Transcript Audit Commission in Wales

Bridgend County Borough Council
Audit of the Corporate Improvement Plan
Auditors’ Report
29 October 2004
© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.
The KPMG logo and name are trademarks of KPMG International.
Index
Introduction
This document contains our Auditors’ report to Bridgend County Borough Council (“the
Authority”) on its Corporate Improvement Plan which was published in June 2004. It also sets
out our observations and recommendations under the four key themes as set out by the Audit
Commission in Wales.
Contents of Statutory report

Auditors Report

Observations and Recommendations on the Plan
- Joint Risk Assessment
- Corporate Improvement Plan
- Performance Management
- Track Record
Note on recommendations
All formal recommendations contained within this document are prefixed by the letter R eg R1.
Recommendations from prior years are prefixed S eg S2.
© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.
The KPMG logo and name are trademarks of KPMG International.
2
ABCD
Marlborough House
Fitzalan Court
Fitzalan Road
Cardiff CF24 0TE
Tel +44 (0) 29 2046 8091
Fax +44 (0) 29 2046 8201
Keri Lewis Esq
Chief Executive
Bridgend County Borough Council
Civic Offices
Angel Street
Bridgend
CF31 4WB
29 October 2004
Dear Keri
Auditors’ report to Bridgend County Borough Council on its Corporate Improvement Plan published July 2004
Certificate
We certify that we have audited Bridgend County Borough Council’s Improvement Plan in accordance with
Section 7 of the Local Government Act 1999 and the Audit Commission’s Code of Audit Practice. We also had
regard to supplementary guidance issued by the Audit Commission.
This report is made solely to Bridgend County Borough Council, in accordance with Section 7 of the Act. Our
audit work has been undertaken so that we might state to the Authority, to the Audit Commission and (where
necessary) to the Welsh Assembly Government those matters we are required to state to them in such an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than (i) the Authority, for our audit work, for this report, or for the opinions we have formed, (ii)
the Audit Commission, for our recommendations under section 7(4)(e) and (iii) the Welsh Assembly Government,
for our recommendation (if positive) under section 7(4)(f) of the Act.
Respective responsibilities of the Authority and the Auditors
Under the Local Government Act 1999 (the Act) the Authority is required to prepare and publish a Best Value
Performance Plan summarising the Authority’s assessments of its performance and position in relation to its
statutory duty to make arrangements to secure continuous improvement to the way in which its functions are
exercised, having regard to a combination of economy, efficiency and effectiveness.
This was supplemented by further guidance on how the Wales Programme for Improvement (WPI) will be
implemented under Sections 3, 5 and 6 of the Local Government Act 1999. Under this guidance, the statutory Best
Value Performance Plan has been replaced by a statutory Improvement Plan (the Plan) which must be published
by 30 June of the financial year to which the Plan relates. For one year only, 2004, the publication date was
changed to 31 July in order for new authorities to have more time, following the elections, to consider the
Improvement Plan before publication.
The Authority is responsible for the preparation of the Plan and for the information and assessments set out
within it. The Authority’s future work programme set out in the Plan should connect to the outcomes of the
updated risk assessment. The Authority is also responsible for establishing appropriate performance management
and internal control systems from which the information and assessments in its Plan are derived and for ensuring
that it provides sufficient capabilities and capacity needed to manage change and improvement. The form and
content of the Plan are prescribed in Section 6 of the Act and statutory guidance issued by the Welsh Assembly
Government.
As the Authority’s auditors, we are required under Section 7 of the Act to carry out an audit of the Plan, to certify
that we have done so, and:
• To report whether we believe that the Plan has been prepared and
published
in
accordance with statutory requirements set out in Section
6 of the Act and statutory guidance and,
where appropriate, recommending how the Plan should be amended so as to accord with
statutory requirements
•
To recommend:
- where appropriate, procedures to be followed in relation to
the Plan;
- whether the Audit Commission should carry out an Inspection of the
Authority under Section 10 of the Local Government Act 1999; and
- whether the Welsh Assembly Government should give a direction
under Section 15 of the Local Government Act 1999.
© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.
The KPMG logo and name are trademarks of KPMG International.
3
Basis of report
We planned and performed our work so as to obtain all the information and explanations that we considered
necessary in order to report and make recommendations in accordance with Section 7 of the Act.
For the purposes of our report, we have interpreted compliance with the statutory guidance issued by the Assembly
in the Wales Programme for Improvement: Guidance for Local Authorities as being sufficient to meet the statutory
requirements under Section 6 of the Act.
