ARDS AND NORTH DOWN BOROUGH COUNCIL · 2015 Section 75 Compliant Yes ☐No Not Applicable ☒ ......

ARDS AND NORTH DOWN BOROUGH COUNCIL

11 December 2018 Dear Sir/Madam You are hereby invited to attend a meeting of the Audit Committee of the Ards and North Down Borough Council which will be held in the Council Chamber, 2 Church Street, Newtownards on MONDAY, 17 DECEMBER 2018 commencing at 7.00pm. Tea, coffee and sandwiches will be available from 6.00pm. Yours faithfully Stephen Reid Chief Executive Ards and North Down Borough Council

A G E N D A

1. Apologies

2. Chairman’s Remarks

3. Declarations of Interest

4. Meeting with NI Audit Office & Internal Audit Service in the Absence of Management

5. Matters Arising from Previous Meeting a) Minutes of Audit Committee held on 25 September 2018 (Copy attached) b) Actions Register (Copy attached)

6. Performance Improvement Report (Copy attached)

7. External Audit a) Final Report to those Charged with Governance 2017/18 (Copy attached) b) Improvement Audit and Assessment (Copy attached) c) Final Annual Audit Letter 2017/18 (Copy to follow)

8. Internal Audit a) Internal Audit Progress Report (Copy to follow) b) Recently completed audits:

i. Grant Funding (Copy attached) ii. Building Control (Copy attached) iii. Staff Performance Management (Copy attached) iv. Planning (Copy attached) v. Travel and Subsistence (Copy attached)

9. Corporate Governance

a) Corporate Risk Register (Copy attached) b) Interim Statements of Assurance (Copy attached)

ITEMS 10 – 13 ***IN CONFIDENCE***

10. Single Tender Actions Update (Copy attached)

11. Fraud, Whistleblowing and Data-protection Matters (Verbal Update)

11.1 General Data Protection Regulation & Data Protection Act 2018 (Report attached)

12. Internal Audit and Corporate Governance Contract Update (Copy attached)

13. Any Other Notified Business.

MEMBERSHIP OF AUDIT COMMITTEE (11 MEMBERS)

Alderman Carson Councillor Armstrong-Cotter

Alderman Gibson Councillor Chambers

Alderman Fletcher (Vice Chairman) Councillor Douglas

Alderman Irvine (Chairman) Councillor Dunlop

Alderman Keery Councillor Muir

Mr S Hagen

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ITEM 5b

Ards and North Down Borough Council

Report Classification Unclassified

Council/Committee Audit Committee

Date of Meeting 17 December 2018

Responsible Director Director of Finance and Performance

Responsible Head of Service

Date of Report 12 December 2018

File Reference AUD02

Legislation Local Government (Accounts and Audit) Regulations 2015

Section 75 Compliant Yes ☐ No ☐ Not Applicable ☒

Subject Follow up actions from previous meetings - Action Register

Attachments Follow up actions register

In line with best practice, the purpose of this report is to make the Audit Committee aware of the status of outstanding recommendations of any outstanding actions from the previous Audit Committee meetings. The Committee will note that 5 actions are required from previous committee meetings, these are detailed in the appendix. RECOMMENDATION It is recommended that Committee notes the report.

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Appendix

Item

Title Action Status

January 2018

7 Outstanding External Audit Recommendations

• Clear legacy issues by December 2018

• Income policy to be progressed before June audit committee meeting

Head of Finance Mar 2019

June 2018

9a

Single Tender Actions

• Numbers of Direct award contracts to be reported to Committee

Head of Performance and Projects & Head of Administration Mar 2019

11 Draft Financial Statements • Completion of the Bank reconciliation process for 2017/18 financial year.

Head of Finance Dec 2018

September 2018

5a

Matter arising from Previous minutes

• Report to RDC on Brexit preparations

Complete Item 3 RDC 8 Nov 2018

8c(i) FOI Internal Audit Report • Report to CSC regarding update of FOI page on website

Complete Item 12 CSC 9 Oct 2018

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Audit Committee PIP Quarter 2 : 2018-19 Progress Report

Performance Key

The key outlined below provides definitions for the three Red, Amber, Green (RAG) status levels which have been chosen to measure progress.

RAG Status Definition

Target/standard, actions and measures are on track

Target/standard, actions and measures are mostly on track but some are falling short of plan

Target/standard, actions and measures are of concern and are mostly falling short of plan

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Corporate objective

PEOPLE: We will ensure we engage with, and support, all local communities to deliver real social benefits

Improvement Objective 1 : We will support local communities to develop community resilience for emergency planning.

Improvement aspects:

Strategic Effectiveness

Service Quality

Service Availability

Fairness Sustainability Efficiency Innovation

What are we going to do this year?

Action: Progress at Q1 2018/19 Progress at Q2 2018/19 Current RAG Status

1. Engage with local communities and form at least one Community Resilience Group

Not yet commenced Council is currently collaborating with Street Pastors and Civil Aid Corps NI to initially build resilience in Holywood and Newtownards with a view to further rollout across the Borough.

2. Conduct a series of Community Resilience talks

Not yet commenced Community talk at PCSP Community Safety Event is scheduled to be held in December.

3. Update the Emergency Planning section of Council’s website to signpost to information and advice

Not yet commenced The Council’s Emergency Planning section of the website has been updated to signpost users to information and advice on:

• Home insurance

• Emergency contact telephone numbers such as NIHE, NI Water, Flooding Incident Line

• Severe weather

• Homeowner flood protection grant scheme

The Council’s social media sites are also utilised in the event of emergencies.

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Corporate objective

PLACE: We will ensure we make the very best of the natural, cultural and environmental assets in our Borough

Improvement Objective 2 : We will increase recycling and divert waste from landfill.



Service Quality



What are we going to do this year? Promote the recently introduced Kerbside glass recycling scheme through:


1. Raise awareness by leafleting every household to encourage glass diversion from residual waste bins

Leaflets have been issued by glass collection teams to householders not presenting their glass box.

This is an ongoing project, where crews will monitor glass box presentation at each collection date and record perceived change in set out rate. The tonnage will also be monitored to assess if the leaflets are having any impact.

2. Introducing a Glass collection calendar on Bin-ovation App

Glass collection calendar now live. The Bin-ovation App received 1,546 new users in the period and since its launch the “New glass collection service update” article has had 4,485 views via the App. Officers have requested an indicator for visits to the ‘calendar’ link through bin-ovation. However, they have been advised that it cannot go specifically to waste types as it is a simple link to the calendar linked to the address.

3. Continue implementation of route optimisation.

Majority of in-cab devices now live in RCV’s

All in-cab devices are now live, and drivers have received training regarding their use. The in-cab devices enable drivers to communicate directly with the Depot regarding issues they encounter such as blocked access, road works, contaminated bins, etc. This in turn means that when a member of the public rings in, the Admin staff have information to hand to advise why collections have been disrupted and what alternative arrangement is in place.

4. Revise and improve the range of commercial recycling collection services, including kerbside, available to businesses

Following consultation with commercial waste customers, revisions to service have been agreed by Environment Committee.

Strand 4 of the SWRMS working group was established on the proposed revisions to the commercial waste service have been agreed by Council and will go live in April 2019. This will largely result in commercial collections mirroring household collections i.e. fortnightly residual and recycling collection services and 4 weekly glass collections. The expected impact of these revisions will be a saving to the trade customer; a decrease in waste going to landfill and an increase in recycling.

5. Further refinements to kerbside recycling initiatives and revision of access rules at Council HRCs

Additional measures being introduced at the HRCs to ensure materials that can be recycled are placed in the appropriate containers.

A Working group has been established and met on 29 August – the ToR for the group are to take forward Strand 3 of the Sustainable Waste Resource Management Strategy

Actions from the initial meeting included:

• Communicating with all multi-use permit holders regarding breach of use;

• Collating visitor numbers to sites to evidence period of high usage to assist with prioritising supervision/monitor/resource deployment;

• Communications campaign.

Work is ongoing to review layout of HRC’s to optimise recycling engagement/outcomes.

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Corporate objective


Improvement Objective 3 : We will ensure we make the very best of the natural, cultural and environmental assets in our Borough



Service Quality



What are we going to do this year? Promote the recently introduced Kerbside glass recycling scheme through:


1. Maintain ISO 14001 accreditation for 22 sites

Accreditation maintained.

• Following accreditation the Auditor remarked on the Council’s environmental performance improvement: Increased recycling has saved £200,000, this money is then used to fund other environmental improvement initiatives without any increased cost to the council. The borough are investigating the possibility of becoming a water refill borough, to reduce the use of plastic water bottles in the borough. The council is also planning to eliminate the purchase of single use plastics within the council operations – demonstrates proactive initiatives.

• The Council has improved its Sustainability and Environment Policy

• A communication strategy has been developed

• It should be noted that accreditation now applies to 21 sites as Donaghadee Parks Depot is no longer council owned.

2. Increase the amount of compostable waste produced by Council buildings

Internal Waste Management Strategy drafted and with HoST for consultation.

The Internal Waste Management Strategy was approved by Corporate Committee on 19 June and ratified on 27 June. Monitoring across all Council buildings indicates 13.8% of waste was compostable and 25.03% was recyclable. Work continues to encourage a reduction in the waste going to landfill.

3. Increase the amount of waste for recycling produced by Council buildings

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Corporate objective


Improvement Objective 4 : We will improve street cleanliness.



Service Quality



What are we going to do this year? Introduce Town Centre Wardens in five towns and revise sweeping schedules to focus more on litter hot spots.


1. Introduce Town Centre Wardens in five towns

Not yet commenced. Assimilation process for remaining cleansing staff commenced in October with the target to complete by end of March 2019. This process will include the filling of the Town Warden posts

All drivers have been assimilated and the majority of generic Refuse, Recycling and Street Cleansing Operative posts. Job Descriptions have been drafted for the Town Centre Wardens? Once in post the TCWs will deal with any cleansing issues in town centre areas, cleaning down street furniture, removal of fly posters, graffiti, etc. and will act as a contact point for traders regarding any cleansing issues.

2. Revise sweeping schedules to focus more on litter hot spots.

Sweeping schedules been not yet been revised. However, surveys have been carried out by the Neighbourhood Team and through reviewing complaints received 30 dog fouling hot spots have been identified which will be the focus of the new schedules.

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Corporate objective

PROSPERITY: We will ensure the Borough’s towns and rural localities are prosperous, vibrant and attractive.

Improvement Objective 5 – We will support and invest in our Borough to promote economic growth, regeneration and sustainability



Service Quality





1. Support women to move into business creation and development through the NI Women in Enterprise Challenge Programme which is replacing the previous planned action in order to better meet needs and to complement existing business start provision.

Agreement to proceed with programme for year 1 agreed by Council in April 2018. Collaboration agreement drafted and with legal – programme scheduled to commence November 2018

Further legal advice was sought on the details for the implementation of the NI Women in Enterprise Challenge Fund programme. Collaboration document between all participating Councils has been prepared and to be issued to Councils for approval. It is now anticipated that the programme will only get underway in January 2019.

2. Feed into a borough marketing strategy with the creation of a proposition to promote Ards and North Down as an attractive destination to do business and invest

Terms of Reference in development for Borough proposition.

Terms of reference

• Visitor element of Borough Proposition in development

• investor element of Borough Proposition in development

3. Create an Economic Development Forum

Inaugural meeting held 18 June 2018. 22 of the 54 companies invited were available to attend. Terms of Reference have been agreed. Next meeting scheduled for 2 October 2018.

There were no meetings of the ED Forum in Q2. Preparatory work was undertaken to confirm membership and data sharing. Planning activity was undertaken to prepare for meeting on 2 October.

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Corporate objective

PERFORMANCE: We will ensure we take time to understand our customer’s needs and manage our people, money and assets effectively so we can deliver on our objectives for the Borough.

Improvement Objective 6 – We will improve customer access to services and functions provided by the Council and improve their efficiency



Service Quality



What are we going to do this year? We will improve customer access to services through:


1. Launching an online application service for licensing.

In progress. Discussions have been held with Tascomi but at the present this is not high on their priorities to provide. Work is ongoing to better utilise the current online Tascomi licensing package to improve the service provided to licensees. It is expected that the service will be available by March 2019.

2. Implementing an electronic Grant Management System.

In progress A number of meetings have taken place with the Performance Improvement Unit to develop a business case for the project. The draft business case has now been developed and will be presented to committee in January for consideration.

3. Developing the Planning Service webpages to include FAQs on popular topic areas

Work is ongoing to update the Planning Service webpages to enable fast sourcing of information and self-service, and will cover trees, enforcement, permitted development and the application process

The Planning Service webpages have been updated to include information on Planning Enforcement, Trees ie. TPO’s, Conservation and How to make a request for a TPO, and information on the Pre-planning Application Discussions. Work on updating the website continues and will shortly include a portal for the public to query locations of TPO’s.

4. Introducing online reporting for environmental based issues.

In progress The decision has been made to pause these plans for the following reasons:

• We are in the process of reassessing the response to service requests particularly in relation to dog fouling and littering/fly tipping. The current process sees all such requests automatically assigned to NET to assess whether there are any enforcement opportunities. Evidence suggests that in the majority of cases the member of the public is in fact simply making a cleansing request. Before any new system is implemented this decision would need finalized at HOS level.

• An Elected Member brought forward a query with regard to the ReportAll system used by some Councils. This was investigated and concerns were raised that there could be a significant increase in workload for our Admin team as ReportAll is not linked to our current software solution resulting in each report requiring manual entry to Te-Care. Further clarification is to be sought as to whether the systems could be linked and at what cost.

• Utilisation of Council Direct has also been considered and an anonymous reporting form created by the software supplier. However, there concerns that anonymous reporting may result in a high volume of potentially unfounded incidents being created and the associated issues around the resourcing of this.

In view of the above it is unlikely that online reporting for environmental based issues will be in place by March 2019.

5. Implement Mobile working for Environmental Health Service

Awaiting input from Supplier with regard to mobile working for Environmental Health

Owing to software functionality issues we are reviewing the situation with the current vendor. In view of this and potential issues around EU exit it is unlikely that Mobile working for EHS will be in place by March 2019.

6. Introduce a Purchase-2-Pay system Purchase-2-Pay Project commenced 7/9/2018

The Purchase-2-Pay project commenced on 7 September and is progressing. It is expected that the system will be in place by March 2019.

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Corporate objective


Improvement Objective 6 – We will improve customer access to services and functions provided by the Council and improve their efficiency



Service Quality



What are we going to do this year? We will improve customer access to services through:


7. Integration of back-office systems (HR, Employee Payments, Time and Attendance)

Integration of back-office systems (HR, Payroll, Time and Attendance) Project commenced 3/9/2018

Integration of back-office system commenced on 3 September and the mobilisation phase of the project was completed by the due date. Work on the Information Gathering and Data Migration phases is ongoing.

8. Develop protocol with Building Control to ensure submitted applications have benefit of appropriate planning approval where necessary

Building Control protocol project commenced 03/09/2018

The project commenced on 3 September and an employee has been put in place to check Planning Approval status on new Building Control Applications being received. Work is ongoing between Planning and Building Control to update the BC Application Forms to ensure appropriate Planning Approval information is received.

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Corporate objective


Improvement objective 7 - We will reduce staff absence levels across the Council.



