. Climate change must be central and integral to all council activity. This report will be considered, in the first instance, by the Climate Change Board (CCB). The CCB will identify any steps which require to be taken by the Council. Tackling child poverty Chief Officer HSCP Longer-term joint planning is needed to address child poverty in Scotland, which has increased since targets were set in 2017. Actions to tackle child poverty are ongoing and co-ordinated via the Argyll & Bute Child Poverty Action Group. A report will be prepared to provide information on local actions and the Child Poverty Action Plan Review 2021-22. Best Value Assurance Report Comhairle nan Eilean Siar Chief Executive Councillors at Comhairle nan Eilean Siar must provide leadership and clear priorities if the organisation is to improve public services and address significant financial and workforce challenges. This report was considered by SMT in October where it was agreed that the content was useful but no actions are required. Page 17
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National Fraud Initiative (NFI) 3.14 NFI data matching involves comparing computer records held by one body against other computer records held by the same or another body to identify potentially fraudulent claims and payments to be identified. Note though that the inclusion of personal data within a data matching exercise does not mean that any specific individual is under suspicion. Where a match is found it indicates that there may be an inconsistency which requires further investigation. No assumption can be made as to whether there is fraud, error or other explanation until an investigation is carried out. A reminder process is in place to ensure that matches are reviewed on a timely basis. 3.15 The most recent cycle of NFI activity has now been concluded with the new data set due to be available in January 2023. Therefore the usual table update on matches progressed has been removed as there has been limited activity since the last committee. The table updating the committee on matches progressed will be reinstated from the March 2023 meeting of the Committee onwards. Internal Audit Development 3.16 The table below details progress against the action points in our Internal Audit development plan. All items have been addressed and no additional items have been added in quarter one. Table 4: Internal Audit Development Key Actions: Area For Improvement Agreed Action Progress Update Timescale Nothing outstanding. 3.17 Internal Audit scorecard data is available on pyramid. The indicators reported are aligned to those for internal audit in the Financial Services service plan. All indicators are shown as currently being on track. Page 18
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Table 5: Internal Audit Team Scorecard Internal Audit Team Scorecard 2022– 23 – FQ2 22/23 (as at September 2022) BO115 We Are Efficient And Cost Effective Internal Audit Level of Satisfaction Actual 97% G Target 80% Review of Strategic Risk register Status On Track G Target On Track Percentage of audit plan completed Status 100% G Target 100% Percentage of audit recommendations accepted by management Actual 100% G Target 100% 4 CONCLUSION 4.1 The 2022/23 audit plan is on track and the Counter Fraud Team is continuing with visits and pro-active work throughout Argyll and Bute. 5 IMPLICATIONS 5.1 Policy - Internal Audit continues to adopt a risk based approach to activity 5.2 Financial –None 5.3 Legal –None 5.4 HR – None 5.5 Fairer Scotland Duty – None 5.5.1 Equalities – None 5.5.2 Socio-Economic Duty – None 5.5.3 Islands Duty – None 5.6 Climate Change – None 5.7 Risk – None 5.8 Customer Service – None For further information please contact Internal Audit (01546 604108) Paul Macaskill Chief Internal Auditor 20 December 2022 Page 19
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ARGYLL AND BUTE COUNCIL AUDIT AND SCRUTINY COMMITTEE FINANCIAL SERVICES 20 DECEMBER 2022 INTERNAL AND EXTERNAL AUDIT REPORT FOLLOW UP 2022-23 1.0 INTRODUCTION 1.1 Internal and external audit reports include an action plan with a management response establishing the agreed action, timescale and responsible officer. Internal Audit record these in a database and, on a monthly basis, follow them up to ensure they are being progressed. 1.2 This report updates the committee on all open actions as at 30 September 2022 including information on actions where the agreed implementation date has been rescheduled. 2.0 RECOMMENDATIONS 2.1 To endorse the contents of the report. 3.0 DETAIL 3.1 The two tables below provide a numerical summary of open audit actions with a split between actions due by and due after 30 September 2022. Table 1 - Actions Due by 30 September 2022 SMT/Service Complete Delayed/ Rescheduled No Response Evidence Required Total Internal Audit CE – Financial Services 2 2 0 0 4 DH – Commercial Services 2 1 0 0 3 DH – Legal & Regulatory 1 0 0 0 1 DH – Learning & Teaching 0 1 0 0 1 DH – Lifelong Learning & Support 2 2 0 0 4 KF – Customer Support Services 2 1 0 0 3 KF – Development 1 0 0 0 1 Page 21 Agenda Item 5
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& Economic Growth KF – Roads & Infrastructure Services 4 5 0 0 9 H&SCP (IJB) – Adult Services (Older Adults & Community Hospitals) 0 3 0 0 3 H&SCP (IJB) – Finance & Transformation 0 1 0 0 1 H&SCP (SW) – Adult Services (Mental Health Learning Disability, Addictions & Lifelong Conditions) 0 1 0 0 1 External Audit Nil TOTAL 14 17 0 0 31 Table 2 - Actions due after 30 September 2022 SMT/Service Complete Delayed/ Rescheduled No Response On Course Evidence Required Total Internal Audit CE – Financial Services 0 5 0 0 0 5 DH – Commercial Services 0 0 0 3 0 3 DH – Legal & Regulatory 0 0 0 4 0 4 DH – Learning & Teaching 0 0 0 2 0 2 DH – Lifelong Learning & Support 0 0 0 1 0 1 KF – Customer Support Services 0 1 0 3 0 4 KF – Development & Economic Growth 0 0 0 1 0 1 KF – Roads & 0 1 0 1 0 2 Page 22
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Infrastructure Services H&SCP (IJB) – Adult Services (Older Adults & Community Hospitals) 0 1 0 0 0 1 H&SCP (IJB) – Strategic Planning & Performance 0 0 0 2 0 2 H&SCP (SW) – Adult Services (Mental Health Learning Disability, Addictions & Lifelong Conditions) 0 1 0 0 0 1 External Audit Nil TOTAL 0 9 0 17 0 26 3.2 Appendix 1 provides further detail on actions that have either been delayed and rescheduled or for which Internal Audit have received no response from the service to inform this follow up. 4.0 CONCLUSION 4.1 Satisfactory progress continues to be made implementing audit actions and we are pleased to note that we received responses from all those contacted. 5.0 IMPLICATIONS 5.1 Policy - None 5.2 Financial - None 5.3 Legal - None 5.4 HR - None 5.5 Fairer Scotland Duty - None 5.5.1 Equalities – None 5.5.2 Socio-Economic Duty – None 5.5.3 Islands Duty - None 5.6 Risk –None 5.7 Customer Service – None Page 23
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Paul MacAskill Chief Internal Auditor 20 December 2022 For further information contact: Paul MacAskill, 01546 604108 Paul.macaskill@argyll-bute.gov.uk APPENDICES Appendix 1 – Action Plan Points Delayed & Rescheduled or with No Response Page 24
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Appendix 1 - Action Plan Points Delayed & Rescheduled or with No Response No Response Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer Nil Action Plan Points Due by 30 September 2022 – Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer Financial Services – Capital Monitoring Capital Programme Training There is no training programme to support officers involved in the management of the Council’s capital programme. It would be beneficial to engage with project managers to identify training needs and address these through the development of a training programme to help ensure a consistent and Medium Training documentation to be created that project managers can refer to. Refresher training to be provided for existing Project Managers and a plan put in place for training for any new staff that have capital budget monitoring responsibilities. 30 June 2022 30 September 2022 31 March 2023 While ongoing training and support has been provided to project managers, the creation of a procedure manual and upload of training to LEON has not yet happened due to staff absence. This outstanding element of the action will be progressed over the coming months. Delayed and Rescheduled Finance Manager Page 25
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Action Plan Points Due by 30 September 2022 – Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer robust approach to capital project management. In particular this should include training on capital project profiling. Financial Services – Systems Interfaces & Reconciliations General Ledger Reconciliations There is no reconciliation performed between the source system and the general ledger for ResourceLink. Medium Reconciliations will be performed following consideration of data and technical requirements. 31 March 2021 31 December 2021 30 June 2022 30 September 2022 31 October 2022 Further work to be completed to produce a report from Resource Link and the new Oracle Fusion system so that the two systems can be reconciled. Delayed and Rescheduled ResourceLink – Pensions & Payroll Officer Commercial Services – Contract Management – Property Services Concerto In order to present cost KPI data the Contract Manager needs to extract data from Concerto and manipulate it in Excel using pivot tables. There would be merit in investigating whether the required KPIs can VFM Investigate and develop functionality of Concerto as necessary to minimise data manipulation and therefore officer time. 30 September 21 31 March 22 30 September 22 31 December 22 Delivery has been materially affected by property services restructure as there has been a resignation and 2x posts have been changed who would have delivered this. New post holders appointed in late summer 2022 and investigation work now underway to Property Maintenance Manager Page 26
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Action Plan Points Due by 30 September 2022 – Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer be generated via a standard reporting package rather than through data manipulation although we acknowledge there may be a cost involved in this which would need to be considered. complete task. New timescale added. Delayed and Rescheduled Learning & Teaching – ICT Remote Working Education Management Circular 1.18 – Use of Internet and Glow The circular requires parental consent for pupils to access the internet and GLOW, however, this form is no longer required. Low Education Management Circular 1.18 will be updated to reflect current requirements. 31 August 22 31 October 22 There was a delay due to change in Education Manager. Updated procedure being presented to Education Management Team on 18th October 2022 and will be updated on website by 31st October. Delayed and Rescheduled Digital Lead – Education Lifelong Learning & Support – Early Learning & Childcare Parental Satisfaction Parental Engagement and Home Family Learning Strategy. The overarching Parental Low Education staff will undertake a review of establishments to confirm which have a formal written Parental 30 September 22 30 December 22 As part of the Early Years Quality Assurance visits, the Early Years team are undertaking these checks. This is (Acting) Education Manager Page 27
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Action Plan Points Due by 30 September 2022 – Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer Engagement Strategy requires that all ELC establishments develop and publish their own Parental Engagement and Home Family Learning Strategy. Three of the four establishments reviewed were unable to provide a copy of their Parental Engagement and Home Family Learning Strategy Engagement and Home Family Learning Strategy in place and support development of one if not in place. to avoid additional workload whilst supporting settings through recovery. Each area will update and record this information within our EY drive. Delayed and Rescheduled Lifelong Learning & Support – Pupil Work Placements Reporting There are no periodic management reports on pupil work placements. These would form an important understanding of the success and challenges of work placements and VFM Identify and agree meaningful KPIs for new service plan, monitoring and reporting. Implement new KPI data collection in schools. Establish robust reporting framework including EMT and CSC. 30 June 22 31 December 22 The precise means of reporting to CSC - whether as an addition to an existing report or as a short separate report - has still to be finalised. Regular reporting to EMT on all aspects of Developing the Young Workforce, including work Head of Education - Support & Lifelong Learning Page 28
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Action Plan Points Due by 30 September 2022 – Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer facilitate discussions about how to overcome some of the barriers which are resulting in a decreasing pool of employers signing up to the scheme. placements, is in place. Consultation with schools on KPIs is in process and also will be complete, and KPIs in place, before Christmas. Delayed and Rescheduled Customer Support Services – Workforce Planning Monitoring Strategic Workforce Plan Actions There is no consolidated process for monitoring and tracking the actions agreed in the Strategic Workforce Plan meaning it is difficult to assess progress toward delivering it or its impact. As the Plan is due to be refreshed in 2022 it is not deemed a Medium Include milestones for progress reporting in the revised Workforce Plan. 30 September 22 31 January 23 The HROD Manager has been working closely on the CEO's Change Programme and is now adapting the draft SWFP to reflect the agreed priorities of the Change Programme, building on the previous draft SWFP that was considered by ELT in July 2022. This will be brought forward to ELT in November 2022 with a final version now targeted for completion by Jan 2023. HROD Manager Page 29
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Action Plan Points Due by 30 September 2022 – Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer valuable use of resource to implement a monitoring process for the current iteration of it however this should be considered to support the revised plan. Delayed and Rescheduled Roads & Infrastructure – Street Cleaning Partnership Agreement Oban Business Improvement District (BID) has agreed to fund an additional seasonal street sweeper employed by the Council. The street sweeper has been appointed through the Council’s recruitment process, however no formal agreement is in place and income from BID has not been received. High Formalise arrangements with Oban BID for the funding of the seasonal street sweeper 30 April 22 30 September 22 31 December 22 The partnership continues to work with the BIDS group funding additional street sweeping services in Oban. Discussions are ongoing with colleagues in Legal Services to establish a partnership agreement. Delayed and Rescheduled Operations Manager, Roads & Infrastructure Services Page 30
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Action Plan Points Due by 30 September 2022 – Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer Roads & Infrastructure – Street Cleaning Updating of ELM Local Environment Teams (LETs) are not currently using tablet devices to indicate that work allocated has been completed. Supervisors are updating the system in some areas but this is not consistent across the Council. Low Reintroduce use of handheld devices subject to ongoing Covid restrictions etc. to allow efficient updates to ELM. 31 July 22 31 December 22 We are experiencing some hardware problems and access issues. Refresher training has been arranged and will take place during the month of October. Delayed and Rescheduled Operations Manager, Roads & Infrastructure Services Roads & Infrastructure – Street Cleaning Recharging for sweeping of Council car parks The Council’s income generating car parks are recharged for street sweeping according to information retained in work schedules rather than actual work taking place, additionally the Council’s non- VFM Ensure that timely and accurate recharges are carried out and a system in place to ensure that this is regularly taking place. 31 March 22 30 June 22 30 September 22 31 December 22 A proposed specification has been forwarded to N & S colleagues for approval this proposal makes the necessary amendments for the service to be delivered within budget. Delayed and Rescheduled Operations Manager, Roads & Infrastructure Services Page 31
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Action Plan Points Due by 30 September 2022 – Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer income generating car parks are not recharged for sweeping. Roads & Infrastructure Services – Warden Services Second Bin Service Verification Wardens are expected to verify the veracity of applications from customers for a second domestic bin service. This requires the warden to confirm that information provided by the customer is accurate and meets the defined criteria. The information provided to substantiate an application can be very personal and sometimes of a sensitive medical nature. Wardens have been asked to provide this High Review the process for: Review the second bins that are in place and the process for rationalising. This review to also give consideration to composition and identify opportunity to increase recycling and reduce general waste. 30 September 22 31 December 22 The roads and amenity administration staff have pulled together the information in relation to bins that have been approved. We are now in the process of identifying those who have received a bin for medical needs these will be eliminated from the future assessment of those applicants who will be invited to re-apply. This is in line with the advice received from the governance team. The service are also in the process of drafting a new waste policy to further increase recycling and reduce general waste. Operations Manager, Roads & Infrastructure Services Page 32
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Action Plan Points Due by 30 September 2022 – Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer service but have received no formal training in how to ensure a customer’s dignity is maintained or to ensure they are aware of the requirements of General Data Protection Regulation (GDPR) in relation to personal data for this specific process. Due to the sensitivity of this process, and the potential risks associated with data protection it is recommended that the current verification process is reconsidered to determine if it is appropriate to maintain it in its current form. If it is decided it should Delayed and Rescheduled Page 33
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Action Plan Points Due by 30 September 2022 – Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer be retained then there should be engagement with the Council’s Governance and Risk Manager to ensure it is being carried out in full compliance with GDPR. Roads & Infrastructure Services – Fleet Management Driving Hours Compliance Fleet drivers not subject to EU legislation maintain manual driving records which are handed to supervisors on a weekly basis to check and sign. This is a resource intensive process which is subject to human error. There would be clear process efficiency gains and less risk of error if the Council adopted the system already Low The key officer will ensure that all drivers hold and use tachograph cards to move away from the paper book records. 31 December 20 31 March 21 30 June 21 31 March 22 30 June 22 31 August 22 31 March 23 Operation services continue to use a combination of electronic cards and hand filled forms, the combination of these systems ensures compliance can be monitored and the ongoing interim position pending a final solution being put in place. Delayed and Rescheduled Procurement/Technical Officer Page 34
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Action Plan Points Due by 30 September 2022 – Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer in place for fleet drivers subject to EU legislation and rolled out electronic driver cards to all fleet drivers. ADULT SERVICES (OLDER ADULTS & COMMUNITY HOSPITALS) – HSCP Care Programme Approach CPA Training There is no programme of CPA training available to relevant HSCP staff to ensure a consistent approach to CPA service provision across the HSCP. High A training programme will be developed once key service staff are recruited. 30 September 22 28 February 23 A further delay is required due to a failure to recruit a member of staff to implement the recommendation. An offer has now been made and accepted, a start date has not yet been confirmed. End February 2023 now considered realistic. Delayed and Rescheduled Service Manager ADULT SERVICES (OLDER ADULTS & COMMUNITY HOSPITALS) – HSCP Care Programme Approach Client Records There is no consistent agreed process for maintaining client records, including the recording and sharing of High HSCP expect to transition to new Eclipse system. Implementation of the new system and associated processes and procedures will address this 30 June 22 30 September 22 31 March 23 A further delay is required as the Eclipse project implementation has been delayed. The roll out of Eclipse is now due to commence in January 2023. Service Manager/ Eclipse Project Manager Page 35
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Action Plan Points Due by 30 September 2022 – Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer information. recommendation and the Data Officer will be involved in the development of processes and procedures. Delayed and Rescheduled ADULT SERVICES (OLDER ADULTS & COMMUNITY HOSPITALS) – HSCP Care Programme Approach Carefirst Carefirst does not have a specific identifier category for clients on the CPA programme. Carefirst will be replaced by the system Eclipse system in June 2022. Medium Service is moving to Eclipse on June 2022, an identifier category will be included. 30 June 22 30 September 22 31 March 23 A further delay is required due to the delayed implementation schedule for Eclipse. Roll out Eclipse is now expected to commence in January 2023. Delayed and Rescheduled Service Manager/ Eclipse Project Manager Finance & Transformation – H&SCP – Complaints Handling Training Training should be provided in the complaints handling procedures for the IJB Low Complaints Handling Training will be incorporated into staff training processes 30 September 22 30 November 22 This is now complete in respect of council employees but still to be confirmed in respect of the NHS. Delayed and Rescheduled Chief Nurse-NHS Highland Page 36
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Action Plan Points Due by 30 September 2022 – Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer Adult Services (Mental Health Learning Disability, Addictions & Lifelong Conditions/CSWO – SW – Charging for Non-Residential Care Services Service Uptake Data Records held on Carefirst do not allow for an analysis of the level of service uptake compared to those assessed as having a need. If this analysis could be performed it would help inform discussions and decisions in relation to service uptake, charges and barriers to uptake. It would be advisable to progress this issue in conjunction with the CareFirst replacement programme which is scheduled to be complete by April 2022. VFM Recommendation accepted. Further discussion will be held with supplier to include service uptake functionality and reporting capabilities on new system from April 2022. 31 March 22 30 September 22 31 March 23 Further delay required due to Eclipse implementation being postponed to Jan 2023. A phased approach to roll out of the new system will be taken. Delayed and Rescheduled Deputy Head of eHealth HSCP Page 37
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Action Plan Points Due After 30 September 2022 - Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer / Status Financial Services – Capital Monitoring Capital Programme Planning & Management Guide The Council’s Capital Guide has not been revised since 2018 and requires a review to ensure it reflects current working practices and provides appropriate support to officers involved in the capital monitoring process. The Council is currently developing a new Capital Strategy which is to be presented to the Policy and Resources Committee in August 2021 and we recognise that a review of the Guide should be conducted after the Medium Capital Planning and Management Guide to be updated once the Capital Strategy has been approved to ensure the two are aligned and provide clarity. 31 March 22 30 September 22 31 December 22 31 March 23 Similar to the FTPP document, this is dependent on the completion of the capital strategy which the Head of Commercial Services has advised will not be going to P&R in October as intended. Date of this has been moved to 31st March, however this will be dependent on the completion of the Strategy in advance of this date to allow time for this to be progressed before the March deadline. Delayed and Rescheduled Head of Commercial Services/Finan ce Manager Page 38
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Action Plan Points Due After 30 September 2022 - Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer / Status Strategy has been finalised to ensure the two documents complement each other and. The Guide could also benefit from being linked to, or referencing, other relevant Council processes, in particular the Project Management section on the Hub. Financial Services – Fixed Asset Register (AIRS) Fixed Asset Register Reconciliation to Service Records The exercise to reconcile AIRS to Concerto commenced in 2017/18 was not completed, additionally, there has been no reconciliation to other council records to ensure Medium Work with Property Services to complete reconciliation between AIRS and Concerto. Look at other systems within the Council to identify any other opportunities to verify those assets not categorised as Operational Land & Buildings. 31 December 22 31 March 23 Staff absence meant that this could not be progressed so was put on pause. Work has now began again with a revised completion date of 31st March. Delayed and Rescheduled Accountant - Capital Page 39
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Action Plan Points Due After 30 September 2022 - Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer / Status that all assets held by Council services are included on AIRS or removed when no longer in use or held as an asset. Financial Services – Fixed Asset Register (AIRS) Asset Record Maintenance There are inconsistencies in descriptions when recording Council assets across the various systems and asset references are not always available to aid cross referencing. This results in difficulties reconciling assets held in service records to the fixed asset system AIRS. Medium Work with Property Services and Fleet to ensure systems record the same assets and refer to references on other systems. 31 December 22 31 March 23 Staff absence meant this had to be put on pause but work has resumed and will be completed for 31st March. Delayed and Rescheduled Accountant - Capital Financial Services – Following the Public Pound Guidance on Following the Public Pound (FtPP) Although High Following the Public Pound guidance will be drafted to provide a consistent 30 June 20 31 December 20 30 June 21 31 December 21 Per previous updates, this cannot be completed until the Capital Strategy has been completed. Head of Financial Services Page 40
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Action Plan Points Due After 30 September 2022 - Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer / Status the Council has an approved process to manage external funding requests it is limited in detail, is not closely aligned to the Code of Guidance on Funding External Bodies and Following the Public Pound and there is a general lack of awareness amongst officers that it exists. Audit testing identified a number of areas of good practice within the Council and overall compliance with the principles of FtPP however there were examples of inconsistent practice. A more comprehensive guidance document should approach to managing the award of external funds. 30 September 22 31 December 22 31 March 23 Indications from the Head of Commercial Services are that the Strategy will not be presented to P&R in October as intended therefore this has a knock on effect to the completion of this document. Date has been amended to end of March 2023, however this again will be dependent on the capital strategy being completed. Delayed and Rescheduled Page 41
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Action Plan Points Due After 30 September 2022 - Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer / Status be established which provides a more standardised and tiered approach providing greater clarity over roles and responsibilities and standardised templates for key stages in the process including funding assessments and post award monitoring and reporting. The audit team researched a number of examples of FtPP guidance which had been created by other councils during the planning phase of the audit and can make these available to inform the creation of an Argyll and Bute equivalent. Page 42
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Action Plan Points Due After 30 September 2022 - Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer / Status Financial Services – Purchasing Cards Inappropriate authorisation of transactions The Support Officer in the creditors’ team approves a considerable number of pre- authorised transactions for catering staff and procurement staff. Furthermore creditors will also approve any outstanding transactions for other departments to ensure that the bank direct debit is completed within agreed timeframes. Medium The wording of the current monthly email to cardholders and approvers will be updated to remind them of their responsibilities. Once available, a one page procurement guide will be issued to all purchase card holders and approvers. 30 June 22 31 October 22 31 March 23 There is a delay with the changeover of the catering cards but this issue wholly lies with Brakes who are having issues setting up the change at their end – as a result we only have one catering card changed over when we initially expected all cards to be over by Easter and then summer break. Brakes are currently looking into this at their end therefore we are still using the existing credit card system for all other schools. Both the Creditors team and the bank continue to engage with Brakes on a regular basis to try and progress this as quickly as possible but it is out with our control. Delayed and Rescheduled Creditors Supervisor/Cre ditors Support Officer Customer Support Services – Sickness Absence Dedicated HR Assistants VFM HR will review attendance trends and survey 30 June 21 31 December 21 31 March 22 Review will now be carried out with paper to SMT in December with data re HR Team Leader Page 43
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Action Plan Points Due After 30 September 2022 - Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer / Status Development & Infrastructure and Education have a dedicated HR Assistant for Attendance who circulate reports on a monthly basis to the Heads of Service. The HR assistants provide analysis and trends over time on sickness absence. As there is no mechanism in place to assess the impact of a dedicated HR assistant on levels of sickness absence it is not possible to assess whether they are delivering value for money. Development & Infrastructure and Education services to assess and report to SMT on how effective the dedicated HR assistants have been to their service. 31 July 22 31 December 22 absence cases supported and outcomes. Delayed and Rescheduled ROADS & INFRASTRUCTURE SERVICES – Fleet Management Management of Pool Cars A high level analysis of the use of pool cars suggests the VFM The pool car module will be released through Tranman. The pool car module offers a centralised 30 September 20 31 December 20 30 June 21 31 December 21 30 April 22 Delayed and Rescheduled Procurement/T echnical Officer Page 44
