To receive an update on Third Party Spend Purchase to Pay, in response to a limited assurance audit.
Minutes:
At the Chairman’s invitation Andy Brown (Corporate Director Resources, Deputy Chief Executive and s151 Officer) gave a presentation on Third Party Spend Purchase to Pay. The officer explained that SWAP had given a limited assurance audit report on this at the last Committee meeting. It had highlighted issues within Wiltshire Council regarding the procurement process and on how spend and contracts were managed. There were pockets of good practise, but this was not organisation wide and improvement was required. The commercial framework needed to be reviewed. An officer task and finish group would be set up with officers from procurement and legal, to ensure that when going to tender and issuing contracts that internal rules were followed and legislative requirements met. Exemptions (where the Council does not follow internal rules) were another issue and these were occurring too frequently. Exemptions should be few and far between and for good reason, but providers contracts were regularly rolled over without the market being tested. Therefore, another task group would look at that issue.
The Commercial Board which the officer Chaired was set up to take oversight of procurement. The officer explained that it was really important to manage third party spend as it was the biggest spend that the Council had. The Commercial Board hoped to capture savings as result of re-tendering. It would also look as whether contracts were required, whether they were statutory, and would ask questions around markets and prices.
The officer further explained that legislation had been updated as a result of Brexit and we needed to ensure that we were compliant, had good governance, had standard procurement documentation and provided commercial awareness training to budget managers.
The officer gave assurance to the Committee that whilst there was still quite a lot of work to do across the organisation, he was focused on the issues and spoke regularly to SWAP. It was possible that there may be further limited or no assurance audits whilst the new processes were being embedded.
The Chairman stated that the presentation was a bit shocking, but he was glad to hear that a lot of work was being undertaken to resolve issues and thanked Mr Brown for the update.
Members also expressed unease about the situation and requested whether it might be possible to have a timeline going forward of the issues that might be coming the Committee’s way and that it would be useful to know about controls and mechanisms. Questions were also asked as to whether there was a separate mechanism for political discussion regarding this.
In response the officer explained that regarding controls there were still things to put in place. The current resourcing and structure were being reviewed and would be changed. The senior management restructure had placed commissioning and procurement together so that there was a commercial focus. There was a roadmap for improvement and some of the work had already started, for example to ensure the basics such as the documentation was correct. Resources were now being looked at, but there were not currently timescales that could be shared.
The officer also explained that COVID had put the Council in a completely different place financially. The Council had to lock down spending and ensure that it was financially sustainable. The Commercial Board had evolved out of that process in order to give oversight. This remit would now cover the future lifecycle of procurement. Part of the vision was to have an up-to-date contract register, with knowledge of market performance and expectations. It was hoped the new processes and controls would become ingrained within the organisation and be part of business as usual. The officer stated he was happy for this subject to be added to the Forward Work Programme and to update on it at the next Committee.
Cllr Pauline Church (Cabinet Member for Finance) responded regarding the political aspect. Cllr Church stated that procurement decisions were operational and not political in nature and were undertaken by officers. However, the strategic direction taken was political and the Scrutiny Committees were involved in order to hold the executive to account and therefore give reassurance to councillors that things were going in the right direction. The aim was to change the procurement culture within the Council. Cllr Church felt that a lot of time was spent on how much money was raised via the precept, but not enough time was spent looking at how money was spent and whether the Council got value for money. Aligning procurement and commissioning was a good start. It was recognised that some commercial skills were in short supply and additional resources may be required.
Councillors commented that they agreed with the Cabinet Member and officers and congratulated them on the approach being taken. Councillors also stressed the importance of concentrating on how we go about spending, rather than how we go about saving and it was a critical role of the Audit and Governance Committee to check this. There should be a clear pathway and processes to follow when procuring and all Directors and officers should be aware of this. It was felt that contracts were extended too often just because the Council had always used those companies. It was,
Resolved:
That the Committee note the Third Party Spend Purchase to Pay presentation.