Agenda item

Following an Unsatisfactory Internal Audit opinion in relation to Purchasing Card (P-Card) Transactions, the Strategic Director and the Head of Service responsible for the P-Card system were invited to the Governance and Audit Committee to provide assurances that appropriate improvements within service provisions and the control environment were made. 

The Committee considered the explanations and assurances provided by the Strategic Director and the Head of Service in relation to the concerns raised by Internal Audit for P-Card Transactions, that improvements were made in service provision following an Unsatisfactory audit opinion.

This annual audit had been finalised with a report and action plan in place and was issued as final in March 2023.

The Head of Finance advised that this was discussed at the Corporate Management Team (CMT) and the executive board.  This was therefore a wider action plan and had received the highest level of attention and would be subject to an annual follow up and a significant improvement in the service area was to be expected when revisited.

The Strategic Director for Transformation and Corporate added context by advising that the audit was undertaken at the back end of the pandemic and staff were not operating a completely different than would ordinarily do so.  It was also important to explain the use of P-Cards within the Council was because a lot of activity had to be responsive on a day to say basis and eliminated the need for petty cash and P-Cards were there to ensure that under the circumstances, there was a continuation to help with spending. The Policy had been re written and reissued.  New online training was online, as of 15 May with a deadline of 23 June for every authoriser, supervisor and user to complete, those who had failed to complete the training would have their P-Cards cancelled. To date 77 out of 217 had undertaken the training and was therefore taken seriously.  In addition, all of the actions that had been put in place had been completed.

Committee Member Comments:

§  Dr Barry had confidence in what officers had said and had that they had taken these issues seriously, however did not accept that it was because of covid as policy should be followed regardless. When going through action list, Dr Barry considered that this was not a capability matter but a disciplinary matter. It was good to hear that training had been taken up and it was hoped that it would tackle the root cause of the problem.  Dr Barry felt that strong management and supervision was needed, with assurances that the policy was robust.  The Strategic Director for Transformation and Corporate referred to some of the management actions, in particular Appendix 2 where monthly inspections were put in place to ensure that staff were adhering to policy. With reference to covid, staff were operating in a remote way, therefore some things were harder to undertaken than previously, which had an impact on management control.  

Dr Barry asked had any disciplinary action been taken as a result and was advised by the Strategic Director for Transformation and Corporate that this was an HR issue and could only advise that any appropriate action would be taken.

§  Councillor Cocks felt that card supervisors were responsible for overseeing the use of P-Cards and asked how robust the process was and what were the card supervisors expected to do to uphold this.  The Head of Finance advised that the language in policy was more direct in regard to what was not acceptable and that training also had direct instruction on what was not allowed and the consequences for this. The policy was therefore strengthened policy, replicated in the training and card holders and supervisors were reminded of their role.  The E Procurement Team would send a notification to the relevant Head of Service if card supervisors were not authorised for transactions on that card on a monthly basis and internal audit would also check this on an annual basis.

§  Chair considered that Head of Finance’s response did not give reassurance and asked if  the wording in the policy be amended to be more robust to say that all supervisors would carry out a quarterly check on 10% of the purchases.  The Head of Finance advised that they were checked and that every transaction needed to be approved by the supervisor, including the supporting documentation for the transaction in the form of either an invoice or receipt.

§  Councillor Horton wanted assurance that emails in relation to each transaction were being read, understood and actioned. The Strategic Director for Transformation and Corporate along with the sanctions for not following the process.  Emails were therefore part of that process and the training as part of the Meta compliance system would ensure that supervisors would fully understand every aspect of the process.

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§  Cllr Mogford asked, if there were 217 P-Cards in circulation, what was the maximum spending limit on the card and would it need to be pre or post -approved.   The Head of Finance advised that the P-Cards came with a standard transaction limit.  The Service Manager for Procurement and Payments advised that the limit was £100 per transaction and a monthly limit of £5,000. The standard transaction limit could be varied by the card supervisor or Head of Service if it needed to be increased.

§  The Chair referred to increasing the threshold spend and asked should this be approved by a more senior officer, such as the Head of Finance authorised this rather than the service manager and who would check this from the finance team. The Chair suggested that a supervisor could increase the limit to £10,000 to £15,000, without the Finance team being aware of this spend. Therefore, was there a check on the spending of £5,000.  The Head of Finance advised that it came through the Procurement Team who would undertake a reasonable check and inform the Head of Service, especially as the Procurement Team would pick up any anomalies in spending immediately.  In addition, if the Procurement Team were not happy, they would report directly to the Head of Finance. 

With regard to the training, the Chair, the suggested that if the remainder of the 217 had not completed their training within the required deadline of 23 June, those staff outstanding should have their P-Cards removed. Further to this, the Chair asked for figures to be made available of staff that did not complete the training to be brought to the July Committee.  The Head of Finance agreed to these suggestions and also advised that all new card holders would also need to undertake training in the future.  The Strategic Director for Transformation and Corporate clarified that of the 217 staff required to undertake training, 33 were supervisors and there were 184 P-Card holders.

The Chair also referred to Page 31 Appendix 1 Table 4b ‘completed action’ and ‘work in progress’ for communications to be issued to all staff regarding parking/speeding tickets when using a vehicle on council duty and the procedures which must be followed. It says comms to be re-issued and policy to be updated, it then said fleet management implementation date 20 June but this could not be implemented until the Policy was completed.  When would this be done. The Head of Finance would find this information by the next meeting. 

The Chair also advised that in Appendix 1 Table 4b, Action taken to recover the cost of parking / speeding fines was in progress, the Chait therefore asked The Strategic Director for Transformation and Corporate to chase this with the HR Team.

In relation to the above, the Strategic Director for Transformation and Corporate also assured the Chair that appropriate measures would be taken such as disciplinary action, if needed.

The Chair felt that great progress had been made and thanked the Audit Team for addressing this along with CMT and this was ongoing and that the internal audit review could take place within six months.

Resolved:

That Members of the Governance and Audit Committee:

Accepted the explanations and assurances of the Strategic Director and the Head of Service, which would be confirmed via the follow up internal audit planned for 2023/24.