Friday Joke: No joke. Another extraordinary audit commitee. Part One

Another audit committee in Broken Barnet


At last night's audit meeting, Mrs Angry sat firmly kettled, as usual, for nearly three hours, detained between two gentlemen bloggers, Mr Reasonable and Mr Mustard. This is necessary not just so they can poke Mrs Angry awake during the slower parts of the evening, or to explain to the dimwitted Mrs Angry, in discreet whispers, the finer points of auditing and accountancy, but really to keep a stern eye on her and look for signs that she is about to bolt for the door and make her escape. Mr Tichborne, she noted with envy, managed to leg it without being caught. Huh.

Still, now that she has a high profile reputation for her forensic skill in auditing, Mrs Angry has a duty to attend these audit committee meetings, cause mischief where possible, and try to look as if she knows what the f*ck everyone is banging on about. So she does. No need to thank her, Yes: in fact, perhaps you should. I want what the senior officers have listed in the recently chiselled out declarations: boxes of chocolates, tickets to the ballet, a (fresh) croissant, cupcakes and what was it Ms Pam Wharfe was given, Mr Mustard? Football tickets? Hmm. Maybe don't bother with those. Actually don't bother with the ballet, either - all that dancing always spoils the story, I find. Dancing, football, sex: three things you should do and not watch. But I digress.

If only a few of our elected representatives felt the same duty to attend these hugely important meetings. They are paid to, after all. Citizen journalists and armchair auditors are not. Last night in the public seating area, however, despite the seriousness of most of the issues raised, there were no councillors of any party, no Cabinet members - and of course no leader, or what passes for a leader here in Broken Barnet, ie Richard Cornelius, a man completely out of his depth, and drowning in a sea of lost opportunities.

Also missing from the meeting were any local reporters. You know, I'm not sure I want to hear any more moaning about the death of traditional journalism, the rise of churnalism and the loss of local newspapers: Mrs Angry's advice to those who complain is to pull your fecking fingers out and do your job, reporting and investigating stories of interest to your local communities, then maybe people will read your papers. This is not a dig at our local reporters, who struggle to cover their areas on ridiculously low staffing levels - it is a criticism of the management of the papers who have become complacent and uninterested in the challenge of news reporting.

Also in line for criticism, I am afraid, are the opposition councillors of Broken Barnet. Complacency and inertia is a problem here too, let's be frank. There is a war going on in this borough: if the bloggers are the resistence movement, you are meant to be at the frontline, not sitting back in the barracks with your feet up. There are some very dedicated Labour councillors in Barnet, who have served the community for a long time, and diligently attend meetings, read all the paperwork and keep the party going. There are others who are ... less active, shall we say, and too easily satisfied. The party as a whole needs to find some fire in its belly, and grab all the issues handed on a plate by this truly atrocious Tory administration, and fight for the community they represent. Stop being so polite, and fight dirty. You can't deal with the likes of Brian Coleman by committee, or motions, or members' questions to full council. Wake up.

As for the backbench Tories: well, Mrs Angry's views on that subject are well documented. With the exception of Mark Shooter, none of you have ever shown any balls whatsoever, or tried to divert your party leadership from the catastrophic course on which it has taken us. You turn up to (some) meetings, do as you are told, enjoy the buffet, collect your allowances and go home, waiting for your turn as Mayor - and hoping that if you keep your heads down you will be rewarded with the extra dosh paid for being the Chair of a committee. You are betraying the trust placed in you by your constituents, and have sold their best interests down the river with your endorsement of the grubby One Barnet programme. Pathetic, shameful, and to your eternal discredit.

But where were we?

Ah yes. The audit meeting. Present in the public area, apart from an assortment of bloggers, were a collection of senior officers, some having been asked to attend to answer questions. They sat and whispered in the back. Ominously enough, Mrs Angry's grim faced friend, Mr Chris Palmer, head of (avoiding) communication on behalf of the London Borough of Broken Barnet, sat by himself (rather poignantly, Mrs Angry felt) at the vacant Press desk.

Sitting at the end of the table were Mr Paul Hughes and Mr Tom Foster, from our external auditors, Grant Thornton. Chairing the meeting was Libdem councillor Lord Palmer, from the senior management team, Captain Craig Cooper, head of commerce, and Maryellen Salter from internal audit. The panel of councillors included Tories Hugh Rayner, Brian Schama, Graham Old, Sury Khatri, (whom Mrs Angry has never yet heard speak), and from Labour Geof Cooke and Alan Schneiderman.

