Agenda and draft minutes

Audit and Performance Committee - Monday 16th July, 2018 6.30 pm

Venue: Room 3.1, 3rd Floor, 5 Strand, London, WC2 5HR. View directions

Contact: Reuben Segal, Head of Committee and Governane Services  Tel: 020 7641 3160 Email:

No. Item



To note any changes to the membership.


1.1       There were no changes to the membership.


Declarations of Interest

To receive declarations by Members and Officers of the existence and nature of any personal or prejudicial interests in matters on this agenda.


2.1       There were no declarations made.


Minutes pdf icon PDF 161 KB

To approve the minutes of the meetings on the 23 April and 21 June 2018.

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3.1       RESOLVED:  That the Chairman, with the agreement of the Committee, signed the minutes of the meetings held on 23rd April and 21st June as correct record of proceedings.


2017/18 End of Year Performance Business Plan and Finance Period 2 (May) Report pdf icon PDF 562 KB

Report of the Director Policy, Performance and Communications and the City Treasurer.

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4.1       Steve Mair, City Treasurer, introduced the Finance Period 2 Monitoring report.  He explained that the papers were circulated with less than the 5 working days notice due to a conflict between the internal reporting timeline to the Executive Leadership Team and the agenda publication date.


4.2       The report provided details of the forecast outturn in respect of revenue and capital and projected revenue and capital expenditure by Cabinet Member including key risks and opportunities.  The report also included details in relation to the revenue and capital expenditure for the housing revenue account.


4.3       With regards to the capital forecast outturn (Cabinet Member for Finance, Property and Regeneration), the Committee noted that £2.564m had been re-profiled for the refurbishment of the Coroner’s Court to 2019-20 as there had been no agreement from Merton LBC. [NB: Westminster, RBK seek and Wandsworth all willing to contribute their share]. In response to questions, Steve Mair confirmed that agreement is required from all four boroughs that the court covers (Westminster, RBKC, Wandsworth and Merton) before the capital project can proceed.


4.4       With regards to the place shaping budgets, the Committee asked which projects or schemes the £20.225m of re-profiled capital expenditure related to. The City Treasurer advised that this related to the West End Partnership Programme which is subject to review and will be reported to Cabinet and Council in October and November as part of the review of the Council’s Capital Programme.  The City Treasurer clarified that current expenditure on the Oxford Street district approach is being funded through the revenue budget rather than via capital expenditure.


4.5       The Committee asked when the Capital Programme Management Office (PMO) is due to start operating.  Barbara Brownlee, Executive Director, Growth, Planning and Housing, explained that the office started operating in June and consists of three directly employed staff which will monitor and report on the Council’s whole capital spend, including social value commitments, VFM capital spend and physical progress.  She advised that it will start producing reports in the autumn and that an update on its work can be reported to the Committee at the same time.


4.6       Julia Corkey, Director of Policy, Performance and Communications, introduced a year end report that presented detailed performance results for the year April 2017 to March 2018 against the 2017/18 business plans.  The report set out how the Council performed against the City for All priorities and included progress towards achieving the deliverables and targets within the Business Plans. The information presented was reported by exception and focused on those areas of notable achievement or concern where action/intervention is likely to be required. The report also provided early views into the challenges that await in 2018/19.


4.7       The featured insight for the quarter focused on the diversity of Westminster’s workforce.  The Committee noted that in 2018 63% of Council staff have not recorded a disability statement and that just under 20% have not recorded their ethnicity.  Members commented that this made it difficult to accurately determine  ...  view the full minutes text for item 4.


Annual Contracts Review 2017/18 pdf icon PDF 418 KB

Report of the Interim Chief Procurement Officer.

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5.1       Maria Benbow, Interim Chief Procurement Officer, introduced the Annual Contracts Review report. The reporting format had been updated to focus on the Executive Leadership Team who are responsible for the overall management of the Council, for setting and monitoring overall direction, ensuring high performance and for overall risk and reputation management.


5.2       The report also highlighted a number of areas where Procurement Services are working to support the Council to deliver best value, in terms of professional development of staff, contract management and transition to the new Integrated Business Centre for finance and HR.


5.3       The review outlined the contracts let by the Council for value for money and adherence to the procurement code. The committee noted that 104 contracts commenced during the 2017/18 period. Fifty one contracts were below the value of £100,000 threshold and fifty three over the value of £100,000. There were nine extensions of existing contracts.  This latter represented a reduction compared to the previous year. In exceptional circumstances a waiver to the requirements of the Procurement Code may be obtained from the Chief Procurement Officer.  Seventy two waivers were approved during the course of the year.  This represented an increase to the previous year.


5.4       The report highlighted that the capitalEsourcing contracts register is regarded as the “single source of truth” and forms the basis for reporting on contract information across the Council.


5.5       Members expressed concern that only 51% of all contracts (65 of 127) over the value of £100,000 had been assessed and performance rated within the system during the year, a downward trend on the previous year. Compliance varied significantly between service areas.  The committee noted that of the 62 contracts that have not been performance rated, 25 had a value over £1.5m. Whilst Officers provided assurances that large value contracts were being evaluated locally, Members commented that in the absence of a complete set of data it was difficult for the committee to properly fulfil its statutory role in this respect. The Chief Executive undertook to investigate why compliance in reporting by service areas was not being achieved. The committee requested that a standing update is provided to each future meeting on progress in achieving compliance.


5.6       Officers were referred to the fact that quite a number of waiver requests were received for a change to the mandatory evaluation criteria either due to the use of framework agreements whereby the terms stipulate alternative criteria or following extensive market research.  Members asked about the thoroughness of the market research undertaken.  Andrew Polley, Head of Category Management, advised that this is commensurate with the level of risk associated with the procurement. 


