Agenda item

Report CEO 15013

The Committee looked at the comprehensive report written by the Head of Audit concerning Financial Regulations and Contract Procedure Rules. 

The report was required as it had been three years since Members had approved previous updates. Both documents now required updating due to changes in legislation, government requirements, organisational change and technology.

The Committee were referred to section 3 of the report where the main changes were summarised. The Committee heard that the regulations and rules had been working well, and that the current proposals were basic amendments to current procedures.  Of particular significance were proposals to use electronic signatures to cut down on bureaucracy, and clarification on the rules concerning paying for services in advance. Similarly, there was also a proposal to increase the individual debt write off limits which would also reduce bureaucracy and align LBB with other local authorities. The Committee were informed that a new Transparency Code had been drafted in line with new requirements that had been set out in the Local Government Transparency Code. 

The Committee were informed that the limit for righting off low level debts had been increased from £5k to £15k. This was one of the changes recommended for approval by the Audit Sub Committee. Cllr Fawthrop questioned why LBB were seeking to implement the limit increase. He felt that it was not good enough just to be aligning with other boroughs, perhaps the other boroughs were adopting a policy that was too lax. The Head of Internal Audit explained that the reasons for the increase in limit  was to reduce bureaucracy at a time when there were reductions in  staffing resources.  It was also the case that all recovery methods for large debts were explored by management before debts were written off and that write offs including large debts are audited annually to ensure compliance with procedure.

Cllr Fawthrop asked if spot checks would be undertaken on some of the debts that had been written off, and the answer to this was yes. Cllr Fawthrop was relieved to hear this, and reminded the Committee that there was a previous problem with a staff member writing off personal debt. The Head of Internal Audit commented that these debts were under £10.00. Cllr Fawthrop suggested that perhaps there should be a “split” applied to the way debts were written off. He suggested that the write off of cash debts should be limited to £5k. The Chairman stated that he was happy to support the revised limit of £15k.

Cllr Fawthrop asked the Head of Internal Audit for more information about how many debts there had been in the last financial year between £5k and £15k. The Head of Internal Audit responded that he would look into this and email the information to Sub Committee Members.

Cllr Keith Onslow directed the attention of the committee to Section 5, (sub section 22) of the report which dealt with “Risk Assessment and Contingency Planning”. He was concerned about project risk, and asked if there was a formal risk assessment process in place. Mr Dave Starling (Head of Procurement) responded that in all projects involving corporate and high level risks, a Risk Manager would be allocated to oversee any potential risks to the project.

The Committee noted that the report stated that for all contracts with a value over £50k, the Contract Manager was required to:

·  Maintain a risk register during the contract period

·  Undertake appropriate risk assessments

·  Ensure contingency measures were in place 

Cllr Onslow asked if a Risk Matrix was used, and Mr Starling responded that it was. Cllr Onslow asked about the recent decisions made by the Executive concerning Biggin Hill, and commented that he did not see any reference to risk assessment on the documentation. He wondered if a risk assessment had been undertaken. Mr Starling asked what specific contracts Cllr Onslow was referring to. If it was to do with the airport lease, then the query would have to be referred to the appropriate section.

Cllr Onslow was of the opinion that a risk assessment should have been carried out concerning the lease agreement with Biggin Hill Airport. He stated that if one was not undertaken, then he would still like to see one carried out. He asked if this was possible. Cllr Simon Fawthrop commented that if a risk assessment had not been undertaken, then the decision may have to be called back in. 

The Chairman referred the Committee to page 272 of the agenda, and section 5 which dealt with Contract Management. Cllr Fawthrop asked if this information had gone to Members of the Contracts Working Party, and particularly to Cllr Stephen Wells. The Chairman expressed the view that Cllr Wells would have this information available. The Committee noted that the proposed changes to Financial Regulations and Contract Procedure Rules would be presented to the GP&L Committee at their next meeting.

RESOLVED

(1) that the changes proposed for Financial Regulations be approved

(2) that the changes proposed for Contract Procedure Rules be approved