Issue - meetings

To approve the Business Case for the Shared Audit Service between Huntingdonshire District Council, Cambridge City Council and South Cambridgeshire District Council.

To not proceed with the Business Case for the establishment of a Shared Audit Service, for the matter to be considered at a later date.

By way of a report by the Head of Resources (a copy of which is appended in the Minute Book) the Cabinet considered the Business Case for the Shared Audit Services between Huntingdonshire District Council, Cambridge City Council and South Cambridgeshire District Council.

It was explained that the rationale for the establishment of the Shared Audit Service differed to those Shared Services that had previously been agreed between the three partner Councils as it provided the opportunity to deliver a more resilient and responsive service rather than the generation of savings being the main focus. The employing authority for the Shared Audit Service would be South Cambridgeshire District Council.

The opening staff budget for the Shared Audit Service would be circa £425k combining the 2016/17 staffing budgets for the three authorities.  The ratio of the budget contribution initially for the Council would be 40%, formed by the saving distribution and additional costs incurred, if any, such as redundancy, pay protection and savings of £51.9k had been targeted for 2017/18.

The Shared Audit Services would generate a minimum saving target of 11% of net revenue budget. In the first year there would be the requirement for the Council to contribute £10k to the initial set-up costs, which would be met from the Special Earmarked Reserve and reimbursed within a year.

The governance principles and decision-making processes in existence at the three Councils would remain, meaning that Internal Audit matters at Huntingdonshire District Council would continue to be reported to the Corporate Governance Committee.

The Shared Audit Service, including a new Senior Audit Manager post, was expected to be in operation from April 2017.

At 7.08pm, Councillor S Cawley entered the meeting.

Having been invited to address the Cabinet, the Chairman of the Corporate Governance Committee presented its recommendation to the Cabinet, the matter having been considered by the Committee at its meeting on 27 September (Minute No.27 of the Corporate Governance Committee refers).

It was explained that the Committee were concerned as it appeared that the decision had already been made and the report and Business Case prepared to fit the decision.

All Members of the Committee except one had expressed an opinion on the matter and there was consensus that the Council had a high quality audit service that could be diluted with the requirement to support the other local authorities within the Shared Service Partnership.

At 7.10pm, Councillor D Brown entered the meeting.

The Chairman of the Corporate Governance Committee noted that the Executive Councillor for Strategic Resources had stated that the 3C Shared Service Partnership arrangement would not be allowed to affect the sovereignty of the Council.  However, it was felt that the decision to proceed with the Shared Audit Service would have a profound effect long-term on the sovereignty.

The Committee were also concerned that the decision to proceed with a Shared Audit Service would affect the efficiency and morale of staff and to date there had been no consultation with affected staff.  Currently the Internal Audit  ...  view the full minutes text for item 48

To present the Business Case for the Shared Audit Services between Huntingdonshire District Council, Cambridge City Council and South Cambridgeshire District Council.

The Committee considered a report by the Head of Resources (a copy of which is appended in the Minute Book) to which was attached a Business Case to establish a Shared Internal Audit Service between the Council, Cambridge City and South Cambridgeshire District Council. Attention was drawn to an update in the level on savings identified in Appendix 2 of the Business Case, whereby the figures had been amended for Cambridge City to £24,546, Huntingdonshire to £21,337 and South Cambridgeshire to £6,336 to bring them in line with the protocol utilised for the identification of savings in accordance with the previous shared service models.

The Head of Resources advised the Committee that the employing authority would be South Cambridgeshire District Council for the Shared Audit Service (SAS) and drew Members attention to Appendix A of the report that highlighted the benefits of the proposal. The savings identified had been targeted at £51.9k for 2017/18 and the Council’s liability for the initial set up costs would be £10k to be funded from Special Earmarked Reserves.

Arising from a comment from Councillor Mrs S Conboy on the high level of non-productive time recorded, the Internal Audit and Risk Manager confirmed that the level had been high across the three authorities and advised Members of how the target to reduce levels by March 2019 would be achieved. Councillor Mrs Conboy further highlighted her concerns with the proposal urged that consideration be given to prioritisation of the Council’s risks, together with allowance of a ‘break clause’ in the contract.

In response to a question from Councillor Ms L A Duffy on why South Cambridgeshire had been nominated as the employing authority, the Head of Resources had confirmed that they had put themselves forward for the role. Councillor Ms Duffy further drew attention to the suggested resilience that would ensue with the SAS and reported upon her concerns that the high quality of audit service that the Council had currently supplied could be diluted with the requirement to support the other local authorities. The Head of Resources confirmed that when the Council had entered into an agreement to share services with the other authorities it had been considered that the Internal Audit Service would be a prime service to share, creating greater resilience but not necessarily generating savings.

Councillor T Hayward commented upon his concerns for not being the lead authority and how the SAS may not have the advantage of understanding how the Council works and functions, comparing such a scenario to External Audit if the service is extended further to include Peterborough City Council. The Head of Resources confirmed that there had been no proposals to include Peterborough and had expected the level of internal audit service provided to be of the standard that is currently being provided.

Councillor D Dew referred to the previous services that had been implemented as a shared service at the authority and commented that the Council currently had no evidence to support the success of these services  ...  view the full minutes text for item 27