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Action Plan Points Due After 30 September 2022 - Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer / Status Council could generate considerable savings through more efficient use of pool cars. Fleet Services should explore this further via a more detailed review which should consider the potential benefits of: · a more centralised approach to the administration and booking of pool cars. approach to bookings and visibility. The Council’s internal communications department will be contacted to highlight the use of the pool cars. Work will be undertaken to increase usage. 29 July 22 30 September 22 31 December 22 ADULT SERVICES (OLDER ADULTS & COMMUNITY HOSPITALS) – HSCP Care Programme Approach CPA Procedures There are no agreed CPA written procedures, including client assessment processes, to ensure a consistent approach to CPA service provision across the HSCP. High Processes and procedures will be developed across Argyll & Bute to improve consistency and ensure service provision is appropriate across the region. This is subject to the recruitment of key posts within the 30 June 22 31 December 22 28 February 23 Implementation has been further delayed due to inability to recruit a member of staff to complete the work. The post has now been offered, start date to be confirmed. End February 2023 now a realistic implementation date. Delayed and Rescheduled Consultant Nurse Page 45
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Action Plan Points Due After 30 September 2022 - Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer / Status service which are currently vacant. ADULT SERVICES (MENTAL HEALTH LEARNING DISABILITY, ADDICTIONS & LIFELONG CONDITIONS/CSW O) – H&SCP – Impact of New Legislation NMAHP Implementation Group reporting The NMAHP Implementation Group is accountable to the NMAHP Workforce Planning & Development Group, which in turns reports to NMAHP Professional Leadership Committee and the Programme Board. Risk There is a risk that compliance with the Staffing Act is not being monitored and reported on with sufficient frequency, and High Recommendation The NMAHP Implementation Group should provide a work plan and update reports to the NMAHP Workforce Planning & Development Group in accordance with its Terms of Reference. Required actions arising from the reports should be clearly recorded on the NMAHP Implementation Group’s action plan. Management Action. The NMAHP Implementation Group has been disbanded. All actions will be picked up by the NMAHP Oversight 31 May 21 30 June 22 31 December 22 1 April 24 Nursing aspect complete. AHP aspect with NHS Highland for consideration. Legislation now expected to come into force in April 2024 (link provided below) https://www.rcn.org.uk/sco tland/Influencing-On-Your- Behalf/SafeStaffingScotlan d. Delayed and Rescheduled Lead Nurse Page 46
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Action Plan Points Due After 30 September 2022 - Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer / Status appropriate actions are not being taken where necessary. The NMAHP Implementation Group’s Terms of Reference states that the group will provide an annual work plan and bi- monthly update reports to the NMAHP Workforce planning & development group in respect of: • Adherence to the Common Staffing Methodology • Completion of establishment reviews (following SOP for establishment reviews) for all clinical areas with access to validated Group. This group will report on actions to the IJB to provide the requisite assurance. Page 47
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Action Plan Points Due After 30 September 2022 - Delayed & Rescheduled/Evidence Required Service / Report Finding Priority Agreed Action Dates Comment Responsible Officer / Status tools by February 2020 • Develop schedule for annual tool run to be implemented from 2020 • Development of a Risk Register • Development of an Issues Log • Monitoring monthly any change to current establishments However, whilst some oral updates have been provided at meetings of the NMAHP Workforce Planning & Development Group, the reports have not been provided to the group. Page 48
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ARGYLL AND BUTE COUNCIL AUDIT AND SCRUTINY COMMITTEE FINANCIAL SERVICES 20 DECEMBER 2022 INTERNAL AUDIT REPORTS TO AUDIT AND SCRUTINY COMMITTEE 2022/2023 1. EXECUTIVE SUMMARY 1.1 There are Nine audits being reported to the Audit and Scrutiny Committee. 1.2 The table below provides a summary of the conclusions for the audits performed. The full reports are included as appendices to this report. Audit Name Level of Assurance High Actions Medium Actions Low Actions VFM Actions Externally Funded Projects Substantial 0 2 1 0 Heritage Assets Substantial 0 1 5 0 Early Years High 0 0 0 0 Private Sector Grants & Housing Adaptations Substantial 0 1 2 0 Oban Airport High 0 0 0 0 LiveArgyll - Campbeltown Aqualibrium Substantial 0 1 0 0 Performance Management – HSCP (Part of the HSCP Internal Audit Plan and presented for information only) Substantial 0 1 0 0 Directions – HSCP (Part of the HSCP Internal Audit Plan and presented for information only) Substantial 0 3 0 0 Commissioning – HSCP (Part of the HSCP Internal Audit Plan and presented for information only) Substantial 0 0 0 0 1.3 Internal Audit provides a level of assurance upon completion of audit work. A definition for each assurance level is documented in each audit report. 2. RECOMMENDATIONS 2.1 Audit and Scrutiny Committee to review and endorse this summary report and the detail within each individual report. Page 51 Agenda Item 6
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3. DETAIL 3.1 A high level summary of each completed audit report is noted below: Externally Funded Projects-Rothesay Pavilion: This audit has provided a Substantial level of assurance. This means internal control, governance and the management of risk is sound, however, there are minor areas of weakness which put some system objectives at risk. Terms and conditions are in place for all external funders. Extensive use of external funders was noted. Internal audit took assurance from an external review of European Union (EU) carried out by the Scottish Government. A grant claim for £308k is outstanding from European Regional Development Fund (ERDF) dating back to April 2021. Comprehensive highlight reports are produced on a regular basis by the project manager which covers all issues pertinent to the project. Regular meetings are held with external funders and chaired by the Head of Commercial Services. Updates to Council committees are provided periodically on the matter of ongoing developments and financial position relating to the Rothesay Pavilion. Heritage Assets: This audit has provided a substantial level of assurance. Internal control, governance and the management of risk is sound, however, there are minor areas of weakness which put some system objectives at risk. Asset management documentation is approved annually by Council and heritage assets values are correctly reflected on the Council’s Annual Accounts. Heritage assets are appropriately managed and insured with the exception of archive documents that are considered to be of value. Detailed records of assets are held within each area of responsibility, however, 6 artworks were omitted from the Argyll collection record and 4 of the 11 artworks and one located at another authority recorded as missing had not been updated when recovered/located. Museum exhibits and artworks on display are available to view during premises opening hours and items in storage areas are secure, however, in some cases the artworks are inappropriately stacked against each other. Civic chains and archive documents are secured in council accommodation and made available for use by prior arrangement. Elements of the collections can be accessed digitally by members of the public from their personal devices, however there is no access to historical archive records by this means. Most of the collections are subject to periodic or ad-hoc inspections, however, these are not always recorded. The Argyll Collection is not currently rotated around schools and is not inspected unless loaned to external organisations who will check the condition of the artwork. Heritage assets are recorded as fixed assets on the Council’s fixed asset management system, AIRS, however there was no inclusion of the civic chains nor any archive documents considered to be of value. Early Years: This audit has provided a High level of assurance. This means that 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. The Covid recovery funding provided the Early Years team with the ability to bring forward a future planned project to support effective transitions into Primary School. Management were able to react quickly by redeploying resources already within the team to create the 12 month secondment for the Education Support Officer (ESO) Transitions post, which has assisted them in developing plans and taking action to embed play-based pedagogy in early Page 52
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primary and creating the Argyll and Bute Play Pedagogy Network on Google classroom. This allows teachers to share good practice across the authority and as mechanism for the ESO to deliver network sessions, post Career-long Professional Learning (CLPL) webinars and provide participants with up to date literature / blogs etc. about play. There is good evidence of engaging with staff and using feedback to tailor materials and help shape training and development and identify a key Improvement Outcome for future year’s transitions. The Scottish Government required only minimal reporting which the Council has complied with. Private Sector Grants & Housing Adaptations: This audit has provided a substantial level of assurance. Internal control, governance and the management of risk is sound, however, there are minor areas of weakness which put some system objectives at risk. The Council has volunteered to participate in a review of the Scheme of Assistance an action with a target date of 2023, is contained in the Local Housing Strategy (LHS) 2022-2027. Applications and referrals for assistance are assessed, processed and recorded in line with procedures. There would be benefit to updating the procedures to reflect current working practices, which have evolved due to hybrid working arrangements and the digitalisation of records. Grants, claims and disbursements are processed in line with procedures and adequate evidence of expenditure is provided and retained. There is clear evidence of separation of duties at each stage of the process with staff communicating and working well together to confirm tasks relating to the processing of grants applications and payments are dealt with timeously. There are good record retention processes. There is extensive monitoring and reporting of the PSHG funds including performance relating to those helped. Oban Airport: This audit has provided a High level of assurance. This means that 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. This audit covered 5 of the 22 operating instructions within the aerodrome operating manual and all were found to be satisfactory. The Manual is updated on an annual basis and no audit issues were raised. Campbeltown Aqualibrium This audit has provided a substantial level of assurance. This means that internal control, governance and the management of risk are satisfactory and any issues identified can be managed through a programme of works. It was noted during the visit that water ingress was evident in some areas of the building and although these had been reported and in some cases repaired to some degree more permanent repairs are required to maintain functionality in all areas and minimise the risk to staff and customers who use the facility. Management have outlined that all agreed maintenance protocols had been adhered too and that water ingress issues have regularly reported and these will in part be dealt with as part of the Asset Management Plan. Performance Management – HSCP (for information only): This audit has provided a substantial level of assurance. This means internal control, governance and the management of risk is sound, however, there are minor areas of weakness which put some system objectives at risk. There has been a moving theme in the type and approach to performance management this has been largely due to the Covid pandemic. Performance reporting during the pandemic focussed on addressing the re-mobilisation of services. This new Page 53
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approach was per the guidance from the Scottish Government and was based upon 6 priority areas. A revised Integrated Performance Management Framework (IPMF) is currently being prepared and will focus on eliminating long waits in both inpatient and outpatients services. Performance targets during COVID were set at 70%-80% of the 2019/20 service activity as at November 2021. Targets were agreed with the Scottish Government. Performance reporting will be based upon a revised set of targets that reflect priorities going forward. Performance is regularly reported to the Integrated Joint Board (IJB) at their bi-monthly meetings. Health and Social Care Partnership (HSCP) performance information should be made available on the Councils performance information system. A comprehensive annual report for 2020-21 which includes a summary of performance against targets has been published. Directions – HSCP (for information only): This audit has provided a substantial level of assurance. This means internal control, governance and the management of risk is sound, however, there are minor areas of weakness which put some system objectives at risk. A strategic Commissioning Plan has been published in accordance with Scottish Government Guidance, however, a Directions Policy has not yet been prepared. Directions issued are clearly aligned to this plan and include all functions delegated to the IJB along with the allocated financial resources. Directions are promptly issued and a log is maintained, however, the log does not indicate the current status/progress in implementing the content of the directions issued, nor is this progress reported to the IJB committee as part of the quarterly performance updates. The budgets allocated to functions as a result of the budget proposal directions are monitored via budget monitoring reports. Commissioning – HSCP (for information only): This audit has provided a substantial level of assurance. This means that 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. Whilst the risks of commissioned providers withdrawing from the market can never be fully mitigated, working together the HSCP and the Council’s procurement team have put in place measures to minimise the risk and impact of commissioned service providers withdrawing from the market. Taking a risk based approach, prior commissioning with a provider for services, numerous checks are undertaken. The Scottish Government and COSLA jointly published guidance on the Procurement of Care and Support Services, in line with the guidance, the first HSCP Joint Strategic Commissioning Strategy for everyone in Argyll and Bute who require health and social care services was approved in March 2022. In addition, the Council have well established procurement policies and procedures in place. A Procurement Strategy and The Procurement Manual are the overarching documents applicable to Council staff involved in the procurement process. The Council’s procurement staff work alongside HSCP staff to ensure that ongoing monitoring is undertaken with regular meetings held with providers, HSCP staff, the Care Inspectorate where appropriate and Council procurement staff. A review of performance and assessment of value for money forms part of the process of ongoing regular meetings with suppliers. Measures are in place to minimise the impact of commissioned service providers withdrawing from the market. The HSCP guidance document: “Guidance for Closure of a Care Home”, is guidance for the closure of a Care Home. The purpose of this document is to provide guidance for the HSCP to identify and manage any possible risks and ensure continuity of service provision in the event of a planned or unplanned closure of Page 54
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a Care Home. 4. CONCLUSION 4.1 Management has accepted each of the reports submitted and have agreed responses and timescales in the respective action plans. 5. IMPLICATIONS 5.1 Policy - None 5.2 Financial - None 5.3 Legal - None 5.4 HR – None 5.5 Fairer Scotland Duty - None 5.5.1 Equalities – None 5.5.2 Socio-Economic Duty – None 5.5.3 Islands Duty – None 5.6 Climate Change – None 5.7 Risk - None 5.8 Customer Service – None Paul Macaskill Chief Internal Auditor 20 December 2022 For further information contact: Paul Macaskill, Chief Internal Auditor Tel: 01546 604108 Email: paul.macaskill@argyll-bute.gov.uk APPENDICES 1. Externally Funded Projects 2. Heritage Assets 3. Early Years 4. Private Sector Grants and Housing Adaptations (To follow) 5. Oban Airport 6. Campbeltown Aqualibrium 7. HSCP – Performance Management 8. HSCP – Directions 9. HSCP - Commissioning Page 55
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Argyll and Bute Council Internal Audit Report November 2022 FINAL High Medium Low VFM Number of Findings 0 2 1 0 Externally Funded Projects- Rothesay Pavilion Audit Opinion: Substantial Page 57
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2 Argyll and Bute Council – Internal Audit Report – Externally Funded Projects, November 2022 Contents 1. Executive Summary ........................................................................................................................ 3 Introduction ............................................................................................................................................ 3 Background ............................................................................................................................................. 3 Scope ....................................................................................................................................................... 4 Risks ........................................................................................................................................................ 4 Audit Opinion ......................................................................................................................................... 4 Recommendations ................................................................................................................................. 4 2. Objectives and Summary Assessment ........................................................................................... 5 3. Detailed Findings ............................................................................................................................ 5 Appendix 1 – Action Plan ..................................................................................................................... 11 Appendix 2 – Audit Opinion ................................................................................................................. 13 Contact Details Internal Auditor: Paul Macaskill Telephone: 01546 604108 e-mail: paul.macaskill@argyll-bute.gov.uk www.argyll-bute.gov.uk Page 58
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3 Argyll and Bute Council – Internal Audit Report – Externally Funded Projects, November 2022 1. Executive Summary Introduction 1. As part of the 2022/23 internal audit plan, approved by the Audit & Scrutiny Committee in March 2022, we have undertaken an audit of Argyll and Bute Council’s (the Council) system of internal control and governance in relation to Externally Funded Projects-Rothesay Pavilion. 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 refurbishment of the Rothesay Pavilion is the final project in the Councils’ plans to assist regeneration and economic development in its 5 waterfront towns namely Campbeltown, Helensburgh, Oban, Rothesay and Dunoon. The strategic aim of the project is to bring the building back into economic use by allowing a mix of new commercial, cultural and community activities to be provided within it that will stimulate local economic activity and contribute to the wider regeneration of Rothesay. 5. The contract commenced on site on 29th November 2017 and was initially scheduled for completion in 87 weeks with a contractual completion date of 31st July 2019. As a result of works variations in the contract, this was extended with a proposed final handover in February 2020. However, due to the administration of the main contractor CBC Glasgow the project is currently being re-assessed and a completion date has yet to be finalised. 6. The Rothesay Pavilion full business case under section 1.7 emphasised the requirement for external funding to enable the project to go ahead and consequently a number of external funders were identified by the Council namely: Name Amount Heritage Lottery fund(HLF) £4,187,500 HLF-Volunteer Input £50,900 European Regional Development Fund (ERDF) £1,055,602 Highland and Islands Enterprise(HIE) £750,000 Regeneration Capital Grant Fund £625,000 Coastal Communities Fund £600,000 Historic Environment Scotland £750,000 West Coast Foundation £116,957 Scottish Landfill Communities Fund £20,000 Total £8,155,959 Page 59
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4 Argyll and Bute Council – Internal Audit Report – Externally Funded Projects, November 2022 7. All external funders provide a grant offer letter to the Council which sets out the terms and conditions that the Council should meet in order to satisfy the grant requirements. Scope 8. The scope of the audit was to assess the Councils compliance with the terms and conditions as specified by the external Fund providers as outlined in the Terms of Reference agreed with the Head of Commercial Services on 24th June 2022. Risks 9. The risks considered throughout the audit were: Audit Risk 1: the council does not have an agreed offer letter in place from external providers specifying terms and conditions Audit Risk 2:the council does not have procedures/processes in place to ensure that grant requirements are met Audit Risk 3: the Council has failed to ensure compliance with the requirements stipulated within grant letters Audit Risk 4: the council does not have reporting arrangements in place to appropriate Council bodies in order to provide assurance that grant requirements are met Audit Risk 5: Reputational risk to the Council. Audit Opinion 10. 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. 11. Our overall audit opinion for this audit is that we can take a Substantial level of assurance. This means that 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. Recommendations 12. We have highlighted two medium priority recommendations and one low priority recommendations where we believe there is scope to strengthen the control and governance environment. These are summarised below: outstanding grant claims should be followed up timeously; action plan should be prepared to determine the extent of completion of project that can be achieved based on available funding; consideration should be given to reviewing extensive use of external contractors 13. Full details of the audit findings, recommendations and management responses can be found in Section 3 of this report and in the action plan at Appendix 1. Page 60
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5 Argyll and Bute Council – Internal Audit Report – Externally Funded Projects, November 2022 2. Objectives and Summary Assessment 14. 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 CO1 The Council has procedures/processes in place to ensure compliance with grant letter terms and conditions Audit Risk 1 Audit Risk 2 Reasonable All external funders have issued a grant letter outlining the terms and conditions attached to funding. T&C’s have been agreed by the Council. Risk registers are in place that identifies risk in relation to funders with mitigation actions specified. Extensive use of external contractors was noted. CO2 Procedures/processes to ensure compliance with grant offers conditions are applied Audit Risk 3 Substantial Internal audit took assurance from the external review carried out by the Scottish Government that the Council were compliant with EU funding guidelines in regard to funding from European bodies. A grant claim submitted to ERDF for £308k is outstanding dating back to April 2021. CO3 There are appropriate reporting arrangements in place to Council bodies to provide assurance that grant terms and conditions are met Audit Risk 4 High Comprehensive highlight reports are produced on a regular basis by the project manager which covers all issues pertinent to the project including compliance with external funding requirements. Regular meetings are held with external funders and chaired by the head of commercial services. Updates to Council committees are provided periodically. Financial services issue regular updates on the capital spend of the project. Action plan to determine the extent of completion of project that can be achieved based on available funding should be prepared. 15. Further details of our conclusions against each control objective can be found in Section 3 of this report. 3. Detailed Findings The Council has procedures/processes in place to ensure compliance with grant letter terms and conditions Page 61
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6 Argyll and Bute Council – Internal Audit Report – Externally Funded Projects, November 2022 16. The Principal Contractor, Central Building Contractors (Glasgow) Ltd (CBC), was placed in Administration by its’ Board of Directors, and this was formally notified to the Council on 29 April 2020. At the Policy and Resources committee dated 9th December 2021 it was decided to 'pause' the Rothesay Pavilion Project due to a forecast of a significant funding shortfall to complete the works, with various follow on actions agreed for Elected Members and Officers to progress to try to close the 'gap'. 17. Included within the funding shortfall is the financial risk of circa £6.85M which is the value of external funding thus far claimed against the capital costs of the project, and which funder’s may seek to recover if the Rothesay Pavilion project is not satisfactory concluded in regard to funding requirements. 18. The majority of the capital funding is being provided by the Council (41%) and the Heritage Lottery Fund (HLF) (30%) respectively. The capital grant awards include standard and specific terms and conditions that are required to be met in delivering the project by the Grantee/s (i.e. Council and the Rothesay Pavilion Charity (RPC)). The terms and conditions include delivery of approved purposes and activities, performance reporting and monitoring, governance processes, and completion/evaluation reports. 19. All External funders have issued a grant letter to Argyll and Bute Council that sets out the terms and conditions (T&C’s) that the Council should meet. The standard T&C’s are applicable in the event of specific circumstances such as : the Grantee commits a default; the funder considers that any change or departure from the purposes for which the grant is awarded warrants an alteration to the amount of the grant; failure to carry out the project; progress of the project is not satisfactory; fraudulent and/or negligent activity incorrect or misleading information; future of the project is in jeopardy; grantee’s change in status i.e. insolvency or winding up disposal of asset: subject to prior written consent up to 15 years. Permission is dependent on: the Grantee pays a share of the net proceeds and the sale must be at full market value the terms and conditions will be applicable from between 6 to 10 years. 20. Specific terms and conditions are split between those expected to be met by the Council and those expected to be met by the Rothesay Pavilion Charity (RPC). As regards the specific requirements of the Council each of the funders has a requirement for the Council to deliver against the specified approved purposes and benefits. These can be summarised as follows: repair of the historic fabric of Rothesay Pavilion; upgrade of main auditorium to support events programme and to create 3 nos. business units: Café/Bistro. 2 nos. bars and shop/box office; creation of new community facilities including music rehearsal and recording space, a second venue with independent entrance targeted at young people, function rooms including new roof top multi-purpose space; new exhibition space with high quality permanent and temporary exhibition space for changing programmes; heritage interpretation space for display; refurbishment of the Caretaker’s House to provide offices for local SMEs; Page 62
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7 Argyll and Bute Council – Internal Audit Report – Externally Funded Projects, November 2022 community Arts projects – Video & Photographic record of interviews; film and creative skills weekends; creation of a historic archive; marketing and Communications: increased community engagement through development workshops with Schools and improvement in visitor offer; heritage interpretation space: design & themed content. 21. Both the Highlands and Islands Enterprise Board (HIE) and European Regional Development Fund (ERDF) have specified a number of defined benefits which are summarised below namely: enhanced community venue; one income generating asset; £287k per annum increase in turnover in the social economy; 14 full time equivalent jobs; 30 volunteers engaged with project delivery; 40 people accessing training; 40 community groups increasing their capacity through engagement with pavilion activities; 2 organisations supported to deliver growth aspirations 22. The project manager prepares a regular ‘Highlight’ report on the ongoing status of the Rothesay Pavilion Project. The report includes under section 7 an update on the current risks associated with the project including the following : Identifies the risk assess the likelihood and impact of the risk prioritise the risks (red, amber or green) How the Council will mitigate and manage the risks identified. Commercial Services also identified within their overall risk register the risk of “unavailability of internal capital funding” for all projects including Rothesay Pavilion and prioritises the risk as “red” with mitigation actions including ensuring resources are available to complete projects. 23. The project includes a full time project manager as well as support from a variety of internal Council bodies such as Legal and Planning and administration and external bodies such as design and conservation architects. The initial project manager left 5 months into the construction period in May 2018 and a new project manager was recruited in August 2018. Strategically the project was managed internally by the council’s project manager, however, in terms of day to day activities and implementation there was a heavy reliance on external consultants and contractors. Consideration should be given to reviewing the extensive use of outside contractors as opposed to investing in in-house resources in regard to major capital projects especially in light of the projected overspend on the project. Action Plan 3 Procedures/processes to ensure compliance with grant offers conditions are applied 24. Due to the Scottish Government (SG) being ultimately responsible for ensuring that EU funded projects are properly administered a review was undertaken by the SG the on behalf of HIE and ERDF during the 1st Quarter of 2021 i.e. post the administration of the main contractor. (Note :EU funding represents 21% of total external funding) The review was termed a “stage 2 on the spot verification” which included the following : Page 63
