The Audit Committee of Wandsworth Council met on Wednesday 6th November 2019 to review progress on governance issues and the effectiveness of contract management. The committee received an interim governance progress report, noting that while some improvements have been made, further action is required in several service areas. They also discussed a review of contract management, highlighting concerns about a fragmented approach and the potential risks associated with it.

Interim Governance Progress Report

The committee received a report detailing progress on governance issues and internal control improvements identified in the 2018/19 Annual Governance Statement. While the council has made some progress, leading to improved assurance levels in certain areas, further action is needed to establish effective controls in others.

Discussions highlighted limited progress on the proposed London Counter Fraud Hub due to procurement challenges. Councillor Peter Carpenter raised concerns about the implementation date for S75 NHS agreements, which was clarified as 31st December 2019. Councillor Leonie Cooper questioned the reasons for a lengthy list of unimplemented issues, particularly concerning schools. The Assistant Director of Resources (Financial Services), Paul Guilliotti, explained that obtaining updates from schools can be challenging, though some updates were received after the report's publication. Regarding support for schools' financial processes, Mr. Guilliotti stated that while the council offers support, financial responsibility largely lies with individual schools and their governing bodies.

Councillor Carpenter emphasised the importance of timely implementation of IR35 legislation for payments made by Shaftesbury Park Primary School, given HMRC's focus on this area. He also stressed the significance of children's safeguarding services and requested an update if implementation had not occurred by the next meeting.

It was clarified that issues concerning missed Community Infrastructure Levy (CIL) cases related to Richmond Council, not Wandsworth. The Housing Stock Condition Survey has been delayed until July 2020. Following the meeting, the Assistant Director of Housing and Regeneration, Ian Stewart, provided further details, stating that an independent consultant would complete the next survey after the new housing IT system is operational. This process will involve uploading data on major works completed over the last 20 years and targeting the survey at blocks with poor or missing records, with the aim of creating more accurate records to inform the capital programme.

The committee noted the completion of the first phase of the Grenfell Tower Inquiry report and suggested reviewing its recommendations. Mr. Stewart confirmed that the Housing and Regeneration Overview and Scrutiny Committee would receive a report on this in January 2020, and that the council was proactively implementing necessary changes without waiting for legislation.

Councillor Carpenter inquired about support for housing co-ops. Mr. Guilliotti explained that the council works collaboratively with co-ops, conducting audits to assist and advise them, with Resident Participation Officers providing most of the support. He added that termination notices could be served if organisations fail to comply with requirements. Mr. Stewart confirmed that training is provided to co-op committee members and managers, and that annual reviews follow a consistent format. He undertook to verify if the checklist for these reviews included the new requirement for Resident Management Organisations to be registered for data protection. Despite significant resources allocated to supporting this area, a substantial improvement had not yet been observed.

Regarding IT security, the Director of Resources, Mike Gravatt, indicated that new guidance on password structures and multi-factor authentication was under consideration. In response to a query about blue badge permit fraud, the Deputy Head of Audit, Fraud and Risk, Kevin Holland, reported that Wandsworth prosecutes persistent misuse cases with evidence of at least three offences. This, combined with parking pressures, has led to an increase in prosecutions and higher sentences compared to other boroughs, with the responsible team receiving national awards.

Review of Contract Management

The Assistant Director of Resources (Financial Services), Paul Guilliotti, presented a report summarising internal audit and corporate risk reviews of contract management. The South West London Audit Partnership (SWLAP) report highlighted that while some good practices exist, the absence of a corporate approach to contract management exposes the council to future risk. Consequently, Directors have commissioned an external review to identify more effective ways to manage outsourced services, with a report to be considered by the Audit Committee at a future meeting.

Councillor Richard Field questioned plans to ensure contract management expertise is not concentrated in individual officers. Councillor Peter Carpenter underscored the importance of this area, given the value of contracts and their impact on residents. Mr. Gravatt acknowledged that while some areas have skilled officers, efforts are needed to standardise practices across all departments.

Councillor Leonie Cooper expressed the committee's concern regarding the report's statement that The current piecemeal and fragmented approach to contract management across the SSA does not consistently allow for evidence of poor / inadequate performance to be managed effectively… . The committee discussed the merits of outsourcing versus in-house service provision, with the Chairman, Councillor Clare Salier, noting that the council evaluates both options to determine the most efficient approach. Mr. Guilliotti added that the procurement board considers both options and the cost of contract management.

The committee sought information on the timing of the external review. Mr. Guilliotti stated that work was underway to find a suitable contract management expert and that the report would be presented to the committee as soon as possible. A progress update was agreed for the next meeting.