A Glowing Report: or another Audit Committee in Broken Barnet, Part one

The art of external audit

As the Audit Committee began on Thursday night, Mrs Angry realised, to her increasing alarm, that she was going to be the only armchair auditor present - Mr Reasonable had a family emergency to excuse his absence, but Mr Mustard had clearly bunked off and not bothered to turn up. Tut tut, Mr Mustard. This meant Mrs Angry was flying solo. Uh oh. Her heart sank. She would now actually have to LISTEN to the evening's proceedings, and try to follow them carefully with some grasp of the interminable discussions about assurances, red lights, green lights, capital reserves and all that stuff. She moaned softly to herself.

Luckily, the delightful and very charming Rabbi Jeffrey Newman was sitting next to her and agreed to perform the most important function of the missing bloggers by poking her awake with his pen at slower points of the evening. Are Rabbis allowed to poke lady bloggers, with or without a pen? Not sure. Reform and Liberal rabbis: yes, probably, Mrs Angry.

Aha: and then Mrs Angry cheered up quite a lot when she remembered Question Time, always a source of entertainment, and of course this time she had submitted some deliberately provocative questions (by audit standards, you understand, don't raise your expectations too high).

An unprecedented number of questions had been submitted to the meeting by members of the question time, a fact which was welcomed by the Chair, the Libdem councillor Lord Palmer, and clearly only an opposition chair would be so welcoming of so many awkward questions.

Palmer began the proceedings by reminding the public that as an opposition councillor, he found his position as Chair very difficult. His political views on One Barnet are pretty clear, and nothing to do with this committee, where his responsibilities are clearly defined.

Four of the questions were from Mr Reasonable, so he will no doubt comment himself on his written responses.

Seated opposite the public, at the far end of the committee table, were the three wise monkeys from external auditors Grant Thornton, headed by Mrs Angry's old sparring partner, Mr Paul 'That would be your opinion' Hughes, who looked to Mrs Angry as if he was in rather a bad mood.

The reason he may have been in rather a bad mood was because because the questions submitted were largely focused on matters which were within the remit of the external auditors, and unusually, many of the written answers were accompanied by comments from Grant Thornton.

Adam Langleben asked about assurances for the internal audit of One Barnet projects, or lack of them and received a bla bla bla response saying everything was in order, of course, with a comment from Grant Thornton saying they were not required to justify the audit approach they take, ooh, get you, Grant Thornton, but 'for the benefit of the Chairman' (not the electors or the questioner, you note, they were in agreement with the council's response. To his supplementary question the reply was only that reports on the issues raised will come to the audit committee.

Barbara Jacobson also asked if the Chair can ensure that the external auditors explained how they reached the conclusion that 'there are adequate arrangements in place for the overall governance of the transformation projects' - ie One Barnet privatisation of council services.

Another snotty answer from GT saying, in effect, this is none of your business and we do not have to tell you. Barbara asked the Chair if he would ask to see the relevant documents. He commented ruefully that he was not running the council, although he wished he was.

Leonardo Alvarado asked about the management of risks relating to the One Barnet programme, and how the community was involved in the scrutiny of this management. Ha. Good question, Mr Alvarado, to which the answer of course is that it is not. The official response expressed the view that our elected members do this on our behalf. Oh, please. His supplementary question asked for a greater involvement by stakeholders, ie you and me, the taxpayers.

The Chair offered to pass the message back to those whom it concerns that there is a desire for residents to be involved. He thought Mr Andrew 'Black Hole' Travers, the Section 151 officer seated at his left hand with an inscrutable expression might like to consider this possibility. He observed with some regret that the censored Residents Forums no longer allow for the open discussion of such matters.

Tirza Waisel asked about the council's own survey which found 'the council scores relatively poorly on whether residents feel involved and able to influence local decisions'. How will the council address this? Response .... bla bla bla, an overarching (Yesss, overarching: now we know we are back in Broken Barnet) an overarching engagement strategy and oh, you get the picture.

At this point Mrs Angry would like to pay tribute to Tirza Waisal, and all the other Barnet residents who are putting so much effort into speaking up for their communities and defying the immoral agenda of the Barnet outsourcing lobby: the councillors, senior officers and private companies circling around the prostrate body of our council services. What they are doing is courageous, admirable, and deserves an expression of gratitude from the rest of us.

Tirza, as ever, struggled valiantly with another question: this council is about to sign two massive contracts: what assurances are there that there will be effective participation by residents in this process before the deals are done?

Palmer told her this was outside the remit of the Audit Committee. All this committee could do is ensure that the existing processes are operated correctly. He repeated his regret at the effective suffocation of the Residents Forum, and noted that the Audit Committee acted historically, reviewing what had happened. Mmm, thought Mrs Angry. And in Broken Barnet, history is rewritten by the victors, as it always is.

Rabbi Newman had also asked about engagement with the local community, something which clearly deeply troubles this thoughtful, conscientious man, who again deserves commendation for his personal committment to the best interests of the community, and the risks raised by the mass privatisation of the One Barnet scam.

Rabbi Newman was palmed off with some reference to 'improvement areas'. He appeared to be unimpressed. He made a reference to localism ... aha: the noble Lord had something to say. Rabbi Newman's question was, he thought, an incredibly good question - Palmer has of course spoken in the Lords on Pickles' Localism bill ...