Service Quality


Fairness Sustainability

Efficiency Innovation



1. Continue to monitor and manage absence to reduce the average days lost per employee

• Average days lost per employee with sickness absence has decreased and is getting closer to the target set.

• % absence is 6.49% -v- Target of 5%. Although there has been some improvement regarding short term absenteeism in the first quarter, it is critical that there is continual monitoring of procedures and processes in order to bring the % target in line with the target of 5%.

• HoST is currently setting up a Managing Absence working group to get innovative ideas from across the Council to address high absenteeism.

Average days lost in Q2 : 12.2 an improvement on Q1 of 0.4%. YTD figure is 16.17. Absence in Q2 is 6.67% an improvement of 0.18% on. Short term absence shows a slight improvement of 0.03% (Q2 1.46% -v- Q1 1.49%), long term absence continues to rise 0.20% increase in the period. In the period there was an increase in absence due to:

• Stress, depression, mental health and fatigue of 11.27%

• Back and neck problems 18.36% However, absence due to Musculo-skeletal problems decreased by 13.84%.

The HR and OD service continues to manage absence through its Absence Management policy via the following initiatives:

• Employees identified as suffering from stress are immediately referred to occupational health;

• Employees absent due to stress are offered to attend a ‘stress Management programme’ run by the South-Eastern Health and Social Care Trust;

• Employees absent from work for a period of 4 weeks are referred to occupational health;

• Regular counselling meetings take place with staff who are ill in an attempt to enable them to return to work;

• Flu vaccine has been offered, free of charge, to all staff in an attempt to reduce flu-related absence;

• Council has recently had a Mental Health Charter agreed at Committee and consultation is currently taking place with unions and staff regarding this;

• A number of events have been organised to encourage staff to improve their health and wellbeing eg the step challenge;

• Refresher training on the Staff Absence Management Policy has recently taken place to ensure managers are well equipped to deal with staff absences.

Year one of ‘Our People Plan’ aims to improve staff engagement which in turn it is anticipated by having a more motivated and engaged workforce will reduce absenteeism. A number of events e.g. sports day, staff breakfasts etc have been held to encourage more engagement.

2. Delivery of Our People Plan Delivery of Our People Plan is in progress.

Part of the overall OD Strategy, Our People Plan launched in June 2018 focusses on 4 high level promises that were the result of employee engagement sessions in January 2018 - a copy of the plan is attached for

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Corporate objective


Improvement objective 7 - We will reduce staff absence levels across the Council.



Service Quality


Fairness Sustainability

Efficiency Innovation



reference. Progress against the promises in Quarter 2 is as follows:

• Consultation on Service Plans – a number of workshops have been held with teams;

• Assimilations ongoing – 81% of employees are either recruited or assimilated into the AND structure;

• Survey on Employee Awards has been prepared for circulation and promoted in News AND Info;

• 4 Social events were held in the period at locations across the Borough and involved participation of 302 employees. Members of CLT and HoST attended these sessions

Work to progress the delivery of Our People Plan is ongoing.

3. Roll out of the Organisational Development Strategy

Roll out of the Organisational Development Strategy is in progress.

Work continues to progress the delivery of the OD Strategy with the following actions having been carried out in Quarter 2:

• Employee engagement continues via joint CLT/HOST workshop, Business Conference and Health and Wellbeing events;

• Citizen Space Survey on Review of Pride in Performance Conversation Scheme;

• Customer Excellence Working Group Year 1 Action Plan completed;

• Launch of Behaviour Charter Guidance via special team briefs.

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STATUTORY INDICATORS

PLANNING STATUTORY INDICATORS – latest available figures refer to Q1 April-June 2018/19

Average processing time of local planning applications

Processing time for local planning applications was 15.9 weeks (an improvement of 1.5 weeks on the same period last year).

In the period the Council received 243 applications with 204 applications being decided. Processing times dependent on front loading by applicants, response times by consultees and volume of objections received.

Average processing time of major planning applications

267.8 weeks (an increase of 170 weeks on the same period last year).

The 2 applications decided comprised a 2013 application for the redevelopment of Crawfordsburn Country Club which underwent a large number of revisions and required a legal agreement; and a 2015 quarrying application which had an associated enforcement case. Determination of these two major cases represented further reduction in the number of outstanding legacy DOE applications which transferred to the Council – from 577 to 12.

Percentage of enforcements cases processed and concluded within 39 weeks.

72.6% (a reduction of 3.7% on the same period last year).

Ards and North Down had the fourth highest number of enforcement cases opened across the 11 councils. An enforcement case is opened when a member of the public or a planning officer reports an alleged breach. An enforcement case is concluded when one of the following occurs: a notice is issued; legal proceedings commence; a planning application is received; or the case is closed. The number of cases concluded in each quarter depends greatly on the particulars of each case.

WASTE STATUTORY INDICATORS – latest available figures refer to Q1 April-June 2018/19

Percentage of household waste collected by the district council that is sent for recycling (including waste prepared for re-use)

54.8% (Q1 same period last year 52.3 an increase of 2.5%)

The amount (tonnage) of biodegradable Local Authority collected municipal waste that is landfilled

4,814 (Q1 same period last year 4,796 – increase of 18 tonnes)

The amount (tonnage) of Local Authority collected municipal waste arisings

25,138 (Q1 same period last year 24,987)

ECONOMIC DEVELOPMENT INDICATOR – latest available figures refer to YTD 30 September 2018/19

Number of jobs promoted through start-up activity via the Go for It Programme

The current number of jobs promoted between 1 April and 30 September is 56 and remains on target to achieve or exceed 85 by end March 2019.

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ITEM 6



Council/Committee Audit


Responsible Director Director of Finance and Performance


Head of Performance and Projects


File Reference 260501 - Performance Management

Legislation Local Government Act (2014) Northern Ireland

Section 75 Compliant Yes ☒ No ☐ Other ☐

If other, please add comment below:

Subject Performance Improvement Plan 2018/19 - Update on Key Actions

Attachments Audit Committee progress update - Quarter 2 2018-19

The Local Government Act (Northern Ireland) 2014 Part 12 put in place a new framework to support continuous improvement in the delivery of council services. The Council is required each year to determine its priorities for improvement which are aligned to the Community Plan and Corporate Objectives and to publish these in the format of an Improvement Plan.

In the 2018/19 year council’s Performance Improvement Plan (PIP) identified 7 improvement objectives with a corresponding 27 actions together with 7 Statutory Indicators, all of which are included in the Council’s Service Plans which are monitored and reported on through each Service’s respective Standing Committee.

The following table gives an overall assessment of the status across all actions in the PIP the detail of which can be found in the attached progress report.

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Summary Table of Progress against Our Improvement Objectives for 2018/19

Corporate Plan Theme

Improvement Objective Aggregated RAG Status across all actions

PEOPLE We will support local communities to develop community

resilience for emergency planning.

PLACE We will increase recycling and divert waste from landfill We will ensure we make the very best of the natural, cultural

and environmental assets in our Borough

We will improve street cleanliness PROSPERITY We will support and invest in our Borough to promote

economic growth, regeneration and sustainability

PERFORMANCE We will improve customer access to services and functions

provided by the Council and improve their efficiency

We will reduce staff absence levels across the Council

OVERALL

RECOMMENDATION

It is recommended that the report is noted.

1


Audit and Assessment Report 2018-19

Report to the Council and the Department for Communities

under Section 95 of the Local Government (Northern

Ireland) Act 2014

Draft: 30 November 2018

http://www.niauditoffice.gov.uk/index.htm

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Contents

1. Key Messages

2. Audit Scope

Page

3

5

3. Audit Findings 6

4. Annexes 8

We have prepared this report for sole use of the Ards and North Down Borough Council and the Department for

Communities. You must not disclose it to any third party, quote or refer to it, without our written consent and we

assume no responsibility to any other person.

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1. Key Messages

Summary of the audit

Audit outcome

Status

Audit opinion

Unqualified opinion

Audit assessment

The Local Government Auditor (LGA) has not drawn a conclusion [this year only]

Statutory recommendations

The LGA made no statutory recommendations

Proposals for improvement

The LGA made two new proposals for improvement

This report summaries the work of the LGA on the 2018-19 performance improvement audit and

assessment undertaken on Ards and North Down Borough Council. We would like to thank the Chief

Executive and his staff, particularly the Performance Improvement Manager, for their assistance

during this work.

We consider that we comply with the Financial Reporting Council (FRC) ethical standards and that, in

our professional judgment, we are independent and our objectivity is not compromised.

Audit Opinion

The LGA has certified the performance arrangements with an unqualified audit opinion, without

modification. She certifies that an improvement audit and improvement assessment has been

conducted. The LGA also states that, as a result, she believes that Ards and North Down Borough

Council (the Council) has discharged its performance improvement and reporting duties, including its

assessment of performance for 2017-18 and its 2018-19 improvement plan, and has acted in

accordance with the Guidance.

Audit Assessment

The LGA has assessed whether the Council is likely to comply with its performance improvement

responsibilities under Part 12 of the Local Government Act (Northern Ireland) 2014 (the Act). This is

called the ‘improvement assessment’.

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The Council has discharged its duties in respect of Part 12 of the Act as far as possible, in that its

arrangements continue to mature. It remains too early for the Council to demonstrate a track

record of improvement: consequently, it is not possible for the LGA to conclude as to the extent of

improvement that may be made. The LGA did not exercise her discretion to assess and report

whether the council is likely to comply with these arrangements in future years.

This is the second year in which councils have been required to fulfil their full statutory

responsibilities under Part 12 of the Act. In the LGA’s opinion councils should be able to

demonstrate a track record of improvement in 2019 to allow a full assessment to be made.

Audit Findings

During the audit and assessment we identified no issues requiring a formal recommendation under

the Act. We made two proposals for improvement (see Section 3). These represent good practice

which should assist the Council in meeting its responsibilities for performance improvement.

Detailed observations on thematic areas are provided in Annex C and progress on proposals for

improvement raised in prior years has been noted in Annex B.

Status of the Audit

The LGA’s audit and assessment work on the Council’s performance improvement arrangements is

now concluded. By March 2019 she will publish an Annual Improvement Report on the Council on

the NIAO website, making it publicly available. This will summarise the key outcomes in this report.

The LGA did not undertake any Special Inspections under the Act in the current year.

The total audit fee charged is in line with that set out in our Audit Strategy.

Management of information and personal data

During the course of our audit we have access to personal data to support our audit testing. We

have established processes to hold this data securely within encrypted files and to destroy it where

relevant at the conclusion of our audit. We can confirm that we have discharged those

responsibilities communicated to you in accordance with the requirements of the General Data

Protection Regulations (GDPR) and the Data Protection Act 2018.

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2. Audit Scope

Part 12 of the Act provides all councils with a general duty to make arrangements to secure

continuous improvement in the exercise of their functions. It sets out:

a number of council responsibilities under a performance framework; and

key responsibilities for the LGA.

The Department for Communities (the Department) has published ‘Guidance for Local Government

Performance Improvement 2016’ (the Guidance) which the Act requires councils and the LGA to

follow. A multi-stakeholder group comprising of representatives of the Department and councils has

been established and a subgroup of this has drafted guidance to clarify the requirements of the

general duty to improve. A working draft has been agreed and further improvements to reporting

on the general duty are expected in 2019.

The improvement audit and assessment work is planned and conducted in accordance with the

Audit Strategy issued to the Council, the LGA’s Code of Audit Practice for Local Government Bodies

in Northern Ireland and the Statement of Responsibilities.

The improvement audit

Each year the LGA has to report whether each council has discharged its duties in relation to

improvement planning, the publication of improvement information and the extent to which each

council has acted in accordance with the Department’s Guidance. The procedures conducted in

undertaking this work are referred to as an “improvement audit”. During the course of this work the

LGA may make statutory recommendations under section 95 of the Act.

The improvement assessment

The LGA also has to assess annually whether a council is likely to comply with the requirements of

Part 12 of the Act, including consideration of the arrangements to secure continuous improvement

in that year. This is called the ‘improvement assessment’. She also has the discretion to assess and

report whether a council is likely to comply with these arrangements in future years.

The annual improvement report on the Council

The Act requires the LGA to summarise all of her work (in relation to her responsibilities under the

Act) at the Council, in an ‘annual improvement report’. This will be published on the NIAO website

by March 2019, making it publicly available.

Special inspections

The LGA may also, in some circumstances, carry out special inspections which will be reported to the

Council and the Department, and which she may publish.

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3. Audit Findings

This section outlines key observations in the form of Proposals for Improvement, arising from

following thematic areas of the Council’s audit and assessment:

General duty to improve;

Governance arrangements;

Improvement objectives;

Consultation;

Improvement plan;

Arrangements to improve; and

Collection, use and publication of performance information.

These are not formal recommendations, which are more significant matters which require action to

be taken by the Council in order to comply with the Act or Guidance. Proposals for Improvement

include matters which, if accepted, will assist the Council in meeting its performance improvement

responsibilities. The LGA will follow up how these proposals have been addressed in subsequent

years. We recommend that the Council’s Audit Committee also track progress on their

implementation.

Our procedures were limited to those considered necessary for the effective performance of the

audit and assessment. Therefore, the LGA’s observations should not be regarded as a

comprehensive statement of all weaknesses which exist, or all improvements which could be made.

Detailed observations for the thematic areas can be found at Annex C.

Thematic area Issue Proposal for improvement

Arrangements to improve

Each objective is supported by a number of actions with measures which will be used by the Council to indicate performance. The figures for waste collection, recycling and absenteeism measures are provided for three years, but baseline data is not available for a number of other measures, particularly where they are new. This makes it difficult for a reader to judge if any progress can realistically be made, or how appropriate the targets set will be.

Where possible the Council should report performance over several years. The Council monitors over 300 Key Performance Indicators (KPIs) which provide a rich source of information, with data extending over a number of years.

Arrangements to improve

The measures for some objectives are dependent on other areas of work being completed first. The Council is not solely responsible for the success of some of these as they involve working with other bodies. Any

Where objectives are wide ranging or dependant on other targets being met it would be appropriate to break the objective down into smaller units and to set interim targets and milestones to measure progress.

7

Thematic area Issue Proposal for improvement

slippage will impact on the achievement of the overall objective.

8

4. Annexes

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Annex A – Audit and Assessment Certificate

Audit and assessment of Ards and North Down Borough Council’s performance improvement

arrangements

Certificate of Compliance

I certify that I have audited Ards and North Down Borough Council’s (the Council) assessment of its

performance for 2017-18 and its 2018-19 improvement plan in accordance with section 93 of the

Local Government Act (Northern Ireland) 2014 (the Act) and the Code of Audit Practice for local

government bodies.

I also certify that I have performed an improvement assessment for 2018-19 at the Council in

accordance with Section 94 of the Act and the Code of Audit Practice.

This is a report to comply with the requirement of section 95(2) of the Act.

Respective responsibilities of the Council and the Local Government Auditor

Under the Act, the Council has a general duty to make arrangements to secure continuous

improvement in the exercise of its functions and to set improvement objectives for each financial

year. The Council is required to gather information to assess improvements in its services and to

issue a report annually on its performance against indicators and standards which it has set itself or

which have been set for it by Government departments.

The Act requires the Council to publish a self-assessment before 30 September in the financial year

following that to which the information relates, or by any other such date as the Department for

Communities (the Department) may specify by order. The Act also requires that the Council has

regard to any guidance issued by the Department in publishing its assessment.

