South Ribble Borough Council has suffered major failings in its governance with auditors having given ‘no assurance’ over two spending areas and criticised legal service procurement.
Leader Paul Foster, who took office in May 2019, said the council’s combined governance report for 2018-19 and 2019-20, debated at this month’s governance committee meeting, “asks the council to recognise that there has been significant failings in the operation of the organisation and that certain individuals have, at times, disregarded controls put in place to act as checks and balances for the authority”.
He added: “We’ve been able to get to the bottom of some of the issues that have hung over the organisation for a number of years and we are well on the way to putting these things right.”
Auditors said there had been “a culture arising from the top of the organisation, where the most senior officers of the organisation and statutory officers have disregarded the systems of checks and balances put in place to protect the organisation and its officers”.
They gave the rare ‘no assurance’ assessments to procurement of utilities services and the development of a local health and leisure centre.
They also found instances of external legal advice “being acquired without involving the internal legal services team in the process. This is poor practice and can lead to difficulties and complications.”
This though happened in 2018-19 but not the following year when “there has been an improvement in how the monitoring officer and the section 151 officer have been involved in the decision making process”.
The utilities procurement had seen a “fundamental failure of contract procedure rules and elements of the council’s constitution [and] a failure of European Procurement Rules…there is no evidence of value for money and the contracts have not been agreed or signed off by members in accordance with the appropriate rules”.
Costs for the health and leisure centre increased by £3.6m for the core project plus additional costs of some £6m, "which had not been reported to cabinet by officers”.
Auditors noted: “As the budget increases were not reported this clearly breaches the council financial procedure rules in regard to approval for capital expenditure.”
The report also found that performance information previously reported “was inaccurate, not evidenced and not properly signed off”.
Another failing concerned cases where payments to the council’s creditors were “processed for significantly more than order value and in excess of available budget”.
The report said that both the section 151 and monitoring officer posts had at points been occupied only on an interim or temporary basis, and risks of this might have been mitigated had “clear and robust leadership structures” been in place to manage decision making.
There was though an “absence of clear accountability, delegations or strong culture [that] meant confusion arose over who was responsible or accountable for decisions and implementing the governance framework”.