Internal Audit Give Barnet Limited Assurance Rating - it goes from bad to worse

The forthcoming Audit Committee papers have been published and it doesn't make for pleasant reading. All the reports are all here  In particular the Internal Audit Opinion is damning with only a limited Assurance rating, something the Council has not received since 2010/11. It includes statements like:

• There has been a weakening of the organisation’s control framework, with an increasing number of findings which demonstrate weaknesses and non-compliance in the framework of governance, risk management and control;

• An increasing number of high risk and medium risk findings relate to the financial management practices in place at the Council, specifically those around income and expenditure monitoring;

• Roles, responsibilities and reporting lines were not consistently defined or understood, leading to gaps in delivery and oversight;

• Data quality and integrity issues were noted across some areas at the Council, particularly regarding Pensions, HR, Section 106 and CILs. In the absence of strong data management and analysis, governance is weakened because the ability of senior staff and Members to scrutinise performance is reduced.

• Statutory and internal deadlines for activity were met, increasing the Council’s potential liability for additional fees and charges, and legal sanctions and reducing the extent to which its own enforcement activity can be carried out;
• We noted issues with the performance of key employment checks including DBS and right to work checks, which could lead to fines, legal action and reputational damage;
• Key health and safety checks relating to water safety were not carried out in line with required statutory timescales;

There are many more. I have already submitted my questions as set out below. We will, as always, 

have to wait and see if any of them actually get answered. I'm not hopeful but they are questions that must be asked.

1. Who decided that Appendix 1 should be exempt and was it at the request of an officer, a member or Capita?
2. You are stating Appendix 1 is exempt under paragraph 3, Part I, Schedule 12A Local Government Act 1972 which relates to financial or business affairs yet this report is about a failure of that financial or business performance. As such publishing the report may inform decisions being taken on the 19 July at the Policy and Resources committee. Please could you provide a copy of the public interest test that was undertaken before deciding that this report should be exempt?
3. Given that all of these events outlined in the report happened on the CEO’s watch, that the CEO is a Board Director of Re and that the CEO was the S151 Officer when the Capita and Re contracts were being decided, how can the CEO ensure that he is perceived as the right person to lead the council going forward?
4. Given that Grant Thornton were the Council’s external auditors when the CSG and Re contracts were let and that they may have reviewed the financial controls at that time or during the 2013/14 or 2014/15 audit, to what extent do you think this might be perceived as a conflict of interest and were any other accountancy companies considered to carry out this work?
5. The report states “We also noted a decrease in the extent to which staff were willing to engage with audit requests and provide deliverables in a timely manner. This led to prolonged periods of engagement in the case of some audits and an increase in audit delivery costs.” Were there any particular departments or delivery units where this was more prevalent and what would you say was the cause of this unwillingness to engage with Internal Audit?
6. It appears that a culture of ignoring the central guidance has developed with individual departments making their own decisions. What has caused this culture to develop and how do you think that culture can be changed?
7. As all of the items listed in this report have been flagged before in quarterly reports, it cannot come as a great surprise to you that the council has been given a limited assurance rating. What reassurance can you provide to me that this will get better given the senior management team when these events occurred are still in place?
8. The report states “There are significant weaknesses and noncompliance in the framework of governance, risk management and control which put the achievement of organisational objectives at risk” To what extent do you think this committee has to accept some of the blame for this situation and if so what do you think this committee could do better in the future?
9. The governance statement appendix B mentions best practice. Best practice suggests that “the audit committee chair should not be, expressly, a member of the executive. A non-executive chair is important in order to promote the objectivity of the audit committee and to enhance its standing in the eyes of the public”. Given that Cllr Finn is, or was until recently, the Chief Whip of the Conservative Group, please provide evidence as to how you believe there is a genuine separation from the Executive, that is both clear and perceived to be clear by residents, opposition and independent members?
10. Can you please clarify if monitoring CSG and Re for fraud is within the terms of reference of the CAFT team. What discussions have taken place with Capita’s own internal audit/investigation team about this situation, why did they not identify this fraud and to what extent should or could CAFT take responsibility for investigating CSG and Re going forward?