Council’s ‘Weak’ Internal Controls Highlighted By Auditor

town hall windows signThe Council of the Isles of Scilly does not have a sustainable financial plan beyond 2015 and has poor internal controls over finances.

Those are two of the findings of the Authority’s Internal Auditor, presented to councillors on Monday.

Simon Garlick from auditing company Grant Thornton described the document as the Council’s “end of term report for 2013/14.” He said this was a busy period with changes to key officers and elected members.

Mr Garlick highlighted several areas that the Council needs to address, although he acknowledged that some progress had been made in the last few months.

Hi said the internal audit had found the control environment to be weak, with a business continuity plan, used if there’s a major disaster, that’s “not fit for purpose.”

The Council also isn’t reviewing its biggest risks often enough. They currently only look at these once a year when it’s recommended to do it every quarter.

Problems were found with the administration of the payroll and not all payments to external suppliers and individuals were supported with the correct information.

The Council has been facing a big budget deficit with councillors told last year that their reserves could be used up by 2016.

Mr Garlick said there was no sustainable financial plan in place for balancing the Council’s budget after 2015. He added that budget reductions made this year had been “fortuitous” – found through one-off savings such as deferring projects and not filling vacancies.

Cllr Fran Grottick said staffing is the Council’s largest single expense at 64% of the budget. She said all councils were facing significant financial challenges and will need to take “difficult decisions.”

Cllr Richard McCarthy said he’d seen a number of governance issues raised by internal auditors over the years and, in the past, there’s been a tendency to “smooth over them,” without giving the detail of what was going wrong.

He said some of the issues may be minor, but they’re still mistakes that shouldn’t have happened.

Chairman Amanda Martin said she had confidence in the new finance team to get it right from now on.

Cllr Gordon Bilsborough agreed, saying he was “cautiously optimistic” about the future and the Council needs to “look forward and learn lessons from past.”

Mr Garlick said the 2013/14 accounts can’t be closed yet because he’s received an objection, raising questions about the Porthcressa Regeneration Scheme.



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