In giving our opinion we are not required to form a view on the completeness or accuracy of the information or
realism and achievement of the Plan published by the Authority. Our work therefore comprised a review and
assessment of the Plan and, where appropriate, examination on a test basis of relevant evidence, sufficient to satisfy
ourselves that the Plan includes those matters prescribed in legislation and statutory guidance and that the
arrangements for publishing the Plan complied with the requirements of the legislation and statutory guidance.
Included in the Plan are the Authority’s performance estimates for the year ended 31 March 2004. Actual results
for the year may be different from the figures reported, because events and circumstances frequently do not occur
as expected and the differences may be material. To the extent that the figures included in the Plan are estimates,
our audit work comprised an assessment as to whether the estimates made by the Authority had been properly
compiled in all significant respects on the basis of the assumptions stated by the Authority, as at the date at which
the Plan was prepared.
For the purpose of determining whether or not to make recommendations on procedures to be followed in relation
to the Plan, our work included a review and assessment, and where appropriate, examination on a test basis of
evidence relevant to the adequacy of the systems set in place by the Authority for collecting and recording
specified performance information; and the testing of specific Performance Indicators (PIs) selected by the Audit
Commission in Wales (ACiW) and ourselves because of the inherently higher risks of their mis-statement.
The work we have carried out in order to report and make recommendations in accordance with Section 7 of the
Act cannot be relied upon to identify every weakness or opportunity for improvement. In particular, it has not
necessarily covered the same areas as an Inspection.
Many of the issues identified by this work as requiring further attention have already started to be addressed by the
Council through their inclusion in improvement work programmes. Others are currently being discussed with the
Council.
There are, nonetheless, a number of important issues that are fundamental to the delivery of the Council’s
improvement agenda that are raised as formal recommendations in pages 6 to 11 of this report.
Unqualified Opinion
In our opinion Bridgend County Borough Council has prepared and published its Corporate Improvement Plan in
all significant respects in accordance with Section 6 of the LGA 1999 and the statutory guidance issued by the Welsh
Assembly Government.
Recommendations on referral to the Audit Commission in Wales / Welsh Assembly Government
We are required each year to recommend whether, on the basis of our audit work, the Audit Commission in Wales
should carry out a Best Value Inspection of the Authority or whether the Welsh Assembly Government should give a
direction.
On the basis of our work:
We do not recommend that the Audit Commission in Wales should carry out a Best Value Inspection of Bridgend
County Borough County Council under Section 10 of the Local Government Act 1999.
We do not recommend that the Welsh Assembly Government should give a direction under Section 15 of the Local
Government Act 1999.
Appointed Auditor’s signature:
Date:
The Authority must consider this report and formally respond to the statutory recommendations contained within it,
within 30 working days.
© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.
The KPMG logo and name are trademarks of KPMG International.
4
Recommendations/Updated Risk Assessment
Observation: Risk Assessment
Recommendation
A key element of the Wales Plan for Improvement process is the requirement for each
Authority to undertake a Whole Authority Analysis on a five yearly basis, which should be
revisited annually. The Authority updates its self assessment and agrees the results with the
regulators in the Joint Risk Assessment Process. The Authority’s risk assessment for the
current year considered, among other things;
(R1) The Authority will need to prioritise the risks identified in the Joint Risk Assessment, as
soon as possible, in order to focus its limited resources on the areas which are considered to
pose the most significant threat to the successful implementation of the Corporate
Improvement Plan. The urgency is driven by the forthcoming budget process, which must
begin to reflect the corporate priorities to drive change.
 the corporate and service priorities as detailed in the 03/04 Corporate Improvement
Plan
 the findings of the Joint Risk Assessment produced by the Audit Commission in
2003
 a Strategic Risk Profile of the Council produced by external consultants, Marsh
The final risk assessment exercise was undertaken in March 2004 by the Cabinet and
Corporate Management Team Working Group and agreed with the regulators. We believe
that the process undertaken by the Council for identifying risks was fair and subject to
internal challenge, however, the Authority recognises in the Corporate Improvement Plan
that they have yet to prioritise the identified risks. Given the Authority’s expected tight
budgetary settlements from the National Assembly of Wales, prioritisation is crucial if the
Authority is to have sufficient focus to be able to deliver on its key objectives.
© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.
The KPMG logo and name are trademarks of KPMG International.
5
Recommendations: Corporate Improvement Plan
Observation: Linking of the budget to the Corporate Improvement Plan
Observation: Community Strategy
The 2004/05 Corporate Improvement Plan is a well-designed document that presents a fair
picture of the Council’s performance in the year and sets out relatively concisely the plan for
the year ahead. The summary corporate improvement plan is also well set out, and is a fair
reflection of the full corporate improvement plan. Following discussions with ourselves, the
Authority has decided that future Corporate Improvement Plans will be prepared on a rolling
basis to cover three years. The Authority will then be able to plan on a longer term basis,
annual budgets will be more closely linked to the Corporate Improvement Plan than in
previous years, and the Authority’s key objectives should have the necessary financial resource
to deliver their set targets.