As the Council’s auditor, I am required by the Act to determine and report each year on whether:

The Council has discharged its duties in relation to improvement planning, published the required improvement information and the extent to which the Council has acted in accordance with the Department’s Guidance in relation to those duties; and

The Council is likely to comply with the requirements of Part 12 of the Act.

Scope of the audit and assessment

For the audit I am not required to form a view on the completeness or accuracy of information or

whether the improvement plan published by the Council can be achieved. My audits of the Council’s

improvement plan and assessment of performance, therefore, comprised a review of the Council’s

publications to ascertain whether they included elements prescribed in legislation. I also assessed

whether the arrangements for publishing the documents complied with the requirements of the

legislation, and that the Council had regard to statutory guidance in preparing and publishing them.

For the improvement assessment I am required to form a view on whether the Council is likely to

comply with the requirements of Part 12 of the Act, informed by:

A forward looking assessment of the Council’s likelihood to comply with its duty to make arrangements to secure continuous improvement; and

A retrospective assessment of whether the Council has achieved its planned improvements to inform a view as to its track record of improvement.

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My assessment of the Council’s improvement responsibilities and arrangements, therefore,

comprised a review of certain improvement arrangements within the Council, along with

information gathered from my improvement audit.

The work I have carried out in order to report and make recommendations in accordance with

sections 93 to 95 of the Act cannot solely be relied upon to identify all weaknesses or opportunities

for improvement.

Audit opinion

Improvement planning and publication of improvement information

As a result of my audit, I believe the Council has discharged its duties in connection with (1)

improvement planning and (2) publication of improvement information in accordance with section

92 of the Act and has acted in accordance with the Department for Communities’ guidance

sufficiently.

Improvement assessment

As a result of my assessment, I believe the Council has as far as possible discharged its duties under

Part 12 of the Act and has acted in accordance with the Department for Communities’ guidance

sufficiently.

The 2018-19 year was the third in which councils were required to implement the new performance

improvement framework. The Council’s arrangements to secure continuous improvement, as is to

be expected, are still developing and embedding. The Council continues to strengthen its

arrangements to secure continuous improvement, and has delivered some measurable

improvements to its services in 2017-18. However, until the Council’s arrangements mature and it

can demonstrate a track record of ongoing improvement in relation to the framework, I am unable

to determine the extent to which improvements will be made.

I have not conducted an assessment to determine whether the Council is likely to comply with the

requirements of Part 12 of the Act in subsequent years. I will keep the need for this under review as

arrangements become more fully established.

Other matters

I have no recommendations to make under section 95(2) of the Local Government (Northern

Ireland) Act 2014.

I am not minded to carry out a special inspection under section 95(2) of the Act.

Pamela McCreedy

Local Government Auditor

Northern Ireland Audit Office

106 University Street

Belfast

BT7 1EU

30 November 2018

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Annex B – Follow up of implementation of prior year proposals for improvement

Year of report

Reference Proposal for improvement Action taken by Council Status

General Duty to Improve

2016-17 GD1/2017 Linking the forthcoming community plan, and the ongoing processes that underpin it, with the Council’s improvement processes.

Implemented

2016-17 GD2/2017 Analyse any trends from the performance management system as further data becomes available. This will help identify those functions/services which would benefit most from improvement.

Implemented

2017-18

GD1/2018

The Council should continue the development of its performance management system to achieve the best measurement of all its functions and services, to ensure identification of those areas which would benefit most from improvement.

The Council has continued to work in this area and this is an ongoing process. Performance management is continuing to develop.

In progress

2017-18 GD2/2018 The Council should ensure that the process through which functions are prioritised and selected for improvement forms the basis for objective-setting in a ‘bottom up’ approach. This should provide a better link between objective and actions, help to improve transparency, and help with the measurement of the objective outcomes.

The Council’s service planning template was updated in October 2017 to improve quality and focus during the early stages of service planning and to ensure performance improvement initiatives were identified. Further development of service planning is underway and in the 2018-19 year will be combined with the budget planning

In progress

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Year of report


process to ensure that appropriate financial resources are allocated to both business as usual and performance initiatives. While the Council consults with residents and stakeholder groups and encourages responses from them during the year, many of the actions are corporate and inward looking. The council needs to continue to work on the “bottom up” approach and to make the link between objectives and actions very clear to ensure that the actions identified will provide measurable benefits to ratepayers.

2017-18 GD3/2018 The Council should ensure that performance framework documentation is updated in line with documented procedures and that evidence of review is recorded (even where no changes have occurred).

The Performance Framework documentation is currently being updated to reflect the process changes mentioned above.

In progress

Governance Arrangements

2016-17 GA1/2017 Terms of Reference for the Audit Committee should be updated to reflect its specific performance improvement responsibilities.

Implemented

2016-17 GA2/2017

Performance improvement should feature as a regular item on the Audit Committee agenda.

Implemented

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Year of report


2016-17 GA3/2017 The Corporate Leadership Team should facilitate Members on each of the relevant standing committees and the Audit Committee with training and support to discharge the performance improvement responsibilities.

Implemented

2016-17 GA4/2017

The Audit Committee should monitor the activity of any committee specifically charged with the scrutiny of performance improvement.

Implemented

2016-17 GA5/2017 The Audit Committee should consider the benefit of using internal audit, where required, to provide it with future assurance on the integrity and operation of the Council's performance framework and identify areas for improvement.

The Audit Committee receives internal audit reports at each quarterly meeting. The internal audit plan for 2018-19 does not refer specifically to work being carried out on improvement, or on auditing the measures associated with it. Such work would provide the Committee with valuable assurance and additional insight on these areas.

Partially implemented

2017-18 GA1/2018 Senior management should establish a central review role at committee level and ensure that all relevant Committees and the Audit Committee are provided with more detailed performance improvement documentation to carry out their scrutiny and monitoring functions.

Implemented

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Year of report


Improvement Objectives

2016-17 IO1/2017 Going forward, ensure that each improvement objective is focused on outcomes for citizens in relation to improved functions and/or services rather than focusing primarily on achieving corporate efficiencies.

While six of the seven 2018-19 improvement objectives do focus on outcomes for citizens, at the action level it is not always clear how citizens will benefit from some specific actions, or how they relate directly to the overall objective. There is a possibility that actions may not be directly relevant to the achievement of the objective.

Partially implemented

2016-17 IO2/2017 In relation to the improvement objectives, more detail is required in the ‘performance improvement plan’ so that it is clear to a reader how citizens will be better off if the Council improves as it intends to.

Implemented

2016-17 IO3/2017 Ensure that improvement can be demonstrated and, where possible, measured through the use of meaningful performance indicators and data collection and/or other qualitative methods. These indicators should not just concentrate around, nor be limited to, the statutory indicators and standards imposed by central government. Where possible and relevant, the Council should use baseline performance data/information against which future improvement can be demonstrated.

The use of indicators and data collection was also raised in 2017-18 – see IO2/2018 and IO3/2018 below. The 2018-19 objectives include a wider range of measures and are not limited to statutory indicators. However, because these have not been used in the past, there is no historic data available to provide a baseline or to justify the proposed target. Further work in this area will be required.

In progress

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Year of report


2017-18 IO1/2018 The Council should link the improvement objectives more closely to the identified actions, keeping in mind the intended outcomes. A bottom-up approach to objective setting may help the Council to avoid improvement objectives that are too broad and open-ended. It should also narrow the gap in the council’s ability to clearly demonstrate the impact on the outcomes for citizens.

The revised service planning template introduced for 2018-19 was designed to assist officers to identify performance improvement initiatives at an early stage, to clearly link them through the Corporate and Community Plans and to identify the outcome of the initiative and what difference it would make to stakeholders. However, objectives remain broad and it is not always clear from the measures that an action should be started or completed by a particular date. More consideration should be given to breaking down objectives, and ensuring that the related actions will deliver progress towards meeting them.

In progress

2017-18 IO2/2018 The Council should ensure that underlying projects are more focused on outcomes or that the collective outputs contribute to an evidence-based outcome at the objective level. The outcome(s) should always be clearly stated so that citizens can understand how they will benefit.

The self-assessment report for the 2017-18 Performance Improvement Plan shows that the indicators or standards selected have not always been suitable for measuring progress against outcomes. The Council has acknowledged this.

In progress

2017-18 IO3/2018 Where possible and relevant, the Council should use baseline performance data/information (and set standards which it hopes to achieve) against which future improvement can be demonstrated.

Where available baseline data has been introduced, however there are a number of objectives where outturn data is not available for previous years.

In progress

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Year of report


The Council should continue to work on identifying appropriate indicators and standards which will demonstrate clearly that improvement has been achieved. The Council should also continue to work towards identifying benchmarks with other councils.

Consultation

2016-17 C1/2017 Continue to raise the profile and transparency of the performance improvement framework throughout the year on the Council's website and other communication channels for example social media, citizen magazines etc.

Implemented

2016-17 C2/2017 Encourage citizens and stakeholders to contribute at any time during the year by providing contact details on the Council website.

Implemented

2016-17 C3/2017 Consider other methods of obtaining views (as well as service level feedback) from citizens and organisations, for example, a citizen panel, staff and councillor workshops and focus groups.

Implemented

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Year of report


Collection, use and publication of performance information

2017- 2018

CUP1/2018 In addition to the local indicators and standards relating specifically to improvement objectives, the Council should select a range of local indicators and standards to enable it to measure and monitor improvement across its full range of functions, as part of its general duty arrangements to continuously improve. This information should be included in the published Performance Improvement Plan and Annual Self-Assessment Report and provide year on year comparisons. The Council should continue working with other councils and the Department to agree a suite of self-imposed indicators and standards. This will enable meaningful comparisons to be made and published in line with its statutory responsibility.

The Council has 16 individual service plans that include over 300 KPIs that are monitored in the quarterly service plan reports brought before committees. It is the Council’s view that if the corporate performance and service plans are aligned and integrated then the KPIs at the lowest level ensures that all plans are monitored. However, this detailed information is not included in the Performance Improvement Plan or the self-assessment report. The Improvement Plan includes three non-statutory measures apart from those used in the objectives, but these do not cover the whole range of Council activities. The Council continues to work with the sector, the Association of Public Sector Excellence (APSE) and the Department for Communities in order to inform future self-imposed indicators and to explore potential bench-marking opportunities. A sub group of the Multi-Stakeholder group was tasked with drafting guidance to

In progress

18

Year of report


clarify the requirements of the General Duty to Improve. A working draft has now been agreed and we expect that further improvements to reporting on the General Duty will be made in 2019.

2017-18 CUP2/2018 Self-assessment reports must clearly set out a section on performance in relation to its general duty to improve as required under the legislation.

To better show compliance with legislation the Council should clearly set out its assessment of its performance under Part 12 of the Local Government Act (NI) 2014 regarding the General Duty to Improve in the next self-assessment report.

Not implemented

2017-18 CUP3/2018 Self-assessments should not focus solely on the underlying projects but also include an assessment of the Council’s progress in delivering its improvement objectives.

The self-assessment reviews progress on each of the objectives set for 2017-18 however the focus is at a detailed operational level rather than looking at the achievement of the overall improvement objectives and it is difficult in some cases to gauge how successful it was. The Council should review the reporting of its objectives to ensure that it addresses this appropriately.

Not Implemented

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Annex C – Detailed observations

Thematic area Observations

General duty to improve The Council has continued to work on the General Duty to Improve. The service planning template has been updated and in 2018-19 this will be combined with the budget planning process to ensure a joined up approach. The council has aligned the Improvement Plan and its objectives to The Big Plan 2017-32 (the Council’s Community Plan) and also to the Council Corporate Plan 2015-19. These documents are clearly referred to in the Improvement Plan and are easily accessed from the Council website. However, in the Self-Assessment Report the council has not clearly set out a section on performance in relation to its general duty to improve as required under the legislation. The Council should ensure that it complies with all of the requirements to ensure that there is transparent reporting of the work carried out for performance improvement. A sub group of the Multi-Stakeholder group was tasked with drafting guidance to clarify the requirements of the General Duty to Improve. A working draft has now been agreed and we would expect that further improvements to reporting on the General Duty will be made in 2019.

Governance arrangements In response to a recommendation made last year by NIAO that senior management should establish a central review role to ensure that improvement objectives are subject to appropriate and consistent scrutiny and challenge, the Council has amended the Terms of Reference for the Audit Committee so that a report on progress against the Performance Improvement Plan will be brought to future Audit Committee meetings, and, that going forward, the Audit Committee will be responsible for monitoring progress in respect of the Performance Improvement Plan. The Council should consider the role internal audit could play in providing independent validation and assurance on the integrity and operation of the Performance Improvement Framework and the processes in place which feed into it.

Improvement objectives The 2018-19 Improvement Plan contains seven objectives. These are clearly linked to the Corporate Plan priorities and also to the associated Big Plan – the Council’s Community Plan. Each of the objectives has associated actions and outcomes, as well as measures, and there is a lead officer for each objective.

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In last year’s report we commented that not all of the projects, outcomes and targets were outcome based, some of the objectives were at a strategic level and were broad and open ended. The objectives set out for 2018-19, however, remain at a high level and the detail for each objective lies in the actions. A number of these actions are strategic or refer to administrative processes within the council, and it therefore is not always clear how they relate to an improvement in performance which will benefit ratepayers.

Consultation The Council has continued to consult with stakeholders and citizens and encourages them to engage in the performance improvement process. This is being addressed pro-actively, though “Your Opinion Matters” which is an ongoing campaign which will run continuously and is advertised in the Borough Magazine, and on line. The Performance Improvement Plan presents a summary of responses received from consultations but states that “As the majority of feedback was in agreement with the proposals no changes have been made to the Plan”. It is important that stakeholders see that their input is accepted and that changes can be made as a result of it. In future Plans it would be beneficial if proposals submitted under “Your Opinion Matters” could be summarised, with information on which of these suggestions were accepted. If no suggestions are accepted, or no changes are made to the plan following feedback then interested parties may cease to engage with the process as it will not be seen as a valid consultation exercise.

Improvement plan NIAO noted in 2017-18 that although the Performance Improvement Plan did include published statutory indicators and standards it was not clear how it intended to achieve these as there was no description of its plans to meet them, and as a result it was not fully compliant with the legislation. In addition the Council did not publish a range of local (non-statutory) indicators and standards in its plan (other than those relating directly to its improvement objectives and underlying activities). A paragraph headed “Corporate Indicators” has been included in the 2018-19 Performance Improvement Plan with an explanation that the Council has a suite of corporate indicators and that these include statutory indicators and also non statutory indicators. There is also a table showing statutory indicators and four non statutory indicators. Some of the statutory indicators are used to measure performance in the Council’s Performance Improvement Objectives, for example recycling and diverting waste from landfill, but there is no narrative to explain this, nor is there

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an explanation on how the Council intends to improve its performance on either the statutory indicators, or the non-statutory indicators. In order to comply with the legislation the Council should provide clear information on how it is working to monitor progress on statutory indicators and set out its arrangements to monitor progress against its own self-imposed performance indicators.

