Agenda item

·         SICA report

·         Housing Rents report

·         Key Financial Controls – Debtors and Arrears report

·         Waste Management report

PLazenby provided an overview of audit reports, noting that 2 audit reports have been completed since the last meeting.  1 audit report has been delayed due to no DBC representative being available for the last meeting to provide a response, and that this has now been provided today. It was confirmed that there is a range of audit opinions with 1 substantial, 1 limited and 1 reasonable. 

For the Housing Rents report, it was confirmed that there were 4 important, 2 routine and 2 operational recommendations made.  The audit identified that Housing Rents are present in relation to payments arrears and former tenant arrears, though there are issues regarding priority 1s with all cases having inconsistencies and a general failure in escalation.  Performance of individuals in relation to current tenant arears and systems in relation to former tenant areas was also queried.  A management response was given in relation to issues raised, indicating that responses are being addressed in a timely manner.  There was also some mitigation with management contributing to observations as well as through the recruitment of 2 posts.  It was also noted that management have provided a response regarding the balance of the suspense account and have confirmed this will be reviewed in September.  It was confirmed that no issues were overly concerning in nature, but that errors and consistency were present in a reasonable proportion of items reviewed and that management must address underlying issues.  It was also noted analytical techniques will be brought into next year’s plan and that issues must therefore be addressed. 

Cllr Birnie asked why it took 2 years for the auditors to discover that the rent arears, and write-off policy review was 5 years overdue.  It was confirmed that the audit programme runs across a 3-year rolling plan and that this had not been incorporated within the plan.  Cllr Birnie stated that this was important as part of the rent arears and that he was surprised it had not been reviewed. OJackson confirmed that a light-touch review of the policy has been carried out and a full review is booked in for Q2. 

Cllr Birnie commented there was no figure for the total of arears over the period.  PLazenby confirmed that this was not included in the report and that the review was on the process rather than the figures. 

Cllr Birnie noted the appointment of 2 further housing officers and asked if the amount of arears and write-offs justified this expense. OJackson advised that the growth bid was submitted for 2 additional income officers, which includes a number of KPIs, and they are recruited on a 2-year fixed-term basis to allow the impact of these 2 additional posts to be assessed.  It was noted that the addition of these 2 members of staff also brought the team in line with other neighbouring authorities. 

Cllr Birnie remarked that he hoped F&R Committee have access to the figures, adding that this was not the case for the SPAE O&S Committee, and that he felt there was a discharge between the Audit Committee assessing matters after the event and committees that assess specific issues on a quarterly basis.  Cllr Chapman agreed, stating that an update as the matter progresses would be beneficial.

Cllr Chapman referred to page 67 of the report, asking if the draft regarding the business community was now complete.  PLazenby advised that it was due to be issued by the end of the week. 

PLazenby confirmed no significant concerns were raised in the Debtors and Arrears review with 2 low-priority recommendations made in relation to debt management and appropriate management actions have been provided.  It was also noted that financial controls in this area have remained strong.

PLazenby next looked to the Waste Management report, stating that there was a long series of non-compliance with operational matters, resulting in 20 recommendations raised of which 3 are urgent, 10 are important and 7 are routine.  Concerns included defect reports not being completed, checks not being undertaken, defect numbers not being reported, fluid checks being ticked off at the end of the route, and completion of insurance claims forms. 

Cllr Birnie noted his surprise that, despite the number of failings recorded, that it is stated in the report that there has been no reduction in effectiveness.  Cllr Birnie acknowledged the pressure on the team at Cupid Green but that a number of failings had been raised and he was therefore unsure how these could not affect Waste Management’s operations.  PLazenby confirmed that Cllr Birnie was referring to the audit plan memorandum, which is completed at the start of the audit based on management’s assertions at the start of the review.  

PLazenby covered some of the concerns raised in more detail.  It was noted there was no central process for monitoring required medical updates and that drivers’ sheets were not being fully completed in a timely manner in the majority of cases examined.  On operations, it was identified in 4 incidents that drivers had not followed expected processes with drivers having different understandings of limits.  Handbooks were not signed and management indicated that this was in the process of being resolved.  It was noted that a depot transformation programme was due to be commenced in January 2021 with a view for potential implementation at the end of Q3, which would help with the requirements noted, and the response alone forms much of the risk management responses.  In the event that this doesn’t occur, a different set of management responses and mitigations will be required, so will require substantial follow-up work to provide sufficient assurance that underlying risks are being addressed. 

Cllr Birnie commented that the audit report had highlighted a number of items that should have been highlighted to the SPAE O&S Committee and none of these matters had been mentioned.  Cllr Birnie noted that a number of officers report to the Committee and he read out the following:

“A difficult quarter for Waste Services due to the loss of 200 days due to Covid-related absence and the national shortage of drivers, resulting in the loss of 5 full-time and a number of agency LGV drivers.  Despite this, all services were maintained without significant disruption.  Market supplement agreed and paid LGV drivers, subsequently all 5 drivers who left requested to return and 4 out of the 5 have been re-employed.”

