Minutes of Meeting of the Audit and Standards Committee held in Committee Room 1, Council Headquarters, Glenurquhart Road, Inverness on Thursday, 21 April 2005 at 10.30 a.m.


Mr D W Briggs , Mr W Fernie, Mr A MacKay, Mr M Macmillan, Mr R J Lyon, Mr L Fraser, Mr W Clark.

Non-Members also Present:

Mr H Fraser, Mr T MacLennan.

Officials in attendance:

Mr A McCourt, Chief Executive
Mr A Geddes, Director of Finance
Mr G Munro, Head of Internal Audit and Risk Management
Mr N Rose, Principal Auditor, Internal Audit
Mr C MacCallum, Payroll Manager
Miss J MacLennan, Principal Administrator, Corporate Services
Mrs S Lunn, Principal Administrative Assistant, Corporate Services
Mrs L Hamilton, Administrative Assistant, Corporate Services
Also in attendance:
Ms M Bruce, Senior Audit Manager, Audit Scotland
Ms S Shiels, Computer Auditor, Audit Scotland 

1. Apologies for Absence

There were no apologies for absence.

2. Presentation by the Scottish Public Services Ombudsman

A Presentation was undertaken at the meeting by the Scottish Public Services Ombudsman, Professor Alice Brown, and the Depute Ombudsman, Mr Lewis Shand Smith.

During the presentation, it was confirmed that the role of the Ombudsman service was to provide a ‘one stop shop’ in the creation of a modern complaints service. In this respect, new listed authorities (Enterprise Bodies), new jurisdiction (Mental Health complaints) and new developments (Health complaints, Higher & Further Education) were highlighted. It was also stressed that the Ombudsman service required to be seen to be independent, impartial, free, accessible, accountable and confidential as well as having the power to require evidence and submit reports to Parliament. As well as the handling of complaints and requests in a bid to enable informal resolution, there was a need to increase public awareness of the service, promote good administrative practice and work with other agencies in order to be proactive in complaint avoidance.

In terms of Complaints and Enquiries, it was advised that the five largest areas of complaint dealt with in 2003/04 had been Planning, Housing Repairs, Council Tax, Neighbour Disputes and Hospital Clinical Treatment.

Although there was no room for complacency, it had been encouraging to note that a large number of Local Authorities were reviewing their complaint procedures and making changes and a number of Councils now had multi-tiered procedures which included general information on complaints, customer guides, complaints forms, information in other languages/forms, good practice guidelines and training for staff.

During general discussion, and in regard to evidence taken for a formal investigation, it was confirmed that a complainant would be advised that written evidence required to be submitted to the Ombudsman in the first instance. Interviews would also be undertaken to establish verbal evidence and, following close examination of all papers, a conclusion would be reached. The formal report, from which all personal details would be removed, would also contain a summary of any transcripts which had been taken during the course of the investigation.

In regard to relationships with professional associations, close liaison was undertaken with Unions in order to ensure better delivery of services. If it was considered that complaints in this respect could be more properly dealt with elsewhere, the complainant would be advised accordingly. Any issue which was judged to be illegal or a danger to the public would be immediately reported.

In terms of complaints against Health services, it was acknowledged that the demise of Local Health Councils had led to a reduction in support for members of the public although this was currently being discussed with a view to providing alternative arrangements.

In terms of the respective roles of the Ombudsman and the Standards Commission, it was advised that a Memorandum of Agreement was now in place in regard to the sharing of information which would enable the delivery of a better service for the public.

The Committee otherwise NOTED the terms of the presentation and thanked both the Ombudsman and Depute Ombudsman for their attendance at the meeting.

3. Minutes of Previous Meeting – 17 February 2005

There had been circulated for information the Minutes of the Meeting of the Committee 17 February 2005 - which were NOTED.
4. Internal Audit Reviews

Period – 22 January 2005 – 31 March 2005

There had been circulated Report No. AS-06-05 dated 8 April 2005 by the Head of Internal Audit and Risk Management which summarised the following final reports issued since the date of the last meeting, together with other information relevant to the operation of the Internal Audit Section.