Kicking off with public question time: straight into battle.

Mr Reasonable and I had both submitted questions. Sometimes the response to such public questions is given only verbally, at the table, and the member of the public has to digest this immediately and then instantly produce an appropriate supplementary question. This time Monroe Palmer had ensured that at least a written response was available minutes before the meeting, which was useful.

Mr Reasonable's questions were precise, and detailed:

Agenda Item 6:

1. Do the audit committee have misgivings about the statement in the auditors letter that “The Council made proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March 2011” when it is clear that procurement controls were in a complete mess giving rise to MetPro and the subsequent identification that hundreds of contracts were either not in place or not compliant.

Agenda Item 10

2. At the committee in September, the Procurement Controls and Monitoring Plan Progress Report noted at page 26, para 9.3 that “Early work on our Contracts Register to date has highlighted that over 80% of spend is compliant with existing Contract Procedure Rules (CPR’s)”. Yet at page 122 para 9.5 third bullet point of the latest report states that “Further work is required to ensure that the contracts register is complete and accurate”. This raises very serious concerns that the statement given in September was thoroughly misleading by suggesting that 80% of the Contract Register was compliant when it had not been established if the actual register was complete or accurate. Does the committee share my concern that people (councillors as well as residents) were misled by this statement in September.

3. All the target dates dropped off or been removed from the latest version of the Action Plan RAG report. Looking at the plan from September all but one of these actions should have been completed by now. Why were the dates removed from the latest version of the plan and how many targets have been missed?

4. Page 132 -Action plan “Contract Procedure rules should be followed by all services to procure works supplies and services rules” is flagged as green simply because Directors AD’s and heads of service have been written to. However evidence in the report is quite clear that the rules are still not being complied with. The second bullet point under this heading also notes that attending a training programme was mandatory yet attendance has been low. Does the green flagging of both these actions strike the committee as complacent, negligent, or just inaccurate?

5. Para 9.4 notes that in the past “there has often been a disconnect between commissioners, procurement colleagues and legal advisors in ensuring compliance with Contract Procedure Rules”. What level of reassurance do the committee feel that this issue is, even now, being adequately addressed?

6. Pages 126-128 details the progress that has been made, but also highlights some significant problems such as, but not limited to, the following: · internal audit were not confident that two directorates had carried out sufficient checks to sign off their quality assurance statement; · contracts signed as compliant were not compliant; · contracts were signed by officers who were not authorised to sign; · that actual spend sometimes exceeded the contract value that was accepted and approved; · a number of fields in the contract register were not being completed by services; · that some contracts over £25k had not been recorded in the central contracts register as either compliant or non compliant.

How concerned are the committee that 6 months on these problems are still arising and that the centralisation process is not expected to materialise before June 2012 and at what stage do the committee believe that the Commercial Director/Chief Executive should be summoned before the committee to explain why the progress is so lamentably slow.

7. Given all of the shortcoming identified in the procurement and monitoring systems how confident are the audit committee that the One Barnet programme of mass outsourcing will be handled adequately and monitored with the utmost efficiency and do they believe that in light of the problems identified that One Barnet now represents a major financial risk to the council.

All very good. The response, translated from the One Barnet corporate bullshit:

Bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla.

Mr R persevered with his supplementary questions.

Again he queried he traffic light system of red, green, or amber for performance indication, a form of appraisal that is meaningless when green lights are given to unsatisfactory outcomes. The use of 'waivers' (ie get out of jail free cards for non compliance) undermines the move towards reform of the hopelessly incompetent procurement process. What, he asked, is the point of rules if you can get away with it? Senior officers looked on blankly, thinking, but that is precisely the point of our obligingly submissive One Barnet rules, Mr Reasonable, so we can get away with it ...

Lord Palmer looked pained. 'Things have changed, Mr Reasonable,' he said. He said he was satisfied with the audit process he had now, and the internal audit team, who would be supported where necessary with back up from PWC, and services shared with Enfield. He was in an interesting position, as a member who did not support the One Barnet programme, yet was charged with seeing it implemented in the proper manner. One Barnet, we were told, was 'inherently risky' (has anyone told the Tory Cabinet?). Lord Palmer would like to see some action to make sure that it was not as inherently risky.