Cllr Birnie noted that the Committee had been delighted with the report provided to the SPAE O&S Committee and returned to an earlier comment regarding a lack of information being provided to committees who are supposed to be scrutinising issues on a quarterly basis.  Cllr Birnie reiterated that no identified issues were reported to the SPAE O&S Committee during Q3, with no mention of the internal audit or concerns raised.  Cllr Birnie suggested that Waste Management should figure heavily in the next audit plan given the failings highlighted in the report, adding that Cabinet should look closely at the relationship between the Audit Committee and scrutiny committees.  Cllr Chapman agreed that full information should be provided but that he felt Cupid Green had performed well despite the number of absences and difficult circumstances. 

Cllr Townsend commented that he felt the team at Cupid Green had performed well and that the report didn’t suggest the work wasn’t being done.  Cllr Townsend noted that one of the mitigations is listed as ongoing and that he found this unsatisfactory and asked for an update on the actions taken so far. 

CThorpe remarked that the findings on Waste Management had been surprising and that the picture isn’t as bleak as has been presented. It was noted that there have been communication problems with drivers and transport managers, and motivational differences, and that they don’t know that drivers have not completed checks until they go out.  Regarding on-board scales, it was noted that this is a calibration issue and that there have only been 2 overloads in the last year and none were over the legal limit.  It was confirmed that weight limits are set 1 ton below the legal vehicle capacity and that it is down to the driver to perform vehicle calibrations, though actions are taken when a weight ticket is received. 

Cllr Silwal acknowledged the shortage of drivers and asked if recorded incidents had been performed by the same drivers.  CThorpe confirmed that numerous agency drivers have been used over the last 2 years, and that it was difficult to provide the level of detail on training for agency drivers compared to those who work for DBC who have a 1-2 day induction on vehicle checks.  It was also noted that there have been difficulties in attracting agency drivers due to salary levels.  CThorpe advised that he had identified issues over the last year and wanted the audit to take place. 

Cllr Silwal commented that actions need to be taken if drivers repeatedly make mistakes.  CThorpe confirmed that actions are taken when drivers are found to be non-compliant and disciplinary cases have taken place.  A comment was also made that waste drivers had worked well during the pandemic and that there had been a national shortage of drivers, and that the issues raised could be easily mitigated. 

Cllr Birnie stated that he had the highest regard for CThorpe and his team and that his concern was around the lack of information coming to the SPAE O&S Committee.

Cllr Townsend referred to page 93 of the report and the concern on the scales, noting that the management comments state that any vehicles exceeding a safe weight is issued with a defect number.  Cllr Townsend stated that he would expect a further commitment to address the finding and asked if the management comments provided do this.  PLazenby advised that the engagement of the audit was a commitment by the organisation to provide transparency on issues that need to be addressed and risks that need to be mitigated to then track improvements going forward.  PLazenby noted that no audit had previously looked at this topic and that management responses are not in the form that they would want, and while they mostly provide key dates, the control, risks and responses don’t align as they would in departments used to regular audits.  PLazenby confirmed that they would address the responses as part of the follow-up processes to ensure that the response has been actioned and that the root cause has been addressed.

Cllr Townsend recommended that wordings be given to the Audit Committee to provide reasonable assurance that the concerns will be addressed.    PLazenby suggested that rather than provide an updated report with revised responses, they instead incorporate all recommendations as part of the follow-up to the next Audit Committee with an updated response on the underlying risk.  Cllr Townsend agreed with the proposal.  FJump confirmed that they would work with PLazenby on providing this. 

CThorpe commented on the item regarding on-board scales, stating that the vehicle was never over its legal load as it is set 1 ton less, and that the issue was that the driver was not informing them that the vehicle was going out of calibration.  CThorpe stated that any weighing system will go out of calibration, and that the comments on continuing to monitor this and setting loads 1 ton less below the legal limit means they don’t risk the vehicle being overloaded. 

Cllr Birnie noted the reference in the report to CPC checks not being done and that it is the driver’s responsibility to keep these up to date.  Cllr Birnie asked if they are putting too much on drivers and if supervisors in the depot should instead perform these checks.  CThorpe advised that drivers’ CPC cards and driving licences are checked every morning.  For new or agency drivers, their CPC may not be in date and that this won’t be known until their licence is taken from them.  Cllr Birnie asked if ongoing checks could be performed from a management point of view.  CThorpe confirmed that they arrange training for their own drivers and therefore know their CPC dates, but that this is more challenging with new or agency drivers.