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8 Argyll and Bute Council – Internal Audit Report – Externally Funded Projects, November 2022 the eligibility, status and outcome of participants/businesses (where applicable); the expenditure declared and the existence and compliance of the audit trail for a number of expenditure items (involved checking 23% by value of all claims made by the Council); the outputs and/or achievements linked to the operation(s); the compliance with the relevant eligibility rules, public procurement, state aid instruments, environmental, financial instruments, horizontal themes and publicity. The outcome of the audit was that all criteria checked were found to be fully compliant and no actions by the Council were required. 25. All claims submitted against each external funder are recorded on a claims summary. A summary of outstanding balances yet to be claimed as at the time of the audit is shown in the table below. Funder Grant-(£) Claimed-(£) Received (£) Balance to be claimed-(£) HLF 4,187,500 3,,627,657 3,627,657 559,843 HES 750,000 525,000 525,000 225,000 HES COVID 62,794 62,794 62,794 0 ERDF 1,055,602 929,078 621,171 434,431 HIE 750,000 744,253 744,253 5,747 Total 1,225,021 26. The balance outstanding in regard to ERDF and HIE is due to the grants being payable on completion of specified percentages of work done on the project. The Council has procedures/processes in place whereby a qualified quantity surveyor who is independent of the Council and the contractors evaluates and certifies the work completed at each stage to enable grant claims to be made timeously. This involves the following : External building contractor required to assesses the work completed and materials on site and applies for payment via the Cost Consultant/QS A&B representative i.e. QS measures and agrees the work completed and materials on site and assesses the value prior to agreeing the Contractors application for payment; the Architect/Contract Administrator then issues a valuation certificate for the monetary value as advised by the QS; once agreed the contractor issues an invoice based on the agreed figure; the invoice is checked/matched against the Valuation Certificate and is then approved for payment by the Project Manager. This operation has a specific ledger code which is then applied to the invoice then passed to the DA’s finance department for payment; the ledger is checked each month to ensure that all invoices have been correctly coded; claim is then submitted. All claims against outstanding grant balances funders are currently on hold. 27. A claim of £307,907 was submitted to ERDF in April 2021 and as at August 2022 this claim has not been paid by ERDF. Verification on the status of the outstanding claim has yet to be received. Action Plan 1 There are appropriate reporting arrangements in place to Council bodies to provide assurance that grant terms and conditions are met Page 64
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9 Argyll and Bute Council – Internal Audit Report – Externally Funded Projects, November 2022 28. The project manager produces on a regular basis a ‘highlight report’. A review of the reports found them to be comprehensive and included the following : Program Summary key performance indicators such as cost summaries , cash flow and budgets key issues including communications with Funding Partners, grant claims progress against Plan budget major Issues including compliance with grant requirements from external funders major risks i.e. risk log 4 week horizon Issues pertinent to addressing grant offer conditions are included within the highlight reports. The report is forwarded to all appropriate Council committees including Area committees, Strategic Management Team (SMT) and Policy and Resources Committee. 29. Due to the terms and conditions varying for each of the funders the project manager produces on a monthly basis a bespoke report for each of the funders that reflects the areas covered within the highlight reports. In addition the project manager has arranged for site visits on a number of occasions when requested by funders. 30. Regular meeting are held with all grant funders and chaired by the Head of Commercial Services. A review of the attendees confirmed that all funders were present at the meetings. A review of minutes subsequent to the administration of the main contractor included the following: Update on progress by the project manager including all areas of concern financial update including latest projected cost forecasts implications for Project completion feedback from external Funders concerning their concerns outline of actions going forward including discussions with Partners over additional funding The project manager has also supplied comprehensive updates to the main funders during the course of the project. 31. The Council has extensive reporting arrangements in place to provide assurance to stakeholders that grant terms and conditions are met. A summary of the Council bodies who are regularly updated with issues pertinent to the Rothesay Pavilion Project including funding issues is shown below: Body Regularity Issues discussed Policy and Resources Committee Every 2 months Update included where appropriate in agenda Committee is updated on major developments Departmental Team meetings Weekly Updated on budgets , current issues External Funders meetings Quarterly Chaired by Head of Commercial Services Commercial Services Team Meetings 6 weekly Updated on budgets , current issues Rothesay Pavilion Charity Board Quarterly Current progress update on Rothesay Pavilion Re-development Bute and Cowal Area Committee Quarterly Update included where appropriate in agenda Page 65
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10 Argyll and Bute Council – Internal Audit Report – Externally Funded Projects, November 2022 32. Financial Services provide a regular update on the capital spend of all projects including Rothesay Pavilion. Project managers provide comment on any issues, update the forecast spend and provide details of any slippage or acceleration of spending. Financial Services monitor the return of these spreadsheets and follow up non returns and query those returned with either no comment or insufficient comment. Financial Services present the capital monitoring report to SMT on a monthly basis and as a standard agenda item to each meeting of the Policy and Resources Committee (except the May meeting). 33. Whilst our review of the reporting arrangements was satisfactory, it nevertheless identified that there are considerable financial and reputational risks associated with the project. These risks need to be addressed in terms of compiling a plan to take forward the funding gaps with funding partners and determining the extent of completion that can be achieved based on available funding. Action Plan 2 34. During the course of the audit a number of issues were identified that did not fall within the scope of our review but which nevertheless should be considered. It may be of benefit that a review by internal audit on the Rothesay Pavilion Redevelopment project be considered as plans for the next stages of development are taken forward as funding becomes available. Discussions with the project team noted that they would expect a full review /audit of the project to take place especially if extra funding is required from the SG. Page 66
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Appendix 1 – Action Plan No Finding Risk Agreed Action Responsibility / Due Date Medium 1 Outstanding Claims A claim of £307,907 was submitted to ERDF in April 2021 and as at August 2022 this claim has not been paid by ERDF. Verification on the status of the outstanding claim has yet to be received. Failure to follow up status of outstanding claims may lead to non- payment. Followed up with HIE as Agent for Scottish the Government. Due to the uncertainty the SG confirmed they are not in a position to settle the outstanding claim relating to the Pavilion. Project Manager Completed. Medium 2 Project Plan There are considerable financial and reputational risks associated with the project. An action plan to take forward the funding gaps with funding partners and determining the extent of completion that can be achieved based on available funding should be prepared. Failure to prepare an action plan to determine extent of completion based on available funding may lead to non- completion of project. A revised construction strategy has been developed with options. This is a work in progress with a key output being a report to P&R. Project Manager January 31st 2023 Low 3 Resources Consideration should be given to reviewing the extensive use of outside contractors and consultants as opposed to investing in in-house resources in regard to major capital projects especially in light of the projected overspend on the project. Failure to address the Councils use of external resources may lead to in house resources not being efficiently utilised. As part of the End Project Report, Lessons Learned, a review of the decision pertaining to project resourcing will be undertaken, and recommendations made to Head of Service with respect to the on-going efficient resourcing of projects. In developing future projects the Council will continue to give consideration to the most efficient resourcing model. Project Manager 30th June 2023 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: Page 67
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12 Argyll and Bute Council – Internal Audit Report – Externally Funded Projects, November 2022 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). Page 68
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13 Argyll and Bute Council – Internal Audit Report – Externally Funded Projects, November 2022 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. Page 69
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Argyll and Bute Council Internal Audit Report November 2022 FINAL High Medium Low VFM Number of Findings 0 1 5 0 Heritage Assets Audit Opinion: Substantial Page 71
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Argyll and Bute Council – Internal Audit Report – Heritage Assets, August 2022 Contents 1. Executive Summary ........................................................................................................................ 1 Introduction ............................................................................................................................................ 1 Background ............................................................................................................................................. 1 Scope ....................................................................................................................................................... 2 Risks ........................................................................................................................................................ 2 Audit Opinion ......................................................................................................................................... 2 Recommendations ................................................................................................................................. 3 2. Objectives and Summary Assessment ........................................................................................... 3 3. Detailed Findings ............................................................................................................................ 4 Appendix 1 – Action Plan ..................................................................................................................... 10 Appendix 2 – Audit Opinion ................................................................................................................. 13 Contact Details Internal Auditor: Mhairi Weldon Telephone: 01546 604294 e-mail: Mhairi.weldon@argyll-bute.gov.uk www.argyll-bute.gov.uk Page 72
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1 Argyll and Bute Council – Internal Audit Report – Heritage Assets, August 2022 1. Executive Summary Introduction 1. As part of the 2022/23 internal audit plan, approved by the Audit & Scrutiny Committee in March 2022, we have undertaken an audit of Argyll and Bute Council’s (the Council) system of internal control and governance in relation to heritage assets. 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. Argyll and Bute has a remarkably rich and diverse historic and cultural heritage reflecting thousands of years of historic development. 5. Heritage assets are intended to be preserved in trust for future generations because of their cultural, environmental and historical associations. In common with other Local Authorities, the Council is responsible for caretaking these interesting, rare and unique artefacts. This includes: the records, civic chains and regalia of former parish and burgh councils, Argyll County Council and Bute County Council Anderson Trust Collection of paintings of Helensburgh and District Argyll Collection of prints, paintings, ceramics, textiles, drawings and sculpture McGrory photographic collection of Kintyre 1890 – 1911 (partially reproduced from original glass plates) Other heritage assets including schools, museums, libraries, public art, scheduled monuments and grave yards and historic gardens and landscapes. 6. Sound asset management is crucial if the Council is to make best use of the resources available to it to deliver its overall aims and objectives. Asset management is a structured and systematic approach to managing assets on an ongoing basis to address all phases of its life-cycle. Effective asset management planning means knowing what you own, where it’s located, it’s value, what it costs you, what it will cost you in the future, whether it will support current and future service delivery and who is responsible for it. Asset management is the process of ensuring that the Council’s Assets are: Fit for purpose Used efficiently Maintained on a sustainable basis Matched in investment terms to service needs Page 73
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2 Argyll and Bute Council – Internal Audit Report – Heritage Assets, August 2022 7. The Corporate Asset Management Strategy acknowledges that in preparing Service Asset Management Plans, Service Asset Managers must consider sharing assets with Community Partners and Third Sector to maximise public benefit. Heritage assets are therefore managed across Council Services and also in partnership with LiveArgyll and Kilmartin Museum who make arrangements for artwork and historic artefacts to be displayed at various locations throughout Argyll and Bute. 8. Heritage assets are reported in the Council’s balance sheet at insurance valuation which is based on market values and are updated periodically. These assets are deemed to have indeterminate lives and a high residual value and it is therefore considered inappropriate to charge depreciation. 9. In February 2022, another local authority reported that 1,330 objects from their art gallery and museums’ collection with an aggregate value of just under £200k were missing due to thefts, historic losses or unconfirmed location. It is therefore important that suitable measures are in place for the management and control of such assets. Scope 10. The scope of the audit was to review the management and record keeping of heritage assets as outlined in the Terms of Reference agreed with the Head of Commercial Services on 30 September 2022. Risks 11. The risks considered throughout the audit were: SRR02: Condition and suitability of infrastructure & asset base Audit Risk 1: Heritage assets are ineffectively managed leading to damage, loss or theft of items Audit Risk 2: Heritage assets are not catalogued with sufficient information (e.g. description, value, location, condition and ownership) Audit Opinion 12. 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. 13. Our overall audit opinion for this audit is that we can take a substantial level of assurance. This means that 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. Page 74
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3 Argyll and Bute Council – Internal Audit Report – Heritage Assets, August 2022 Recommendations 14. We have highlighted one medium priority recommendations and five low priority recommendations where we believe there is scope to strengthen the control and governance environment. These are summarised below: Officers representing the various services involved should meet to discuss the requirements for valuation, insurance and inclusion within the Council’s Annual Accounts and nominate responsible officer(s) to take forward any actions identified as a result. The procedure followed to create and maintain archive records should be documented. A list of missing artworks should be provided to schools with a request to check the premises in an effort to locate them. The record of artworks belonging to the Argyll Collection should be updated to include those omitted using details from the 2016 valuation schedule. The condition of civic chains should be documented when issued and returned. A programme of inspections to evaluate the condition of artworks belonging to the Argyll Collection should be implemented. 15. Full details of the audit findings, recommendations and management responses can be found in Section 3 of this report and in the action plan at Appendix 1. 2. Objectives and Summary Assessment 16. 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 Policy and procedures are in place to ensure assets are managed appropriately SRR02 Audit Risk 1 Substantial High level asset management documentation is approved by Council each year. Heritage assets are appropriately managed across various services within the Council or by external organisations acting as curators via formal agreement. Artworks and civic chains are included within the Council’s All Risks insurance policy however, valuable archive documents are not. 2 A robust cataloguing procedure/system is in place to prevent assets being misplaced, lost or otherwise unavailable for users Audit Risk 2 Substantial There are detailed records of assets held within each area of responsibility. Artworks recorded as missing from the museum and libraries collection have been recovered, however only 4 of 11 have been recovered for the Argyll Collection and one has been located in another local authority with whom we share ownership. The details of 6 Page 75
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4 Argyll and Bute Council – Internal Audit Report – Heritage Assets, August 2022 artworks were omitted from the Argyll collection record. 3 Heritage assets are displayed or stored securely, appropriately insured and subject to a programme of inspection and maintenance SRR02 Audit Risk 1 Reasonable Museum exhibits and artworks on display are available for the public to view during opening hours. Storage areas are secure, however, in some cases the artworks are inappropriately stacked against each other. Civic chains and archive documents are secured in council accommodation and made available for use by prior arrangement. Elements of the collections can be accessed digitally by members of the public from their personal devices, however there is no access to historical archive records by this means. Most of the collections are subject to periodic or ad-hoc inspections, however, these are not always recorded. The Argyll Collection is not currently rotated around schools and is not inspected unless loaned to external organisations who will check the condition of the artwork. 4 Heritage assets are accurately reported in the Council’s financial statements Audit Risk 2 Substantial Heritage assets are recorded as fixed assets on the Council’s AIRS system however there was no inclusion of the civic chains nor any archive documents considered to be of value. The total value of heritage assets recorded on AIRS is correctly reflected on the Council’s Annual Accounts. 17. Further details of our conclusions against each control objective can be found in Section 3 of this report. 3. Detailed Findings Policy and procedures are in place to ensure assets are managed appropriately 18. There is a Corporate Asset Management Strategy and Plan, together with a Capital Plan that are approved by council at its budget setting meeting in February of each year. These strategic documents encompass all asset categories and their need to support and contribute to the corporate objectives in the Argyll and Bute Outcome Improvement plan (ABOIP), they are published on the Council’s webpage and are therefore available for public access. 19. Heritage assets are managed across various services within the Council and also by LiveArgyll, Kilmartin Museum and Culture, Heritage &Arts (CHARTS) Argyll & Isles who are appointed curators with line management responsibilities. The asset categories and the service area responsible for their management are detailed in the table below. Page 76
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5 Argyll and Bute Council – Internal Audit Report – Heritage Assets, August 2022 Asset Responsible Service Area Archaeological Museum Exhibits Kilmartin Museum (Curator support via SLA) Social History, Natural History and Fine Arts Collections CHARTS (Curator support and line management of modern apprentice via SLA) Archive Documents LiveArgyll Anderson Trust Artworks Collection The Anderson Trust (stored & insured by the Council) The Argyll Collection Education Services Museum and Libraries Artworks Collection LiveArgyll War Memorials Amenity Services Civic Chains Members Services 20. Service Level Agreements (SLAs) are in place between the Council and LiveArgyll and also with Kilmartin Museum who are appointed curators for the Council’s archaeological museum exhibits. An annual report summarising management of the collection has been provided by Kilmartin Museum as required by the SLA. A further agreement is in place between LiveArgyll and CHARTS, who will provide professional support for the delivery of services at Campbeltown Museum and train a modern apprentice in curator responsibilities. 21. There is guidance in place to manage the museum exhibits, Archives, the Argyll Collection and the Museum and Libraries collection, the Anderson collection is managed by a Trust out with the Council. A security protocol is in place to guide members and officers when civic chains are required to be worn at events. 22. Paintings and museum exhibits are covered in the “All Risks” section of the Council’s insurance policy with a value assigned that is consistent with the artworks valuations that took place in 2015 and 2016, there was no valuation provided for the museum exhibits. The civic regalia are also covered in this policy based on the original value and adjustments made accordingly. There is, however, no inclusion of archive documentation within the policy despite some of these being of considerable value, in particular there are original drawings of the Hill House in Helensburgh by Charles Rennie Macintosh. Action Plan 1 A robust cataloguing procedure/system is in place to prevent assets being misplaced, lost or otherwise unavailable for users 23. Heritage assets are managed by various officers across the Council and with third-party organisations appointed as custodians. These assets are included within the Council’s annual accounts in accordance with accounting standards. 24. Detailed catalogues or a register of artworks are maintained for each of the collections. 25. There is detailed guidance on how to maintain the records for the museum collections and this is planned to be updated in the near future. The catalogues for the archives are maintained in a structured format on the Council’s shared drive area and whilst there is an acquisition policy and collecting agreement explaining what may be accepted, the process to create and maintain these records has not been documented. Action Plan 2 Page 77
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6 Argyll and Bute Council – Internal Audit Report – Heritage Assets, August 2022 26. Records held for the artworks collections and war memorials are maintained in list formats and require little updating. Copies of all records were provided and found to be comprehensive with appropriate fields available for completion. 27. The 2015 and 2016 valuation schedules were reviewed, it was found that there were no artworks recorded as missing at the time of the valuation for the Anderson Collection, however, there were six items recorded as missing in the valuation schedule for the Museum and libraries collection, these have all now been located and updated on the custodian’s collection record provided. Additionally, there are 54 entries on the Museum and Libraries collection record that are not included within the valuation schedule as they had been added after the valuation exercise took place. These artworks will be included in any future valuation exercise conducted. 28. There were 11 artworks recorded as missing in the valuation document for the Argyll Collection, five of these have been located and six remain missing, the value of these artworks is unknown, they are as follows: Unknown artist, Round Bowl, Ceramic, Green, 195mm diameter (no record) Anne Gillie, Drawing, 43 X 56cm (location unknown) Charles Mitchell, winged skull, mixed media, 64 X 64cm (location unknown) William Birnie, "Mains Farm, Buchlyvie", watercolour, 55 X 72cm (no record) Rock Samples, Rocks, granite, pumice, black rock, beige pebble and beige rock with water worn holes(reference no. missing from list) Unknown (Anita Man), Penguins and two chicks, Wood carving, 210mm tall (no record) Action Plan 3 29. A sample of 36 artworks including the 17 recorded as missing on the valuation documents and an additional 19 with the highest values was selected from across the three collections and records were compared with the valuation schedules of 2015 and 2016, these were found to contain similar fields for storing information. There was a small number of differences in sizes recorded across the collections, however these are considered to be immaterial. 30. The review of the Argyll Collection record revealed that four of the five recovered artworks were included, however the remaining artwork is located at another local authority with whom the Council shares ownership and the record has not been updated to reflect this. Additionally, there was no detail entered against the reference number for 4 of the artworks that remain missing and one was omitted from the record (both reference and detail). One further entry for an artwork that has been recovered but has a duplicate reference was not included on the record provided. Action Plan 4 Heritage assets are displayed or stored securely, appropriately insured and subject to a programme of inspection and maintenance 31. The 6 missing items noted above, one located at another local authority and one located remotely were removed from the sample of 36 artworks leaving 28 for viewing. Page 78
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7 Argyll and Bute Council – Internal Audit Report – Heritage Assets, August 2022 Location Artworks Expected Artworks Found Comments Helensburgh Library 2 2 One located in Library storage room, the other on display in Campbeltown Marriage Room. Helensburgh Library Anderson Collection 5 5 All items were located in the storage area. Castle House Museum 2 2 Both on display to the public near the main entrance. Library HQ 2 2 Both are displayed although visits are by appointment only, one is situated on an easel and the other on the floor against a cabinet. Campbeltown Museum/ Marriage Room 7 7 Three were displayed in the Marriage room, 2 in the museum and 2 in storage. Schools 10 10 All 10 artworks were located although one was at a different school from that recorded. 32. All but one of the artworks viewed on display were appropriately fixed to a wall or mounted on an easel, the remaining one was placed on the floor leaning against a cabinet. The locations allow either members of the public or school pupils to view the artworks within opening hours and are secured within the buildings when closed. 33. The purpose of the Argyll Collection is to provide a learning resource for the young people of Argyll and Bute that will enable them to experience fine art in an area with little access to museums and galleries. The artworks were formerly rotated around schools to provide a variety of artist’s works for young people to view, however, there has been no full rotation since May 2013 and following the valuation exercise in 2016, art teachers are no longer prepared to be responsible for transporting valuable artworks in private vehicles and no budget is currently available to fund the professional packaging and transportation required. The Cultural Co- ordinator, Education is working with CHARTS to identify and apply for external funding to reinstate the rotation of the artworks. 34. The artworks in storage belonging to the Anderson Collection and those located at Campbeltown Museum were located in numbered racks in purpose designed, climate controlled locked storage rooms. The remaining artworks were located in secure storage areas, wrapped in protective coverings and stacked upright against other artworks at floor level. This situation is not ideal as it is difficult to locate specific items and damage may result from the accumulated weight of multiple artworks or movement to gain access to other items in the storage areas. A potential storage solution at Council Headquarters in Kilmory had been identified for the Argyll Collection and is expected to progress under the “Our Modern Work Space” project. 35. The Council’s Members Services Officers are responsible for managing the Civic Chains. Seven of these are retained at Kilmory Castle in a suitable protective environment. All seven were present, stored in protective casing and appeared to be in good condition at the time of the review. The remaining two are located at Mull Museum and Inveraray Castle. Chains are issued by the Council Officers following authorisation from the Executive Director. Page 79
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8 Argyll and Bute Council – Internal Audit Report – Heritage Assets, August 2022 36. Archive records are retained in Council office accommodation in a climate controlled storage area. Access to records by the public is by prior arrangement and officers are present at all times. 37. War memorials are located across the Argyll and Bute area, 16 of these were viewed and found to be located according to the record provided, appeared to be in good condition with surrounding grounds maintained and accessible by members of the public at any time. 38. There is no specific reference of heritage assets within the ICT Digital Strategy 2021/24, however, the document encompasses all services with an aim to create efficiencies, savings and improve services for both staff and customers. Elements of the collections can be viewed on the internet with further links provided to social media sites to obtain additional information. Committee records from 1995 and other information is available to the public on the Council’s website, however, historical archive records cannot be accessed digitally by members of the public as the system used is not able to replicate the structured format of files from the shared drive area. There has been some consideration of creating a new digital archive facility that would be accessible by the public, however, this was deemed to be cost prohibitive. 39. The artworks and museum collections are marketed via websites and social media platforms operated by the various appointed curators. These items are non-income generating to encourage the public to enjoy the content, there is a small charge, however, to those who wish some research to be conducted by the archivist team on their behalf and any associated printing of documents. LiveArgyll are currently exploring an opportunity to generate income via the installation of donation receptacles in some of their facilities. 40. Heritage assets are not generally disposed of due to their historical and cultural significance, however, they may be loaned to other areas of the Council or external organisations by use of a formal terms of agreement which is completed in each instance. 41. The museum and library exhibits are inspected prior to and following exhibitions with the condition noted on records and dated. Periodic artefact checks are undertaken by the museum curator in compliance with the SLAs in place. 42. Archive documents are inspected as part of the stock-taking process and whenever extracted for use. The Anderson collection is managed independently by the Trust who carry out their own inspections. Civic chains are carefully checked by a Council Officer prior to and following every issue for use at events, however, this is not documented. Action Plan 5 43. The Argyll Collection is not currently subject of any programme of inspection, when artworks are loaned, the condition is checked by the external organisations. Action Plan 6 44. There is no budget nor schedule for maintenance or preservation of heritage assets, any needs would be of an ad-hoc nature and identified during inspections or at time of use. Any funding required to address identified needs for maintenance or preservation would be requested via the appropriate channels. Page 80