Arrangements to improve Each objective is supported by a number of measures which will be used by the council to indicate performance. The Council template allows disclosure of 2016-17 performance, 2017-18 performance to date, and the 2018-19 target. The figures for each of these categories is available primarily for the waste collection and recycling measures, and for absenteeism, but in other objectives, particularly where there are new measures, they are left blank or marked not applicable. There is no indication that alternative measures were explored, either from within the Council or from other comparable bodies. This makes it difficult for the reader to judge if any progress can realistically be made, or how appropriate the targets set will be. The measures for some objectives are dependent on other areas of work being completed first. The achievement of some of these measures is also dependant either on other bodies, or on wider projects in the Council. Any slippage in these will impact on the achievement of the Objective. In some instances it might have been more appropriate to break the objective down into smaller pieces or to set interim targets and milestones to measure progress. In one instance the measure was to begin work by a certain date, without stating a completion date.

Collection, use and publication of performance information

In 2017-18 NIAO noted that in addition to indicators and standards relating specifically to improvement objectives the Council should select a range of local indicators to enable it to measure and monitor improvement across its full range of functions and to publish them in the Performance Improvement Plan (see CUP1/2018 above). The council has published three non-statutory indicators in the Performance Improvement Plan for 2018-19 but it has not set out how it plans to improve performance for these indicators and they do not cover the full range of functions.

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To date the Council has not provided information which would allow performance improvement to be compared with progress in other councils other than for the statutory indicators. It is important that work to identify comparative information from other bodies continues so that this can be identified and published allowing stakeholders to make an informed assessment of progress on these areas. We note that a Multi-Stakeholder Group has been established which comprises of representatives from the Department for Communities and the Councils, and is also attended by NIAO. The work plan of the group includes consideration of benchmarking. We hope that sufficient progress will be made by September 2019 to allow a broader range of functions to be compared with other councils. The self-assessment report could be improved by:

having a separate section on performance in relation to the general duty to improve; and

ensuring that the review of progress on each of the objectives set for 2017-18, looks at the achievement of the objectives, rather than focussing at an operational level as it currently does. The Council should review its reporting to ensure that it addresses the delivery of the objectives.

Making sure public money is spent properly

Northern Ireland Audit Office 106 University Street

Belfast BT7 1EU

Direct Line : (028) 9025 1076 Fax : (028) 9025 1051 E-mail : [email protected]

www.niauditoffice.gov.uk @NIAuditOffice Stephen Reid Chief Executive Ards and North Down Borough Council Town Hall The Castle Bangor BT20 4BT

13 December 2018 Dear Stephen, Annual Audit Letter 2017-18: Ards and North Down Borough Council Please find enclosed the Annual Audit Letter issued under Regulation 17 of the Local Government (Accounts and Audit) Regulations (Northern Ireland) 2015 and the Code of Audit Practice 2016. Regulation 17 requires a local government body to:

publish (as a minimum on the local government body’s website) the letter; notify the local government auditor of the date of publication, and make copies available for purchase by any person on payment of a reasonable sum.

The Code of Audit Practice 2016 states that whilst it is the responsibility of the Council to publish the annual audit letter, the Local Government Auditor may publish each annual audit letter on the NIAO website to enhance the transparency of public reporting. I would be grateful if you would arrange to include the Annual Audit Letter on the agenda of the next meeting of the Audit Committee. I would like to take this opportunity to thank you and your staff for the assistance and co-operation received throughout the audit. Yours sincerely

PAMELA McCREEDY Local Government Auditor

N I A O

Pamela McCreedy Chief Operating Officer

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Ards and North Down Borough Council Audit Committee Internal Audit Progress Report September-November 2018 The purpose of this summary report is to inform members of the Audit Committee of work carried out by Internal Audit during the period September-November 2018. Details of the work carried out on completed assignments is contained in the Executive Summary Audit Reports presented to the Committee.

1 Background

Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. It helps organisations accomplish their objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of the risk management, control and governance processes. The Internal Audit service is currently delivered by Moore Stephens.

2 Progress against Planned Work

During the months of April and May Internal Audit liaised with Council managers to agree proposed timings for each of the audits contained in the Audit Plan for 2018/19 (which was approved by the Audit Committee in March 2018). The current status of each planned audit to be completed by Internal Audit based on the Annual Audit Plan is shown in the table below.

Audit Area Proposed Schedule

Status Assurance Rating

Risk Management November

Fieldwork ongoing -

Partnership arrangements January 2019 - -

PCSP May complete Satisfactory

Information governance and data protection

November Fieldwork complete -

Freedom of Information May/June Complete Satisfactory

Capital project management September Fieldwork complete

and report drafted -

Contract management and contractor monitoring

June

Complete Satisfactory

Planning- enforcement and development control

September Complete and attached

Satisfactory

Building Control August

Complete and attached

Satisfactory

Contract management & operations; Exploris

August Postponed Fieldwork complete and report drafted

-

Staff performance management

September Complete and attached

Satisfactory

Ards & North Down Borough Council Internal Audit Quarterly Update

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Audit Area Proposed Schedule

Status Assurance Rating

Workforce planning (from 2017/18)

February 2019 Postponed until 2019/20*

-

Travel and subsistence October Complete and

attached Satisfactory

Grant funding July Complete and

attached Satisfactory

Tenders & contracts December ToR agreed -

Income & Cash handling September Fieldwork complete

and report drafted -

Follow-up of prior year recommendations

Ongoing - -

Other

Support relating to risk management and assurance statements

Ongoing - -

Review of Governance Statement Framework

May/June 2018 ongoing -

* this audit is being postponed as the focus of HR has been to fill the posts in the new Council. HR have a

deadline to get all posts filled within the new structure by the end March 2019. For these reasons, an internal

audit of workforce planning is not timely or practical at this point.

3 Issues Arising from Work During Period Reported (September -November)

3.1 Outstanding Management Responses to Draft Reports

None

3.2 Reports Awaiting Sign-Off by the Head of Service

None

3.3 Limited or Unacceptable Assurance Opinion Audits

None.

4 Audits Planned for Next Period (December-March)

The following audits are planned for completion during the next period:

• Partnership Arrangements

• Tenders and Contracts

• Risk Management

Ards & North Down Borough Council Internal Audit Quarterly Update

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• Information Governance and Data Protection

• Income and Cash Handling

• Follow-up prior year recommendations

5 Performance Indicators

The following sets out progress against performance indicators for the internal audit function.

5.1 Progress against Assurance Assignments in Revised Annual Audit Plan

Progress against Assurance Assignments in Annual Audit Plan

Description No of days

planned

No of days completed

to date

Variance

Risk Management 8 6 ongoing

Partnership arrangements 10 - -

PCSP 6 6 -

Information governance and data protection 10 9 ongoing

Freedom of Information 8 8 -

Capital project management 10 10 -

Contract management and contractor monitoring 10 10 -

Planning- enforcement and development control 10 10 -

Building Control 10 10 -

Contract management & operations; Exploris 10 9 ongoing

Staff performance management 8 8 -

Workforce planning (from 2017/18) * 8 - -

Travel and subsistence 9 9 -

Grant funding 10 10 -

Tenders & contracts 10 - -

Income & Cash handling 10 8 ongoing

Follow-up of prior year recommendations 10 1.5 ongoing

Total assurance days 157 114.5 42.5 days remaining

Support relating to risk management and assurance statements

10 - -

Review of Governance Statement Framework 12 4.5 ongoing

5.2 Acceptance of Audit Recommendations & Client Satisfaction

Other Performance Indicators Progress

Percentage of audit recommendations accepted by management

100%

Client Satisfaction Survey Results Survey’s issued – results will be reported when completed surveys received

Report Ref: ANDBC1819-4

Final December 2018


INTERNAL AUDIT REPORT

EXECUTIVE SUMMARY

Area of Review: Grant Funding

To: Head of Community and Culture

Head of Regeneration

Head of Building Control, Licensing and Neighbourhood Environment

CC: Director of Community and Well-Being

Director of Regeneration, Development and Planning

Director of Environment

Director of Finance and Performance

From: Internal Audit Service

This report is a confidential internal document intended solely for the use of the above-named individual(s).

The disclosure, copying or contents of this report is strictly prohibited.

Ards & North Down Borough Council October 2018 Grants

TABLE OF CONTENTS

1. INTRODUCTION ................................................................................................................. 1

2. EXECUTIVE SUMMARY ..................................................................................................... 2 3. STATEMENT OF RESPONSIBILITY .................................................................................. 9 4. AUDIT APPROACH .......................................................................................................... 10 APPENDIX 1 - DEFINITIONS ................................................................................................ 12 APPENDIX 2 – POINTS FOR THE ATTENTION OF MANAGEMENT .................................. 13

This report is prepared on the basis of the limitations set out at Section 3.


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1. INTRODUCTION This internal audit was completed in accordance with the 2018/2019 Internal Audit Plan. General Audit Objectives Our aim is to provide assurance to Senior Management, the Chief Executive, and the Audit Committee Members on the contribution of control, risk management and governance processes of Ards and North Down Grant Funding to the achievement of the Council’s corporate objectives. The objective of this review was to form an opinion as to:

1. the level of internal controls in existence within Ards and North Down Grant Funding; and 2. whether or not these controls are operating effectively.

The risks identified by Internal Audit relating to Ards and North Down Grant Funding (against which audit testing was performed on a sample of grants) and agreed with management are as follows:

1. There may be no or inadequate policies in place, leading to a lack of transparency in the grant funding award process and potential reputational damage to the Council

2. Assessment procedures may not be applied in relation to the provision of grant funding, leading to ineligible organisations receiving funding from the Council, or funding for ineligible costs being provided by Council

3. Proportionality may not be applied leading to inefficient use of Council staff time and resources.

4. Payments may be made to projects without appropriate vouching and verification of costs and progress leading to ineligible expenditure being paid by the Council

The audit testing focused on grant procedures and applications in relation to the following sample of funding programmes:

• PEACE IV

• Recycling Community Investment Fund (RCIF)

• Donaghadee Town centre Heritage Initiative (THI) Acknowledgement We wish to acknowledge the support from the Council’s staff and the staff of Keep NI Beautiful charity who manage the RCIF Live Here Love Here (LHLH) programme. They supported the completion of this audit and we thank them for their co-operation.


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2. EXECUTIVE SUMMARY Overall Audit Opinion Please refer to Appendix 1 of this report for the definition and explanation of audit assurance levels and prioritisation of audit recommendations and audit findings. As a result of our audit of Ards and North Down Grant Funding, we are able to provide the Chief Executive, Senior Management and Audit Committee with the following overall level of assurance:

Satisfactory

Overall there is a satisfactory system of governance, risk management and control. While there may be some residual risk identified, this should not significantly impact on the achievement of system objectives.

Through our audit we found the following examples of good practice:

✓ A comprehensive Grant Funding Policy is in place (although this does not apply to EU funded programmes or Capital programmes)

✓ The PEACE IV team in Council works very closely with the Special EU Programmes Body (SEUPB) and regularly seeks their advice and approval in the appropriate and compliant management of the PEACE IV fund.

✓ The outputs and outcomes of the Live Here Love Here Grant programme (managed by the Keep NI Beautiful charity) and which Council partners in are closely monitored by the Keep NI Beautiful team managing the programme and this is reported to Council. (23 local organisations/groups from across the Borough have been awarded funding in 2018/19 and are presently developing and implementing projects.)

Audit findings are categorised as being priority 1, 2 or 3 with priority 1 being the highest priority. The table below summarises the number of recommendations made against each of the risk areas: Summary of Recommendations against Risks

Risk

Number of recs & Priority rating

1 2 3

1. There may be no or inadequate policies in place, leading to a lack of transparency in the grant funding award process and potential reputational damage to the Council

- - -

2. Assessment procedures may not be applied in relation to the provision of grant funding, leading to ineligible organisations receiving funding from the Council, or funding for ineligible costs being provided by Council

- 1 3

3. Proportionality may not be applied leading to inefficient use of Council staff time and resources.

- - -

4. Payments may be made to projects without appropriate vouching and verification of costs and progress leading to ineligible expenditure being paid by the Council

- 1 3

Total recommendations made - 2 6


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Ref. No.

Finding Recommendation Priority Management Response Responsible Officer &

Implementation Date

1. The Keep NI Beautiful charity manage the Live Here Love Here (LHLH) small grant programme in partnership with a number of organisations in Northern Ireland including Ards and North Down Borough Council. The LHLH team at Keep NI Beautiful assess all small grant applications, monitor all successful applicants’ projects and process all claims for payment.

When testing the application process audit noted that the only documentation that was requested with an application were bank statements. Policies e.g. safeguarding, or insurance information was not requested In the absence of the existence of relevant policy and insurance cover being verified there may be a risk that groups are being funded who do not have the relevant insurance or policies and procedures in place in areas such as safeguarding, health and safety etc. It is accepted that the organisations receiving these small grants are usually groups of volunteers who may not have formal policies or insurance in place. It may be the case that the insurance and policies of Keep NI Beautiful could apply but this could not be verified at the time of audit.

Keep NI Beautiful and Council should determine if appropriate insurance coverage is in place. Where organisations do not have formally documented policies and procedures Keep NI Beautiful and Council should determine which organisation’s (Keep NI Beautiful or Council) polices volunteers should operate under. Keep NI Beautiful and Council should ensure all groups funded are aware of these requirements.

2 One of the unique positives of LHLH grants is that anyone can apply, it doesn’t have to be a legally constituted organisation e.g. applicants can be a group of volunteers. The drawback of this, as audit rightly pointed out, is that insurance and formal policies can be an issue. Council and Keep Norther Ireland Beautiful are currently actively reviewing this issue and aim to identify a solution as soon as possible.

Stephen Addy 31st March 2019

5. Council leads the Donaghadee Townscape Heritage Initiative (DTHI) which receives the majority of its funding via a Heritage Lottery Fund

There is a risk that applicants are not being informed of the application status in a timely fashion, there is also a risk of a lack of consistency in

2 The following actions will be undertaken to address the points raised:

David Shivers

1st March 2019


4

Ref. No.


Implementation Date

(HLF) grant. The HLF provides grants for programmes for the repair and regeneration of historic environment in towns and cities throughout the UK. The DHTI programme identifies projects and award grants to eligible property owners. A sample of 5 applications for DHTI grants were tested and it was noted that 2 applicants were notified of their success with 1 month of the application being received by Council other 3 other successful applicants were notified between 3 and 5 months after receipt by Council. Audit was advised that a number of factors affect the time required to process applications:

• Gaps in information received from grants applicants can cause delays in processing the applications

• There is a reliance on DHTI steering group meetings taking place in a timely manner

• Some applications require full council approval and approval by HLF

assessing applications which may lead to confusion amongst applicants and a perceived sense of lack of fairness. This can also increase the risk of inefficient management of the funds budget.

DTHI should introduce more formality in the receipt and processing of applications for the HTI fund. Some steps which could be taken include:

• Establishing deadlines for communicating with applicants and processing of applications at each stage.

• Stamping each application when it is received to support the timely notifications of receipt to applicants. Such notification should include requests for any missing information and details of future deadlines within the process

• Retaining copies of and standardising communication with applicants (especially if all information is not initially provided by the applicant)

• Agreeing a 12-month schedule for DHTI steering group meetings which allows timely review and forwarding of information to Council meetings and the HLF.

• If due to unforeseen or exceptional circumstances, deadlines cannot be adhered to, then Council should retain

• THI applications and supporting documentation to be date stamped upon receipt.

• Applicant to be issued with formal standardised letter confirming receipt of the THI application. Letter will notify the owner if there is any supporting documentation outstanding.

• Applicant to be informed by formal standardised letter when all information has been received and informed that the application will be processed within 8 weeks from the date of receipt of all supporting documentation.

