A verbal update will be given.
Contact: Andy Wilde (01743) 256401

The Assistant Director for Growth and Infrastructure gave a verbal update in terms of the recommendations from the external audit including the governance and management of the project.  He confirmed that some work had already started in these areas, and he gave some examples.  He explained that he had taken the principles of the commercial model that sat in his current service area and applied it to this project, and they had sincetaken some measures to improve and increase the level of transparency and substantiation around payments and so strengthening the commercial arrangements that sat within the project in its current form.  They had also done some analysis on data management to ensure they had a good robust handle on all of that information before undertaking an assessment of the risks.

The Assistant Director for Growth and Infrastructure drew attention to the governance arrangements and he informed the Committee that an initial meeting had taken place to start to review the existing governance as this was something that was highlighted in the audit report and that needed to be revisited in order to strengthen and improve arrangements, taking into consideration all of the points raised in that external audit report.The findings from the audit report would be a key instrument in shaping what progress looked like and the areas for himself and his team to focus in on.  He went on to explain that this work would come to a natural conclusion as the Business Case was finalised prior to going to Full Council for approval.

Finally, he wished to reassure the Committee that work around the governance arrangements had been started, along with work around the other areas highlighted in Internal Audit’s report and were very much on the agenda for his team to focus on and would be moved forward as the project developed.  Once the Business Case was approved by Council, they would need to look at how they would set the project up should it move into the construction phase because the governance arrangements would need to look different for that phase of the project.

The Chairman felt that the Assistant Director for Growth and Infrastructure seemed to have a grasp of the concerns of many Members around the governance of the NWRR.  Members raised concerns around the seriousness of some of the recommendations contained within the audit report and were disappointed that they would not be getting any of the financial information at this meeting.  In response to a query the Assistant Director for Growth and Infrastructure assured the Committee that the first new Executive Board, chaired by himself, had taken place, the appropriate officers were in attendance, and he was reassured that Minutes and Actions were captured  As the governance arrangements were being revisited, the things that could be changed quickly had been, and other issues, including the Terms of Reference, were coming together. 

In response to further comments, the Assistant Director for Growth and Infrastructure assured the Committee that he was fully cognisant of the work of the Audit Committee and the need to work closely with both internal and external audit.  He was committed to the organisation going forward and making sure that the whole council felt like it had the transparency that it was seeking, that audit recommendations were factored in quickly and that the correct procedures were in place.

Councillor Evans expressed his disappointment that no papers had been received for today’s meeting and that the Business Case, which was due to be discussed at Council on 27 February, was still not available to the Audit Committee.  The internal audit was undertaken some 15 months ago, and he had stated that it was the worst audit he had even seen.  He understood that the NWRR would form part of the Medium-Term Financial Strategy, papers for which were due to be published that day, then going to Scrutiny and Cabinet the following week but the NWRR would not be referred to in detail before going to Council.  It was a multi-million pound project that was at risk, the business case still needed to go to Government to decide whether they were going to fund it or not and in the meantime Shropshire Council was still spending millions, with no planning permission yet having been issued. 

Councillor Evans wished to be assured that all of the recommendations from the internal audit were being carried out as the Committee had been assured on a previous occasion that they were, but the Committee had seen no proof of this, they had also been told that the NWRR was going to the September Council, then the December Council and now the February Council.  This project seemed to be drifting, whilst the Council was spending money it could ill afford to lose, and it could have dire consequences for the Council.

The Internal Audit Manager gave an update from an internal audit perspective.  She reported that they were scheduled to start the follow-up audit in quarter 4 and the terms of reference for the audit had been agreed with the Assistant Director and the field work had been commenced.  As part of the audit, they would be following up all of the recommendations contained in the previous audit along with those raised by the External Auditors.  It was hoped that this would be finalised and ready for the next meeting in June or possibly July.  This would provide independent assurance on the actions taken to implement the recommendations.

In response to a query, the Assistant Director for Growth and Infrastructure explained the governance changes that had been put in place.  The Chairman felt that all information that was available would be published later that month for discussion at Council on 27 February.  The Assistant Director for Growth and Infrastructure was currently not sure when the Business Case would be ready to be presented to Council.

RESOLVED:

To note the contents of the verbal update.