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9 Argyll and Bute Council – Internal Audit Report – Heritage Assets, August 2022 Heritage assets are accurately reported in the Council’s financial statements 45. Heritage Assets are recorded as fixed assets on the Council’s AIRS system which holds details of two museums, two monuments, two clock towers, 57 war memorials and 270 works of art in this category. One of the works of art from the sample selected for review had the incorrect value applied on AIRS, however, the overall effect of this error is immaterial. The values of the remaining items correspond with those provided on the 2015 and 2016 valuation records and excludes those that were recorded as missing at that time. There is no inclusion of any museum exhibits, valuable archive documents owned by the Council nor the Civic chains. Action Plan 1 46. The total value of heritage assets recorded on AIRS has been correctly reflected in the Council’s Audited Accounts as at 31 March 2021. Page 81
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Appendix 1 – Action Plan No. Findings & Recommendations Risk Agreed Action Responsibility/ Due Date Medium 1 Valuations, Insurance & Fixed Assets Register Finding: Civic chains, archive documents and museum exhibits are not included within the Council’s programme of valuations. Finding: There is no inclusion of valuable archive documentation within the Council’s All Risks insurance policy. Finding: Civic chains, Museum exhibits and valuable archive documents are not included within the Council’s Fixed Asset Register, AIRS. Recommendation: Officers representing the various services involved should meet to discuss the requirements for valuation, insurance and inclusion within the Council’s Annual Accounts and nominate responsible officer(s) to take forward any actions identified as a result. Valuable heritage assets may not be appropriately covered by the Council’s All Risks insurance policy should they be lost, stolen or damaged. The value of assets stated on the Council’s annual accounts may be incorrect. Officers representing the various services involved will meet to discuss the requirements for valuation, insurance and inclusion within the Council’s Annual Accounts and nominate responsible officer(s) to take forward any actions identified as a result. Head of Legal and Regulatory Support 31 March 2023 Low 2 Archives cataloguing procedure Finding: Whilst there are some policies surrounding the management of archives, there is no documented procedure in place regarding creation and maintenance of records. Recommendation: The procedure followed to create and maintain archive records should be documented. Failure to document formal policies, procedures and processes may lead to the loss of skill and/or knowledge when staff members leave. Procedure notes will be reviewed and updated. Archives Officer 31 March 2023 Page 82
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11 Argyll and Bute Council – Internal Audit Report – Heritage Assets, August 2022 No. Findings & Recommendations Risk Agreed Action Responsibility/ Due Date Low 3 Argyll Collection – Missing Assets Finding: Six missing artworks at the time of the valuation in 2016 have not been located. Recommendation: A list of missing artworks should be provided to schools with a request to check the premises in an effort to locate them. Assets may have been lost or stolen. A list of missing artworks will be provided to schools with a request to check the premises in an effort to locate them. Cultural Co-ordinator, Education 31 December 2022 Low 4 Argyll Collection – Record Keeping Finding: There were no entries on the record provided for 4 of the missing artworks, one shared with other local authorities nor one with a duplicate reference number. Recommendation: The record of artworks belonging to the Argyll Collection should be updated to include those omitted using details from the 2016 valuation schedule. Incomplete or incorrect records may lead to inefficient management of assets. The record will be updated to include missing artworks identified in the 2016 valuation. Cultural Co-ordinator, Education 31 December 2022 Low 5 Civic Chains Finding: Civic chains are carefully checked by a Council Officer prior to and following issue for use at events, however, this is not recorded. Recommendation: The condition of civic chains should be documented when issued and returned. The condition of civic chains would not be available should the information be required. The record of issue of chains will be updated to include date checked and condition of chain at that time. Members Services Officer 31 December 2022 Low 6 Argyll Collection – Artworks Inspections Finding: There is currently no programme of inspections taking place to evaluate the condition of artworks held. Recommendation: A programme of inspections to evaluate the condition of artworks belonging to the Argyll Collection should be implemented. The condition of artworks would not be available should the information be required e.g. insurance claim. Programme of inspections will be agreed by Education Services Cultural Co-ordinator, Education 31 December 2022 Page 83
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12 Argyll and Bute Council – Internal Audit Report – Heritage Assets, August 2022 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). Page 84
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13 Argyll and Bute Council – Internal Audit Report – Heritage Assets, August 2022 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. Page 85
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Argyll and Bute Council Internal Audit Report November 2022 FINAL High Medium Low VFM Number of Findings 0 0 0 0 Early Years – use of Covid recovery funds Audit Opinion: High Page 87
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2 Argyll and Bute Council – Internal Audit Report – Early Years –use of Covid Recovery Funds, November 2022 Contents 1. Executive Summary ........................................................................................................................ 3 Introduction ............................................................................................................................................ 3 Background ............................................................................................................................................. 3 Scope ....................................................................................................................................................... 4 Risks ........................................................................................................................................................ 4 Audit Opinion ......................................................................................................................................... 4 2. Objectives and Summary Assessment ........................................................................................... 4 3. Detailed Findings ............................................................................................................................ 5 Appendix 1 – Audit Opinion ................................................................................................................... 9 Contact Details Internal Auditor: Annemarie McLean Telephone: 01700 501354 e-mail: Annemarie.mclean@argyll-bute.gov.uk www.argyll-bute.gov.uk Page 88
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3 Argyll and Bute Council – Internal Audit Report – Early Years –use of Covid Recovery Funds, November 2022 1. Executive Summary Introduction 1. As part of the 2022/23 internal audit plan, approved by the Audit & Scrutiny Committee in March 2022, we have undertaken an audit of Argyll and Bute Council’s (the Council) system of internal control and governance in relation to Early Years – use of Covid recovery funds. 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. No actions have been identified 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 COVID-19 pandemic has impacted upon educational delivery with the closure of schools and early learning establishments across Scotland putting education outcomes at risk and increasing educational and social inequities for children and young people. During periods of lockdown, some learners may have had positive experiences, enjoying the extra time with family and developing their digital skills and independent learning. Research suggests, however, that COVID-19 may have had adverse consequences on the health and wellbeing of some learners, as well as their attainment. 5. Early learning and childcare (ELC) plays a vital role in supporting families attaining high quality learning which is linked with improved outcomes for children. Throughout the pandemic, access to ELC was provided for those children who needed it most and the Scottish Government prioritised the re-opening of ELC to all children ahead of the re-opening of other sectors. 6. The Scottish Government's 'Covid Recovery Strategy for a Fairer Scotland' strategy identifies three key outcomes as most likely to have the greatest impact on tackling the inequality and disadvantage highlighted by Covid: financial security for low income households; wellbeing of children and young people; and good, green jobs and fair work. 7. In order to mitigate inequity caused by the pandemic, and champion a vision that supports children and young people to continue to progress their learning and achievement, the Scottish Government has published the Coronavirus (COVID-19) education recovery: key actions and next steps plan, to achieve the long term aims to: improve children's outcomes; help to close the poverty-related outcome gap; increase family resilience; and support parents and carers into work, study or training. 8. Using the Getting It Right For Every Child (GIRFEC) approach, where the needs of the individual learner must be at the centre of our actions, the education recovery plan recognises that Page 89
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4 Argyll and Bute Council – Internal Audit Report – Early Years –use of Covid Recovery Funds, November 2022 schools, teachers and early years practitioners will know best how to help individual children, including identifying those who need extra support with specific subjects or with their health and wellbeing, and what type of individual support that may be required. 9. Across Scotland over £450m of additional funding has already been committed during 2020/21 and 2021/22 as part of education recovery. £240m of that total has already been provided for the recruitment of extra staff to promote resilience and to provide additional support for learning and teaching. In addition, a further £145.5m is being added permanently to the local government settlement from April 2022 to allow local authorities to offer sustained employment of additional teachers and support staff. Scope 10. The scope of the audit was to assess compliance and use of Early Years Covid recovery funds as outlined in the Terms of Reference agreed with the (Acting) Education Manager on 19 July 2022. Risks 11. The risks considered throughout the audit were: Audit Risk 1: COVID-19 recovery funding is not being used effectively or for the purposes intended Audit Opinion 12. 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 1 to this report. 13. 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 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 14. 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, Early Years Team, has an appropriate plan for the use of Covid recovery funding. Audit Risk 1 Satisfactory The Covid recovery funding provided the Early Years team with the ability to bring forward a future planned project to support effective transitions into Primary School. Management were able to react quickly by redeploying resources already within the team to Page 90
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5 Argyll and Bute Council – Internal Audit Report – Early Years –use of Covid Recovery Funds, November 2022 create the 12 month secondment for the Education Support Officer (ESO) Transitions post 2 Plans to support effective transitions into P1/P2 have been developed and these have been communicated to staff. Audit Risk 1 Satisfactory The Early Years team have provided strong evidence that the ESO (Transitions) has assisted them in developing plans and taking action to embed play-based pedagogy in early primary and creating the Argyll and Bute Play Pedagogy Network on Google classroom. This allows teachers to share good practice across the authority and as mechanism for the ESO to deliver network sessions, post Career-long professional learning (CLPL) webinars and provide participants with up to date literature/ blogs etc. about play. In addition, there is good evidence of engaging with staff and using feedback to tailor materials and help shape training and development and identify a key Improvement Outcome for future year’s transitions. 3 Appropriate performance and reporting arrangements are in Place. Audit Risk 1 Satisfactory The Scottish Government only required Local authorities to report on the number and type of additional staff recruited using this funding and the setting they are employed in. The Council have submitted returns in the format requested, confirming that 1 post was used in Early Years. 15. Further details of our conclusions against each control objective can be found in Section 3 of this report. 3. Detailed Findings The Council, Early Years Team, has an appropriate plan for the use of Covid recovery funding. 16. In February 2021 the Scottish Government announced an additional allocation of £60 million to further support Covid recovery in education in 2021-22. In May 2021, Argyll and Bute Council (the Council) received a letter informing them of their allocation of £869, 000, stating: Funding will be distributed as a redetermination of the General Revenue Grant in 2021- 22. Local authorities will be required to report on the number and type of additional staff recruited using this funding and the setting they are employed in. This funding covers continued education recovery COVID costs and supports continued financial sustainability. Page 91
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6 Argyll and Bute Council – Internal Audit Report – Early Years –use of Covid Recovery Funds, November 2022 It is expected that additional flexibility may be required in how these costs are managed, and it is for local authorities to manage this against ongoing funding requirements for education recovery 17. The Scottish Government agreed with COSLA Leaders the funding could be used flexibly by local authorities for the following purposes in relation to Early Years: To employ early years practitioners to support the transition from ELC to primary school by, for example, embedding play-based pedagogy in early primary, supporting information sharing and organising transition activities. 18. As is practice with educational funding, COSLA issued a distribution notice to Councils asking Leaders to consider and agree the recommendations from the Settlement and Distribution Groups (SDG) that the allocated funding be split 90% for schools and 10% for Early Learning and Childcare (ELC), noting that the split is for distribution purposes only. Councils were asked to submit a funding response to COSLA to provide details of their intended split and plans for use. 19. The Council’s response confirmed that, in line with recommendations, the intended distribution for Early Years would be £89, 600 (10%) with planned use to support consistency of transition from all ELC settings to Primary One by providing: training and direct peer support in the classroom to Primary One teachers to develop their confidence and skills in delivering active and play based learning. active and play based learning outdoors as is central to our curriculum vision. additional Early Years practitioners to ensure that developmental milestones and other quality data are shared with schools, checking it is understood so that transitions to schools are effective and well supported. 20. Given the short timescales, the Education Manager Early Years, in place at the time, decided that the most efficient and effective use of resources to deliver this project was via an additional Education Support Officer (ESO) post to be in place for the academic year. The member of staff selected to deliver the Transitions project was chosen because their current work, undertaken as part of the ‘Into Headship’ assignment, on Play Pedagogy provided the team with the ability to implement the project at short notice. 21. Financial records confirm that the cost centre, EDU - COVID 19 - Education Recovery - Additional Staff in School and ELC settings, has been set up and provides evidence of defrayal of the funding on employee costs specifically relating to one Early Years post - Education Support Officer (ESO) – Transitions. 22. Educational funding is awarded for academic years and so crosses financial years meaning automatic approval for Ear Marked Reserves to be taken forward for use in the next financial year. In the financial year 2021-22 a total of £45,043.70 was spent with the remaining balance of £44,556.30 being carried forward to the current financial year, 2022-23 as part of the larger Education Ear Marked Reserve for Covid Recovery Funding. 23. The total costs relating to ESO Transitions post amounted to £68,848 for the academic year 21- 22 and officers confirmed that the remaining underspend of £20,752 is available for Early Years team to spend to support active and play-based learning outdoors. This is consistent with the award letter and the Council’s planned use. Page 92
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7 Argyll and Bute Council – Internal Audit Report – Early Years –use of Covid Recovery Funds, November 2022 Plans to support effective transitions into P1/P2 have been developed and these have been communicated to staff. 24. The Education Support Officer (ESO) developed and shared various plans, training materials and resources to ensure the transition to school is based around a developmental, play-based approach to learning. The main examples of these are: The Argyll and Bute Play Pedagogy Network on Google classroom to allow teachers to share resources and good practice across the authority. A Framework for Transition – providing details of events and key activities across the academic year. Primary One Teachers transition resource Introduction to Developing Playful Pedagogy in the Primary Classroom and A Whole School Approach - continuing professional development (CPD) sessions Transition – self-evaluation form Somewhere Over the Rainbow Transition Project, which included setting up a Facebook page to share good practice and encourage continuity with transition across the summer months Coming back to school in a bubble – a book for children Planning for Play Outdoors 25. The Argyll and Bute Play Pedagogy Network on Google classroom provided the mechanism for the ESO to deliver network sessions, host CPD webinars and provide participants with up to date literature / blogs etc about play. Examples of how the developmental, play-based approach to learning has been shared with staff and rolled out include: Using the Play Pedagogy Network teachers from 18 schools participated in 5 training sessions 4 sessions of “Introduction to Developing Playful Pedagogy in the Primary Classroom” were delivered between May and November 2021 17 schools due to be inspected from across the authority were initially offered support to implement and develop play pedagogy in preparation for an inspection. Bespoke support from the ESO for schools who made specific requests. 60 teachers from across 25 schools participated in the In Service Day training /CLPL session held on 14th February 22. The session aim was to provide an enhanced understanding of how play pedagogy can be delivered in the classroom “A Whole School Approach” session held on 20th April 2022 was attended by about 70 teachers from 30 schools 26. To evaluate performance the ESO initiated a Google Forms survey before Christmas 2021 using the Transition – Self Evaluation form to gather the thoughts of ELC settings and schools on how effective the transition projects were across the authority. A total of 67 responses were received, these were fairly evenly spread between all 4 areas and a wide variety of roles with half of the respondents choosing to leave comments and feedback. 27. The general consensus was that the transition projects were not perceived to have been taken forward in schools as well as they had been in ELC. The survey itself showed us that not enough Primary One teachers were represented. This could imply that relevant information does not always reach the correct people. Page 93
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8 Argyll and Bute Council – Internal Audit Report – Early Years –use of Covid Recovery Funds, November 2022 Transition is generally successful in ELC but aspects could be improved when children reach Primary One. Further work is required in order to ensure that all Primary One teachers have a sound understanding on what constitutes a ‘quality’ transition. 28. The results of the survey led to the creation of a key Improvement Objective for future years transition “To ensure that the transition project work is carried forward into Primary One in a more meaningful and comprehensive manner than in previous years” and helped shape the In Service day and the April CLPL session noted above. Appropriate performance and reporting arrangements are in Place 29. The Scottish Government required local authorities to report on the number and type of additional staff recruited using this funding and the setting they are employed in. The Council have submitted returns in the format requested, confirming that one ESO post was used in Early Years. 30. The secondment has now finished and the current Education Manager Early Years confirmed that transitions will continue to be monitored in line with the ESO role/job description and as required by the national curriculum requirements. Page 94
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Appendix 1 – 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. Page 95
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Argyll and Bute Council Internal Audit Report December 2022 FINAL High Medium Low VFM Number of Findings 0 1 2 0 Private Sector Grants and Housing Adaptations Title of Audit Audit Opinion: Substantial Page 97
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2 Argyll and Bute Council – Internal Audit Report – Private Sector Housing Grants and Adaptations December 2022 Contents 1. Executive Summary .............................................................................................................. 3 Introduction................................................................................................................................. 3 Background.................................................................................................................................. 3 Scope........................................................................................................................................... 4 Risks ............................................................................................................................................ 4 Audit Opinion .............................................................................................................................. 5 Recommendations ....................................................................................................................... 5 2. Objectives and Summary Assessment.................................................................................... 5 3. Detailed Findings .................................................................................................................. 7 Appendix 1 – Action Plan............................................................................................................ 11 Appendix 2 – Audit Opinion........................................................................................................ 13 Contact Details Internal Auditor: Annemarie McLean Telephone: 01700 501354 e-mail: Annemarie.mclean@argyll-bute.gov.uk www.argyll-bute.gov.uk Page 98
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3 Argyll and Bute Council – Internal Audit Report – Private Sector Housing Grants and Adaptations December 2022 1. Executive Summary Introduction 1. As part of the 2022/23 internal audit plan, approved by the Audit & Scrutiny Committee in March 2022, we have undertaken an audit of Argyll and Bute Council’s (the Council) system of internal control and governance in relation to Private Sector Housing Grants (PSHG) and Housing Adaptations. 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. Section 72 of the Housing (Scotland) Act 2006 (the Act) requires local authorities to prepare and make publicly available a Scheme of Assistance outlining the circumstances in which they offer assistance for private sector housing. 5. The Scottish Government have issued accompanying guidance - the Implementing the Housing (Scotland) Act 2006 advisory guidance for Local Authorities, to aid the preparation and delivery of their duties under the Act. 6. The Scheme of Assistance is the Council’s plan on how to improve the quality and suitability of private sector housing across Argyll and Bute by offering the following support; Advice and Information (along with key partners in their relevant areas of expertise) - on home repairs, maintenance, improvements, adaptations, home energy efficiency and fuel poverty. Practical Assistance - relating to the repair and maintenance of homes Financial Assistance: i. Adaptations – 3 Types of Grant available, one is mandatory and 2 discretionary ii. Repairs – 7 Types of Grant available, 6 are discretionary and the other is the Home Energy Efficiency Scheme (HEEPs). 7. The Public Bodies (Joint Working) (Scotland) Act 2014 (the Act) requires Health Boards and Local Authorities to integrate planning for, and delivery of, certain adult health and social care services. This legislation means that from 1st April 2016 the Integrated Health and Social Care Body has responsibility for disabled adaptations. To reflect this the Council’s Scheme of Assistance document outlines application criteria detail in 2 Parts:- Page 99
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4 Argyll and Bute Council – Internal Audit Report – Private Sector Housing Grants and Adaptations December 2022 Part 1 – Those sections of the legislation relating to grants for adaptations. To meet the assessed needs of people with long term life limiting conditions, who are living in the private sector and require adaptations to allow them to live in their homes as independently as possible for as long as they choose to do so. Incorporated within Part 1 is the management of the contract for Argyll and Bute Care and Repair Services relating to adaptations. Part 2 – All other grant funding for private sector housing including, repair, improvement, energy efficiency and empty homes grants. To address disrepair in private sector homes by encouraging home owners to recognise that they have the primary responsibility for maintaining their properties. Limited resources will be targeted at properties where there are common repair responsibilities and empty homes. 8. Argyll and Bute Council’s Housing Service will deliver both Parts 1 and 2 of the Scheme. It is accountable to the Health and Social Care Integrated Joint Board for Part 1 and to the Council for Part 2. 9. Local Authorities receive Private Sector Housing Grant (PSHG) enables the Council to deliver statutory disabled adaptations to private owners and also enables the Council to fulfill other statutory functions in relation to common repairs as outlined within the Council’s Scheme of Assistance. The amount of capital resources allocated to PSHG from 2016-17 to 2021-22 has been £1.033m per annum, as per the General Capital Grant award however the 2021- 22 settlement reduced this to £0.941m. The Council, at its budget meeting on 24th February agreed to fund the gap of £0.092m through borrowing for 2022-2025. 10. The use of the PSHG is detailed in the table below: Scope 11. The scope of the audit was to assess compliance with policies and procedures as outlined in the Terms of Reference agreed with the Development Policy and Housing Strategy Manager on 21 September 2022. Risks 12. The risks considered throughout the audit were: SRR03: Financial Sustainability – Insufficient resource to meet current and future service requirement. Budget not aligned/does not support business outcomes. 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Advice and Prevention Cases Recorded 254 259 214 189 166 153 No of Grants Approved 243 181 219 232 138 208 Grant Approvals (£)k £1.192m £0.862m £1.048m £1.002m £687k £884k New Applications Registered 239 189 240 234 131 218 Value of Payments (£)k £1.454m £1.054m £0.980m £1.152m £0.421m £0.552m Disabled Adaptations Grant Spend (DAG) £849k £640k £701k £764k £332k £503k Common Repairs Spend £605k £414k £279k £388k £89k £49k TOTAL £1.454m £1.054m £0.980m £1.152m £0.421m £0.552m Page 100
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5 Argyll and Bute Council – Internal Audit Report – Private Sector Housing Grants and Adaptations December 2022 ORR52: Housing Services Adaptation – various risks due to impact of Covid and materials availability and price increases. Audit Risk 1: Failure to deliver statutory functions Audit Risk 2: Failure to comply with established processes and procedures 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 substantial level of assurance. This means that 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. Recommendations 15. We have highlighted one medium priority recommendations and two low priority recommendations where we believe there is scope to strengthen the control and governance environment. These are summarised below: Procedure notes do not specify timescales for requests to record the Council’s interest on beneficiaries’ title deeds nor the associated fees, which are to be processed after final payment of grant. Procedure notes should include timescales and journals for income should be credited to Legal Services and not via PSHG income code. The Scheme of Assistance does not contain up to date information and should be updated after the outcome of the national policy review. Procedures and shared Documents should be updated to reflect current working practices, which have evolved due to hybrid working arrangements and the digitalisation of records. Consideration should be given to creating a checklist to promote consistency. 16. Full details of the audit findings, recommendations and management responses can be found in Section 3 of this report and in the action plan at Appendix 1. 2. Objectives and Summary Assessment 17. 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 a Scheme of Assistance that is aligned to legislative requirements, is up Audit Risk 1 SRR03 Unsatisfactory The Council has a Scheme of Assistance that is aligned to legislative requirements, which is publicly available but is not up to date. The Council has volunteered to participate in a review of the Scheme Page 101
