Audit Committee Papers Reveal Shortcomings of One Barnet Outsourcing Advisors

Barnet's Audit Committee will be considering Internal Audit work on Monday. In the Exception Report Internal Audit give a "Limited" Assurance rating on the client side of outsourced legal services (page 18). The three Priority One findings they identified are as follows:

Contract Management - The review identified areas where the client side management of the Joint Legal Service (JLS) contract could be strengthened. There is currently no Contract Manager in place. The Contract Manager post for the JLS will form part of the Commercial arrangements, as part of the retained organisation. However this recruitment process has been delayed since September 2012.

 Risk Management -The review found areas where the client side risk management controls could be improved. The Inter Authority Agreement clearly sets out the risk management procedure which the JLS should maintain in the delivery of the service. However, the absence of a Contract Manager may result in this process not operating effectively in practice. Risks noted within the project prior to go ‘live’ were not transferred internally for those retained risks identified.

Benefits Realisation - The review found that there was no documented process in place for ensuring that the cost, quality and effectiveness benefits, set out in the original business case, were regularly monitored and managed to ensure that they are fully realised. The review was unable to identify a nominated person responsible, in the absence of a Contract Manager, for the ongoing monitoring, management and realisation of benefits. The review also found that there were no documented baseline figures for the benefits to be monitored against.

Personally, I find it unacceptable that a service which was outsourced last September still has such fundamental client side short comings. Where were the advisors and why didn't they flag this up as an issue? Getting the client side functions in place is critical to the successful management of  any outsourced service. The fact that Barnet cannot measure whether benefits are being realised appears to undermine the entire rationale for outsourcing.  If these mistakes are repeated with the NSCSO and DRS contracts it could be an absolute disaster. But hang on a minute....

It is also interesting to note that while not an "Assurance Reports" and therefore no receiving an "assurance" rating there were two management reviews undertaken; one into the KPI's of the NSCSO contract and one for the DRS KPI's.We do not see copies of these reports however, the following summary is included on page 24 of the exception report:

NSCSO and DRS key performance indicators – a number of key performance indicators included to measure the success of both contracts were not robust in terms of data quality. For example, policies and procedures governing the collection of data were not in existence, some targets did not have baseline data, some data was inaccurate, and some of the source data was not adequately

protected from data loss or data error. These reviews were a proactive audit requested from the projects to ensure that any issues could be rectified pre-contract sign. 

Given that the only reason these contracts haven't been signed yet is because of the Judicial Review, perhaps Barnet should be thanking Maria Nash for helping them to avoid yet another cock up.  However, I am also left wondering how such fundamental shortcomings can arise on such a heavily resourced project that has paid millions to consultants an lawyers to avoid exactly these sorts of problems. Frankly I think this demands a an immediate independent review as it may expose many more shortcomings in these two massive outsourcing projects. Richard Cornelius may brand people like me "whingers" but when you read reports like this it is hardly surprising people are concerned.