• The applicant will be formally notified by a formal standardised letter on the outcome of the application and (if applicable) the standard LOO will be issued with the standard Third-Party Agreement. The letter will also provide details on how to submit a THI grant claim and the supporting information required. An outline timeframe for receipt of payment into the owner’s account by BACS will also be provided.

• If it becomes evident that a stated timeframe cannot be met due to unforeseen reasons or third parties, the owner will be informed at the earliest opportunity by formal letter, explaining the cause of the delay and establishing a new deadline.

• A 12-month schedule of Steering Group meetings will be agreed with members and implemented at the start of the 2019-2020 financial year, in accordance with the recommendation


5

Ref. No.


Implementation Date

evidence of contact with the applicant providing an update on the progress of assessing the application and advise of any new deadline.

2. Audit reviewed the terms and conditions (T&Cs) in the letter of offer for successful LHLH applicants and noted the following procurement guidelines:

• for items up to £1500 two quotes need to be supplied by a grantee, and

• for items over £1500 four quotes need to be supplied.

Through testing a sample of 6 projects and the tender and quotation information provided by the successful applicant, audit discovered that for two of the successful applicants the required number of quotes were not supplied.

The current procurement requirements of LHLH are not proportionate to the value of the grants and lead to inefficient use of LHLH staff time in chasing quotes for very minor purchases. It should be noted that Council policy only requires quotes to be sought where expenditure is in excess of £3,000 e.g. 3 quotes between £3,000-£15,000.

If the required number of quotes are not received from LHLH projects there is a risk that the applicant/project is non-compliant with the current T&Cs of the grant. This also increases the risk of inefficient use of resources in attempts to ensure compliance with the current T&Cs relating to procurement. The Keep NI Beautiful LHLH team should review the need for quotations for expenditure below £1,500 and the number of quotations required for expenditure greater than £1,500. LHLH might consider adopting Council’s procurement policy when implementing this grant programme.

3 LHLH will review the procurement limits and consider increasing the limits where quotations are required. This will be discussed and agreed with Council.


3. Audit observed that there is no documented or consistently applied procedure for processing payments

In the absence of a standardised, documented process for payment there may be a risk that a payment is

3 An online claims system is now being used by Keep NI Beautiful for LHLH, and procedures for staff are being documented



6

Ref. No.


Implementation Date

relating to LHLH grants. Despite this, testing found that payments are being made accurately and in a timely manner.

processed incorrectly, missed or duplicated. The Keep Northern Ireland LHLH team should create, document and train staff in one standard method of processing payments.

4. As the lead for implementing the DHTI programme Council has responsibility to manage the fund and make all payments to those managing rebuilding and refurbishment projects across Donaghadee. Under the DTHI individual building owners may apply for a grant from the pool of funding and Council and other major partners may carry out direct works to buildings in their ownership or to the public realm.

Testing of 5 payments related to grants awarded within the DHTI scheme revealed that supporting evidence was consistently reviewed, checked and appropriately approved for payment by Council as the lead in this programme. However, it was noted that the process is not formally documented.

In the absence of a short-documented payment process there is a risk that if a situation arose where, due to unexpected or prolonged absence of key Council staff involved with DHTI, someone unfamiliar with the process would not be in a position to appropriately process a payment. Council should document the full payment process for DHTI.

3 A Payment Process document is to be drafted by the THI Project Officer for approval by senior management and finance which, in the absence of the THI Project Officer, will enable other Council staff to process payments appropriately and in a timely fashion.

David Shivers 1st March 2019


7

Ref. No.


Implementation Date

6. Details of projects being considered for grant funding by LHLH are summarised and presented at a panel meeting where the decision is made whether to award or not award funding. Representatives of Council, LHLH and at least one independent member sits on this panel. During testing it was noted that criteria checklists for assessing project proposals were developed but were not being filled out by the awarding/scoring panel. Audit was advised that the checklist is used as a guide for panel members but not completed and signed by the panel during scoring. No formal minutes or notes of the panel meetings are created; although there was evidence on file of some handwritten notes of points raised during discussion at the panel meeting.

In the absence of documented minutes or action points and without an assessment and scoring checklist there is an insufficient audit trail to demonstrate how the panel came to the decision of awarding the funding. This could potentially lead to a perceived lack of transparency and potential reputational damage to Council. A criteria checklist and scoring summary for each project assessed should be completed and signed by the panel and retained on file. Minutes or notes of the panel meetings should be retained to provide an audit trail of how the grant was recommended to be awarded.

3 LHLH accept the audit findings and are working towards creating a criteria checklist and scoring summary for each project assessed which will be completed and signed by the panel and retained on file. Minutes or notes of the panel meetings will be retained to provide an audit trail of how the grant will be recommended to be awarded.


7. Testing revealed that conflict of interest declarations, are not being completed and signed by LHLH assessment panel members. Audit was advised that if a conflict of interest arises that the panel member declares it and leaves the meeting until the rest of the panel complete the scoring of the proposed project. However, as there are no minutes of the panel meeting this is not documented

Without completed and signed conflict of interest declaration forms; there is a risk that a conflict of interest could go undetected which could potentially lead to funding being awarded unfairly. The absence of documented minutes recording panel members excusing themselves from the meeting during discussion of groups which they may have an interest in there is a risk of a lack of evidence and transparency of how potential conflicts of interest are being avoided.

3 In future, panels will be asked to declare a conflict of interest and will opt out as suggested. (As noted in the previous recommendation minutes or notes of the panel meetings will also be retained.)



8

Ref. No.


Implementation Date

All panel members and staff involved with the application process should be completing and signing a conflict of interest declaration form for each assessment meeting. All instances of a panel member leaving the room, due to conflict of interest should also be noted in formal minutes or other documented record of the meeting.

8. Testing revealed that declaration of conflict of interest forms are not used for members of the DTHI Steering Group who review and approve the projects to be awarded funding within the Donaghadee Townscape Heritage Initiative.

When conflict of interest checks/declarations are not in place there is a risk that potential or real conflict of interests for members of the Steering Group are not documented and acted upon which may lead to a perception of or a real lack of fairness in the awarding of funding. The DTHI should implement and document conflict of interest checks for all those involved with the application assessment and approval stages.

3 Declaration of conflict of interest forms will be issued to all members of the Donaghadee Town Steering Group, in addition to the verbal declaration of interests requested at the start of each Steering Group meeting as an agenda item and the formal minuting of such interests.

David Shivers 1st March 2019

Points for the attention of Management In addition to these recommendations additional system enhancements were identified during the course of the audit which do not form part of our formal findings but provide suggested enhancements to support effective controls. These are detailed at Appendix 2.


9

3. STATEMENT OF RESPONSIBILITY Limitation of scope As limited purpose audit testing was performed, our findings cannot be relied upon to be representative of the operation of control procedures at any time other than the time of observation of these control practices and in relation to the transactions tested. There are inherent limitations in any internal control system and thus errors or irregularities may occur and not be detected in our work. Projection of evaluations to future periods is subject to the risk that the policies and procedures may become inadequate because of changes in conditions, or that the degree of compliance with those policies and procedures may deteriorate. The Internal Audit Service takes responsibility for this report which is prepared on the basis of the limitations set out below. The matters raised in this report are only those which came to our attention during the course of our Internal Audit work and are not necessarily a comprehensive statement of all the weaknesses that exist or all improvements that might be made. Recommendations for improvements should be assessed by you for their full impact before they are implemented. The performance of Internal Audit is not and should not be taken as a substitute for management’s responsibilities for the application of sound Management practices. We emphasise that the responsibility for a sound system of internal controls and the prevention and detection of fraud and other irregularities rests with Management and work performed by Internal Audit should not be relied upon to identify all strengths and weaknesses in internal controls, nor relied upon to identify all circumstances of fraud or irregularity. Auditors, in conducting their work, are required to have regard to the possibility of fraud or irregularities. Even sound systems of internal control can only provide reasonable and not absolute assurance and may not be proof against collusive fraud. Internal Audit procedures are designed to focus on areas as identified by Management as being of greatest risk and significance and as such we rely on Management to provide us full access to their systems, records and documentation for the purposes of our audit work and to ensure the authenticity of these documents. Effective and timely implementation of our recommendations by Management is important for the maintenance of a reliable internal control system.


10

4. AUDIT APPROACH Our audit fieldwork comprised:

• Internal controls identified from system notes and interviews – see table below.

• Substantive/compliance testing to check existence of controls and adequacy of how they are being implemented

• Analytical review

• Review of reporting.

Risk Key controls

There may be no or

inadequate policies in

place, leading to a lack of

transparency in the grant

funding award process and

potential reputational

damage to the Council

1. The Council has a corporate policy is in place that covers the full range of organisations funded

2. The funding policy has been clearly communicated to external organisations and stakeholders

3. Such a policy is aligned to the Council’s Corporate Plan 4. The policy sets out clear procedures dealing with the call for funding

applications, assessment of applications, award of funding (including where funding is provided to bodies without going through an open call), provision of funding and verification of funding claims

5. Council has an appropriate procurement policy in place to govern the assessment of bids and award of grant funds to projects

Assessment procedures

may not be applied in

relation to the provision of

grant funding, leading to

ineligible organisations

receiving funding from the

Council, or funding for

ineligible costs being

provided by Council

6. Clear criteria have been developed for the provision of grants or awarding of a project (including separate criteria for each type of fund if appropriate)

7. Council grant funding and grant funded projects awarded are in line with Council’s funding policy and/or procurement policy or where appropriate any external funder policies (e.g. HLF, SEUPB)

8. Where funding is provided by the Council not as part of an open call process, there is a clear, approved rationale as to why this is so

9. Appropriate and relevant documentation to support the application/tender (such as financial statements, child protection policy, equal opportunity policy and insurance) is submitted by applicants

10. Award criteria checklists are used for assessing applications/tenders and only those eligible are recommended to receiving funding or be awarded a project

11. Appropriate conflict of interest check is in place when assessing applications/tenders

12. The recommendation to provide funding/award a project to an organisation is approved in line with Council policies

13. Successful and unsuccessful applicants for funding/bidders are notified of the Council’s decision in a timely manner

14. A letter of offer/contract is issued to successful applicants and the successful applicant/tenderer agrees to the terms and conditions of the funding

15. A letter of offer/contract must include clear details on responsibilities, value of project, deliverables – schedule and milestones, payment process etc


11

Risk Key controls

Proportionality may not be

applied leading to inefficient

use of staff time and

resources.

16. The funding policy and procedures consider the Code of Practice for Reducing Bureaucracy in Grant Funding to the Voluntary and Community Sector

17. Revenue Grant Funding is released considering best practice principles in the DFP/DSD Code of Practice for Reducing Bureaucracy (This does not apply to Capital grants, procurement or EU funding) –

a. Checks for registration on the Government Funding Database (GFD) and the Funder’s Passport details on the GFD are carried out b. If the grant is over £30,000 the Financial Systems and Control Assessment of

Voluntary and Community Organisations (FSCA) process has been applied c. The Best Practice Principles (15, 16, 17) have been applied for small grants

(£1,500 - £30,000) d. The Best Practice Principles (18, 19) have been applied for micro grants (below

£1,500) e. Where it may be necessary on occasion for Council to depart from applying

individual best practice principles for sound business reasons, such departures are documented.

Payments may be made to projects without appropriate vouching and verification of costs and progress leading to ineligible expenditure being paid by the Council

18. Funding is paid retrospectively (and regularly) in line with the project agreement/contract

19. Only those claims/invoices etc submitted for payment on time are processed for payment

20. All supporting documents (in line with the project agreement) e.g. invoices, receipts, progress reports etc. are made available to the Council as appropriate

21. Claims/submissions for reimbursement are reviewed to ensure that the funding is spent for the purpose it was originally applied for

22. Claims/submissions for reimbursement are approved by an appropriate person, with sufficient delegated authority, within the Council

23. Procedures are in place to allow the Council to hold back payment of a grant or reclaim a grant, in whole or part, if a funded body fails to adhere to the terms and conditions set within the letter of offer/contract, or it is discovered that the application or supporting documents submitted gave false or misleading information

24. The payment verification and approval process are fully documented


12

APPENDIX 1 - DEFINITIONS

The tables below define and explain audit assurance levels, assessments of likelihood for improvement, prioritisation of audit recommendations and definitions of audit findings. These definitions will be used in the Internal Audit Reports.

Table 1: Assurance Levels

Level of Assurance

Definition

Satisfactory


Limited

There are significant weaknesses within the governance, risk management and control framework which, if not addressed, could lead to the system objectives not being achieved.

Unacceptable

The system of governance, risk management and control has failed or there is a real and substantial risk that the system will fail to meet its objectives.

Table 2: Prioritisation of Audit Findings and Recommendations

Priority 1 Failure to implement the recommendation is likely to result in a major failure of a key organisational objective, significant damage to the reputation of the organisation or the misuse of public funds.

Priority 2 Failure to implement the recommendation could result in the failure of an important organisational objective or could have some impact on a key organisational objective.

Priority 3 Failure to implement the recommendation could lead to an increased risk exposure.

Table 3: Definition of Audit Findings

Audit Finding Definition

System Issue The absence of a control/ process/ procedure that could reasonably be expected to be present.

Compliance Issue The identification of instances of non-compliance with an existing control measure.


13

APPENDIX 2 – POINTS FOR THE ATTENTION OF MANAGEMENT

LHLH – Letter of Offer

During testing it was noted that the letters that are issued by the Keep NI Beautiful Charity when informing applicants of the outcomes of assessing LHLH applications do not include the date of issue. The notification letters are automatically generated by the grant IT software used by the charity, and so an audit trail of the date of issue is available for Keep NI Beautiful. However, for completeness and for the benefit of the organisation to whom the letter is issued, the charity should include a date of issue on the letter of offer/rejection.

Management response: Letters of offer and unsuccessful letters are circulated via email, therefore the email date was used as a reference. In future dates will be added to the letters.

LHLH – Agreement with Council

Discussions during testing of the processes and controls in place to manage the LHLH small grant process which is managed by the Keep NI Beautiful charity revealed that there is no formal agreement in place between Council and the charity in relation to the managing the grant process. Testing revealed a few inconsistencies between Council’s own internal approach to grant funding and the charity’s approach. (These are discussed in section 3 & 4 of the report). To assist in addressing these inconsistencies and to ensure greater understanding of how Council require the grant to be managed, Council should provide the charity with a copy of their grants policy, procurement policy and any other relevant policies and consider drawing draw up a short agreement for both parties to sign.

Management response: An SLA will be put in place before the next round of LHLH contracts.


Final September 2018



EXECUTIVE SUMMARY

Area of Review: Building Control

To: Head of Regulatory Services

Building Control Services Manager

CC: Director of Environment


Head of Finance


This report is a confidential internal document intended solely for the use of the above named individual(s).


Ards & North Down Borough Council September 2018 Building Control

TABLE OF CONTENTS

1. INTRODUCTION ................................................................................................................. 1

2. EXECUTIVE SUMMARY ..................................................................................................... 2 3. STATEMENT OF RESPONSIBILITY .................................................................................. 5 4. AUDIT APPROACH ............................................................................................................ 6 APPENDIX 1 - DEFINITIONS .................................................................................................. 8



1

1. INTRODUCTION This internal audit was completed in accordance with the 2018/2019 Internal Audit Plan. General Audit Objectives Our aim is to provide assurance to Senior Management, the Chief Executive, and the Audit Committee Members on the contribution of control, risk management and governance processes with regards to Building Control to the achievement of the Council’s corporate objectives. The objective of this review was to form an opinion as to:

1. the level of internal controls in existence with regards to Building Control; and 2. whether or not these controls are operating effectively.