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6 Argyll and Bute Council – Internal Audit Report – Private Sector Housing Grants and Adaptations December 2022 to date and publically available. of Assistance, together Scottish Government, Scottish Housing Network (SHN) and other stakeholders. On completion of this review the Councils’ Scheme of Assistance will be updated An action with a target date of 2023, is contained in the Local Housing Strategy (LHS) 2022-2027, progress toward this is reported annually to Area Committees. 2 Applications and referrals for assistance are assessed, processed and recorded in line with procedures/guidance Audit Risk 2 Unsatisfactory The Council has procedures and a range of shared documents for staff in relation to the PSHG. While the vast majority of requirements are included there would be benefit to updating these to reflect current working practices, which have evolved due to hybrid working arrangements and the digitalisation of records. Grant conditions require the Council’s interest be recorded on beneficiary’s title deeds. The procedure notes do not currently specify a timescale for requests to be passed to Legal Services. There is evidence of delays which creates a potential risk of loss of ability to recover grant funds should properties be sold or conditions of grant breached. Journals for the recording fees are currently credited to a holding PSHG income account code, not Legal Services. Staff within the team are experienced and so do not always refer to the procedure notes. Consideration should be given to creating a checklist to act as an aide memoire and ensure consistent application of processes. 3 Grants, claims and disbursements are processed in line with procedures/guidance and adequate evidence of expenditure is ORR52 Audit Risk 2 Satisfactory There is clear evidence of separation of duties at each stage of the process with staff communicating and working well together to confirm tasks relating to the processing of grants applications and payments are dealt with timeously. There are good record retention processes. Page 102
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7 Argyll and Bute Council – Internal Audit Report – Private Sector Housing Grants and Adaptations December 2022 provided and retained. There are some minor housekeeping issues mainly related to either procedure notes requiring to be updated or location of documents, this is covered in CO2 above. 4 The PSHG funds are appropriately monitored and reported to ensure sufficient resources are available to those with needs. SRR03 ORR52 Satisfactory There is extensive monitoring and reporting of the PSHG funds including performance relating to those helped. The Council has a statutory duty to produce a Local Housing Strategy Annual update and to submit the Housing Statistics Annual return. Reports are provided to Full Council, Area Committees, Strategic Housing Forum and HSCP Strategic Planning Group. Internally, within Housing Services there is evidence of meetings with all levels of staff and budget monitoring meetings with senior Financial Services staff. 18. Further details of our conclusions against each control objective can be found in Section 3 of this report. 3. Detailed Findings The Council has a Scheme of Assistance that is aligned to legislative requirements, is up to date and publically available. 19. The Council has a Scheme of Assistance that is aligned to legislative requirements, which is publicly available but which does not contain up to date information. Together with Scottish Government, Scottish Housing Network (SHN) and other stakeholders the Council has volunteered to participate in a review of the Scheme of Assistance. In its Local Housing Strategy (LHS) 2022-2027 action plan, the Council has published its commitment that the Scheme of Assistance will be updated in 2023 following the national review. Action Plan 2 20. The Councils Scheme of Assistance (SoA) which was introduced under the duties and powers set out in the Housing (Scotland) Act 2006, and sets out the strategy of support for owners to address properties which are Below Tolerable Standard (BTS) and in disrepair. Housing Improvement Officers work with closely with private owners, landlords and relevant partners, to address issues of poor property condition, common repair works, factoring, and, where applicable, the use of enforcement powers. 21. Assistance, advertised on the Council’s website, ranges from provision of advice and information; to financial support to undertake disabled adaptations, common repair works, and bring empty homes back into use. The SoA provides a platform to take a practical approach to encourage and help owners to carry out repair and improvement works to their homes. Page 103
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8 Argyll and Bute Council – Internal Audit Report – Private Sector Housing Grants and Adaptations December 2022 22. The Council has a statutory duty to provide a Housing Contribution Statement (HCS) for the Health and Social Care Partnership (HSCP). The HSC has been included in the HSCP joint strategic plan for 2022-2025 which was launched in June 2022. 23. The HSCP have lead responsibility for disabled adaptations and they provide information on various types of Help at Home and in your community on their website. The majority of applications for disabled adaptation grants are initiated by referrals from GPs to Occupational Therapists (OT) who assess what adaptations are required to enable applicants to remain in their own homes and prioritises these needs based on the Prioritisation of Needs Framework. The OT then passes the referral and recommendations to Argyll and Bute Care and Repair (ABCR) who generally act as agents for applicants during the grant application and works processes. 24. Council Housing Services Officers who form the PSHG team hold team meetings to monitor all aspects of the fund, including OT referrals and applications received from ABCR. Minutes provide evidence that there is an ongoing issue with recruiting OTs and that locums have been used in some areas to gain coverage of service, which has led to an uplift in referrals. In order to accurately monitor timescales between the various stages, Council officers have revised the OT referral form to gather this information and assist in tracking the time between key dates. 25. We note the reduction in capital resources allocated from the General Capital Grant for Private Sector Housing Grant (PSHG) and acknowledge the Council’s decision to fund the gap of £0.092m through borrowing for 2022-2025. Applications and referrals for assistance are assessed, processed and recorded in line with procedures/guidance. 26. The Council has procedure notes for staff detailing the requirements at each stage of the journey from referrals to applications for assistance to closure of files including records retention. While the vast majority of requirements are included there would be benefit to updating these to reflect current working practices, which have evolved due to hybrid working arrangements and the digitalisation of records. 27. Procedure notes state that staff should make folders and store information on their desktops. The information is not accessible by other staff and this does not reflect Council policy that information should be stored in the relevant drive/server on a Council maintained system. Team Leaders have now made arrangements that documents are now stored on the relevant drive. 28. There is a requirement to note the Council’s interest and specific conditions on beneficiaries’ title deeds in the land register upon completion of works. Requests should be sent to Legal Services department to record the Notice of Payments (RNOP). The procedure note does not set a specific timescale for these to be sent. Testing of grants found requests were not sent to Legal Services at final payment, instead they ranged from 6 weeks up to 22 weeks. This creates a potential financial risk of loss of ability to recover grant funds should properties be sold or conditions of grant breached. Page 104
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9 Argyll and Bute Council – Internal Audit Report – Private Sector Housing Grants and Adaptations December 2022 29. The fee for recording the Council’s interest on the title deeds is currently £80 and becomes due on final payment of the grant. These fees are initially credited to a PSHG income account and not directly to Legal Services cost centre. The amounts involved are not material in relation to the PSHG budget, however, this may lead to reconciliation delays of PSHG budgets and forecasting issues. Action Plan 1 30. The ABRITAS system is used to record all requests for information, advice given and practical assistance grants provided. Post Covid, grant applications and supporting documentation are now received by email, however this is not retained and sometimes documents are renamed prior to uploading onto the ABRITAS system. A record preserving the email showing the original grant application and supporting documents should be retained for the avoidance of doubt. 31. A selection of 30 grants with a total value of £194, 000, representing 19% of the approved budget allocation, were selected for testing. The receipt of electronic files has allowed staff in different locations to process grant applications and approvals quickly once the correct supporting documents have been supplied. When signing the application form, owners are required to sign a declaration consenting to be bound by the conditions of the grant. 32. Accurate decision notices were issued to all applicants within the sample reviewed and all awards were appropriately authorised by relevant service staff. Minor issues that have been classed as housekeeping issues have been shared with the team, these include inconsistent application of what constitutes a valid application and the adding of notes/ documents to the system. This is in part due to the fact the Council has to pay for document storage on ABRITAS so some documents are stored elsewhere. Officers advised that they are in discussion with IT regarding finding the most appropriate Document Management system. 33. Staff within the team are experienced and so do not always follow the procedure notes when completing tasks. When updating the procedure notes, consideration should be given to creating a checklist to act as an aide memoire and promote consistent application of processes. Action Plan 3 34. Applicants or their agents receive two formal communications from the Council: An acknowledgement email confirming receipt of their application An Approval of application for grant assistance which is valid for 12 months from issue. 35. Housing Improvement officers, for each area, monitor and follow up their own caseload getting in touch with applicants and ABCR as necessary and provide updates at team meetings. Grants, claims and disbursements are processed in line with procedures/guidance and adequate evidence of expenditure is provided and retained. 36. Grants awarded are based on the lowest estimate or quote supplied during a tender exercise. The grant award letters issued state “The Council has decided to pay a grant of …” and restates the conditions of the grant but there is no reference to this value being a percentage of the costs nor does it state that the value awarded is dependent on actual costs. There is no requirement for the applicant to acknowledge this. Page 105
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10 Argyll and Bute Council – Internal Audit Report – Private Sector Housing Grants and Adaptations December 2022 37. All grant payments were made following either submission of an invoice from contractors or an internal recharge to CARS. Payments were either made by single payment following completion of work or by instalments at agreed project stages. Payment certificates evidenced that the sums of the instalment(s) paid did not exceed the value of works carried out at time of payment. As noted previously minor housekeeping issues relating to shared documents have been noted and shared with staff. Officers have advised that shared documents will be updated as part of the review of procedures. 38. The payments are currently being treated as Zero rated for VAT purposes but based on advice from the Council’s VAT team, the categorisation should be Out with Scope. Officers have advised that procedures and payment certificates will be updated to reflect this. 39. There is clear evidence of separation of duties at each stage of the process with staff communicating and working well together to ensure tasks are dealt with timeously. 40. Due to the grant conditions requiring that documents are retained for 10 years there are good record retention processes. 41. The Council does not carry out formal inspections and quality assessments of the work prior to payment. In the case of Disabled Adaptation grants these are carried out by ABCR as part of their contract with the Council, prior to them submitting the final request for payment. For all other works reliance is normally placed on the beneficiary’s declaration that the works have been carried out to their satisfaction. The note fields within the ABRITAS system is not consistently updated to reflect this. Action Plan 3 42. End users are not currently asked to provide feedback on the grant process nor is there a process requiring this. Officers advised that moving forward Satisfaction Surveys will be incorporated into the Housing Communication Strategy. The PSHG funds are appropriately monitored and reported to ensure sufficient resources are available to those with needs. 43. The lead in time associated with grant works sometimes means that payments are made in more than one financial year. As the PSHG is a capital budget there is an automatic carry- forward in to the next financial year. Minutes of PSHG, Housing Management and Budget Holder Engagement meetings were provided to demonstrate the active monitoring of the PSHG funds. 44. There is extensive monitoring and reporting of the PSHG funds and performance towards LSH outcomes, with reports provided to Full Council, Area Committees, Strategic Housing Forum and HSCP Strategic Planning Group. Additionally the PSHG contribution towards Conservation Area Regeneration Schemes (CARS) funding has been presented to DMT and Policy and Resources Committees. 45. The Council has complied with its statutory duty to produce a Local Housing Strategy Annual update and to submit the Housing Statistics Annual return. Page 106
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Appendix 1 – Action Plan No Finding Risk Agreed Action Responsibility / Due Date Medium 2 Recording the Notice of Payments and associated fees There is a requirement to note the Council’s interest and specific conditions on beneficiaries’ title deeds in the land register. The procedure note does not set a specific timescale for the request to be sent Legal Services to record of the Notice of Payments (RNOP). The journal processing the recording fees should go straight to Legal Services and not via a PSHG income code. Potential risk of loss of ability to recover grant funds. Income not credited directly to Legal Services dept may lead to reconciliation of PSHG budgets and forecasting issues Procedure notes will be reviewed and updated and specific timescales will be introduced for requests and income from recording fees to be sent to Legal Services Team Lead - Housing operations 31 March 2023 Low The Scheme of Assistance The Councils Scheme of Assistance (SoA) which was introduced under the duties and powers set out in the Housing (Scotland) Act 2006, and sets out the strategy of support for owners to address properties which are Below Tolerable Standard (BTS) and in disrepair does not contain up to date information and should be updated after the outcome of the national policy review. The public may not be aware of the Councils current Plans and Strategies of support for owners to address properties which are Below Tolerable Standard (BTS) and in disrepair. As per Local Housing Strategy 2022-2027 Action Plan: The Scheme of Assistance, will be revised in 2023, after the outcome of national policy review on adaptations. Team Lead - Housing Strategy 31 December 2023 Low 3 Procedure Notes and Shared Documents While the vast majority of requirements are included there would be benefit to updating these to reflect current working practices, which have evolved due to hybrid working arrangements and the digitalisation of records. Consideration should be given to creating a checklist to ensure consistent application of processes. Processes may be applied inconsistently. Procedures and documents will be reviewed and updated. Checklists to be drawn up and introduced when updating the procedures Team Lead - Housing operations 31 March 2023 Page 107
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12 Argyll and Bute Council – Internal Audit Report – Private Sector Housing Grants and Adaptations December 2022 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). Page 108
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13 Argyll and Bute Council – Internal Audit Report – Private Sector Housing Grants and Adaptations December 2022 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. Page 109
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Argyll and Bute Council Internal Audit Report November 2022 Final High Medium Low VFM Number of Findings 0 0 0 0 Oban Airport Audit Opinion: High Page 111
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2 Argyll and Bute Council – Internal Audit Report – Oban Airport, November 2022 Contents 1. Executive Summary .............................................................................................................. 3 Introduction................................................................................................................................. 3 Background.................................................................................................................................. 3 Scope........................................................................................................................................... 4 Risks ............................................................................................................................................ 4 Audit Opinion .............................................................................................................................. 4 2. Objectives and Summary Assessment.................................................................................... 4 3. Detailed Findings .................................................................................................................. 6 Appendix 2 – Audit Opinion.......................................................................................................... 9 Contact Details Internal Auditor: Leanne Rennie Telephone: 01369 708516 e-mail: Leanne.rennie@argyll-bute.gov.uk www.argyll-bute.gov.uk Page 112
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3 Argyll and Bute Council – Internal Audit Report – Oban Airport, November 2022 1. Executive Summary Introduction 1. As part of the 2022/23 internal audit plan, approved by the Audit & Scrutiny Committee in March 2021, we have undertaken an audit of Argyll and Bute Council’s (the Council) system of internal control and governance in relation to Oban Airport. 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. Oban Airport is one of three aerodromes operated by the Council, and licensed under Article 211 of the ANO 2009 by the Civil Aviation Authority (CAA). Deemed as a Public Service Obligation (PSO), scheduled services, and scholar flights for island school children, operate from Oban airport to Coll, Colonsay, Islay and Tiree. Additionally, the airport deals with chartered traffic and military flights as well as general aviation traffic such as medevacs, coastguard operations, training flights and scenic tours by private operators. 5. Prior to the grant of a licence and for continued licensing, the CAA requires the Aerodrome Operator to meet the minimum standards detailed in CAP168 Licensing of Aerodromes. CAP 168 sets out the standards required at UK national licensed aerodromes relating to management systems, operational procedures, physical characteristics, assessment and treatment of obstacles, visual aids, rescue and fire-fighting services and medical services. 6. The Oban Airport Aerodrome Manual (the Manual) provides information about the airport, its systems for managing safety and the required operational procedures. The Airport Rescue & Fire Fighting Service (RFFS) manual provides guidance on the agreed policy and procedures designed to achieve an effective and efficient RFFS. Both manuals are derived from CAP168. 7. Oban Airport operate the ‘Redkite Equipment Management system’ which is used in all UK airports to help ensure they meet the requirements of the CAA in regard to RFFS personnel and equipment. 8. The overall remit of internal audit is to provide assurance over compliance with the 22 airport operating instructions (AOIs) established by the Manual and the further procedures established by the RFFS manual. Our approach, as agreed in 2018/19, is to provide this assurance over a five year cyclical basis. Page 113
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4 Argyll and Bute Council – Internal Audit Report – Oban Airport, November 2022 Scope 9. The scope of the audit was to provide assurance over compliance with five of the airport operating instructions (AOIs) established by the Manual and the further procedures established by the RFFS manual as outlined in the Terms of Reference agreed with the Oban Airport Station Manager on 28 September 2021. The operating instructions audited in 2022/23 were: AOI 1 – Airside Access Compliance AOI 2 – Airside Safety Compliance AOI 3 – Airside Driving Compliance AOI 4 – Airside Vehicle & Equipment Compliance AOI 5 – Airside Stands & Parking Arrangement Compliance Risks 10. The risks considered throughout the audit were: Audit Risk 1: Failure to comply with operating instructions could result in increased risk of accidents and/or the airport losing its CAA licence Audit Opinion 11. 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. 12. 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 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 13. 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 CO1 The Manual, setting out the operational procedures of the airport, is up to date, appropriate and accessible to all relevant staff. Audit Risk 1 High The Manual is updated annually and is available to appropriate officers. The document was found to be comprehensive with each section outlining the Council Page 114
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5 Argyll and Bute Council – Internal Audit Report – Oban Airport, November 2022 policy for compliance with regulations and procedures. CO2 AOI1 – Access to the aircraft movement area is restricted to appropriate and competent personnel. Audit Risk 1 High Access to the aircraft movement area was found to be restricted to appropriate personnel. Training is carried out on an ongoing basis. CO3 AOI2 - Appropriate action is being taken to minimise airside hazards. Audit Risk 1 High The aerodrome operating manual sets out a comprehensive list of potential hazards that can occur in regard to both airport and apron activity. Training on minimising airside hazards is carried out on an ongoing basis. CO4 AOI3 - Airside drivers are appropriately trained and comply with the driving procedures established by the Manual. Audit Risk 1 High All traffic incidents and all accidents are recorded within the appropriate database. Training on airside driving is carried out on an ongoing basis. CO5 AOI4 - Airside vehicles and equipment are properly maintained, used only by appropriate personnel and appropriately insured. Audit Risk 1 High All airside vehicles are insured under the Councils overarching vehicle insurance policy. A review of the maintenance records confirmed that all vehicles are being maintained per the agreed schedule and meet VOSA standards where applicable. Training on airside equipment is carried out on an ongoing basis. CO6 AOI5 - Procedures for parking and manoeuvring aircraft are consistent with the requirements of the Manual. Audit Risk 1 High A review of procedures for parking and manoeuvring found them to be comprehensive and consistent with the requirements of the manual. Equipment available on site for parking and manoeuvring of aircraft was found to be appropriate. Training covers all aspects of airside stands and parking. Page 115
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6 Argyll and Bute Council – Internal Audit Report – Oban Airport, November 2022 14. Further details of our conclusions against each control objective can be found in Section 3 of this report. 3. Detailed Findings The Manual, setting out the operational procedures of the airport, is up to date, appropriate and accessible to all relevant staff 15. The Manual is available to all relevant personnel on the Council HUB with a hard copy held onsite at the airport. Each section within the Manual sets out: the Council’s policy and established procedures to ensure compliance with relevant rules and/or regulations appropriate monitoring arrangements (where applicable) roles and responsibilities of relevant personnel. 16. The Manual is reviewed annually by the Station Manager, last updated October 2022. The updated version is submitted to the CAA who have 28 days to highlight any queries on the Manual’s content. If no response is received in 28 days then the revised Manual is adopted. 17. In June 2020, in response to COVID, a guidance manual entitled ‘Oban & the Isles Airports – COVID secure procedures’ was issued by the Station Manager. It is available on the Council HUB and paper copies are kept in the office. The airport complies with the Rules of the Air Regulations regarding airside access. 18. The Manual states that all personnel must have received appropriate training (and records kept) be over the age of 16 and are in possession of a current airside driver pass. All airside personnel undergo an initial induction training course which includes an overview of all elements stated in the Manual. Thereafter the Airport has a 12 monthly rolling training programme. The airport complies with the operating instructions to monitor airside safety. 19. The Manual states that all traffic incidents or accidents must be reported accordingly. It also states that training must be in place and personnel are complying with the procedures in order to minimise airside hazards. The Airport complies with the operating instructions regarding airside driving. 20. The Manual states that all traffic incidents or accidents must be reported and recorded. Occurrences are reported to either CAA or AIB depending on the nature of the incident. All personnel must also be trained in all aspects of airside driving to ensure competency. The airport complies with the operating instructions regarding permitted vehicles airside. 21. The Manual states that training must be in place for all personnel in relation to the operation of airside vehicles and equipment. All vehicles used airside must be insured and a maintenance/inspection programme is followed. Airport vehicles are checked on a daily basis by personnel and details recorded. Page 116
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7 Argyll and Bute Council – Internal Audit Report – Oban Airport, November 2022 The airport complies with the procedures for parking and manoeuvring aircraft. 22. The Manual states that a training programme must be in place. Airport policy for the majority of aircraft is to self-park, in the event of any congestion marshals will be provided. Personnel must be issued with the appropriate clothing and equipment, ie, orange bats and illuminated wands (in the event of reduced lighting). Fuel spillages and emergencies will be reported accordingly. Page 117
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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). Page 118
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9 Argyll and Bute Council – Internal Audit Report – Oban Airport, November 2022 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. Page 119
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Argyll and Bute Council Internal Audit Report August 2022 Final Contact Details Internal Auditor: Leanne Rennie Telephone: 01369 708516 e-mail: leanne.rennie@argyll-bute.gov.uk LiveArgyll Establishment Visit Campbeltown Aqualibrium & Library Audit Opinion: Amber Page 121
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2 LiveArgyll – Internal Audit Report – LiveArgyll Establishment Visit – Campbeltown Aqualibrium & Library –August 2022 1. Executive Summary Introduction As part of the 2022/23 internal audit plan agreed with LiveArgyll management, we undertake establishment visits at LiveArgyll sites. LiveArgyll operate 26 establishments and we had agreed that 22 of these would be subject to establishment visits over a four year cyclical basis. As a result of Covid19, this delayed a number of Establishment visits which we intend to undertake over the next 2 years to bring visits back up to date. 1. Appendix 1 sets out the schedule of establishment visits which focus on the areas set out in exhibit 1 and we have agreed checklists for each area with LiveArgyll management. Exhibit 1 – Establishment Visits Areas of Focus Building Exterior Floors Environment Baby Changing Units Doors Public Spaces Signage Income Collection / Facility Booking Ceilings Windows Fixtures & Fittings Floats Walls Elevators Toilets Banking Swimming Pool / Health Suite Library Sports Hall / Gym Staff 2. The audit tests are predominantly observational so any issues highlighted are based on what was witnessed on the visit day. Due to the limiting nature of audit evidence we do not include recommendations in this report. Rather it provides an overview of issues identified allowing the LiveArgyll management team to determine whether any corrective action is required. 3. To ensure consistency of approach, the issues raised do not take account of any planned structural work in the short to medium term. For example, if we identify superficial structural damage we will still report it even if we are aware the establishment is due to be refurbished. Background 4. On 19th July 2022 we visited the Campbeltown Aqualibrium and Library. The scope of the audit was to assess the site against the audit questions agreed with LiveArgyll. Audit Opinion 5. We provide an overall audit opinion for all the establishment visits we conduct. This is based on our judgement on the extent to which there are issues requiring corrective action and how critical they are. We assess establishment visits as either: Red – Intervention is required to correct material areas of concern Amber – Issues identified can be managed through a programme of works Green – Issues identified are relatively minor 6. Our overall opinion for this establishment visit is Amber. This means that whilst we have identified issues we are not of the view that they post an immediate risk to service delivery. However, management should consider how best to address the issues within a reasonable timescale. Page 122
