Agenda item

To consider the report of the Audit  Manager

To accept the report and support the agreed actions which have already been submitted to the managers of the relevant services. GwE (regarding travel costs) and Highways and Municipal (regarding overtime) to be called in to the Controls Improvement Working Group

The report of the Audit Manager was submitted for information, which provided the Committee with an update on the internal audit work for the period between 3 February and 31 March 2020. It was noted that 10 of the plan's audits had been completed.

It was explained that new arrangements had been established for follow-up audits. In 2018/19, agreement had been reached on 88 action steps to be completed by 31 March 2020. Following a request for information and evidence from the relevant Units/Services on action progress, it was shown that on 31 March 2020, there was acceptable implementation on 100% of the agreed actions to mitigate high/very high risks, i.e. 11 from 11, and 72.73% of the agreed actions to mitigate medium/low risks, i.e. 56 from 77.  

It was added that acceptable action had been taken on 76.13% of agreed steps, i.e. 67 from 88 agreed actions with progress made on 12.5%, i.e. 11 agreed actions. However, no response had been received in relation to 11.36% of the actions, despite a request for information having been submitted.  

Reference was made to the audit of the GwE travel cost claims process, which had received a 'limited' assurance level. The purpose of the audit was to ensure that an efficient and effective process was in place to claim travel costs via the self-service system, which reduced the administrative load and kept the risk of loss by mistake or fraud at acceptable levels.

A Member highlighted concern, as the procedure for submitting applications via self-service had reduced the administrative work considerably, that managers were forgetting to check their staff's claims for travel costs.  It was confirmed that GwE management had committed to remind managers to check claims in order to mitigate the risk highlighted. 

Furthermore, it was considered uncertain whether there had been consideration of value for money in changing the official work locations of some GwE staff.  It was emphasised that there was no flaw in the self-service arrangement in general, that managers had a responsibility to check applications for travel costs, and that it was not an administrative role. Regarding GwE specifically, following Gwynedd Cabinet's decision to change the procedure for claiming travel costs, GwE decided to change the work locations of some staff. It was added that Internal Audit was not convinced that remote work locations for staff provided assurance of value for money.

It was reported that discussions had been held between GwE and Corporate Support at the time of changing the work locations, and that GwE had justified the changes before they were approved.

In response to the above, it was suggested that GwE should review the changes to work locations again.

In response to a question as to whether it was commonplace to overturn / change the Cabinet's decision, the Head of Finance noted that the Cabinet had established a travel claims procedure based on work locations, and that GwE had separately re-designated the working location of some staff. It was noted that the Cabinet's decision had not been overturned and that this was not customary practice.

Reference was made to an audit of overtime payments made by the Highways and Municipal Department, which was awarded limited assurance. The purpose of the audit was to ensure that suitable arrangements were in place to ensure that overtime payments were paid at the correct rate and were appropriate.

Despite the excellent work undertaken by the Highways and Municipal Department during the period of the Covid-19 pandemic, concern was raised regarding the fact that an additional £193k had been earmarked for its budget for 2020/21, when the department had an existing overspend of £500k. It was enquired whether there were plans to discuss the service's overspend, and why there was no way of releasing the £193k to them at this point.

In response, it was highlighted that the Department was currently in a transitional year due to changes made to the collection services; with regard to the sum of £193k, it was highlighted that this was a sum included in an application by Gwynedd Council for Government funding due to the crisis.  It was noted that it was necessary to weigh up the lost income, and to hold discussions with all services in September to assess the sum, depending on what is approved. 

In response to the explanation, the observation to the effect that the Department was in a transitional period and that changes were underway was accepted, but reference was made to several references in the report to staffing arrangements in terms of sickness and absence.  An enquiry was made as to whether these matters were given consideration during a transitional period and in plans for rearrangement. With motivation to rush and historical problems with sickness and absences within the service, it was asked whether the arrangements were adequate; if these matters were not given attention, the problems would continue. The observation to the effect that the Department was in a transitional period was accepted; the service was overspending on a yearly basis and therefore needed to be called before the Controls Improvement Working Group.

In response to the concern, it was noted that the Head of Highways and Municipal was addressing these matters due to financial implications. Although sickness and absences were factors in this service, it was suggested that there was a need to examine the overtime policy and the ability to plan work within normal hours in general.

In response, it was proposed that it was necessary to investigate the inconsistencies in the use of the policy across the Council, looking at how overtime was implemented and ensuring that the Council was not open to a case by the Unions.

Bridges Work Programme Scheme - limited assurance level. The purpose of the audit was to ensure that suitable arrangements were in place to conduct inspections of bridges under the care of Gwynedd Council, and that suitable arrangements were in place to prioritise any necessary work to be carried out on them and appoint contractors. Following a suggestion to call the scheme before the controls improvement working group, the Audit Manager noted that this work programme should be excepted as the audit risk score did not reflect the work arrangement processes in place; rather, what was reflected was the risks arising from budgetary limitations for dealing with incidents. 

In response to a question regarding bridge maintenance in Gwynedd and how this was funded, the Head of Finance noted that it was possible for capital schemes to be funded by Welsh Government money. It was added that a long list of applications had been submitted for schemes which were 'ready to go', with some bridges included on the schedule of works. However, there was no certainty that the funds would be available.

The members expressed their thanks for the comprehensive report. It was suggested that the services who had not responded to the actions should be invited to the Committee in order to discuss the matters raised. In response to the suggestion, it was considered that this would be a long list of actions, along with the limited assurance level schemes. The Audit Manager suggested that services could be given a second chance to respond with evidence of the actions, and for the committee to receive an update at the next meeting. Should no response have been received by that time, then the next step would be to call them before the Controls Improvement Working Group

RESOLVED: To accept the report and support the agreed actions which have already been submitted to the managers of the relevant services. GwE (regarding travel costs) and Highways and Municipal (regarding overtime) to be called in to the Controls Improvement Working Group