Agenda item

The panel to undertake the first gateway review of service plans relevant to its remit. Background papers to follow for DSP members.

(To follow)

The Financial Services Manager gave a presentation as part of the first gateway review:

·          The 06/07 service plan included accountancy, audit, insurance, treasury management, and paymaster services. New areas for the plan were concessionary travel, risk management and exchequer services.

·          The service now came under the category A priority ‘use of resources’, which enabled increased focus on the achievement of excellence for the use of resources assessment.

·          An action plan was to be agreed for working towards level 3 of the assessment. This needed to be embedded throughout all services with financial services leading and supporting. Whereas each DSP should be scrutinising financial aspects of their remit, the Resources DSP should take an overarching view.

·          Budget consultation had not provided sufficient feedback and so the service plan was looking to address this.

·          The staffing situation in the section was explained. Three new staff had been appointed and three vacancies were being re-advertised. The officer suggested that the advertised salaries were only attracting partly qualified staff. The panel discussed this issue and expressed concern about the need to pitch salary levels appropriately.

·          The officer outlined key aspects of the action plan for the future of the service.  The panel discussed the upgrade of the LACHS claims handling system. The officer clarified that this should not affect claims processing. The led to discussion on funding the insurance reserve and the appointment of a risk management officer.

·          Gershon savings had been achieved. New procurement process would provide cashable and non-cashable savings and there was an ongoing saving in respect of the audit contract. The quality of the audit contract would be monitored and reviewed at the end of its three-year term.  

·          A member of the panel suggested that there should be a type of audit committee to meet with the auditors. The chairman advised that the scrutiny coordinating committee was reviewing the DSP structure and may make recommendations for the next annual general meeting of the council.

·          Spend was currently matching budget in all relevant service areas and there was currently no anticipated budget increase required for 2006/07, although salary increases anticipated for 2007/08. The officer clarified that whereas failure to achieve level 3 in the use of resources assessment could have a detrimental effect on recruitment, there was no evidence to suggest that this had been the case at this authority.

·          Areas of risk were explained. The officer explained how those area identified had been dealt with during the current financial year. The panel discussed these in detail. 30% purchase orders were being made using the system and the target was 80% for early next year.

·          The officer explained that gateway reviews should not be considered in silos because a lot of cross-boundary movements (such as the move of procurement to assets and facilities) did not affect the council’s bottom line budget requirements.

Conclusions:

The Resources DSP made the following observations on the financial management service plan:

1)     A mechanism should be established for DSPs to scrutinise financial aspects (such as overspends and underspends) on services within their remit and for the Resources DSP to take an overarching role to ensure that this scrutiny is undertaken sufficiently.

2)     Information on the volume of claims dealt with by the LACHS system to be provided for gateway 2.

3)     CIPFA benchmarking information to be provided at a future gateway review.

4)     Estimated amounts for non-cashable Gershon savings and updated cashable savings to be included.

The DSP also concluded to include on its work programme:

·          Scrutiny of salary levels in high priority services

·          Scrutiny of buy-in of financial system throughout the authority