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3 LiveArgyll – Internal Audit Report – LiveArgyll Establishment Visit – Campbeltown Aqualibrium & Library –August 2022 Findings 7. Exhibit 2 summarises the conclusions of the work and any observations made on the day of the visit. Exhibit 2 – Summary Assessment of Control Objectives Area Strengths Areas for Consideration 1 Building Exterior On approach the building conveys the appropriate corporate image. None. 2 Doors The main entrance doors open freely. None. 3 Ceilings All ceilings are in good condition with no cracks or water damage. There are several ongoing leaks throughout the building and although these have been reported and repaired to some degree they need to be addressed to maintain the functionality of all areas and minimise the risk to staff and users of the facility. 4 Walls All walls are clean and damage free, no posters on walls. Skirting is secure. None. 5 Floors & Public Spaces Floors are predominantly clean throughout. None. 6 Windows Windows are clean and tidy with no visible cracks or damaged frames and poolside windows open and close freely. No posters are on the windows. None. 7 Elevators There are two elevators, which are in good working order and kept clean and tidy. None. 8 Environment There is adequate lighting and ventilation and noise levels are acceptable. All lights are in good working order and bins are emptied several times a day. None. 9 Signage Internal signage all in place. None. 10 Noticeboards & Leaflets There is adequate and up to date noticeboards and leaflets. None. 11 Furniture, Fittings & Equipment All furniture and fittings are in good clean order and not in a hazardous position. All sockets are in good working order. None. 12 Toilets The toilets are predominantly clean and tidy. None. 13 Baby Changing Units Baby changing units are in good clean condition. None. 14 Swimming Pool The shop is well stocked and clean and tidy. The swimming pool area is well lit with no visible breakages to floor or wall tiles. The changing village is clean and tidy with no apparent breakages to tiles on the walls or the floor. The health suite is clean and tidy. None. Page 123
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4 LiveArgyll – Internal Audit Report – LiveArgyll Establishment Visit – Campbeltown Aqualibrium & Library –August 2022 Area Strengths Areas for Consideration 15 Sports Hall, Gym and Studios The gym is clean and tidy adequately lit and well equipped. All machines appear to be in good working order. None. 16 Libraries All books are kept in good order on the shelves and are clean and tidy. There is no discarded stock inappropriately disposed of. The public access computers are all in working order. None. 17 Income Collection There are two vending machines which are emptied on a weekly basis by two staff. None. 18 Booking of Facilities No events are held at the Aqualibrium, however the hall can be booked for meetings/conferences. None. 19 Floats Floats are checked on a daily basis by the Senior Duty Officer. None. 20 Banking Banking is performed on a daily basis by the Senior Duty Officer at the local post office. None. Management Response LA fully adhere to all agreed maintenance protocols with Council partners. Water ingress issues have been regularly reported and whilst some remedial action(s) have taken place, the overall issue remains. Some provision has been made within the Council’s Strategic Asset Management Plan (SAMP) for further investigative works. Page 124
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5 LiveArgyll – Internal Audit Report – LiveArgyll Establishment Visit – Campbeltown Aqualibrium & Library –August 2022 Appendix 1 – Establishment Visit Schedule 2022-24 2022/23 2023/24 Complete Leisure Aqualibrium Helensburgh Pool Riverside Leisure Centre Rothesay Leisure Pool Mid Argyll Sports Centre Libraries Campbeltown Cardross Dunoon Helensburgh Lochgilphead Oban In progress Rosneath Rothesay Tarbert Sandbank Office N/A N/A N/A Halls & Community Centres Queens Hall, Dunoon Victoria Hall, Campbeltown Victoria Halls, Helensburgh Corran Halls, Oban In progress Kintyre Community Education Centre Lochgilphead Community Centre Moat Centre, Rothesay Page 125
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Argyll & Bute Health & Social Care Partnership Internal Audit Report September 2022 FINAL High Medium Low VFM Number of Findings 0 1 0 0 Performance Management Audit Opinion: Substantial Page 127
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2 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Performance Management- HSCP, September 2022 Contents 1. Executive Summary ........................................................................................................................ 3 Introduction ............................................................................................................................................ 3 Background ............................................................................................................................................. 3 Scope ....................................................................................................................................................... 4 Risks ........................................................................................................................................................ 4 Audit Opinion ......................................................................................................................................... 4 Recommendations ................................................................................................................................. 4 2. Objectives and Summary Assessment ........................................................................................... 4 3. Detailed Findings ............................................................................................................................ 5 Appendix 2 – Audit Opinion ................................................................................................................. 11 Contact Details Internal Auditor: Paul Macaskill Telephone: 01546 604108 e-mail: paul.macaskill@argyll-bute.gov.uk www.argyll-bute.gov.uk Page 128
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3 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Performance Management- HSCP, September 2022 1. Executive Summary Introduction 1. As part of the 2022/23 internal audit plan, approved by the Audit & Scrutiny Committee in March 2022, we have undertaken an audit of Argyll & Bute Health & Social Care Partnership (HSCP) system of internal control and governance in relation to Performance Management. 2. The audit was conducted in accordance with the Public Sector Internal Audit Standards (PSIAS) with our conclusions based on discussions with Health & Social Care Partnership 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 HSCP. 3. The contents of this report have been agreed with the appropriate Health & Social Care Partnership 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. Effective performance reporting ensures that non-executive appointees, elected members and senior management have the information that allows them to effectively scrutinise HSCP’s performance against agreed key priorities and objectives. Fundamental to this is the Integrated Performance Management Framework (IPMF) document which sets out the Partnership’s approach to performance monitoring. 5. The Performance Management Framework document sets out the following messages namely : Roles and responsibilities need to be clearly identified; managers need to be involved in the development of the KPI’s to ensure ownership and keep them relevant to their services and improved service outcomes; need to learn from what has worked and what has not with regards to previous performance reporting; data is accessible for all managers across health and social care; performance reporting needs to capture manager commentary to give context and allow for more challenging discussions with regards to addressing poor performance and understanding the local context; development of a performance culture needs to be progressive and responsive to wider organisational issues. Page 129
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4 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Performance Management- HSCP, September 2022 Scope 6. The scope of the audit was to assess the adequacy of, and compliance with HSCP’S Performance Management Framework arrangements as outlined in the Terms of Reference agreed with the Senior Performance and Improvement Manager on 27th July 2022. Risks 7. The risks considered throughout the audit were: Audit Risk 1: HSCP does not have an effective Integrated Performance Management Framework Audit Risk 2: Performance targets are not regularly monitored and reviewed Audit Risk 3: Roles and responsibilities are not clear Audit Risk 4: Performance reporting is not carried in line with Performance Management Framework Audit Opinion 8. 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. 9. Our overall audit opinion for this audit is that we can take a substantial level of assurance. This means that 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. Recommendations 10. We have highlighted one medium priority recommendations where we believe there is scope to strengthen the control and governance environment. These are summarised below: HSCP performance information should be made available on the Councils performance information system 11. Full details of the audit findings, recommendations and management responses can be found in Section 3 of this report and in the action plan at Appendix 1. 2. Objectives and Summary Assessment 12. 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 CO1 HSCP’s Performance Management Framework clearly sets out the Audit Risk 1 Substantial Performance reporting during the pandemic focussed on addressing the re-mobilisation of services. This new approach was as per guidance from Page 130
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5 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Performance Management- HSCP, September 2022 planning performance and improvement functions. the Scottish Government and was based upon 6 priority areas. A revised IPMF is currently being prepared and will focus on eliminating long waits in both inpatient and outpatients services. CO2 Appropriate performance targets are agreed annually, communicated and periodically reviewed. Audit Risk 2 Audit Risk 3 Substantial Performance targets during COVID were set at 70%-80% of THE 2019/20 service activity as at November 2021. Targets were agreed with the Scottish Government. Performance reporting will be based upon a revised set of targets that reflect priorities going forward. CO3 Performance is regularly monitored and reported. Audit Risk 4 High Performance is regularly reported to the IJB at their bi-monthly meetings. HSCP performance information should be made available on the Councils performance information system. A comprehensive annual report for 2020-21 which includes a summary of performance against targets has been published. 13. Further details of our conclusions against each control objective can be found in Section 3 of this report. 3. Detailed Findings HSCP’s Performance Management Framework clearly sets out the planning performance and improvement functions. 14. Due to service pressures arising from the pandemic during 2020/21, there has been some disruption to Performance reporting as the HSCP focussed on addressing the pandemic and re- mobilisation of services. The Scottish Government (SG) Cabinet Secretary for Health in December 2020 directed Chief Executives in both Local Authorities and Health Boards to prioritise critical service provision. 15. The change to performance reporting to reflect this directive was agreed at the January 2021 Integrated Joint Board (IJB) i.e. the IJB board agreed to a “temporary suspension of normal outcome performance reporting and instead performance reporting will focus on remobilisation of health and care services and COVID-19 related activity”. Prior to the suspension HSCP Performance reporting was based upon reporting against the HSCP Health & Wellbeing Outcome Indicators. 16. During the period 2021 -2022 HSCP adopted the NHS Highland Remobilisation Plan which describes a system to support the delivery of services for acute and social care within the HSCP and wider NHS Highland Board. The plan focused on the areas agreed as priorities with the Scottish Government. An extensive suite of remobilisation performance indicators were Page 131
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6 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Performance Management- HSCP, September 2022 developed and reported on a weekly and monthly basis to inform managers with regards to their performance against key remobilisation targets. 17. The Remobilisation Plan was based upon 6 key principles namely : Establishment of a clinical priority matrix; protection of essential services e.g. mental health, cancer services; active waiting list management; realistic medicine remaining at the core; review of long waiting patients; patient communication. 18. The NHS Scotland Chief Operating Officer has recently written to all NHS Boards identifying a new focus with regards to eliminating long waits in both inpatient and outpatients services. Consequently HSCP are currently preparing a revised IPMF that will address performance in these areas. 19. A review of the proposed IPMF found it to be comprehensive covering the following areas namely: Overarching Principles Reporting Responsibilities and Timescales Performance Reporting and Data Governance 20. Key Performance Indicators The revised IPMF is scheduled to be adopted during 2022/23.Governance of the IPMF will be carried out via the Clinical and Care Governance Committee, however current governance of Performance reporting will continue to be carried out by the IJB until the new arrangements come into force. 21. Prior to the changes performance monitoring was based upon a suite of outcomes which focussed on the experience and quality of services for people using those services, carers and their families. Reporting was carried out against 9 key National Health and Well-being outcomes and 23 sub indicators. These outcomes and indicators formed the basis for reporting for all HSCPs across Scotland. Examples of outcomes are : People are able to improve their health; people are able to live in the community; people have positive service user experience; services are centred on quality of life; services reduce health inequalities unpaid carers are supported Appropriate performance targets are agreed annually, communicated and periodically reviewed. 22. Performance targets during COVID were set at 70%-80% of 2019/20 service activity as at November 2021. These targets were agreed with the Scottish Government. 23. Example of performance reporting relating to Adult Care as at June 2022 is shown below: Page 132
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7 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Performance Management- HSCP, September 2022 Service Target Actual Variance Total no. of Adult referrals 716 916 28% Adult Protection referrals 224 258 15% Total new people in receipt of homecare 36 26 -28% Total new care home placements 16 14 -13% Total no. of delayed discharges 10 9 -10% Targets have not been updated over the last 2 years but have remained based on the Scottish Government requirement of 70%-80% of 2019/20 service activity as at November 2021. 24. Performance reports include comparisons against all other Scottish health Boards as regards waiting times. As at May 2021 NHS Highland Board have 48% proportion of Outpatients waiting more than 12 weeks, statistically this is below the overall proportion for Scotland at 50%. 25. A review of performance reports confirmed that performance reporting was in line with SG guidance during the relevant periods. 26. New Key Performance Indicators have been established with a series of targets across both inpatient and outpatient specialities for 2022/24. This will replace the previously reported Remobilisation targets identified within the NHS Remobilisation plan. Performance is regularly monitored and reported. 27. The IJB meets bi-monthly with performance reporting being a standard agenda item. The Head of Strategic Planning and Performance presents to the IJB Board meetings an update on the impact on service performance with regards to Covid19 pandemic and the progress made with regard to remobilising health and social care services in Argyll & Bute. 28. A review of the Performance reports found them to be comprehensive and cover the following areas: Covid 19 overview Immunisation performance Remobilisation performance against all HSCP services Waiting times performances Virtual new and return outpatient performance 29. The IJB is required to set a balanced budget each year and therefore has to deliver Health and Social Care Services to the communities it serves within the financial resources available to it. Financial performance is reported in detail to the IJB at each of its meetings and to its Finance and Policy Committee which meets on a monthly basis. It also publishes its Annual Report and Accounts which are subject to independent external audit. Page 133
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8 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Performance Management- HSCP, September 2022 30. The budget for 2020/21 required new savings of £5.7m to be delivered. In addition there were £4.7m of previously agreed savings still to be achieved, making the total savings due to be delivered in year to £10.4m. The HSCP reported an under spend of £1.1m for the financial year 2020/21 which enabled early repayment of debt owed to Argyll & Bute Council. 31. Up until 2020 HSCP performance reporting was highlighted via the Councils Pyramid Performance Management information system against a suite of outcomes which focussed on the experience and quality of services for people using those services, carers and their families. However since 2020 there has been no performance reporting of any kind for HSCP services via Pyramid. Action Plan 1 32. It is a requirement by the Public Bodies (Joint Working) (Scotland) Act 2014) that A&B HSCP produce an Annual report. The report provides an opportunity to report to partners and local communities an update on annual performance. The 2020-21 report provided a commentary on performance across all relevant service areas including the following: Covid 19 performance; remobilisation performance reporting; homecare; residential care; mental health; delayed discharge; service referral activity; waiting times; virtual appointments; benchmarking; performance outcomes and improvements; Included within the report is a comparison of actual spend against budget for all services with a commentary attached in regard to the financial outlook, risks and plans for the future. It was noted that the total spend across all services was 0.4% below budget. The 2021-22 report is currently in draft form and will be published shortly. Page 134
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Appendix 1 – Action Plan No Finding Risk Agreed Action Responsibility / Due Date Medium 1 Pyramid Reporting Up until 2020 HSCP performance reporting was highlighted via Councils Pyramid Performance Management Information system, however, since 2020 no performance reporting for HSCP services has been included. Failure to report performance on Pyramid may lead to ineffective decision making. The new national focus on the remobilisation and waiting times, effectively made the current HSCP performance management defunct. This affected all the HSCP’s with a radical shift to address recovery from Covid. The Dashboard supporting the IPMF will form the new reporting and hopefully be built on the system that replaces Pyramid for the council next year. Douglas Hunter, Senior Manager Performance & Improvement (HSCP) March 2023 Page 135
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10 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Performance Management-HSCP, September 2022 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 HSCP to achieve better value for money (VFM). Page 136
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11 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Performance Management-HSCP, September 2022 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. Page 137
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Argyll & Bute Health & Social Care Partnership Internal Audit Report November 2022 FINAL High Medium Low VFM Number of Findings 0 3 0 0 Directions Audit Opinion: Substantial Page 139
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Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Directions – November 2022 Contents 1. Executive Summary .............................................................................................................. 1 Introduction................................................................................................................................. 1 Background.................................................................................................................................. 1 Scope........................................................................................................................................... 2 Risks ............................................................................................................................................ 2 Audit Opinion .............................................................................................................................. 2 Recommendations ....................................................................................................................... 2 2. Objectives and Summary Assessment.................................................................................... 3 3. Detailed Findings .................................................................................................................. 4 Appendix 1 – Action Plan.............................................................................................................. 8 Appendix 2 – Audit Opinion........................................................................................................ 11 Contact Details Internal Auditor: Mhairi Weldon Telephone: 01546 604294 e-mail: mhairi.weldon@argyll-bute.gov.uk www.argyll-bute.gov.uk Page 140
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1 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Directions – November 2022 1. Executive Summary Introduction 1. As part of the 2022/23 internal audit plan, approved by the Audit & Risk Committee in April 2022, we have undertaken an audit of Argyll & Bute Health & Social Care Partnership (HSCP) system of internal control and governance in relation to Directions. 2. The audit was conducted in accordance with the Public Sector Internal Audit Standards (PSIAS) with our conclusions based on discussions with Health & Social Care Partnership 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 HSCP. 3. The contents of this report have been agreed with the appropriate Health & Social Care Partnership 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 Public Bodies (Joint Working) (Scotland) Act 2014 (The Act) provided the legal framework for the Integration of Health and Social care in Scotland. This means that Argyll and Bute Council and NHS Highland delegate certain functions to the Argyll and Bute Integration Joint Board (IJB). In order to secure the performance of these functions, the IJB must give a direction to either the Council or NHS Highland to carry out these functions in terms of sections 26 and 27 of the Act. 5. Section 29 of the Act places a duty on Integration Authorities to develop a strategic plan, also known as a strategic commissioning plan, for integrated functions and budgets under their control. The legislation sets out what functions and budgets must be delegated and those that may be delegated. 6. Each Integration Authority must set out how they will plan and deliver services for their area over the medium term using integrated budgets under their control. Stakeholders must be fully engaged in the preparation, publication and review of the strategic commissioning plan in order to establish a meaningful co-production approach to enable Integration Authorities to deliver the national outcomes for health and wellbeing, and achieve the core aims of integration. 7. A full list of the functions and associated directions issued to Argyll and Bute Council and NHS Highland was appended to a report submitted to the IJB 28 September 2016. This report also stated that these functions must be performed in accordance with all legal and regulatory requirements and payments must be specified. The appendix noted that the Direction will be for the period from 1st April 2016 with no end date, however, it is also noted that this Direction may vary and further Directions to either replace or expand on this Direction may be issued. 8. The Scheme of Integration listing these functions was revised and subsequently approved by Scottish government in March 2021. This scheme states that the annual direction from the IJB to the Council and NHS Highland will take the form of a letter from the Chief Officer referring to the arrangements for delivery set out in the Strategic Plan and will include information on: Page 141
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2 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Directions – November 2022 The delegated functions(s) that are being directed The outcomes and activity levels to be delivered for those delegated functions The amount and method of determining the payment to carry out the delegated functions. Once issued, these can be amended or varied by a subsequent direction by the IJB. 9. The IJB issued 3 directions in 2020-21 and one each in the following 2 years at the time of budget setting. It is considered that formal directions are not required for the majority of actions to take place due to the good working relationships in place between the HSCP, NHS and the Council. Scope 10. The scope of the audit was to provide assurance over the arrangements for Directions Setting including compliance with the January 2020 statutory guidance as outlined in the Terms of Reference agreed with the Chief Officer on 14 November 2022. Risks 11. The risks considered throughout the audit were: SRR01: Financial Sustainability SRR02: Delivery of Strategic Objectives SRR05: Partnership Working SRR16: Support Services Audit Risk 1: Failure to comply with statutory guidance Audit Opinion 12. 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. 13. Our overall audit opinion for this audit is that we can take a substantial level of assurance. This means that 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. Recommendations 14. We have highlighted three medium priority recommendations where we believe there is scope to strengthen the control and governance environment. These are summarised below: A Directions Policy should be prepared and submitted to the IJB Committee for approval and subsequent implementation. A process should be put in place to monitor progress in implementing directions and this information should be used to update the Directions Log. A unique reference number field should also be added to the Log. Page 142
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3 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Directions – November 2022 Performance reports submitted to IJB Committee meetings should include a summary of directions issued and the progress made towards implementing the content of those directions. 15. Full details of the audit findings, recommendations and management responses can be found in Section 3 of this report and in the action plan at Appendix 1. 2. Objectives and Summary Assessment 16. 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 A Strategic Commissioning Plan has been prepared in accordance with Scottish Government Guidance. All Risks Substantial A Strategic Commissioning Plan and other planning documents have been prepared in accordance with Scottish government Guidance, however, a Directions Policy has not yet been prepared and submitted to the IJB committee for approval and subsequent implementation. 2 Directions are aligned to the Strategic Commissioning Plan setting out how each integrated function is to be exercised and the associated budget All Risks Substantial Directions issued are clearly aligned to the Strategic Commissioning Plan covering all functions of the IJB and the allocated financial resources. Reports submitted to the IJB committee contain a directions section and was completed in all relevant instances. Directions issued by Argyll and Bute IJB are consistent with those issued by two other IJBs albeit in a different format. 3 Directions are issued to the appropriate authority when required, are logged and followed up to ensure they are carried out in pursuit of the purpose intended. SRR01 Reasonable Directions are promptly issued at the same time as the associated report is approved at the IJB Committee. A directions log has been prepared and maintained, however, it does not contain a unique reference for each direction nor a field to record the current status/progress in implementing the content of the direction. There was no evidence within the IJB Committee papers to suggest that the content of the directions issued May and November 2020 had been fully implemented. 17. Further details of our conclusions against each control objective can be found in Section 3 of this report. Page 143
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4 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Directions – November 2022 3. Detailed Findings A Strategic Commissioning Plan has been prepared in accordance with Scottish Government Guidance 18. The IJB has in place a Joint Strategic Plan 2022-25, a Joint Strategic Commissioning Strategy 2022-25 and a revised Scheme of Integration 2021. These are comprehensive documents that are consistent with the aims of integration, they clearly list all of the functions that have been delegated to the IJB and the underlying legislation. There is also clear linkage to key priorities and commissioning intentions as well as addressing both local and national outcomes and objectives. 19. The Strategic Commissioning Strategy contains a detailed explanation of what commissioning is, who the strategy is for, governance arrangements, models used and how outcomes are monitored. There are also links to several national plans and strategies as well as those prepared at a local level. 20. The stages of the commissioning cycle are analysed using various data sets including population statistics, indicators of health and wellbeing, and activity and spend profiles by service and locality. 21. Appropriate engagement has taken place and feedback received has been collated and considered in the preparation of the Strategic Commissioning Strategy. Additional consultation has taken place in accordance with the budget setting process. 22. The mechanism to action the content of the Strategic Commissioning Strategy is through the use of binding Directions from the IJB to one or both of the health board and local authority. 23. Scottish Government guidance states that a Directions Policy should be prepared, this requirement was raised in a report submitted to the IJB committee in November 2020 but as yet a Directions Policy has not yet been prepared. Action Plan 1 Directions are aligned to the Strategic Commissioning Plan setting out how each integrated function is to be exercised and the associated budget 24. There were five directions issued over the last three years, three in respect of annual budget allocations, one for HR resourcing and one for information governance. 25. As part of the budget setting process of the IJB, a direction is issued to both the Council and NHS Highland referring to each of the functions as set out within the IJB Scheme of Integration and the underlying legislative requirements. Two additional directions were issued in 2020 in respect of HR resourcing and information governance, these directions were included within the respective reports containing the full details. 26. The annual directions in respect of the budget proposals are generic, contain the high level budget allocation and refer to the content of the more detailed budget report submitted to the same committee in March each year that includes an appendix showing the budget allocation to each function. The budget is based on the mid-range scenario as outlined in previous planning documents and had been in development since October the previous year with the Finance and Policy committee and IJB kept informed of progress through a number of Budget Outlook reports, proposed savings and consultation results. Page 144
