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 included work in relation to the Local Plan development and response to Ministry for Housing Communities and Local Government (MHCLG).

A Member questioned how, in December 2018 when the role had been reclassified, and elements of work had been handed over, why there appeared to be no significant change to the level of invoicing for work undertaken. The Member also questioned whether ‘dummy’ purchase order (POs) numbers had been issued, and whether this was normal. If so, who sanctioned and authorised this.

The Director of Finance and Investment responded, informing that in the past POs had sometimes raised been raised retrospectively, but present policy was that now unless a PO existed no invoice payments would be made.

Another Member enquired if there were any specific departments with a history of not following procurement / PO arrangements. The Chief Internal Auditor informed that there were further checks to be made in this regard and this work would be reported to the Audit and Risk Management Committee.

Referencing the timeline, a Member questioned the Chief Executive on who was accountable for the highlighted failings, and what actions were being taken to rectify these.

The Chief Executive explained that since his appointment it had been his personal directive that the Council would not run a blame culture, and that he was ultimately accountable for the work of the organisation. He added that junior members of staff should also not be penalised for working in a particular way but should be encouraged to work more effectively and learn from instances such as this.

In response to a particular question regarding the taking up of references, the Chief Executive stated that he had personally followed up Members concerns with the Chief Executive at York City Council who assured him that there had been no wrong doing in York, therefore did not affect employment or engagement of the individual (as an agency worker and consultant). 

Following consideration of the item, and on a motion moved by Councillor Jeff Green and seconded by Councillor Leslie Rennie, regarding the acknowledgment of accountability, it was –

Resolved (7:0) One abstention (Chair)  That:

(1)  the Committee welcomed the acknowledgement of accountability had been accepted by the Chief Executive and his officer team, and looked forward to the implementation of the changes as reported to Members; and

(2)  that the report, and content of the exempt report appendices, be noted.