Speaking to the report, the Head of Internal Audit and Risk Management highlighted the reviews which had been undertaken since the date of the last meeting as follows:-

Social Work – Meals at Home – confirmed that, overall, the implementation of the Meals at Home service had gone smoothly although the review had identified significant weaknesses in relation to the verification of contractor invoices and stock control. A total of five recommendations had been made – all of which had been accepted by management and were due to be fully implemented by May 2005.

ECS – School Transport – confirmed that, although the overall audit had found a high standard of compliance to existing processes and guidelines, there were certain areas where further guidance would be beneficial to enable a consistent approach to be implemented among all the Area Education offices. A total of seventeen recommendations had been made – all of which had been accepted by management and were due to be fully implemented by the end of June 2005.

ECS – Aviemore Streetwork Project – confirmed that the findings of the review had identified a lack of clear guidance covering involvement in the administrative matters of outside organisations. It had been suggested that guidance which detailed acceptable levels of involvement, and the responsibilities of both staff and line management, would address concerns in this regard. In total, three recommendations had arisen from the review. All recommendations had been accepted by management and corrective action undertaken by February 2005.

IS – Consultancy Service Supply – confirmed that the Council might achieve better value for money, and improved quality control, if it adopted a more co-ordinated approach to managing and maintaining the Access databases used by Services. Four recommendations had been made which, if implemented fully, would assist in the accomplishment of this objective.

Housing – Repairs and Maintenance – confirmed that generally the controls in place were operating satisfactorily although it had been suggested that some improvements could be made in relation to public liability insurance and in ensuring that all relevant information was recorded on the system. In total, five recommendations had been made – all of which had been addressed by management and were due to be implemented.

Central System – New Payroll System (Resourcelink) – confirmed that there were several areas which required improvement and that a further and more detailed computer application audit was to be undertaken in the following financial year (2005/06), due to its materiality and the introduction of the Personnel functionality. In total, seven recommendations had been made – all of which had been accepted.

TEC – Tendering and Purchase of Groundcare Equipment – confirmed that the objectives of the audit had been to establish whether tendering processes had complied with the Council’s Standing Orders following a complaint from a groundcare equipment supplier. Following consideration, it had not been possible to conclude that the tender exercise had been fully conducted in a ‘fair and just manner’. It was therefore suggested that, in future, clear evaluation criteria should be determined from the outset and it be adopted in the subsequent evaluation process. In total, eight recommendations had been made – all of which had been accepted by management and were due to be fully actioned by December 2005.

During discussion, a number of Members expressed serious concern in regard to the events which had led to the complaint being received and it was AGREED as follows:-

i.   a letter should be sent to the complainant by the Chief Executive to thank 
     him for bringing the matter to the attention of the Council and to provide
     assurances that the issues raised in the complaint would be taken into
     account in a review of procedures;

ii.   a copy of the letter should be sent to all Members of the Committee for 
     information; and

iii.  the Director of Transport, Environmental and Community Services should 
     be advised of the serious concerns of the Committee in regard to this 
     matter in order that the situation would not be repeated in future.


The Committee otherwise NOTED the terms of the report as circulated.

5. External Audit Reviews

There had been circulated Report No. AS-07-05 dated 8 April 2005 by the Director of Finance which contained reports from the Council’s External Auditors (Audit Scotland) as follows –

-  Progress Update on Overview of Corporate Governance Arrangements

-  Progress Update on Made to Measure? An Overview of Trading Standard 
   Services in Scotland

-  Website Overview

-  Payroll Application System Review

-  Computer Services Review

The reports detailed the recommendations made in the activities reviewed and included an Action Plan which had been agreed by the relevant Service Manager.