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5 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Directions – November 2022 27. The HR resourcing direction does not include the budget allocation, however this is included within the content of the main body of the report. The information governance direction does not include budget allocations as they are not required, this direction is instructing the implementation of a new policy to manage information as part of normal working practices and should be complied with utilising existing budget allocations. 28. All five directions are linked to the service planning and design phase of strategic commissioning and appear to meet all clinical and care governance requirements and standards to ensure patient safety and public protection as well as ensure staff and financial governance. 29. The directions issued were in writing and identified either the Council or NHS Highland as the recipient. The directions clearly drew upon the content of the associated reports submitted to the same IJB committee meetings which contained sufficient detail to allow the functions to be performed and achieve the desired outcome. 30. The directions attached to the budget reports presented to the March IJB committee meetings each year are written in a standard template format. These directions clearly state that the functions delegated to the IJB should be carried out by the Council and NHS Highland as specified in the scheme of integration with the full details of the functions to be carried out embedded within the relevant legislation attached to each function. 31. Both of the additional directions issued in 2020 were clearly written as a paragraph of text within the directions section of the report containing the specific details. 32. The budgets allocated to the functions are carefully monitored via the budget monitoring process, human resources via workforce planning and establishment reviews and functions activity via quarterly performance reports. 33. Directions are submitted to the IJB committee as draft and become formal directions once approved. There are four voting members each from the Council and NHS Highland and representatives also attend from various service areas, the independent sector and the general public on the IJB committee. The directions are considered to have been issued to appropriate senior executives upon approval by the IJB committee and no further action mandate is prepared. 34. Ninety reports have been submitted to the IJB committee since March 2021, the reports were reviewed to assess if a direction should have been issued in accordance with their content. Directions were found to have been issued as a result of the annual budget process in March each year and were not considered to be required in connection with the remaining 88. 35. All reports reviewed contained a designated section for directions that allowed the author to complete a tick box indicating whether they considered a direction was required and if so whether this was for the Council, NHS Highland or both. All but two directions sections within the reports were found to have been appropriately completed. The two that were incorrectly completed indicated that a direction was required for the Council in respect of the annual review of charges for services provided. A direction was not required for each of these as the fees and charges are reviewed as part of the annual budget process and therefore included within the generic annual budget directions. 36. The content of directions submitted to four other IJBs was reviewed and compared to those issued by Argyll and Bute IJB. The results are as follows: Page 145
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6 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Directions – November 2022 Glasgow City IJB – an annual directions report is prepared which lists all directions issued in the previous 12 month period. The most recent report was issued in June 2022 and listed a total of 31 directions. Each direction has a unique reference number, one being consistent with the budget setting process and the remainder relating to adjustments to funding and delivery of services. CNES IJB – budget directions to the Council, NHS and Alcohol and Drugs Partnership are submitted to an IJB meeting following the budget approval meeting. Each function is detailed separately within the direction and includes details of the operational delivery arrangements, the underlying legislation for each function, the budget resource allocated, linkage to the Strategic plan and any additional notes. Borders IJB – Formal directions were submitted to the IJB committee from March 2022 following agreement of a directions Policy at the December 2021 committee. The directions included one to implement the agreed budget by both the Council and NHS in line with the content of the separate report submitted to the same committee. The remaining directions referred to the development of plans and a business case. Dumfries & Galloway IJB – an annual directions report is prepared with the full directions log appended. All directions issued for the year 2021-22 were in May 2021 in relation to annual budget allocations. Each function is listed as a separate direction with unique reference number along with the detail and the desired outcomes. 37. Argyll and Bute IJB direction setting is therefore consistent with those submitted by CNES and Dumfries and Galloway IJBs albeit in varying formats. Directions are issued to the appropriate authority when required, are logged and followed up to ensure they are carried out in pursuit of the purpose intended. 38. Draft directions are submitted to the IJB committee meeting along with the associated report. Once approved by the committee, they are considered to have been issued to the Council, NHS Highland or both at that time, there is no time-lag involved. 39. A directions log is appropriately maintained on an Excel spreadsheet and includes the following fields to record information: report title – refers to the function concerned the date of issue – IJB committee meeting date Decision – notes whether the Council, NHS Highland or both are to receive the directions and also contains the resources allocated or refers the reader to the relevant IJB meeting agenda item containing the resource information to carry out the direction Comments – indicates current status of the direction or any issues raised Author/Contact & Presented by – identifies the report author and the officer presenting the report to the IJB committee The log does not contain a field to record a unique reference number as suggested within the 2020 Scottish Government Guidance. Action Plan 2 Page 146
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7 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Directions – November 2022 40. The Directions log is monitored by the Business Improvement Manager, HSCP, however the progress in implementing the content of directions issued is not currently reported to the IJB committee. Action Plan 3 41. The Directions log indicates that all directions issued have been completed, however, there is no comment in respect of the May 2020 direction regarding HR Resourcing to confirm that the temporary posts funded had been terminated. Action Plan 2 42. The information governance policy attached to the November 2020 direction requests that annual assurance is provided to the IJB regarding arrangements in place at both the Council and NHS Highland. There was no evidence that this has been provided within the IJB Committee documents reviewed. Action Plan 2 43. The direction issued in respect of the 2022-23 annual budget has also been recorded as complete, however this budget year is still in progress. Action Plan 2 Page 147
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8 Appendix 1 – Action Plan No Finding Risk Agreed Action Responsibility / Due Date Medium 1 Directions Policy Finding: A Directions Policy has not been prepared in accordance with Scottish Government Guidance. Recommendation: A Directions Policy should be prepared and submitted to the IJB Committee for approval and subsequent implementation. It may be unclear when a direction is required to be issued. A Directions Policy will be prepared and submitted to the IJB Committee Business Improvement Manager 31 March 2023 Medium 2 Directions Log Finding: There is no field within the directions log to provide a unique reference for each direction issued. Finding: the direction issued in respect of the 2022-23 annual budget has been noted as complete, however, the budget year is still in progress. Finding: There was no evidence that the temporary posts funded as a result of the direction had been terminated upon conclusion of the 23 month agreed period. Finding: There was no evidence within the IJB committee papers that assurance had been provided regarding information governance arrangements within the Council or NHS Highland. Recommendation: A process should be put in place to monitor progress in implementing directions and this information should be used to update the Directions Log. A unique reference number field should also be added to the Log. Directions may not comply with Scottish Government guidance. The directions log may provide an inaccurate reflection of progress made. A process will be put in place to monitor progress in implementing directions and this information will be used to update the Directions Log. A field will also be added to the Directions Log to assign a unique reference number to each direction. Business Improvement Manager 31 March 2023 Page 148
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9 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Directions – November 2022 No Finding Risk Agreed Action Responsibility / Due Date Medium 3 Performance Management Finding: Progress in implementation of directions is not currently reported to the IJB committee. Recommendation: Performance reports submitted to IJB Committee meetings should include a summary of directions issued and the progress made towards implementing the content of those directions. The IJB may not be compliant with Scottish Government Guidance and committee members may not be aware of the progress being made in progressing directions. Performance reports will include a summary of directions issued and the progress made towards implementing the content of those directions. Business Improvement Manager 31 March 2023 Page 149
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10 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Directions – November 2022 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 HSCP to achieve better value for money (VFM). Page 150
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11 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Directions – November 2022 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. Page 151
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Argyll & Bute Health & Social Care Partnership Internal Audit Report December 2022 FINAL High Medium Low VFM Number of Findings 0 0 0 0 Commissioning Audit Opinion: SUBSTANTIAL Page 153
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2 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Commissioning, December 2022 Contents 1. Executive Summary .............................................................................................................. 3 Introduction................................................................................................................................. 3 Background.................................................................................................................................. 3 Scope........................................................................................................................................... 4 Risks ............................................................................................................................................ 4 Audit Opinion .............................................................................................................................. 4 2. Objectives and Summary Assessment.................................................................................... 4 3. Detailed Findings .................................................................................................................. 6 Contact Details Internal Auditor: Moira Weatherstone Telephone: 01546 604146 e-mail: moira.weatherstone@argyll-bute.gov.uk www.argyll-bute.gov.uk Page 154
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3 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Commissioning, December 2022 1. Executive Summary Introduction 1. As part of the 2022/23 internal audit plan, approved by the Audit & Risk Committee in April 2022, we have undertaken an audit of Argyll & Bute Health & Social Care Partnership (HSCP) system of internal control and governance in relation to Commissioning. 2. The audit was conducted in accordance with the Public Sector Internal Audit Standards (PSIAS) with our conclusions based on discussions with Health & Social Care Partnership 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. 3. The contents of this report have been agreed with the appropriate Health & Social Care Partnership 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 HSCP is responsible for the planning and delivery of health and social care services for adults and children within Argyll & Bute. Public services may be delivered internally, commissioned through providers of health and social care or by community or social enterprise groups. The Care Act requires local authorities to help develop a market that delivers a wide range of sustainable high quality care and support services through the provision of care at home or residential care home services. 5. Strategic commissioning in the adult, children and young people health and social care context relates to all of the activities involved in assessing and forecasting need, linking investment to agreed outcomes, identifying and considering options, planning the nature, range and quality of future services and working in partnership to put theses in place. There are different ways to approach commissioning, however the principles are in line with the independent Review of Adult Social Care (IRoASC) where they are collaborative in their approach. 6. The HSCP objectives have been developed through engagement with partners, staff and the public, with the publication of the Commissioning Strategy 2022/2025 (the Strategy). The Strategy has been developed using the best practice guide form the Scottish Government, applying the four steps of the Commissioning Cycle; Analyse, Plan, Deliver and Review. The Strategy is for all providers and potential providers of health and social care, for community or social enterprise groups and for people who use, or work in, health and social care services. 7. The strategy will be future proofed in line with the IRoASC which recommends that Integration Joint Boards should continue to develop strategic commissioning plans, and should be given direct responsibility for procurement, holding contracts and contract monitoring. 8. As is the case in any market, providers may leave from time to time sometimes because they have failed financially or operationally. The care services may be sold or taken over by another provider(s), fail to meet regulatory standards or fail to make the necessary improvements to Page 155
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4 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Commissioning, December 2022 maintain standards in social care or be unable to recruit staff. When care providers leave the market and close services, managing the situation and withdrawal from the market is really important as disruption to care services can cause distress and pose real risks to people’s health and wellbeing. It can also cause stress and anxiety for families and carers of those who use the service. Scope 9. The scope of the audit was to provide assurance that measures are in place to minimise the risk and impact of commissioned service providers withdrawing from the market as outlined in the Terms of Reference agreed with the Chief Officer (HSCP) and Chief Finance Officer (HSCP) on 21 October 2022. Risks 10. The risks considered throughout the audit were: SRR07: sustainability of commissioned service providers Audit Risk 1: HSCP does not have effective measures in place to minimise the risk of commissioned service providers withdrawing from the market Audit Risk 2: failure to have robust contract management arrangements in place Audit Risk 3: failure to meet client care and support needs Audit Opinion 11. 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 1 to this report. 12. Our overall audit opinion for this audit is that we can take a substantial level of assurance. This means that 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. 2. Objectives and Summary Assessment 13. 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 Measures are in place to minimise the risk and impact of commissioned service providers withdrawing from the market SRR07 Audit Risk 1 High Whilst the risk of commissioned service providers can never be fully mitigated, measures are in place to minimise the risk and impact of commissioned service providers withdrawing from the market. This includes a risk based approach to Page 156
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5 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Commissioning, December 2022 assessing providers prior to commissioning and regular ongoing review meetings with providers identifying any issues which can be escalated and addressed. A mulita agency group was formed – The Argyll & Bute Care Homes Assurance Group Meeting as an assurance function for the HSCP for Care Homes and Care at Home Services. The purpose of the Care Home and Care at Home Assurance Group is to provide oversight and support to care homes and care at home service primarily focused on older adults. 2 Commissioning Policies and Procedures are in place and being followed Audit Risk 2 High A commissioning strategy for all the main care groups is in place. This is the first Argyll and Bute Health and Social Care Partnership Joint Strategic Commissioning Strategy. Argyll & Bute Council have well established procurement policies and procedures in place, this includes supplementary guidance notes which are specifically applicable to Health and Social Care Contracts. There is also an agreed HSCP guidance document: “Guidance for Closure of a Care Home”. 3 Measures are in place to review and monitor commissioned services to ensure the ongoing sustainability of service provision SRR07 Audit Risk 2 Audit Risk 3 High The Council’s Procurement Team is heavily involved in managing commissioned services alongside Social Work colleagues. They meet regularly, with providers and identify any issues through a scorecards system, this is carried on through the life of the contract and is updated regularly. 4 Measures are in place to review performance and value for money associated with commissioned services Audit Risk 2 Audit Risk 3 High Monitoring overall compliance by all to the terms of the agreement and contract Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) and implementing improvement plans in the event of under- performance is reviewed when updating scorecards. 14. Further details of our conclusions against each control objective can be found in Section 3 of this report. Page 157
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6 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Commissioning, December 2022 3. Detailed Findings Measures are in place to minimise the risk and impact of commissioned service providers withdrawing from the market 15. Commissioning of social care services is the one of the highest areas of spend in the Council and whilst the risks of commissioned providers withdrawing from the market can never be fully mitigated, working together the HSCP and the Council’s procurement team have put in place measures to minimise the risk and impact of commissioned service providers withdrawing from the market. 16. Throughout the commissioning journey the Council’s procurement team offer an instrumental amount of support to the HSCP in terms of ensuring that the desired outcomes are met and there is ongoing contract monitoring. 17. Taking a risk based approach, prior commissioning with a provider for services, numerous checks are undertaken. As part of the pre-contract checks the Single Procurement Document (SPD) requires to be completed. This is a set of standardised statements that have been developed to support Procurement Officers in adopting a consistent approach to defining minimum requirements in contract notices, these are aligned to the relevant selection questions in the SPD (Scotland) and are available in the standardised statements document on the Procurement Journey SPD (Scotland) website. The Procurement Journey provides guidance for public sector buyers who procure goods, services and care and support services. 18. In general, the HSCP are careful about applying strict criteria that will automatically exclude providers as it is recognised that there is a limited number of providers in Argyll and Bute. The risks from this approach are mitigated through contract management during the life of the contract. 19. Argyll & Bute Care Homes Assurance Group is a multi-agency group which was set up as an assurance function for the HSCP for Care Homes and Care at Home Services. The group covers all care homes and care at home services within Argyll and Bute. The purpose of the Care Home and Care at Home Assurance Group is to provide oversight and support to care homes and care at home services primarily focused on older adults. This multi-agency group has responsibility to address both short term actions and to link with the relevant oversight and strategic planning groups to raise strategic issues affecting care homes and care at home services. The group also has the responsibility to action any concerns, directly with the home or care at home provider in the first instance, including recording agreed actions. 20. In addition, the group requires to read daily information (5 days a week) from care homes with an overview of Covid-19 issues, staffing, safety, PPE, testing and any other pertinent issues. 21. Measures are in place to minimise the impact of commissioned service providers withdrawing from the market. The HSCP guidance document: “Guidance for Closure of a Care Home”, updated and approved in May 2022 is guidance for the Closure of a Care Home based on the CoSLA guidance document “Good Practice Guidance on the Close of a Care Home”. The purpose of this document is to provide guidance for the HSCP to identify and manage any possible risks Page 158
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7 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Commissioning, December 2022 22. and ensure continuity of service provision in the event of a planned or unplanned closure of a Care Home within Argyll and Bute. Included in the guidance is an action plan for closure and identifies a responsible person for each action point. Any contingency Plan has to be agreed and signed off by Care Inspectorate. Commissioning Policies and Procedures are in place and being followed 23. The Scottish Government and COSLA jointly published guidance on the Procurement of Care and Support Services (“the Guidance”). The Guidance aims to assist public bodies to deliver positive outcomes for service users and carers through the delivery of good quality, flexible and responsive services and in recognition of the significant impact that delivery of such services will have on the quality of life, health and well-being of service users and carers. 24. The Guidance introduces a set of Guiding Principles which include the requirements: to have in place a commissioning strategy for all the main care groups should be in place which is supported by delivery plans and works towards an overarching commissioning strategy; to have written and approved policies and procedures for the procurement of care and support services which reflect developments in self-directed support and the guiding principles from the Guidance. In line with the guidance, the first HSCP Joint Strategic Commissioning Strategy (JSCS) for everyone in Argyll and Bute who require health and social care services was approved in March 2022, covering the period April 2022 to March 2025. Working with partners in the HSCP, the manager of Argyll & Bute Council (the Council) Procurement Commercial and Contract Management Team and the Senior Procurement Officer for the Council were members of the working group. 25. The Council’s Procurement, Commercial and Contract Management Team are involved in contract/commissioning work to support colleagues to procure services in a way that gives the best chance of achieving the desired outcomes and in line with the principles of the JSCS. 26. Embedded within the JSCS is the Market Facilitation Plan which describes how the HSCP aim to work with providers and potential providers of adult, children and young people social care in order to ensure they deliver the best services available with the resources which they have. Various types of contractual arrangements exist across the partnership which are clearly defined within the JSCS: Framework Agreements/Collaborative Agreements/Grants/ Contracts for services and supplies/Spot Purchases and bespoke arrangements. 27. The Council have well established procurement policies and procedures in place. A Procurement Strategy 2022-2025 and The Procurement Manual 2022 is available to all social work staff on the intranet – HUB. These are the overarching documents applicable to Council staff involved in the procurement process. 28. Within the Council’s procedures there are supplementary guidance notes, one of which provides guidance on the procurement of Health and Social Care contracts. This provides a summary of the thresholds that apply to care and support contracts and identifies roles and responsibilities Page 159
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8 Argyll & Bute Health & Social Care Partnership – Internal Audit Report – Commissioning, December 2022 for health and social care contracts. A separate supplementary note - the Contract Supplier Management Toolkit explains how contracts are to be managed. Measures are in place to review and monitor commissioned services to ensure the ongoing sustainability of service provision 29. The Council’s procurement staff work alongside HSCP staff to ensure that ongoing monitoring is undertaken. Regular meetings are held with providers, HSCP staff, the Care Inspectorate where appropriate and Council procurement staff. Any issues are identified through a scorecard system. The scorecard is reviewed and updated through the life of the contract. Meetings identify any major or minor concerns which are then reported back to the relevant managers with any agreed actions being taken forward. 30. Any issues or concerns highlighted by the provider regarding the sustainability of the service are recorded and escalated to the appropriate management and an action plan put in place to support the provider. Measures are in place to review performance and value for money associated with commissioned services 31. A review of performance and assessment of value for money forms part of the process of ongoing regular meetings with suppliers. These are recorded on the provider scorecard which is completed after each review meeting. In addition, this will also be reviewed and assessed at the time of any contract variations or renewals. 32. The Argyll & Bute Care Homes Assurance Group also have collective responsibility to focus on the quality of care home/care at home experience for residents, service users and families. Page 160
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Appendix 1 – 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. Page 161
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1 ARGYLL AND BUTE COUNCIL AUDIT AND SCRUTINY COMMITTEE CHIEF EXECUTIVE 20 DECEMBER 2022 COUNCIL 6-MONTH PERFORMANCE REPORT – APRIL TO SEPTEMBER 2022 __________________________________________________________________ 1. SUMMARY 1.1 The Performance and Improvement Framework (PIF) sets out the process for presenting the Council’s performance reports. This paper presents the Council’s 6-month Performance Report for April to September 2022. It is recommended that the Audit and Scrutiny Committee: 1.2 Note that this report presents Council performance on strategic activities across all services; 1.3 Review and scrutinise the Councils 6-month Performance Report; 1.4 Note that the Strategic and Area Committees have responsibility to scrutinise operational performance; 1.5 Note the planned activity for Performance Management and Reporting during 2022/23 onwards. Pippa Milne Chief Executive Page 163 Agenda Item 8
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2 ARGYLL AND BUTE COUNCIL AUDIT AND SCRUTINY COMMITTEE CHIEF EXECUTIVE 20 DECEMBER 2022 ___________________________________________________________________ COUNCIL 6-MONTH PERFORMANCE REPORT – APRIL TO SEPTEMBER 2022 2. SUMMARY 2.1 The Performance and Improvement Framework (PIF) sets out the process for presenting the Council’s performance reports. 2.2 The paper identifies the strategic activities across council services that have occurred during the reporting period, reports on key performance and outlines the planned activity for Performance Management and Reporting commencing 2022/23 3. RECOMMENDATIONS It is recommended that the Audit and Scrutiny Committee: 3.1 Note that this report presents Council performance on strategic activities across all services; 3.2 Review and scrutinise the Councils 6-month Performance Report; 3.3 Note that the Strategic and Area Committees have responsibility to scrutinise operational performance; 3.4 Note the planned activity for Performance Management and Reporting during 2022/23 onwards. 4. DETAIL 4.1 The Performance and Improvement Framework (PIF) was approved by the Council in September 2017. The PIF sets out the agreed framework for planning, monitoring and reporting the Councils performance. 4.2 To support scrutiny of performance by Elected Members and Senior Officers in September 2020 the Performance Management Project commenced. An output of the project to date has been to identify a suite of 47 high-level indicators aligned to the Corporate Outcomes. These 47 indicators are known as the Corporate Outcome Indicators – COIs. The majority of the COIs are reported annually after FQ4 with the exception of 13 COIs which are reported quarterly to Page 164