The risk identified by Internal Audit with regards to Building Control (against which audit testing was performed) and agreed with management are as follows:

• Policies and procedures of the Building Control Department may not be in place leading to inconsistencies of how building control issues are addressed.

• Building applications may not be processed accurately and promptly within agreed time limit leading to unnecessary delays in the assessment and inspection process.

• Fees and invoices may not be managed appropriately and in a timely manner leading to errors in fees being received from applicants and delays in the receipt of income.

• Building control work is not carried out to the required standard leading to poor decision making in relation to approving plans, inspection work and issuing of completion certificates.

• It may be that building control work is not planned appropriately and the work is not prioritised correctly leading to missed deadlines or inefficient use of staffs’ time.

Acknowledgement We wish to acknowledge the support from the Council’s staff involved in the completion of this audit and thank them for their co-operation.


2

2. EXECUTIVE SUMMARY Overall Audit Opinion Please refer to Appendix 1 of this report for the definition and explanation of audit assurance levels and prioritisation of audit recommendations and audit findings. As a result of our audit of Ards and North Down Building Control, we are able to provide the Chief Executive, Senior Management and Audit Committee with the following overall level of assurance:

Satisfactory



Risk


1 2 3

1. Policies and procedures of the Building Control Department may not be in place leading to inconsistencies of how building control issues are addressed

- 1 -

2. Building applications may not be processed accurately and promptly within agreed time limit leading to unnecessary delays in the assessment and inspection process.

- 1 -

3. Fees and invoices may not be managed appropriately and in a timely manner leading to errors in fees being received from applicants and delays in the receipt of income.

- - -

4. Building control work is not carried out to the required standard leading to poor decision making in relation to approving plans, inspection work and issuing of completion certificates.

- - 1

5. It may be that building control work is not planned appropriately and the work is not prioritised correctly leading to missed deadlines or inefficient use of staffs’ time.

- - -



3

Ref. No.


Implementation Date

2 Testing revealed that Senior Building Control Officers (SBCO) do not approve all applications. We were advised that surveyors carry out many site inspections, and that senior staff do not review the quality of inspections for experienced surveyors. SBCOs would accompany new or less experienced surveyors for onsite inspections and support the surveyors when they first start with Building Control. Testing revealed that the Building Control Services Manager (BCSM) does not review in detail every application prior to completion and the work carried out by the surveyors (i.e. site inspections and application approval) will not have been checked in all cases by a SBCO (if completed by a surveyor) prior to going to the BCSM.

Audit acknowledges that every aspect of Building Control work cannot be checked/assured however Building Control should introduce some form of additional quality control using spot-checks on the various aspects of the work undertaken. These spot-checks should be recorded.

2 I would accept that quality control checks would be beneficial to both staff and managers. To implement this will have a resource implication which at the moment is not available within the current complement. As a result of a planning day across all regulatory services numerous support services are being explored. Month 1 to 1’s with line mangers would allow us to address many issues such as fair work-loads, training needs required and ‘quality spot checks.’ This will be implemented for the new financial year.

April 2019 Stephen Addy

3. During testing it was noted that for the period 02/04/18 to 21/05/18 the building control department processed 136 domestic applications and 51.47% of these met the statutory deadline for completion. In the same period there were 20 non-domestic applications with 60% of these meeting processing deadlines. It was noted that the total number of Full Plans, regularisations and building notices have decreased year on year from 2016, 2017 and 2018, the figures are 3419 to 3253 to 2894 respectively. However, the national value of work has increase from £20 million in 2016 to

The department should continue to monitor their deadline rates and report these and the trends in the numbers, values and types of applications, to senior management. The building control department should create an agenda for each staff meeting and when possible have key action points from previous meetings available for staff. Reports of outstanding applications and trends in applications numbers should be discussed at these meetings. The Head of Service should implement his plan to have monthly meetings with

2 Deadlines continue to be monitored, and systems changes are being implemented to reduce process time. Staff meetings do now have an agenda and minutes provided following meetings. As mentioned above monthly 1 to 1’s will also help this. New KPI’s are being developed to help measure and monitor speed and quality of our functions. Such as response times and customer satisfaction.

April 2019 Stephen Addy


4

Ref. No.


Implementation Date

£46.2 million in 2018. Staffing levels have remained constant. We were advised that the nature of the cases being dealt with are larger in scale (and value) and are more complex.

the Building Control Manager, include application trends, progress in meeting targets on the agenda, and have the action points arising documented and circulated for follow-up. Issues identified should be raised with the Director.

1. It was noted during testing that Building Control do not have a current up-to-date documented procedure in place.

Building Control should create a short, documented procedure or flow-chart of the procedures for each type of application and procedure within Building Control which will be regularly reviewed and updated as needed. The staff should receive training on this procedure and have access to it.

3 Processes continue to develop, but it is recognised that documented procedures would be beneficial. Across regulatory services there are many types of ‘education/training/guidance’ we provide. It is recognised flow charts are a tool to aid learning, but this must remain flexible due to a fast changing environment.

SA to oversee educational functions. In place by December 2019


5



6






Risk Key controls

Policies and procedures of the Building Control Department may not be in place leading to inconsistencies of how building control issues are addressed

• Documented procedures governing building control activities are in place;

• Procedures should be reviewed on a regular basis and incorporate updated regulations; and

• Staff have access to and have been trained in procedures.

Building applications may not be processed accurately and promptly within agreed time limit leading to unnecessary delays in the assessment and inspection process.

• All applications when received by the Building Control Department are logged on an appropriate system;

• Each application is allocated to a Building Control Officer

• Appropriate information is recorded by the Administration Officer for each application:

• Applicant details

• Agent details

• Date application received

• Building control purpose group code (e.g. domestic or non-domestic, full plans or building notice, replacement dwelling or extension etc).

• Size of the works

• Cost of the works

• Fee receipt number

• The application forms are checked, and all information has been entered before the application is validated

• Applications are processed within the prescribed number of days e.g. 3 working days from receipt of application; and

• The Building Control Department has established internal targets for assessing plans submitted to the department.

Fees and invoices may not be managed appropriately and in a timely manner leading to errors in fees being received from applicants and delays in the receipt of income.

• Appropriate accuracy checks are carried out on the calculation of the fees.

• Where the fees provided are incorrect, the applicant is contacted, and this is recorded;

• An application is processed when any appropriate fee is received, and correct fee can be requested at later date.

• For building notice and building regularisation applications, the full fee (which includes the plan and inspection fee) is paid on submission of the application and the fee is receipted as having been received.

• Where appropriate the Finance Department is informed to raise an invoice once the initial inspection has been conducted;

• Fees are set by the Department of Finance and Personnel and are dependent on the nature and size of the works.

Building control work is not carried out to the required standard leading to poor decision making in relation

• Building Control Officers are fully qualified to assess plans and carry out building control inspections; Plans are only approved after the Building Control Officer is satisfied they comply with Building Regulations (Northern Ireland) 2000.


7

Risk Key controls

to approving plans, inspection work and issuing of completion certificates.

• Building Control Officers inspect the building work as it proceeds.

• Inspections are undertaken on a timely basis

• Details of each inspection are logged onto the system

• There is adequate communication between builders and building control officers and this is recorded

• A Building Control Manager reviews all plans prior to signing and issuing the approval certificate.

• All works completion certificates are reviewed and signed by Building Control Manager.

• Information from the Northern Ireland Building Control Standards Panel is issued to staff on a timely basis

It may be that building control work is not planned appropriately and the work is not prioritised correctly leading to missed deadlines or inefficient use of staffs’ time.

• Annual Business Plan for Building Control is in place

• All building control activities are planned and managed using an appropriate software or system

• A report of all plans, building notice and regularisation applications received for the month including approved, acknowledged and cancelled applications is produced and reported.

• Meetings are regularly held with staff to review progress and internal targets.

• Regular meetings are held between Building Control manager and Director of Environmental services to discuss applications and performance.


8




Level of Assurance

Definition

Satisfactory


Limited


Unacceptable











Final Oct 2018



EXECUTIVE SUMMARY

Area of Review: Staff Performance Management

To: Organisational Development Manager

Head of Human Resources and Organisational Development

CC: Director of Organisational Development and Administration Directorate





Ards & North Down Borough Council Oct 2018 Staff Performance Management

TABLE OF CONTENTS

1. INTRODUCTION ................................................................................................................. 1 2. EXECUTIVE SUMMARY ..................................................................................................... 2 3. STATEMENT OF RESPONSIBILITY .................................................................................. 7 4. AUDIT APPROACH ............................................................................................................ 8 APPENDIX 1 - DEFINITIONS .................................................................................................. 9

APPENDIX 2 – POINTS FOR THE ATTENTION OF MANAGEMENT .................................. 10



1

1. INTRODUCTION This internal audit was completed in accordance with the 2018/2019 Internal Audit Plan. General Audit Objectives Our aim is to provide assurance to Senior Management, the Chief Executive, and the Audit Committee Members on the contribution of control, risk management and governance processes with regards Staff Performance Management to the achievement of the Council’s corporate objectives. The objective of this review was to form an opinion as to:

1. the level of internal controls in existence with regards to Staff Performance Management; and 2. whether or not these controls are operating effectively.

The risk identified by Internal Audit with regards to Staff Performance Management (against which audit testing was performed) and agreed with management are as follows:

• ANDBC may not have an adequate performance review policy and procedure, leading to ineffective people management and negative impact on organisational performance

• Performance reviews may not be carried out per the policy and procedures leading to missed opportunities for staff recognition and development, and possible issues of poor performance not being appropriately addressed

• Documentation relating to performance reviews may not be securely maintained resulting in non-compliance with data protection requirements



2

2. EXECUTIVE SUMMARY Overall Audit Opinion Please refer to Appendix 1 of this report for the definition and explanation of audit assurance levels and prioritisation of audit recommendations and audit findings. As a result of our audit of Ards and North Down Staff Performance Management, we are able to provide the Chief Executive, Senior Management and Audit Committee with the following overall level of assurance:

Satisfactory


A complete and detailed record of audit findings and recommendations may be found at Sections 3 - 4 of this report. Through our audit we found the following example of good practice:

➢ A staff performance management process called Pride in Performance has been developed, and includes templates, guidelines and training. However, Organisation Development (OD) recognise that deadlines for the process are consistently being missed. As a result, OD have been proactive by offering additional training to managers and also arranging for a review of the process which is currently underway.


Risk


1 2 3

1. ANDBC may not have an adequate performance review policy and procedure, leading to ineffective people management and negative impact on organisational performance

- 1 -

2. Performance reviews may not be carried out per the policy and procedures leading to missed opportunities for staff recognition and development, and possible issues of poor performance not being appropriately addressed

- 1 4

3. Documentation relating to performance reviews may not be securely maintained resulting in non-compliance with data protection requirements

- - 1



3

Ref. No.


Implementation Date

3. Audit was advised that deadlines have not been adhered to for the completion of PIP conversations. PIP conversations should be completed by the end of April each year and documentation submitted to OD. In 2016/17 - 564 returns (approximately 70%) were received by OD; in 2017/18 – 222 returns (approximately 28%) were received and in 2018/19 – over 500 were received at the time of audit. It was noted that the majority of completed PIP templates are not submitted by the end of April, they are returned to OD throughout the year up until October. Audit was advised that a review of the PIP process is currently underway.

The review of the PIP process should help identify key barriers to the process which prevent meeting of current deadlines. Based on audit observation and discussions with managers one key barrier is likely to be the amount of time required for the current process. Management should consider how the process can be simplified e.g. can the PIP templates be shortened, can an electronic system can be introduced to capture and store key steps in the PIP process?

2 The current review of the Pride in Performance Conversation Scheme will be used to identify the key barriers which prevent meeting deadlines. An electronic system is currently being considered in terms of capturing and storing the key steps.

OD Manager by 31 March 2019

5. Testing of 37 completed Pride in Performance (PIP) conversation templates from 20 staff members revealed that the objectives set during the PIP conversations can be non-specific and generally not SMART (Specific, Measurable, Attainable, Realistic, and Time-bound). Testing also revealed that these objectives were not measured or mentioned in the following year PIP conversation documents in 13 cases. The guidance notes supporting the PIP conversation template does refer to the need to review the employee’s progress against objectives; and the section on the template asks an employee to

OD should remind management of the need for PIP conversation templates to record a review of the progress of previous year’s goals/objectives and targets. The section in the PIP conversation template for reviewing what an employee has done should clearly specify that performance should be formally measured against the previous year’s personal objectives and this should be recorded on the PIP conversation template. The creation of SMART objectives would also make measuring progress easier. OD should arrange training for

2 OD will send line managers a reminder in March 2019 reference the guidance on setting SMART objectives and the need to review these objectives in the next financial year. Refresher training on the Pride in Performance Conversations process will also be arranged. The Conversation template for reviewing what an employee has done will be updated to specify that performance should be measured against the previous year’s personal objectives and this should be recorded on the PIP conversation template.



4

Ref. No.


Implementation Date

outline their contribution to the Council, service and/or specific objectives.

managers on how to develop SMART objectives.

1. Audit noted that as part of the guidance provided to managers and staff that the PIP templates should be signed by both parties but states the signatures “do not indicate both parties necessarily agree with everything on the form; it is an indication of the content of the conversation that took place”

Management should consider making it clear that by signing the PIP template that both parties involved are agreeing to specific actions e.g. working towards specific SMART objectives, arranging training etc.

3 The Pride in Performance Conversation Scheme review will update both the line manager and employee guidance to ensure that these documents make clear that both parties involved are agreeing to specific actions e.g. working towards specific SMART objectives, arranging training etc


2. Currently the PIP conversation is between the employee and his/her direct manager. OD oversee the process and collate the completed PIP conversation templates. There is no countersigning of the PIP form by more senior management or evidence to ensure that any significant achievements or issues are raised with more senior management.

As part of the ongoing review of the PIP process the need to put in place a procedure to ensure senior management is informed of any significant issues raised should be addressed. This may involve countersigning of the PIP conversation template or each direct line manager formally advising more senior management of the outcome of the PIP process for his/her team including discussion of significant achievements and/or significant issues raised. Implementation of an electronic system to manage the PIP process would help limit the time pressure any additional steps in the process would place on management.

3 As part of the current review of the Pride in Performance Conversation Scheme, a process will be introduced whereby senior management are made aware of any significant issues raised. The line manager guidance will be updated to this effect i.e. that managers must make senior management aware of any significant issues raised. An electronic system is currently being considered in terms of capturing and storing the key steps.


4. Testing of 37 PIP conversation documents from 20 staff members revealed that on 12 occasions some form of training had been requested;

Introduce a section or modify the current section within the PIP conversation template so that when training/development is requested,

3 The current review of the Pride in Performance Conversation Scheme will modify the current section within the PIP conversation template so that when training/development is requested,



5

Ref. No.