Mrs Angry's questions were on the subject of procurement within the One Barnet outsourcing programme, and the management of potential conflict of interests in the case of senior officers involved in the negotiations with the private companies vying for £1 billion worth of business opportunities in the bargain basement clear out of our council services.


1.What controls and procedures does Barnet Council have in place to manage the risks of conflicts of interest - and the perception of conflicts of interest - inherent in the appointment and secondment of Senior Officers to and from organisations with which the Council has, has had or is likely to have, commercial relationships?

Response:

"Barnet Council's pre-employment recruitment process requires that all selected candidates complete a Code of Conduct-Declaration of Interest questionnaire. Secondees sign a three-way secondment agreement between the individual, Barnet Council and the seconding organisation which will be specific to the requirements of the particular post. All senior individuals working on One Barnet projects sign a declaration of interest form for each One Barnet project for which they are involved in the procurement. In addition, anyone involved in the procurement must sign a Competitive Dialogue Confidentiality Agreement specific to One Barnet."

Hmm. Sounds wonderful, doesn't it? In theory.

Is this information, with case specific details, available for inspection, asked Mrs Angry, innocently? Ah. It was not in the public domain. Lord Palmer thought, however, that you might ask for it via a Freedom of Information request. Mrs Angry confided to Lord Palmer that her experience of making awkward Freedom of Information requests on this sensitive subject was not entirely satisfactory. There was a certain amount of shifting about on seats by senior officers at this point.

2.Has Internal Audit evaluated and evidenced the operation of these controls?

Internal Audit reviewed Recruitment, HR and payroll in 2010-11 and gave limited assurance at that time. We are currently in the process of reviewing payroll and will report back to the Committee in April. Priority one recommendations were agreed to be implemented and have been reported back to the Committee in April.

Mrs Angry had no further question: clearly nothing of value has been done in this regard.


3.Is the Committee satisfied that all conflicts (and perceived conflicts) of interests are registered and open to inspection (by at least the Committee) and that, for conflicted individuals, a transparent system of recusal/disqualification is in operation?

Response: External and internal Audit, who report to the Committee, are free to inspect the Code of Conduct - declaration of interest forms as part of their duties.

Oh. But my question was, said Mrs Angry, (and I am paraphrasing myself here as it is impossible,even for Mrs Angry, to talk and make notes at the same time), is the Committee satisfied that there is transparency and a satisfactory system of recusal/disqualification? Are you satisfied, as Chair?

Palmer made an interesting remark then. 'If people lie ... ', he said ... 'it can be hard to tell ...'

Quite. Hence the need for a satisfactory and transparent system of declaration of interests, and of recusal and or disqualification where appropriate, no?

4.Is the Committee aware of a recent case involving a senior officer who has recently taken up a post with one of the four shortlisted companies competing for £750 million of council services due to be outsourced to the private sector, having reportedly taken part in the tender process involving the same companies? Can the committee confirm that this case has been evaluated and found to represent no conflict of interest or breach of any regulations relating to the procurement of council contracts? If so, in view of the public interest issues raised, and of the need to be open and transparent in regard to such procedures, can the committe explain why this does not represent any conflict of interest or breach of regulations?

Ah. More shifting and interesting body language by senior officers.

Response:

The council is not prepared to answer a question relating to an individual case.

(Maybe not in this context, but answer it you must, if you really are committed to transparency and accountability ...)

In circumstances where this situation arises, the Council would take appropriate action by removing an individual with immediate effect from involvement in any of the One Barnet projects and ensuring that an appropriately specific confidentiality agreement was in place written for the specific individual circumstances and risk.

Cart and horse are the words which come to mind here. And where is the transparency? Without accusing any individual of specific wrong doing, the risk of the perception of potential conflicts will inevitably arise when there is no open and fully accountable process of scrutiny during what is a particularly sensitive period of commercial negotiation.

Mrs Angry asked the Chair if he was not concerned from his position on the committee, as she was, as a resident, about the alleged circumstances of this case. He confirmed that it did cause him concern, and that he had asked internal audit officers to look into the matter.

Mrs Angry will be asking for further confirmation that this will be done, and hopes this will be done in a way which is satisfactory and in the spirit of the Nolan principles which are supposed to inform the standards of behaviour in public office.

Mrs Angry is uncertain, however, whether the Nolan principles which are supposed to inform the standards of behaviour in public office apply in the London Borough of Broken Barnet.

To be continued.