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3 the Area Committees. The full list of the 47 Corporate Outcome Indicators is attached, however work is in progress to finalise the wording for some indicators (Appendix 1). 4.3 The following sections detail the Council’s Management Information which are high-level cross cutting themes such as absence, risks and complaints along with Council activities to note. 4.4 Absence Absence data for FQ1 22/23 saw increases for both Teachers and LGE on the same quarter last year. In FQ2 22/23 teacher absence has reduced by half a day on the same quarter last year, whereas LGE absence has increased by half a day. It should be noted that sickness levels are always lowest in FQ2 for both LGE and Teachers due to the summer holiday period. Figure 1: Teacher and LGE Absence trends across each quarter since 20/21 The top three reasons for absence in both FQ1 and FQ2 22/23 have been – Stress/Depression/Mental Health Infections Other Musculoskeletal Reasons (Fracture and broken bone. This does not include back and neck pain which has its own category) This is quite different from the same two quarters last year the top three reasons being – Stress/Depression/Mental Health Stomach/Liver/Kidney/Digestive FQ1 20/21 FQ2 20/21 FQ3 20/21 FQ4 20/21 FQ1 21/22 FQ2 21/22 FQ3 21/22 FQ4 21/22 FQ1 22/23 FQ2 22/23 LGE 1.59 1.89 2.94 2.82 3.32 3.16 3.49 3.42 3.57 3.66 TEACHER 0.82 0.92 1.52 1.15 1.36 0.89 1.6 1.77 1.79 1.22 1.59 1.89 2.94 2.82 3.32 3.16 3.49 3.42 3.57 3.66 0.82 0.92 1.52 1.15 1.36 0.89 1.6 1.77 1.79 1.22 0 0.5 1 1.5 2 2.5 3 3.5 4 LGE TEACHER Page 165
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4 Medical Treatment With no Covid restrictions and Covid related absence now counting in normal sickness absence reporting figures the increase in days lost due to infections was anticipated. However, as the NHS moves back towards business as usual a rise in absences due to Medical Treatment has not been seen. The following is the analysis of the reasons for absence across the service conditions of APTC, Manual and Teachers for all work days lost - For APTC staff it was Stress/Depression/Mental Health accounting for 20% For Manual Workers it was Stress/Depression/Mental Health accounting for 34% For Teachers the top reason for absence was Infections accounting for 28% Following consultation with staff and managers the Supporting Attendance and Stress in the Workplace procedures were simplified and improved last year. Both procedures are intended to have a positive impact on reducing absence. A survey will be conducted in December 2022 to establish the impact and customer satisfaction of the above procedures. The focus of the Wellbeing Team has been on supporting managers dealing with long term absence, particularly within the HSCP. However, despite this we have seen a continued increase in absence in this area and this must be investigated further. Another new wellbeing initiative has just been launched in October 2022. The Recalibrate Programme focuses on a range of lifestyle subjects and is designed to help build healthy habits that support positive health and wellbeing. This programme is being delivered via Teams over a 12-week period. 4.5 Quality Conversations The Quality conversations approach has replaced the Council’s previous PRD process. The focus is on ensuring managers and employees have conversations about performance, learning and career aspirations throughout the year. The desired outcomes are that employees are clear about what is expected of them and have the skills and knowledge to deliver on their agreed objectives. The approach also aims to ensure that managers feel confident and have the skills to agree objectives with employees and deliver quality feedback and recognition for their work, or discuss barriers to performance as well as employee career aspirations. The previous approach did not measure these outcomes and so initial baseline surveys for both employees and managers took place during summer 2022. Page 166
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5 The employee survey consisted of 11 questions, and the manager survey consisted of 8 questions. Initial indications from the employee survey are that employees know what is expected of them in their role, including the behaviours expected, and have the knowledge and skills required to deliver their objectives. These surveys are currently being analysed by the HR and OD team, who continue to support departments with the roll out of the quality conversation approach. Feedback from the baseline surveys will be used to provide more targeted support across the organisation. Going forward we will be surveying employees annually. Additionally, we will be surveying managers on their handling of Quality Conversations, this is a perspective we have not had from PRDs. 4.6 Complaints The first 2 quarters of 2022/23 saw the number of complaints rising compared with the last 2 quarters of 2021/22. During FQ1 and FQ2 there were 274 Stage 1 Complaints and 120 Stage 2 Complaints received. Roads and Infrastructure Services continues to receive the majority of complaints. Performance within timescale has decreased over the recent 2 quarters and the Compliance and Regulatory team will continue to support services to try to improve this. The table below provides a breakdown by Service. A detailed Annual Complaints Report will be submitted to this Committee meeting. Stage 1 Stage 2 Total number Number in time % within time Total number Number in time % within time Chief Executives Directorate 0 0 - 1 1 100% Financial Services 16 13 81% 4 3 75% Community Planning & Development 0 0 - 0 0 - Executive Director Douglas Hendry Directorate 3 3 100% 0 0 - Education 13 13 100% 18 15 83% Legal and Regulatory Support 4 4 100% 7 6 86% Commercial Services 4 4 100% 0 0 - Executive Director Kirsty Flanagan Directorate 0 0 - 0 0 - Page 167
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6 Customer Support Services 5 5 100% 0 0 - Roads and Infrastructure 180 146 81% 55 33 60% Development and Economic Growth 32 23 72% 12 6 50% Health & Social Care Partnership Adult Care - Health & Community Care 3 3 100% 7 3 43% Adult Care - Acute & Complex Care 1 1 100% 5 1 20% Children and Families & Criminal Justice 12 8 67% 11 6 55% Live Argyll Live Argyll 1 1 100% 0 0 - Overall Totals 274 224 82% 120 74 62% 4.7 Audit Recommendations Internal and External Audit Reports are presented at this committee meeting. Audit recommendations are reported quarterly to the Strategic Management Team and actions to complete them are recorded and allocated to the responsible officers. 4.8 Finance The performance against budget for the first six months of financial year 2022- 23 is a forecast overspend of £0.395m or 0.1%. For reference the 2021-22 forecast overspend as at September 2021 was £0.399m or 0.2%. Social Work, managed by the Health and Social Care Partnership, is reporting a forecast overspend of £0.263m due to a high demand for Services. Within Executive Director Kirsty Flanagan, there is a forecast overspend of £0.106m mainly from an under-recovery of income within Parks and Pest Control. Central Budgets are projecting an £0.026m overspend resulting from the Elected Members pay award, which is set nationally via Statutory Instrument, being greater than the available budget. It should be noted that the above forecast overspend does not include the potential impact of the 2022-23 pay settlement, where negotiations were not finalised as at the end of September 2022. Page 168
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7 4.9 Strategic Risk Register (SRR) The Strategic Risk Register (SRR) details significant challenges and the agreed approaches to manage them. These specific interventions are subject to scrutiny at Strategic Committee Level and kept under review by the Council’s Strategic Management Team. The reported SRR has twelve risks in total. Three are red, six are amber and the remaining three are green. The three red risks relate to population and economic decline, Waste Management, and Cyber Security. 4.10 Operational Risks Executive Director Kirsty Flanagan has six red risks. These relate to the cost of delivering environmental health services in relation to public health; the impact of extreme weather on both the road network and the cost of winter maintenance; waste disposal; the affordability of maintaining ageing bridges and retaining walls on the road network and cyber security breach and associated attack. Executive Director Douglas Hendry has five red risks. These relate to delivery failure of school kitchen supplies; capital investment to keep buildings safe and operational; the availability of resources and funding to delivery capital projects; compliance with the conditions of externally funded projects and increasing utility costs associated with gas, electricity, oil etc. Key actions have been agreed to address these red risks and all other risks in the operational risk registers. Other Strategic Activities 4.11 Education Achievements Dunoon Grammar School received an accolade as the World’s Best School for Community Collaboration at the World’s Best School Prizes. The winners of the 5 categories share a cash prize of US $250,000. This is truly outstanding achievement and as CEO I wish to highlight the key role of the Head Teacher David Mitchell and his staff for their leadership to their pupils who are the stars of this award. Attainment The Annual Participation Measure on the economic and employment activity of 16 – 19 year olds showed a 0.4% rise for Argyll and Bute compared to 2021 with Page 169
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8 93.6% of young people in education employment or training. Argyll and Bute placed 5th out of the 32 local authorities. A Nurturing Council A further ten schools in Argyll and Bute achieved accreditation for developing nurturing cultures in their school communities bringing the total number of schools to 18. Part of the Council’s ‘Our Children, Their Nurturing Education’ strategy which aims to ensure that our young people have the emotional support they require to survive. Led by the Council’s Educational Psychology service, the programme helps staff to better understand learner’s behaviours and put into practice nurturing approaches to support them including children showing signs of distressed behaviour. A Leading Council In a UK first, the Council has teamed up with leading drone specialists to trial the use of Unmanned Aerial Vehicles (drones) in delivering school meals. Flying from Oban Airport, the trial involved delivering meals freshly prepared in Oban to Lochnell Primary 1.5km away. Whilst the majority of our schools have kitchens on site preparing meals, the provision of school meals to some rural and remote schools rely on traditional methods of transport including vans, taxis and ferries which can be affected by weather conditions. All pupils in early years and P1 - P5 are entitled to free school meals and the use of drones may offer an alternative carbon free mode of transport that could reduce costs and delivery times. The trials are part of ambitious plans to create an Unmanned Aerial Vehicle Innovations Logistics Hub at Oban Airport. LEIP – Learning Estates Investment Programme Further to engagement with residents, the Council agreed to submit a business case and funding application to the Scottish Government for a new school campus on Mull. This is the beginning of a competitive bidding process which if successful will require a major financial commitment to the project from the Council. 4.12 Place Current Large Scale Capital Investment The Council is currently delivering across 18 large scale projects worth £35m to the area of which the Council’s contribution is over £5m. Projects includes the following; £10m Conservation Area Regeneration Schemes and Townscape Heritage across Helensburgh, Dunoon, Lochgilphead and Rothesay. £10m Regeneration Capital Grant Funding (Scottish Government’s RCGF) supporting 15 projects including Tiree Community Business Hub, Kerrera Old School Community Hub and Ulva Ferry Shore Facilities Building. Page 170
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9 Scottish Government Place Based Investment (£821,000). Projects include a regional shopfront improvement scheme, public realm improvement works in Oban and Bowmore, priority building repairs in Rothesay and Dunoon and pier resurfacing works in Helensburgh. Scottish Government Islands Programme (£740,000); investment for ten projects on Jura, Gigha, Tiree, Kerrera, Mull, Iona, Islay, Colonsay and Rothesay. Scotland Loves Local (£46,000); supporting local economics and encouraging shopping locally. £1.5m public realm project to transform Lochgilphead Front Green to create a new public square, play park, additional seating, new waling and cycling facilities was completed. Thanks to the funding partners:- the Cooperative’s Local Community Fund, the Lochgilphead Phoenix Project and two Scottish Government funds, Cycling, Walking and Safer Routes (CWSR) and Town Centre Funds. Work to improve the waterfront in Ardrishaig has commenced. The £700,000 scheme will create a new public square, improved car parking, additional seating within a new loch-side viewing area, art work and improved accessibility for the Argyll Sea Kayak Trail to make it easier for kayakers to go between Loch Fyne and the Crinan Canal. The new £23m leisure centre and swimming pool was completed on time and budget. Part of a wider waterfront regeneration strategy, the facilities includes a luxury health suite with steam room and sauna, a café, shop, fitness studios and a gym with panoramic views of the river Clyde. The project includes new flood defences on the waterfront. Thanks to the UK Government from £5m from the Libor Fund and £100,000 from Sports Scotland. Helensburgh Pier received £345,000 to improve the appearance and add to the overall improvement works at the waterfront. Funded by Crown Estates Scotland and the Scottish Government’s Placed Based Investment Programme, work started July for an eight week period. Planned Capital Programmes In September the Council’s Environment, Development and Infrastructure Committee agreed a £500,000 capital programme to improve the quantity and quality of footpaths across Argyll and Bute. Responsible for approximately one million square metres of footpaths, the programme will focus on improving access for all abilities by dropping kerbs at crossing points. At the September Council meeting the Council agreed the Strategic Housing Investment Plan (SHIP) which sets out plans for 750 housing units in the coming years including 247 homes this year. Page 171
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10 In August the Council’s Policy and Resources Committee approved the programme submission to the UK Government with regards to the UK Shared Prosperity Fund. This fund is the successor to the EU Structural Fund. Argyll and Bute’s allocation is £4.5m. All local authorities are required to submit a plan indicating how the funds will be invested and sets out for each priority interventions, outputs and outcomes. Argyll and Bute’s plan is aligned to the three priorities – a) Communities and place b) Supporting local business c) People and skills 4.13 Environment Argyll and Bute Council has reduced its carbon emissions for the fourth year in a row and by a third since 2015/16. This is as a result of a range of measures including making buildings more energy and heat efficient, the street lighting LED scheme, electric and hybrid vehicles and recycling municipal waste. As part of Argyll and Bute’s Community Planning Partnership the Council has allocated £50,000 to part-fund a new post. The new Climate Action Project Manager will have responsibility for formulating a new Climate Action Plan with a strong focus on community involvement. The Council received over £2m from the Scottish Government’s Energy Efficient Programme. This funding is for means tested grants of between £8,000 and £21,100 per household. In July the Council appointed a principal contractor to deliver the Campbeltown Flood Protection Scheme. This is part of a £15m scheme to reduce the risk of flooding in the town including new pipelines to separate surface and sewer drainage, a new ‘storage dam’ facility, a large culvert and underground storage areas. Some homes and businesses will benefit from mitigations including the removal of flood protection barriers on doors, automatically closing airbricks and small pump systems. 4.14 Housing The Council agreed to an additional £90,000 of funding (on top of £72,000 previously awarded) for six affordable houses on the Isle of Ulva. These will be delivered by the North West Mull Community Woodland Company who purchased the island via the Community Right-to-Buy initiative in 2018. In response to the growing challenge with regards to the provision of housing, a housing group led by Executive Director, Kirsty Flanagan has been established. Together with Heads of Service and Senior Officers the group will identify solutions and actions to address housing market issues across all sectors, not just the Council. Page 172
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11 It will also consider how to remove any barriers to developing additional housing across the area. 4.15 Cost Of Living In September the Council agreed to lobby Government and create a Short Life Working Group to alleviate the particular impacts of the cost of living/fuel cost crisis faced by our communities. Argyll and Bute has - The highest number of inhabited islands of all Scottish Local Authorities Highest percentage of people living in Remote Rural Areas of all mainland Councils. Third lowest median pay rate (gross) of all Scottish Local Authorities. Ranked most vulnerable to post Covid economic shock. Additional costs of living in our communities range from 13% to 185% above costs in urban UK areas. Nearly 70% of all households are at risk of fuel poverty or of extreme fuel poverty. The Council calls on Governments to - Urgently provide information on funding for people who do not get their energy through typical means, 50% of our households are non-gas compared to 14% of all Scottish properties. Apply price caps to oil, LPG and solid fuel to ensure all households are given the support they need to heat their homes. Remove the variable standing charge rate that compounds the already higher costs for households in remote and rural areas. This must be changed to a uniform charge. Deliver equity in support for the cost of living and fuel cost crisis by making sure that the support measures are pivoted to take account of the additional costs incurred with remote, rural and island living. The following is a link to the report that went to Council on 29 September 2022 Link to Council document - Cost of living_argyll-bute.gov.uk) with further details on this item. 4.16 Care The Council agreed to take the extraordinary step to take the legal responsibility for the Kintyre Care Centre, a 40 bedroom private sector care home in Campbeltown. The Kintyre Care Centre provides the only nursing care provision in Campbeltown and the west of Argyll. The care centre was due to be closed by the owner HC-One Page 173
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12 for commercial reasons. The Integrated Joint Board of the HSCP considered that it was critically important to try to prevent the closure of the remaining care centre in the area and agreement was reached. The HSCP cannot legally own buildings as it is a partnership between the Council and NHS Highland. Other Activities 4.17 Performance Management Project Data Challenge Following on from previous updates the Council is continuing on the highly ambitious initiative to establish a ‘data platform’. The ‘data platform’ will collect data from various systems and over time will enable the data to be accessed and explored in a dashboard format. A Data Advisory Group consisting of senior officers from across the organisation (both Council and HSCP) has been set up and is accountable to the Executive Leadership Team (ELT). We aim to harness our data to ensure an evidence led approach to performance management, service design, policy development, strategies and other decisions that impacts on outcomes for our communities and stakeholders. Option Appraisals have been developed and presented to ELT with the decision to use current ‘on site’ technology as the best option. This will allow the opportunity to scale-up accordingly as the ‘data platform’ matures. Alongside this a number of Data Challenges have been identified. One such challenge is to explore how we can identify, and therefore support, children that are entitled to financial support. This internal initiative has and will maintain close links with the Scottish Local Government Digital Office data initiative and links to an action within the Council’s Best Value Improvement Action Plan. Change Programme - Service Design After completing Phase 1 of the Performance Excellence Project to review performance at Corporate Level, ELT agreed that Services will undertake a review of Performance as part of the Service Design activity. The project team will provide guidance and support to Services and are currently considering approaches to this significant activity. A proposal will be presented to the ELT in due course. 4.18 PIF Activity As of this financial year the delivery of our Corporate Outcomes will be Page 174
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13 monitored through a suite of 47 Indicators that have been identified. These are known as Corporate Outcome Indicators (COIs). A Council-wide Business Plan will be developed during 2022/23 which will align to our Corporate Plan, and the renewed Argyll and Bute Outcome Improvement Plan (ABOIP). This will replace the previous Service Plans which were not renewed for 2022/23. The 6-monthly ASC report will continue to present performance on cross-cutting strategic themes such as Absence, Complaints and Risks. Additional information relating to strategic activity will also be reported. This agreed process feeds into the Performance Management Project which commenced in September 2020. 5.0 CONCLUSION This report updates the Audit and Scrutiny Committee on how we are delivering our outcomes; the key challenges and how we plan to manage them; other Strategic activity along with implemented and planned changes to the PIF. 6.0 IMPLICATIONS 6.1 Policy: None 6.2 Financial: None 6.3 Legal: None 6.4 HR: None 6.5 Fairer Scotland Duty: None 6.5.1 Equalities - protected characteristics: None 6.5.2 Socio-economic Duty: None 6.5.3 Islands: None 6.6 Climate Change: None 6.7 Risk: This report sets out key challenges to the organisation and actions in response to these. 6.8 Customer Service: None For further information contact: Stuart Green, Corporate Support Manager stuart.green@argyll-bute.gov.uk Sonya Thomas, Performance and Improvement Officer Page 175
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14 sonya.thomas@argyll-bute.gov.uk APPENDICES Appendix 1 - Suite of 47 Corporate Outcome Indicators Pippa Milne, Chief Executive – Argyll and Bute Council 03 November 2022 Page 176
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Appendix 1 Corporate Outcome Corporate Outcome Indicator Reporting Frequency CO1: People live active healthier independent lives Maximise distribution of Scottish Welfare Fund Quarterly The percentage of clients satisfied that they are better able to deal with their financial problems Quarterly Maximise distribution of Discretionary Housing Payment (DHP) fund Annually Proportion of care services graded 'good' (4) or better in Care Inspectorate Inspections Annually Total percentage of adults receiving any care or support who rated it as excellent or good Every 2 Years Total combined percentage carers who feel supported to continue in their caring role Every 2 Years CO2: People will live in safer and stronger communities The percentage of groups who say their effectiveness has increased as a result of capacity building by the community development team Annually The information provided to our community groups, individuals and partners is easy to understand Annually The total value of compensation settlements for vehicle damage / driver injury as a result of road / bridge faults Annually Percentage of adults residents stating their neighbourhood as a 'very good' place to live (CSS – survey owner) Annually CO3: Children and young people have the best possible start Provide quality meals within cost margins to all pupils Quarterly Increase the percentage of our care experienced young people that have the recommended additional tracking and monitoring plans in place Quarterly Percentage of children living in poverty (After Housing Costs) Annually Our percentage rate for attendance across all Argyll and Bute schools is comparable or better than the Scottish national average Annually Support the increase in the uptake of available Grants, Allowance and Entitlements Annually A counselling service is available in all secondary schools Annually The percentage of children with no concerns across all domains at 27 to 30 month assessment Annually 95% of schools that have a suitability rating of A or B Annually CO4: Education, skills and training maximise opportunities for all Maintain the percentage of all young people leaving school achieving a positive destination into further education, training or employment Annually Maintain the percentage of successful examination presentations in levels 4 and 5 for Literacy and Numeracy by our senior phase pupils Annually Increase the uptake of wider achievement opportunities which complement traditional SQA awards and offer alternative ways to develop learning, life and work skills Annually The percentage of Modern Apprentices that go on to a positive destination after completing the Argyll and Bute Council Modern Apprentice Programme Annually The percentage of children that achieve their appropriate developmental milestones by Primary 1 Annually The percentage pass rate for the National 5 qualification is comparable or better than the Scottish national average Annually The percentage pass rate for the National Higher qualification is comparable or better than the Scottish national average Annually Page 177
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Appendix 1 CO5: Our economy is diverse and thriving Percentage of procurement spend spent on local enterprises Quarterly Increase the number of community benefits that are delivered through the contracts we award locally Quarterly Number of business and industry planning applications submitted annually Annually The percentage of homeless applicants who required temporary accommodation this period Quarterly Number of new affordable homes completed per annum Annually The total number of visitor trips to Argyll and Bute Bi-Annually The total visitor spend in Argyll and Bute Bi-Annually Gross Value Added (GVA) per capita Annually Unemployment rate - Claimant Count as a %age of working age population Annually Unemployment rate - Claimant Count as a %age of the population (16-24) Annually The number of business gateway start-ups per 10,000 of population Annually Geographical percentage coverage of 4/5G mobile phone connectivity Annually CO6: We have an infrastructure that supports sustainable growth The percentage of waste that is recycled, composted or recovered Quarterly The number of tonnes of waste sent to landfill Quarterly Percentage of street cleanliness Quarterly The percentage of roads in need of maintenance as defined by the annual survey Annually CO2 emissions per capita (per head of total population) Annually G Getting it right Increase the percentage of all Self-Service and automated contacts Quarterly Sickness absence days per employee (non-teacher) Quarterly Sickness absence days per Teacher Quarterly Level of employee satisfaction Annually Level of customer satisfaction Annually TOTAL NUMBER OF COIs 47 TOTAL FOR COMM SERVICES COMMITTEE TOTAL FOR EDI COMMITTEE TOTAL FOR P&R COMMITTEE 25 15 7 ALL COIs ARE REPORTED TO THE ASC ANNUALLY Page 178
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Audit & Scrutiny Committee Work Plan 2022 – 2023 This is an outline plan to facilitate forward planning of reports to the Audit & Scrutiny Committee Report Lead Service Regularity 20 December 2022 Reports to Committee Services by 25 November 2022 Internal Audit and Counter Fraud Summary of Activities Chief Internal Auditor Quarterly Internal Audit Report Follow Up Chief Internal Auditor Quarterly Internal Audit Reports to Audit and Scrutiny Committee Early Years Heritage Assets Chief Internal Auditor Quarterly External Audit Update Report Audit Scotland/Mazars Quarterly Verbal Update by Chair(s) of Scrutiny Panel Chair and Vice Chair of Audit & Scrutiny Committee Quarterly Council 6-month Performance Report – April to September 2022 Chief Executive/Head of Customer Support Services Bi-Annual 16 March 2023 Reports to Committee Services by 20 February 2022 Internal Audit and Counter Fraud Summary of Activities Chief Internal Auditor Quarterly Internal Audit Report Follow Up Chief Internal Auditor Quarterly Internal Audit Reports to Audit and Scrutiny Committee 2023/24 Chief Internal Auditor Quarterly Verbal Update by Chair(s) of Scrutiny Panel Chair and Vice Chair of Audit & Scrutiny Committee Quarterly RIPSA Annual Report Governance and Risk Manager Annual Internal Audit 2023/24 Plan Chief Internal Auditor Annual External Audit – 2022/23 Annual Plan Audit Scotland Annual 2021/22 Unaudited Annual Accounts Preparation Plan and Timetable Head of Financial Services Annual Treasury Management Strategy and Annual Investment Strategy Head of Financial Services Annual Page 179 Agenda Item 9
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Audit & Scrutiny Committee Work Plan 2022 – 2023 Progress against Best Value Action Plan Update Chief Executive/Head of Customer Support Services Annual Internal Audit Charter and Internal Audit Manual Chief Internal Auditor Annual Scrutiny Manual and Framework Update Chief Internal Auditor Annual 15 June 2023 Reports to Committee Services by 22 May 2023 Internal Audit and Counter Fraud Summary of Activities Chief Internal Auditor Quarterly Internal Audit Report Follow Up Chief Internal Auditor Quarterly Internal Audit Reports to Audit and Scrutiny Committee Chief Internal Auditor Quarterly External Audit Update Report Audit Scotland Quarterly Verbal Update by Chair(s) of Scrutiny Panel Chair and Vice Chair of Audit & Scrutiny Committee Quarterly Council Performance Report – October 2022 to March 2023 Head of Customer Support Services Bi-Annual Audit Scotland Report – Financial Overview 2021/22 (Usually comes in March – delayed in 2022) Head of Financial Services Annual Strategic Risk Register Update Chief Executive Annual Internal Audit 2022/23 Annual Report Chief Internal Auditor Annual Review of Code of Corporate Governance Governance, Risk and Safety Manager Annual External Audit 2022/23 Management Report Audit Scotland Annual Local Government Benchmarking Framework Report Head of Customer Support Services Annual Unaudited Financial Accounts Head of Financial Services Annual Local Government in Scotland: Challenges and Performance 2023 Audit Scotland Annual XX September 2023 Reports to Committee Services by XX August 2023 Internal Audit and Counter Fraud Summary of Activities Chief Internal Auditor Quarterly Internal Audit Report Follow Up Chief Internal Auditor Quarterly Internal Audit Reports to Audit and Scrutiny Committee Chief Internal Auditor Quarterly Page 180
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Audit & Scrutiny Committee Work Plan 2022 – 2023 External Audit Update Report Audit Scotland Quarterly Verbal Update by Chair(s) of Scrutiny Panel Chair and Vice Chair of Audit & Scrutiny Committee Quarterly PSIAS Self-Assessment Chief Internal Auditor Annual Local Government Benchmarking Framework Report Head of Customer Support Services Annual Corporate Complaints Annual Report 2021/22 Governance, Risk and Safety Manager Annual Freedom of Information Annual Report 2021/22 Governance, Risk and Safety Manager Annual Audit & Scrutiny Committee 2021/22 Annual Report Audit & Scrutiny Committee Chair Annual Strategic Risk Register – Assurance Mapping Chief Internal Auditor Annual Strategic Risk Register Update Chief Executive Annual Trust Fund Annual Accounts External Audit Annual Local Government in Scotland Overview 2022 Audit Scotland Annual Counter Fraud Annual Update (End of 2 year pilot) Chief Internal Auditor Annual Page 181
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