In regard to Progress Update on Overview of Corporate Governance Arrangements, it was advised that a risk management implementation plan had been drafted and action plans arising from the Risk Management Strategy had been prepared. At the time of the review, Services had been in the process of identifying operational risks and appointing risk management champions. Also, in terms of the Internal Audit Plan for 2003/04, which included some non-financial activities such as Elections, Health and Safety, Data Protection, etc, Services had yet to complete the identification of their operational risks and the Council had yet to review its systems of internal control to ensure that appropriate measures had been taken to mitigate or avoid these risks and that resources were targeted at established priorities.

In respect of Progress Update on Made to Measure? - An Overview of Trading Standards Services in Scotland – it was confirmed that this had been a follow up audit which had required the Trading Standard service to undertake a self-assessment of its progress to date and complete an Improvement Action Progress Report. In total, nineteen improvement actions had been identified by the services in 2001/02 and, of these, twelve had now been completed. In a further six cases, progress was ongoing and it was advised that the remaining action to develop a strategy to promote business services, advice and education was now not to be implemented due to a lack of resources to expand this service.

In terms of the Website Overview, it was confirmed that development of the site was part of the Council’s e-Government transformation programme which sought to deliver services in electronic form to meet the increased demand of citizens and the challenge of achieving central government targets for electronic service delivery. In this respect, a number of areas of good practice had been identified although there were still a number of improvements to be made which would enable the Council to deliver resources to those areas where they could be more effective.

In regard to the Payroll Application System Review, it had been concluded that the Council required to improve administrative and operational practices in all areas which had been reviewed by the audit, including an agreed service description, procedures for authorising, testing and accepting software upgrades/changes to system parameters and the business contingency plan for payroll.

In respect of the Computer Services Review, it was advised that the review had concluded that the Council had a satisfactory ICT governance process in place although there was scope for improvement in arrangements for Information Security and Business Continuity. In particular, Services required to implement the Information Security Framework and ensure that they had adequate contingency arrangements in place to maintain business critical services.

The Committee otherwise NOTED the terms of the reports as circulated.
6. Strategic Planning 2005/06-2007/08

There had been circulated Report No. AS-08-05 dated 21 March 2005 by the Head of Internal Audit and Risk Management which provided details of the annual review which had been undertaken during January and February 2005 in order to revise Audit Plans for the financial years 2005/06 to 2007/08.

The revised Strategic Plan was the result of needs assessment undertaken with the support of Service Directors and included consideration of the current Risk Assessment methodology adopted by the Council. Planned audits for 2005/06 were highlighted together with an initial assessment for the years 2006/07 and 2007/08 although it was clarified that the latter years could change as they were subject to annual review.

Following discussion, the Committee AGREED the Strategic Plan for 2005/06 to 2007/08 as circulated.

7. Standards Commission for Scotland – Annual Report 2003/04

There had been circulated Report No. AS-09-05 dated 11 April 2005 by the Director of Corporate Services which summarised the contents of the Standards Commission for Scotland Annual Report 2003/04.

During a summary of the report, it was confirmed that, from May 2003 to March 2004, a total of 139 complaints had been received – all of which, except one, had been in regard to Councillors. Principal areas of complaint had included breach of key principles of the Code of Conduct, misconduct on individual applications, disrespect of Councillors, disrespect of Officials/employees, failure to declare an interest, breach of confidentiality, failure to register an interest and misconduct relating to lobbying.

Of the 139 complaints, 80 complaints were still being progressed. Of the remaining 59 cases, investigations had been completed in 53 cases where there had been a decision of no breach of the Code of Conduct. Only 3 cases had been referred to a Hearing, 2 cases had been outwith the jurisdiction of the Chief Investigating Officer and 1 complaint had been withdrawn. Of the 3 cases referred, all had been found to have breached the Code of Conduct and action had been taken in each case.

It was also confirmed that, in the period covered, one complaint had been submitted in respect of a Highland Councillor although this had subsequently been investigated and a decision taken that there had been no breach of the Code of Conduct. Details of the case had been reported to the Audit and Standards Committee on 26th August 2004.

Following discussion, the Committee NOTED the terms of the Annual Report as detailed.

The meeting ended at 12.45pm.