Agenda item

To receive a report informing the Committee of the intended future arrangements for the provision of Internal Audit services. In line with the Committee’s terms of reference, the report seeks the Committee’s comments.

A report by the Head of Democratic Services and Monitoring Officer was submitted (a copy of which is appended to the Minute Book) setting out the intended future arrangements for the provision of Internal Audit services. In line with the Committee’s terms of reference, the report sought the Committee’s comments.

The Head of Democratic Services and Monitoring Officer introduced the report and invited questions from the Committee.

The Committee commended the work of RSM, who had helped give it more assurance since they undertook the Council’s Internal Audit function, however it raised a question over the procurement process that had been followed. Members discussed the respective merits of a direct award compared with market testing and the need to achieve value for money.

In response to the comments raised, the Chief Digital Information Officer advised that the options in regard to the procurement of an Internal Audit Partner were considered in full by the Corporate Leadership Team, as well as the procurement routes available, and it was felt that the YPO Managing Consultancy and Professional Services Framework Agreement provided a level of assurance and protection that ensured the Council remained compliant with Procurement legislation. There was value in the continuation of an Internal Audit function who was experienced and understood the organisation, and it was felt having a period of induction for a different provider would provide a greater risk. Whilst he agreed that under normal circumstances a competitive tender process would be attractive, it was felt that the grounds for a direct award with those assurances from the Framework was the safest and best route to ensure a continued Internal Audit function was in place. The Democratic Services Manager and Monitoring Officer advised that in line with the Council’s process, this decision had been taken via a procurement board and specialist advice had been taken in order to ensure the Council was compliant with procurement legislation. Officers had looked at providing value for money and the risks associated with a change of provider had been considered. On balance, it was considered that continuing with RSM posed the lowest risk to the Council in order to meet governance requirements.

Concerns also were raised regarding the timing of the report in light of the terms of the existing contract with RSM. Though RSM would have been well placed to win a contract on points, it was felt that this should have been tested through a process where the market and best value for money could be tested. The Chief Digital Information Officer advised that the discussion on the arrangements was held by the Corporate Leadership Team on 26^th January.

In response to a question from the Committee, the Head of Democratic Services and Monitoring Officer advised that within its terms of reference the Committee could provide comment, and the delegation with respect of the appointment sat with the Corporate Director - Finance & Resources. The Committee expressed its disappointment around the process. While it was able to express an opinion and make a recommendation it was not able to influence the decision. In the circumstances, Members felt that the Chair should have been consulted and involved in the discussions.

In response to a question from the Committee regarding if the direct award required a mandatory standstill period, the Head of Democratic Services and Monitoring Officer advised that she would take the question away and provide a written response.

The Chair expressed his frustration that there was little the Committee could do other than note the recommendation, given the short time before the contract with RSM came to an end, and that he had not been privy to the discussions. He requested that the comments from the Committee be fed back to Officers.

The Executive Councillor for Governance and Democratic Services noted the comments of the Committee around the process undertaken and reiterated the advice that guidance had been sought. She advised that would speak with Officers outside of the meeting reflecting on the comments made by the Committee.

Whereupon, it was

RESOLVED

that the Committee noted and commented on the future arrangements for Internal Audit as outlined in the report.