5.7       Members stressed the added importance of contract monitoring during the transition between contractors.  Officers were referred to the fact that in June 2017 CWH appointed two long term major works contractors and five new repairs contractors.  The exiting contractor had left a backlog of approximately 2000 outstanding jobs (representing 2 week’s work). This placed an additional  ...  view the full minutes text for item 5.


Annual Counter Fraud Monitoring Report pdf icon PDF 447 KB

Report of the Shared Services Director of Audit, Fraud, Risk and Insurance.


6.1       Andy Hyatt, Tri-borough Head of Fraud, introduced a report that provided an account of fraud related activity undertaken by the Tri-borough Anti-Fraud Service (CAFS) from 1st April 2017 to 31st March 2018.


6.2       Since April 2017 CAFS had identified 230 positive outcomes including 22 prosecutions and 21 recovered tenancies.  For the financial year ending 31st March 2017 fraud identified by CAFS has an estimated a value of over £500,000.


6.3       Members asked in relation to the prevention of fraud and corporate investigations, whether an investigation into potential bribery had been proven.  Mr Hyatt advised that the disciplinary hearing led CAFS to identify another disciplinary issue but there was no evidence of bribery.


6.4       The Committee asked whether the transfer of Westminster residents in receipt of benefits to Universal Credit will make investigating housing related fraud harder for CAFS.  My Hyatt stated it should not make any difference.  He explained that since the transfer of housing benefit investigations from local authorities to the Department of Work and Pensions in March 2015 all investigations in respect of housing benefit fraud are now undertaken by the DWP.  The Council liaises with the DWP and provides information where it suspects such fraud is taking place.  Westminster still has responsibility for and investigates fraud in relation to social housing. 


6.5       Mr Hyatt was informed that a particular frustration expressed by residents is the fraudulent use of disabled badges and Respark permits.  The Committee asked about the sanctions available where disabled parking fraud is proven.  They also asked how the Council communicates its enforcement work and successful prosecutions to residents.  Mr Hyatt advised that each case of suspected parking fraud is assessed on its own merits.  A decision on whether to pursue a prosecution will in part be based on the strength of the evidence available.  Other factors that are considered include the impact of the fraud on the community and the cost to the Westminster taxpayer.  He explained that the reason why the Council pursues more prosecutions for disabled parking badge fraud is due to the greater impact that this can have on the ability of disabled and vulnerable users to undertake everyday tasks.  During its investigations CAFS has identified and shared with Council colleagues weaknesses in processing which will in turn should reduce the potential for permits to continue being used once residents are no longer eligible for them.


6.6       Members recommended that the Service increase its publicity in respect of its enforcement and its successful prosecutions so that residents can be reassured that fraudulent activity is being tackled. The committee also requested that Ward councillors are kept informed of the Service’s successes so that they can publicise these locally.




Annual Report on Internal Audit and Internal Control 2017/18 pdf icon PDF 798 KB

Report of the Shared Services Director for Audit, Fraud, Risk and Insurance


7.1       Moira Mackie, Senior Internal Audit Manager, introduced a report that summarised the work of Internal Audit in 2017-2018 and provided the opinion of the Shared Services Director of Audit, Fraud, Risk and Insurance on the adequacy and effectiveness of the Council’s governance, risk management and internal control environment.  The opinion is provided for the use of Westminster City Council and is used to support its Annual Governance Statement.


7.2       The report outlined that, from the work carried out by the Council’s Internal Audit Service in the financial year, reasonable assurance could be provided that systems of internal controls in place are effective with 85% of the audits undertaken receiving a positive assurance opinion.


7.3       The report further outlined that there were a few areas where control improvements are required and compliance with agreed systems could be improved. In each case action plans are in place to remedy the weaknesses identified.  The Council was found to be effective, in most areas, at implementing recommendations where concerns in respect of controls were identified.


7.4       Moira Mackie informed the Committee in respect of College Park Special School, which had received two consecutive limited assurances, that a follow up audit had been undertaken in June.  All but three low priority recommendations had been implemented to-date.  She advised that in future if a service area should receive two consecutive limited assurances internal audit will write to the service head or headteacher to request details of how they aim to improve compliance with controls.


7.5       Members asked why audits of Public Health and Community Infrastructure Levy (CIL) had been deferred.  Moira Mackie explained in respect of Public Health that this was due to the disaggregation of services following the move from Tri-borough to Bi-borough arrangements as well as the re-contracting of some services to reduce costs.  The CIL audit had been deferred due to the complex nature of the CIL administration process.  The audit will examine the mechanisms for identifying where CIL monies have originated from rather than the processes for allocating funds.  The outcome of the audit will be reported to the next committee meeting as part of the standing quarterly internal audit report.


7.6       The Committee made reference to the fact that a number of significant transitions either had or would shortly take place where there is the opportunity for fraud and data protection issues to arise.  In response to questions, David Hughes, Shared Services Director for Audit, Fraud, Risk and Insurance, confirmed that the 2018/19 Internal Audit Plan included intentions to audit areas involving key risks and change.  


7.7       RESOLVED:  That the Committee noted the Annual report on Internal Audit and Internal Control 2017/2018. 



Work Programme 2018/19 pdf icon PDF 233 KB

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8.1     The Chairman referred to the fact that there were a number of major strategic changes due to take place over the coming year and that these needed to be embedded in the Committee’s Work Programme.


8.2     RESOLVED:


1.     That the Work Programme for 2018-2019 as set out in Appendix 1 to the report be agreed subject to adding a standing update at each meeting on contract management. 


2.     That the work undertaken in response to the actions arising from the meeting on 23 April as set out in Appendix 3 to the report be noted.