Oh Eric Pickles, and Lord Palmer, and Jeffrey: do you honestly think that the bunch of Tory hooligans here in Barnet really understand the concept of localism, and support the idea of the greater empowerment of the community?

Ruth Kutner now asked a very good question:

Why does the auditor's report choose to omit the specific details about public challenge matters, especially when they include alleged breaches of EU procurement rules, ultra vires spending and conflicts of interest by senior officers?

Ha: yes, indeed, Mr Hughes ... Mr Hughes, it should be said, avoided the pen twiddling of previous Audit committee meetings, and was obliged to resort to a hand clasping prayerful position throughout this evening. Not that God was ever going to be very sympathetic, Mr Hughes, in the opinion of this blogger.

Response? Well, nothing was raised that the external auditors thought should be reported to 'those charged with governance'.

Isn't that good news, citizens of Broken Barnet?

Oh: except there were 'recent objections' that they were considering.

Hmm.

Grant Thornton commented that 'the matters referred to remained under discussion and it was not appropriate to report the detail'. Oh. Ok then.

Hello: time for Mrs Angry's first question:

Question 1:

Within the Report to Those Charged With Governance, the external auditors from Grant Thornton state, in Item 3.5 - 'Public Challenge Matters':

"We have met with and taken questions from local electors that we will respond to prior to issuing our audit certificate."

As one of the two electors referred to in this item, I would like to challenge this statement and draw to the attention of the Chair the fact that I feel this process to have been entirely unsatisfactory, and that serious issues of public interest raised by myself and the other elector remain outstanding, and have not been responded to, or unneccessarily deferred. I would like to raise one or two of these issues with the Chair of the committee.

The meeting with the external auditor is supposed to be part of a process of scrutiny in which electors are also able to inspect the accounts of the authority, so as to raise any matters of concern with him. When I attended the council offices to do this with a number of other electors, days before our meeting, we were not able to make a proper inspection as all the material was heavily redacted on the spurious grounds of 'commercial sensitivity'. We raised this matter with the external auditor, to little avail.

I would like to ask the Chair if he and his colleagues on the committee agree that the use of such redactions purely on the basis of political rather than genuine commercial 'sensitivity' is completely inappropriate and in clear conflict with the need for transparency and openness in local government, as defined in the new coalition policy of localism?

The response was rather short:

It is understood by the Chairman that the council sought legal opinion regarding access to contract information. Responses to this question are included within question 4. (ie to Mr Alvarado).

From Grant Thornton:

For the benefit of the Chairman (but clearly not for me) we have concluded our correspondance with Mrs Angry and Mr Reasonable on these matters and have nothing further to add.

Oh, Ok. But Mrs Angry did have something further to add. She pointed out that she had, by a most peculiar coincidence, after a month's delay, that morning received a response from the Section 151 officer, Mr Andrew Black Hole Travers, on this very issue,

Dear Mrs Angry

I refer to your email communication dated 14 August 2012.

As requested, please find attached a copy of the council’s Redaction Policy.

With respect to disclosing ‘information relating to individuals working for suppliers’, you are correct in that the same process of redaction has been applied. Where information identifies a particular individual or enables a particular individual to be identified, the redaction will have been carried out in accordance with the Data Protection Act 1998 and the Council’s Redactions Policy.

With regards to your point around ‘commercial sensitivity’, you are correct in noting that one company stated ‘n/a’ in their ITQ response, where invited to flag whether any information included was ‘confidential’ or ‘commercially sensitive’. The Council’s standard approach is, however, to consult with contractors at the point when a document is being considered for publication. It was at this stage, in response to such consultation, that the contractor responded that they currently perceive their commercial day rates to be commercially sensitive.

The Council, in reviewing the contract, took account of the Court of Appeal case of Veolia ES Nottinghamshire Ltd v Nottinghamshire County Council [2012]. The Council, certainly, balanced the public interest in transparency (particularly where the dealings of public authorities and the use of public money is concerned) against the public interest in the maintenance of information which is valuable commercially confidential information.

In carrying out this balancing exercise, the Council’s consideration included the possibility that the London Borough of Barnet is likely to procure management consultancy support of the type included in this contract again. While specifics of the Council’s requirements might differ from those included in this contract, it is possible that this company would bid for such future work, using a commercial strategy similar to that which was successful for them in this instance.

The Council also took account of the likelihood that other local authorities will contract for packages of work similar to those included within this contract in the near future and that sharing this company’s commercially confidential information at this time would be likely to place it at a commercial disadvantage in future procurements.

The Council, further, took into account the fact that “… electors, who have to pay the bills as [council tax] payers and other persons interested such as commercial ratepayers, who do not pay directly but rather via central government grants, have a role to play in assisting the auditor in his audit….”. It is, after all, for this reason that the entitlement is given to electors to inspect documents to be audited and all books, deeds, contracts, bills, vouchers and receipts relating to them.

Finally, please be reminded that protection is afforded to the public interest by the auditor’s right to access the documents

Kind regards

Andrew Travers

and which she has now, incidentally, replied to as follows:

Dear Mr Travers

Thank you so much for this, even if it took a month to send and arrived, by sheer coincidence, on the day of the audit meeting. I hope you enjoyed the meeting as much as I did.

As for your response in explanation of the reasons for obstructing our inspection of the accounts, frankly, I am afraid that I consider it to be a load of (redacted).

Have a nice weekend,

Mrs Angry

to be continued ...