Implementation Date

this could be general training such as excel or specific training e.g. a diploma in acoustics. On 8 occasions development and/or training was not requested or staff stated that the current support they were receiving was sufficient. The guidance provided with the PIP conversation template states that there is to be an agreement as to which party arranges/sources training, but any actions relating to this are not routinely recorded on the PIP template, leaving a lack of audit trail as to how training needs are followed up. Discussion with OD revealed that they collate all training needs raised as part of PIP and make every effort to address these. The actions taken to address training needs identified are not linked into the following years PIP template leaving a lack of an audit trail as to whether the employees need was satisfactorily assessed and addressed.

actions to be completed are agreed by both parties. Evidence of how training requests are followed up should be retained by OD and discussed and recorded on the PIP template by the relevant manager at the next PIP conversation.

actions to be completed are agreed by both parties. Evidence of how training requests are followed up will be retained by OD discussed and recorded on the PIP template by the relevant manager at the next PIP conversation. The template will be updated to prompt this action occurring.

6. In line with the PIP guidance 6-month reviews should be carried out between

September and November each year. Testing revealed that midyear reviews are not occurring. As returns are not being submitted early in the year; there is not enough time for a 6-month review to take place. Periodic reviews are an important part of any performance process.

Management should review and consider the timing of the process including the 6-month review and ensure that it is not overly formal, complex or time-consuming. (As with the previous recommendation simplifying the templates or considering and electronic system may provide more motivation to complete the original PIP conversation in a timelier manner allowing sufficient time for review during the year).

3 The current review of the Pride in Performance Conversation Scheme will review the timing of the process including the 6-month review and ensure that it is not overly formal, complex or time-consuming. An electronic system would help but would not be feasible by 2019/2020 from a budgeting perspective. An electronic system is currently being considered in terms of capturing and storing the key steps.



6

Ref. No.


Implementation Date

7. As per the PIP guidance managers are required to store their own copies of PIP conversations securely. This is in order to facilitate managers performing a 6-month review. However, 6 months reviews are not currently occurring and discussions with managers revealed that they do not always retain a copy of PIP documentation for themselves and some managers are storing electronic copies of these on their desktop or within outlook. The information contained within the PIP conversation template is sensitive personal information and needs to be securely stored at all times.

OD should remind managers who have retained their own copies of PIP conversation templates of the need to store them securely either keeping hard copies in locked cabinets or if in soft copy following the correct I.T guidelines for storing/saving data. Management should consider removing the stipulation that managers must retain a copy of the completed PIP conversation template until such times as review of the process is in place.

3 The current review of the Pride in Performance Conversation Scheme will review the process from a General Data Protection Regulations (GDPR) perspective and ensure that completed forms are held securely in line with both best practice and legal stipulations. Liaison will occur with the Data Protection Officer and any recommendations actions implemented. Line Manager guidance for the process will also be updated to reflect the importance of GDPR principles and best practice.


Points for the attention of Management In addition to these recommendations additional system enhancements were identified during the course of the audit which do not form part of our formal findings but provide suggested enhancements to support effective controls. These are detailed at Appendix 2


7



8






Risk Key controls

1. ANDBC may not have an adequate performance review policy and procedure, leading to ineffective people management and negative impact on organisational performance

• There is a formal performance review policy and procedure in place that defines:

▪ Measurement (e.g. competencies or targets) against which to assess performance

▪ A process for appraising performance against the targets ▪ A process to provide feedback to individuals on performance ▪ Agreement on actions to enhance ongoing development or address

performance issues ▪ Regular review (e.g. mid-year review)

• Performance review system goals and procedures have been communicated to staff

• Those involved in carrying out performance reviews have received training

2. Performance reviews may not be carried out per the policy and procedures leading to missed opportunities for staff recognition and development, and possible issues of poor performance not being appropriately addressed

• Performance reviews are completed for staff within the appointed timescales

• Measurement targets set are meaningful and measurable and linked to Council objectives

• Actions are identified for further development

• Issues, targets or actions identified in the previous review are reviewed at the next review to ensure they have been progressed

• Reviews are adequately documented using templates/proformas at all stages

• The outcome of the review is agreed by the reviewer and the reviewee, and evidence of this agreement is retained, and counter-signed by the appropriate senior manager.

• Significant performance issues are raised at Head of Service / Director / Chief Executive level as appropriate.

• OD monitors and reviews the consistent use of the performance management process

3. Documentation relating to performance reviews may not be securely maintained resulting in non-compliance with data protection requirements

• All performance review documentation is stored in locked cabinets or secure ANDBC systems accessible only using passwords

• Access to performance reviews is restricted only to those who require it.


9




Level of Assurance

Definition

Satisfactory


Limited


Unacceptable











10


Underperformance – Links between the PIP Process and the Capability Process

The review of the PIP guidance and discussions with OD staff revealed that the Council’s PIP process is not designed to specifically record underperformance issues. Audit was advised that it is expected that these will be addressed by the manager and separate policies and procedures are in place to facilitate this; i.e. Capability Policy and Disciplinary Policy

The capability policy is used to address instances where there is a lack of ability (rather than a deliberate non-performance of duty) and can be triggered by an issue raised in a performance management appraisal setting.

The guidelines for PIP conversations state that underperformance issues will be dealt with via the Capability policy and state that underperformance is outside the scope of PIP.

However, the capability policy states that the first step in addressing an employee’s underperformance is discussion at normal supervision meetings or performance management meetings.

While audit accepts that the PIP process should be viewed as a positive method of encouraging employees; it must be acknowledged that possible underperformance should be discussed and not be viewed as outside the scope of the PIP.

The statement that underperformance is outside the scope of the PIP process may lead to confusion amongst managers and actually undermine the usefulness of the PIP process The PIP process should be seen as a tool for promoting better performance and helping address underperformance; it should not be viewed as separate to the capability policy. Management should ensure that managers and employees understand that PIP is about improving performance, and this involves discussing any issues of underperformance and agreeing how these will be addressed.

Management response: The review of the PIP guidance will be updated to state that underperformance issues may be referred to and any remedial measures discussed. The guidance will also make it clear that there should be, ‘no surprises’ and any underperformance issues should be dealt with in a timely manner throughout the year as these issues arise.


Final December 2018



EXECUTIVE SUMMARY

Area of Review: Planning, Enforcement and Development Control

To: Director of Development, Regeneration

and Planning

Head of Planning

CC: Head of Finance



This report is a confidential internal document intended solely for the use of the above-named

individual(s).


Ards & North Down Borough Council Nov 2018 Planning, Enforcement and Development Control

2

TABLE OF CONTENTS

1. INTRODUCTION ................................................................................................................. 1 2. EXECUTIVE SUMMARY ..................................................................................................... 2 3. STATEMENT OF RESPONSIBILITY .................................................................................. 5 4. AUDIT APPROACH ............................................................................................................ 6

APPENDIX 1 - DEFINITIONS .................................................................................................. 8 APPENDIX 2 – POINTS FOR THE ATTENTION OF MANAGEMENT .................................... 9



1

1. INTRODUCTION This internal audit was completed in accordance with the 2018/2019 Internal Audit Plan. General Audit Objectives Our aim is to provide assurance to Senior Management, the Chief Executive, and the Audit Committee Members on the contribution of control, risk management and governance processes with regards to the Planning Department’s Development Management and Enforcement sections to the achievement of the Council’s corporate objectives. The objective of this review was to form an opinion as to:

1. the level of internal controls in existence with regards to Development Management and Enforcement; and

2. whether or not these controls are operating effectively. The risk identified by Internal Audit with regards to Development Management and Enforcement (against which audit testing was performed) and agreed with management are as follows:

• There is a lack of clarity regarding authority for decision-making and the Planning Committee is not equipped to deal with the decisions being placed before it, leading to poor decision-making and risk of challenge to decisions made.

• Appropriate processes and procedures for dealing with Planning Applications are not adhered to appropriately leading to complaints to the Northern Ireland Public Services Ombudsman in respect of maladministration of the planning service, resulting in associated potential reputational damage to the Council, and award of costs.

• Planning fees are not receipted and lodged in a timely manner leading to increased risk of misappropriation

• Breaches of planning may not be appropriately investigated and resolved leading to reputational damage to the Council



2

2. EXECUTIVE SUMMARY Overall Audit Opinion Please refer to Appendix 1 of this report for the definition and explanation of audit assurance levels and prioritisation of audit recommendations and audit findings. As a result of our audit of Ards and North Down Planning Department’s Development Management and Enforcement sections, we are able to provide the Chief Executive, Senior Management and Audit Committee with the following overall level of assurance:

Satisfactory

Overall there is a satisfactory system of governance, risk management and

control. While there may be some residual risk identified, this should not

significantly impact on the achievement of system objectives.


Risk


1 2 3

1. There is a lack of clarity regarding authority for decision-making and the Planning

Committee is not equipped to deal with the decisions being placed before it, leading

to poor decision-making and risk of challenge to decisions made. - - -

2. Appropriate processes and procedures for dealing with Planning Applications are

not adhered to appropriately leading to complaints to the Northern Ireland Public

Services Ombudsman in respect of maladministration of the planning service,

resulting in associated potential reputational damage to the Council, and award of

costs.

- 1 -

3. Planning fees are not receipted and lodged in a timely manner leading to increased

risk of misappropriation - - -

4. Breaches of planning may not be appropriately investigated and resolved leading to

reputational damage to the Council - - 2



3

Ref.

No.

Finding Recommendation Priority Management Response Responsible

Officer &

Implementation

Date

1 We tested of a sample of 10

applications and found appropriate

management of fees, recording of

information and use of checklists to

monitor progress of the applications.

ANDBC planning team have an internal

deadline to process small household

applications (e.g. extensions) within 8

weeks. 1 of the applications tested did

not met this internal target. There are

also statutory targets for local and

major planning applications, which are

15 weeks and 30 weeks respectively. 2

applications within the sample did not

meet these deadlines.

Audit was advised that there is a traffic

light reporting system in place to

support the monitoring of application

deadlines and approaching deadlines.

Management should consider

performing a review of the planning

process to identify possible blockages

or inefficiencies within current

practices; this should include how

effectively the traffic light system is

currently being utilised to prioritise

applications that are at amber and

red. A standard set of actions to

support the traffic light system could

be developed e.g. when amber visit

site within x days or carry out y action

2 Recommendations are being made to Planning

Committee to enable householder

development approvals which have not

attracted objections to be issued immediately

without need to go through delegated list – this

should enable decisions to be issued faster

and assist in meeting internal performance

targets.

Other targets were impacted upon by delay in

submission by agents of plans/assessments

requested by Planning.

Management is currently working on a Good

Practice Guide to assist applicants/agents in

addressing what information needs to

accompany applications at submission stage

to assist in frontloading and smooth transition

through the processing system.

Identification of issues at validation stage by

staff, rather than later in the system, should

assist in reducing delays later in processing.

MIS reports are to be utilised more by

managers in ensuring site visits are carried out

at appropriate times.

Gail Kerr/Head

of Service

31 March 2019

3 The enforcement strategy states that

complaints need to be acknowledged in

writing or by email within 5 working

days. In one case there was no

acknowledgement letter kept on file

however there was a response email

from the complainant to evidence they

received an acknowledgement letter.

A copy of all acknowledgement letters

should be kept on file.

3 Accepted – to be raised with administrative

staff to ensure compliance

Clare Barker

Immediate


4

Ref.

No.

Finding Recommendation Priority Management Response Responsible

Officer &

Implementation

Date

4 It was noted during testing that

enforcement cases are opened by

entering details onto an enforcement

complaint form. For 1 of the cases

sampled no complaint form was on file

This was because Council decided to

open an enforcement case as a result

of a press query rather than an

enforcement complaint.

The enforcement compliant contains all

the key details of each enforcement

case and is the key reference document

when processing the enforcement

case.

All enforcement cases should be

opened with the use of a complaint

form and these should be kept on file.

3 Accepted – to be raised with administrative

staff and enforcement staff to ensure

compliance

Clare Barker

Immediate



5



6






Risk Key controls

There is a lack of clarity

regarding authority for

decision-making and the

Planning Committee is not

equipped to deal with the

decisions being placed

before it, leading to poor

decision-making and risk of

challenge to decisions made

• A Protocol / terms of reference has been developed for the

Planning Committee

• Council has published a Scheme of Delegation

• Planning Committee members have received training in relation

to planning decisions

• Planning Committee receives sufficient information to enable

effective decision-making

• Planners’ opinions are scrutinised and carefully considered by

the Planning Committee

• There is a clear procedure for dealing with conflicts of interest

Appropriate processes and

procedures for dealing with

Planning Applications are

not adhered to appropriately

leading to complaints to the

Northern Ireland Public

Services Ombudsman in

respect of maladministration

of the planning service,

resulting in associated

potential reputational

damage to the Council, and

award of costs.

• There are clear procedures in place for Planners and

administration staff covering planning applications and

collecting fees / issuing refunds

• Applications are approved by the appropriate person under the

Scheme of Delegation (Committee or Officer)

• The correct planning fee has been paid

• The planning fee checklist has been correctly completed to

verify that the correct fee has been paid

• The fee paid, and checklist matches the fee per the planning

portal

• Any overpayments are clearly identified and returned to the

applicant in a timely manner

• Applications are dealt with within the specified timescales

• Statutory consultees respond to applications within the required

21 days

• There are adequate procedures to identify the required

‘neighbours’ in order to meet neighbour notification

requirements

• Adequate records of telephone calls, meetings and Councillor

enquiries relating to the application are kept on file and recorded

in the portal

• There is adequate segregation of duties in relation to the issue

of refunds, and the correct amount is refunded if applicable

• Income is correctly deferred and released as the application

reaches the relevant stage of progress

Planning fees are not

receipted and lodged in a

timely manner leading to

increased risk of

misappropriation

• Post is opened by more than one officer to prevent

misappropriation

• Monies received by post are fully recorded

• Fees paid are held securely until lodgement

• Fees are lodged in a timely manner

• Lodgements are checked, authorised and accurately recorded

• Fees are correctly recorded in Council’s finance system


7

Risk Key controls

Breaches of planning may

not be appropriately

investigated and resolved

leading to reputational

damage to the Council

• An appropriate enforcement policy and procedure is in place

and available to planning staff

• Council publicise how the public can make complaints relating

to breaches of planning

• Complaints are acknowledged in writing (or by email) and a

case reference created within five working days of receipt

• Reasons for decisions are clearly recorded

• Breaches of planning are resolved through negotiation in line

with the remedies available under the Enforcement Strategy; or

• if enforcement action is necessary; a group decision is recorded,

and action taken expediently

• Enforcement action is taken in line with legislative

timescales/priorities set out in the Enforcement Strategy

• When there is a clear-cut breach of planning control which is

causing immediate harm, Council issues a Stop Notice or

Temporary Stop Notice

• Council make the public aware of the appeals process

• Council is provided with regular updates on enforcement cases


8




Level of

Assurance

Definition

Satisfactory

Overall there is a satisfactory system of governance, risk management and

control. While there may be some residual risk identified, this should not

significantly impact on the achievement of system objectives.

Limited

There are significant weaknesses within the governance, risk management

and control framework which, if not addressed, could lead to the system

objectives not being achieved.

Unacceptable

The system of governance, risk management and control has failed or there

is a real and substantial risk that the system will fail to meet its objectives.


Priority 1

Failure to implement the recommendation is likely to result in a major

failure of a key organisational objective, significant damage to the

reputation of the organisation or the misuse of public funds.

