Members were asked to consider whether they had any disclosable pecuniary interests and/or any other relevant interest in connection with any item(s) on this agenda and, if so, to declare them and state what they were.

No such declarations were made.

The Committee was requested to approve the accuracy of the minutes of the meeting of 11 March 2019.

Resolved – That the minutes of the meeting of 11 March 2019 be approved as a correct record.

Mark Niblock, Chief Internal Auditor introduced his report that provided Members of the Committee with the outcome from two Internal Audit reviews undertaken into the effectiveness of systems in operation at the Council for the ‘Verification of the Validity Supplier VAT Registration Numbers’ and the ‘Appointment / Employment of Agency Workers’.

The Audit and Risk Management Committee was apprised that in February 2019 the Director of Governance and Assurance had commissioned Internal Audit to undertake detailed reviews, to provide management with assurances regarding the efficiency and effectiveness of the systems in operation at the Council in the area detailed in the Chief Internal Auditors report.

The Chief Internal Auditor informed that the review relating to the verification of the validity of supplier VAT registration numbers had been completed and the key findings were that:

• The Council had a system in place for inputting VAT registration numbers that satisfied the requirements of HMRC;

• The system in operation at the Council was consistent with the approach adopted by the majority of Councils across the North West of England and advice and guidance provided by professional bodies and organisations;

• Testing undertaken during the audit review identified a number of potentially incorrect VAT Registration Numbers that required further investigation by the Council and possible reporting to HMRC, pending the outcome; and

• A number of actions for consideration by senior managers had been identified that would further strengthen arrangements in this area for the future.

The Chief Internal Auditor further informed that the review relating to appointment/employment of agency staff had been completed and the key findings were that the Council should undertake the following:

• Ensure that a more robust procedure/process was in place when considering and appointing agency staff;

• Strengthen controls for monitoring and managing agency / interim workers;

• Improve Contract Procedure Rules compliance when appointing agency/interim workers outside of the corporate contract;

• Ensure that an agreement (in the form of a contract or service level agreement) was always in place when appointing an agency / interim worker outside of the corporate contract;

• Strengthen controls over determining and communicating IR35 status when the corporate contract had not been utilised; and

• Improve the process of raising purchase orders and subsequent payment of invoices, for agency workers appointed outside of the corporate contract.

Members noted that the Chief Internal Auditor’s report had resulted in recommendations to improve and develop systems of control currently in operation.

Members stated that this matter continued to be of extreme public interest and questioned the Director of Finance and Investment and the Head of Human Resources on concerns regarding issues raised in the Chief Internal Auditors report, namely:

• Issues of confusion arising from combining discussion on the employment of key people i.e. consultants, and the use of agency workers – these elements needed to be disentangled to allow clarity.

• Extreme concern over the use of consultants paid in excess of £500 per day, Members expressed a wish that before such appointments were made there should be Member oversight either via a  ...  view the full minutes text for item 73.

The following item contains exempt information.

RECOMMENDATION – That in accordance with section 100A (4) of the Local Government Act 1972, the public be excluded from the meeting during consideration of the following item of business, on the grounds that it involves the likely disclosure of exempt information as defined by paragraph 1 of Part 1 of Schedule 12A (as amended) to that Act. The public interest test has been applied and favours exclusion.

Under section 100 (A) (4) of the Local Government Act 1972, it was proposed from the Chair that the press and public be excluded from the meeting during consideration of the following item of business (Forge House Associates) on the grounds that they involve the likely disclosure of exempt information as defined by paragraph 1 of Part I of Schedule 12A (as amended) to that Act.

Following advice from the Director of Governance and Assurance, and on a motion moved by Councillor Jeff Green and seconded by Councillor Ron Abbey that the exemption be lifted in respect of the covering report i.e. content of pages 57 to 60 of the agenda papers.

Following a show of hands, it was: 

Resolved (7:0) One abstention (Chair) – That the exemption in respect of report pages 57 to 60 of the agenda papers be removed.

Following formal lifting of the exemption of elements of the report (i.e. covering report pages 57 to 60 of the agenda papers), Minute No. 73 (ante) refers, the Chief Executive introduced his report that provided Members of the Committee with the opportunity to discuss further the history of appointment of an individual, firstly as an agency worker, secondly as a consultant under a contract for services and then as an interim (agency) director.

The Chief Executive informed that further to the previous item, and following consideration on the matter at the meeting of the Audit and Risk Management Committee (11 March 2019, Minute 61 refers), Members had requested opportunity to consider the results of the further investigations and progress with any subsequent investigatory work into the arrangements for payments made to Forge House Associates. He further informed that for additional clarity his report included a timeline and sequence of decisions in respect of the contract appointment.

A Member questioned the Chief Executive on whether a review had been undertaken at the stages where the contract had been altered or extended, expressing concern that it appeared only one check had been undertaken and that subsequently the contract had then been allowed to ‘run on’. The Member also expressed doubt over the contractor’s credentials and why appointment on a full-time permanent employment basis had been considered. He further questioned whether communications (or lack of) had resulted in the Chief Executive himself being placed in the position of having to respond to interrogation by Members.

The Chief Executive informed that an initial business case had been established, and the contractor had originally been employed to focus on asset management. When revised contractual requirements and a change of duties had occurred, a review should have been undertaken at that time. He further informed that as a result of the Internal Audit investigation, the Director of Finance will be informed immediately of any such instances. The Chief Internal Auditor confirmed that these action points, as reported under the earlier item of business and endorsed by the Committee, had been addressed in his report (Minute No. 73 refers).

A Member questioned that once the action points contained in the Chief Internal Auditor’s report were followed, could assurance be given that similar instances wouldn’t happen again, highlighting that communication within the same directorate had compounded the issue.

In response to the question, the Chief Executive informed that the matter had been discussed with the relevant people involved and expected behaviours for the future had been explained to them.

In response to a question on the matter of compliance with IR35 and how this appeared to be a classic example of a role and status having changed, the Head of Human Resources confirmed that a more robust process was required. He confirmed that as highlighted by the Internal Audit Review, no additional assessment of IR35 had been undertaken in January 2018 when support to other projects had been added into the position under discussion. This notably  ...  view the full minutes text for item 75.