Priority 2

Failure to implement the recommendation could result in the failure of an

important organisational objective or could have some impact on a key

organisational objective.

Priority 3

Failure to implement the recommendation could lead to an increased risk

exposure.


Audit Finding

Definition

System Issue The absence of a control/ process/ procedure that could reasonably be

expected to be present.

Compliance Issue The identification of instances of non-compliance with an existing control

measure.


9


Planning Appeals

The council do appropriately make the public aware of the appeals process in a number of

ways; including putting information on the Ards and North Down Borough Council website.

However, it may be useful if a link to the Planning Appeals Commission website

(https://www.pacni.gov.uk/) were to be included in the Ards and North Down Borough Council

website within the planning section.

This would make the website more user friendly and provide a quick link so that users can

either make an appeal or search for an update of an appeal without calling Ards and North

Down Borough Council in the first instance.

Management response: Currently letters are issued to accompany refusals which advise

recipients that the decision can be appealed to the Planning Appeals Commission with

relevant details. Management accepts that it would be useful to include a blurb and a link

to the relevant website to advise both recipients of refusals, but also recipients of

approvals, as conditions can also be appealed. Management will seek to do this by end of

Qtr 4 2018/19

https://www.pacni.gov.uk/


Final October 2018



EXECUTIVE SUMMARY

Area of Review: Travel & Subsistence

To: Head of Finance

Payroll Corporate Accountant

CC: Director of Finance & Performance




Ards & North Down Borough Council October 2018 Travel & Subsistence

TABLE OF CONTENTS

1. INTRODUCTION ................................................................................................................. 1 2. EXECUTIVE SUMMARY ..................................................................................................... 2 3. STATEMENT OF RESPONSIBILITY .................................................................................. 5 4. AUDIT APPROACH ............................................................................................................ 6 APPENDIX 1 - DEFINITIONS .................................................................................................. 7

APPENDIX 2 – POINTS FOR THE ATTENTION OF MANAGEMENT .................................... 8



1

1. INTRODUCTION This internal audit was completed in accordance with the 2018/2019 Internal Audit Plan. General Audit Objectives Our aim is to provide assurance to Senior Management, the Chief Executive, and the Audit Committee Members on the contribution of control, risk management and governance processes with regards to Travel and Subsistence to the achievement of the Council’s corporate objectives. The objective of this review was to form an opinion as to:

1. the level of internal controls in existence with regards to Travel & Subsistence; and 2. whether or not these controls are operating effectively.

The risk identified by Internal Audit with regards to Travel & Subsistence (against which audit testing was performed) and agreed with management are as follows:

• Travel and subsistence claims may not be completed, approved and recorded accurately leading to incorrect or unapproved payments.

• Incorrect tax and national insurance deductions may be calculated and applied to travel and subsistence claims, leading to underpayment of relevant tax and national insurance and possible reclaiming of sums owed by the tax authorities.

• Mileage claims may not be reviewed on a regular basis in relation to essential car users leading to additional and unnecessary costs to the Council.

• Claim documentation may not be securely stored which could lead to increased risk of non-compliance with GDPR.



2

2. EXECUTIVE SUMMARY Overall Audit Opinion Please refer to Appendix 1 of this report for the definition and explanation of audit assurance levels and prioritisation of audit recommendations and audit findings. As a result of our audit of Ards and North Down Travel and Subsistence, we are able to provide the Chief Executive, Senior Management and Audit Committee with the following overall level of assurance:

Satisfactory


A complete and detailed record of audit findings and recommendations may be found at Sections 3 - 4 of this report. Through our audit we found the following examples of good practice:

• Consistent and thorough checking of travel and subsistence claims by Finance staff prior to processing, has resulted in high levels of accuracy in the payment of travel and subsistence expenses to staff and Councillors.


Risk


1 2 3

1. Travel and subsistence claims may not be completed, approved and recorded accurately leading to incorrect or unapproved payments.

- 1 1

2. Incorrect tax and national insurance deductions may be calculated and applied to travel and subsistence claims, leading to underpayment of relevant tax and national insurance and possible reclaiming of sums owed by the tax authorities

- - -

3. Mileage claims may not be reviewed on a regular basis in relation to essential car users leading to additional and unnecessary costs to the Council.

- 1 -

4. Claim documentation may not be securely stored which could lead to increased risk of non-compliance with GDPR

- - 1



3

Ref. No.


Implementation Date

1. The Council is currently operating under legacy policies and two different methods of processing claims, one is manual, and the other is an electronic system called Transfare. Audit was advised that there is currently a paper in draft format which continues to be developed. This paper will form the basis for a single Ards and North Down travel & subsistence policy once it is completed and has been reviewed by the necessary departments and committees. Audit was also advised that a new online system “Core2” is being implemented for processing all claims which is to be in place for 01/04/2019.

ANDBC should finalise a single travel & subsistence policy as soon as possible and implement a single method of processing claim submissions, either electronically or manually.

2 A first draft of the key issues for decisions in relation to a new travel & subsistence policy has been drawn up for discussion with CLT, HoST and SUMS. Once this has been reviewed and instruction given a clearer path for the policy will become evident. It is hoped the draft policy will proceed through the necessary stages to be implemented for 31/03/2019.

Stephen Grieve & 31/03/2019

3. A review has not been carried out within the new Council to determine whether staff are classified correctly as either casual car users or essential car users. Audit found that the Head of Finance is currently gathering information and statistics on travel and subsistence (as part of the paper referred to in Issue 1.) and that as a result any issues revealed (including inaccuracies relating to essential/non-essential car users) will be addressed.

Consideration should be given to prioritising the update of essential car user status to ensure eligibility is being correctly applied given changes that may have occurred in staff roles and locations of work.

2 Establishing the criteria that should be used to determine whether a post is essential user is one of the key issues to be decided upon in establishing the new policy. The review of the key issues draft document by CLT, HoST and SUMS will give clear direction regarding the essential user issue.

Stephen Grieve & 31/03/2019

2. In line with Council procedures fuel receipts are required from staff to support VAT claims submitted to HMRC. Audit was advised this is not always enforced i.e. not every claimant provides a fuel receipt. From a sample

Finance should ensure that fuel receipts are provided in support of all fuel expense claims.

3 Reminders are sent with requests to submit Transfare claims and this has been highlighted in recent emails.

Stuart Waring & Immediate


4

Ref. No.


Implementation Date

of 16 Transfare claims reviewed during testing audit found that there were no fuel receipts provided.

4. Cabinets in which employee information is stored are not always locked, although rooms in which the cabinets are located are locked at the end of the working day. Not keeping personal data in locked cabinets increases the risk of unauthorised access to employee data and/or theft.

All documentation containing personal information on employees or councillors should be stored in a secure manner.

3 The offices in which the files are held have staff present during office hours and the offices are locked in the evenings. The lever arch files containing personal employee or councillor information will be stored in a locked filing cabinet.

Stuart Waring & Immediate



5



6






Risk Key controls

1. Travel and subsistence claims may not be completed, approved and recorded accurately leading to incorrect or unapproved payments.

• The Council has a travel and subsistence policy which has been distributed to all staff and Councillors

• Claims are accurately completed, calculated and submitted in a timely manner

• Receipts are approved and submitted when required

• Amounts claimed for are considered reasonable (e.g.+ shortest route claimed, car sharing where more than one person goes to the same place)

• All claims are approved by the relevant manager prior to processing the payment of expenses

• Claims are accurately input and processed onto the finance and payroll systems

• Duplicate travel and subsistence claims have not been submitted and paid in a previous claim

2. Incorrect tax and national insurance deductions may be calculated and applied to travel and subsistence claims, leading to underpayment of relevant tax and national insurance and possible reclaiming of sums owed by the tax authorities

• Income tax and employee’s/employer’s national insurance are correctly calculated for each claim

• Councillors are taxed appropriately on mileage between home and the Council’s main offices, in line with staff business mileage rules (per the new statutory treatment).

3. Mileage claims may not be reviewed on a regular basis in relation to essential car users leading to additional and unnecessary costs to the Council.

• Standard distances are used for calculating mileage

• Rates used to calculate mileage are in line with Council Policy

• Evidence that total mileage travelled by staff has been considered by management in relation to essential and non-essential car users with a view to reducing overall travel costs of the Council

4. Claim documentation may not be securely stored which could lead to increased risk of non-compliance with GDPR

• Any hard copy documents relating to travel, and subsistence claims are retained in locked cabinets; accessible only to appropriate staff

• Software systems used to process travel and subsistence claims are log-in and password protected and only accessible to relevant staff


7




Level of Assurance

Definition

Satisfactory


Limited


Unacceptable











8


Deadlines for submission of Travel and Subsistence Claims

During the testing of travel and subsistence claims audit noted the deadline of submission of monthly claims is not being enforced. Audit was advised that the key deadline enforced is submission of the relevant travel and subsistence claims before the end of the financial year. While there is no significant risk attached to this approach it may lead to time pressure on staff if an influx of claims is required to be processed at the year end. If management feel that a monthly deadline is too frequent; perhaps a quarterly deadline could be introduced and enforced instead, in order to avoid a build-up of claims to be processed.

Management response: The legacy North Down policy does require submission within 3 months and this is being enforced to legacy North Down staff. The legacy Ards policy does not have a time limit. The new policy will establish what time limit will be applied going forward. One suggestion is that as long as the claim is submitted in time to be accrued into the correct financial year then this would be acceptable e.g. normal claim submission cut off is the 5th of the month following the relevant month so March claim due by 5th April – hence April’17 claim could be submitted by 5th April’18 and paid in April’18 payroll yet still accrued into correct 17/18 year.

Checks for potential duplicated claims

Audit was advised that when the manual method is used to submit a travel and subsistence claim that the finance officer manually checks that it has not been previously claimed, to reduce the risk of duplicates, However, no record is retained of this check. We were also advised there is a potential for the same claim to be entered twice on the Transfare electronic system and to address this a manual check is performed by Finance by viewing previous claims and comparing to the most recent claim. However, no record is retained for this check. A record of these checks should be retained; or if Council decides to proceed with the new “core2” electronic system for processing travel and subsistence claims then they should ensure that the system has appropriate checks in place to prevent duplicate claims.

Management response: The Core2 expense package will be in place by 01/04/2019 and will have online duplicate journey checks in place. The potential for duplicate journey claims will be reviewed when the new Core2 system is implemented.

Unclassified

Page 1 of 2

ITEM 9a





Responsible Director Director of Organisational Development and Administration


Head of Administration


File Reference AUD 02

Legislation Local Government (Accounts and Audit) Reguslations 2015



Subject Corporate Risk Register - Update

Attachments Corporate Risk Register ver 10, December 2018

As members will be aware, the Corporate Risk Register (CRR) is a live document which is amended as required to reflect new or changing risk factors. The Register has been reviewed by Heads of Service and the Corporate Management Team. There are no substantive changes. The CRR has been updated to reflect the current status of controls with associated amendment, or adjustment, to Risk evaluations and any further actions required. Completed actions have been removed. Updates within Version 10, December 2018 CR1 Updated to reflect the extension of the Corporate Plan to March 2020. CR2 Amended to reflect that the review of Pride and Performance

conversations process has been completed and the Behaviour Charter has been agreed, with training completed and guidance produced.

On review of the overall risks and controls identified, the Residual Risk has been reassessed with the impact reduced from a factor of 4 to 3 reducing the overall risk from 12 to 9.

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CR3 The Annual Performance Improvement Plan is now in place. On consideration of all the risks and controls in place the Residual Risk has been reassessed. It was considered that the potential likelihood of a risk of this nature occurring had been slightly underestimated given the breadth and complexity (including external factors) of this risk. The likelihood increased from a factor of 2 to 3, increasing the overall residual risk from 6 to 9.

CR4 A reassessment of the Emergency Planning support services is planned following completion of the new sub-regional structures.

CR5 A minor amendment was included to reflect the existence of both Internal and External Equality Screening Panels. The Integrated Tourism, Regeneration and Development policy consultation has completed; the Policy is now in place.

CR6 No amendments. CR7 Following the introduction of the General Data Protection Regulations (GDPR) in May 2018 the need for an audit of the implementation of the

requirements of these regulations has been identified. CR8 No amendments. CR9 One minor amendment, the action to commence work on the new

Corporate Plan has been removed following the decision to extend the plan to March 2020.

CR10 No amendments. CR10(a) No amendments. CR11 No amendments.

RECOMMENDATION It is recommended that the amend Corporate Risk Register be noted.

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ITEM 9b





Responsible Director Director of Organisational Development and Administration


Head of Administration


File Reference SOA1

Legislation Local Government Act (Northern Ireland) 2014

Local Government Finance Act (Northern Ireland) 2011

Local Government (Accounts and Audit) Regulations (Northern Ireland) 2015


Subject Statements of Assurance

Attachments

In accordance with the Council’s Risk Management Strategy Heads of Service are required to provide Statements of Assurance. Assurance Statements comprise 4 main sections to be completed by each Head of Service following consultation with each of their Service Units. The Statements are then signed off by Directors and serve, inter alia, to assist the Chief Executive in preparing the annual Governance Statement in accordance with Government Regulations. At the time of writing not all Statements of Assurance have been received. Any significant issues arising out of the remaining statements will be reported to the March meeting of the Audit Committee.


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Findings General – Identification of Risk, Monitoring and Control measures Services have identification principal risks with associated controls in place with other actions, taken or necessary, identified. Where appropriate, new, outstanding or in-progress actions are included within Service Plans. Section 1 – Strategic and Operational Risk Management The Waste and Cleansing service has identified an external risk with potential significant financial risk to the Council should the bidding process for the Residual Waste Treatment project collapse. The procurement of waste management services is undertaken by Arc21 however the outstanding issue revolves around the planning status that remains in limbo due to the current status of the NI Assembly. Section 2 – Internal Control Generally, there are no key issues arising to cause significant concern requiring immediate action. In the main Services have identified sources of control and actions required or in progress. Progress on Internal Audit findings is reported to Committee separately although they are reflected in the Assurance Statements. The Finance Service have identified that both staff attendance and the absence of formal policies along with associated procedures are matters which are negatively impacting on service work load. Progress is being made with the drafting of some policies whilst legacy policies and procedures operate in the interim. Section 3 – Governance The Community and Culture service has highlighted the potential loss of the Citizens Advice Bureau (CAB) for Ards and North Down. The CAB is applying to Advice NI for support with the application process monitored by officers before recommending the extension of the existing contract. A number of Direct Award contracts have been noted. Of the contracts valued between £3,000 and under £30,000 the majority have arisen due to the provider being a sole supplier without a breach of the procurement policy. Single Tender actions (>£30k) are are reported separately through a separate procurement report. Direct Award Contracts >£3k-£30k The following direct awards have been declared:

Community & Culture

• Beesafe (c/o AND) £10,000

• Youth for Christ Football Cage £14,000

• NDA Women’s Aid One Stop Shop £17,000

Tourism

• £8,000 - Earl of Pembroke Tall Ship, Gerry Brennan. Approved by Council.

Regeneration

• WiFi for Bangor and Holywood extended to March 2019. DfC funding, upon which this provision is dependent, has not yet been confirmed.

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Section 4 – Miscellaneous No issues reported.

RECOMMENDATION It is recommended that this report be noted.

ARDS AND NORTH DOWN BOROUGH COUNCIL · 2015 Section 75 Compliant Yes ☐No Not Applicable ☒ ......

Documents

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