The statutory guidance from the National Assembly dictates that the Community Strategy should
be the ‘central reference point’ for the Corporate Improvement Plan. The Authority did not meet
the Assembly’s timetable for issuing the Community Strategy by 31 March 2004, but issued a
draft for consultation in May. The Authority acknowledges that the draft is a ‘high level’
document and does not set out in any detail how the Authority will achieve its aims and
objectives over the coming years.
The Plan and budget are inter-related. The key change activities listed in the 2003/4 plan had
not been subject to formal costing procedures, which the Authority recognised by setting
recycling of resource as one of its key aims.
Recommendations
(R2) The Authority will need to ensure that the budget for 2005/06 reflects the overall aims
of the current Corporate Improvement Plan, and that key objectives are supported with the
appropriate level of financial resource.
(R3) The process for developing the 2005/8 Corporate Improvement Plan is scheduled to start
in the Autumn of 2004. It is critical that this happens, so that the necessary financial analysis
can be used to drive the new three-year plan and ensure that the Authority’s goals are realistic
and achievable.
The Corporate Improvement Plan refers to the draft Community Strategy, but there is a risk that
any changes in the Community Strategy from this process there will be differences in the final
strategy not reflected in the Plan.
The Chief Executive has now taken the lead on the Community Strategy, and has been chairing
the Local Strategic Partnership responsible for producing the Community Strategy. This is
evidence of the importance that the Authority is now placing on delivering a strong relationship
with its community. The Authority has also recruited an external consultant to help the Local
Strategic Partnership complete the process. It is imperative that the Authority continues to drive
this process and that the final, agreed strategy is used to inform the 2005/08 Corporate
Improvement Plan.
Recommendation
(R4) The Community Strategy should be given high priority and brought to a conclusion so that
the 2005-8 Corporate Improvement Plan is based on an agreed ‘central reference point’. The
process should be monitored regularly to ensure that progress is made in accordance with the
agreed timetable.
© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.
The KPMG logo and name are trademarks of KPMG International.
6
Recommendations: Corporate Improvement Plan
Observation: Communication
Observation: Future Work Programme
Ownership and communication are key to the successful implementation of the Corporate
Improvement Plan. It is crucial that all stakeholders support the process and work towards the
same goals. The Authority has engaged with its external stakeholders through the consultation
process. We have also seen evidence of a desire to ensure a cultural change at a corporate level in
Bridgend, facilitated by work carried out during the year by Syniad. However there is still
evidence of a lack of ‘buy in’ from staff members and, as recognised in the Plan, corporate
objectives are still not reflected in directorate and departmental service plans. Going forward the
Authority should consider interactive ways of engaging employees in order to ensure that all
services and departments are aware of the Authority’s objectives and understand and support the
mechanisms that are in place to achieve successful outcomes.
The improvement work programme set out in the Corporate Improvement Plan considers
corporate and service level risks separately. The action plans dealing with service risks include
milestones and deadlines but, as recognised by the Council, lack any detailed information on
costings and efficiency savings. Corporate risk action plans are high level and lacking in detail.
They will need development if the Authority is to be able to achieve its desired improvement.
Recommendation
(R6) Action plans should be further developed to include SMART objectives which are clearly
linked to the risks identified in the Corporate Improvement Plan.
Recommendation
(R5) The Authority should consider how it might engage its staff in a more proactive way for the
2005/08 Corporate Improvement Plan to ensure that the objectives are embraced as widely as
possible across the Authority. This could include, for example, a series of presentations cascaded
from directors and line managers, with opportunity for staff to feed back comments.
© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.
The KPMG logo and name are trademarks of KPMG International.
7
Recommendations: Corporate Improvement Plan
Observation: Performance Indicators
The Authority is required to record and report certain performance indicators set by the National
Assembly for Wales (NAWPIs). Of the NAWPIs disclosed in the Corporate Improvement Plan:
• the majority (79%) had been accurately calculated.
• 11% related to housing indicators that the Authority chose
report as a result of the Housing Stock transfer
not
which occurred mid year
to
• 2% had not been recorded
• 2% were adjusted following audit
• only 6% of indicators were considered to be materially
misstated or not supported.
The set of NAWPIs does not necessarily measure all of the areas of performance that are important to
Bridgend. In these cases, the Authority should develop local PIs to monitor and, where possible,
benchmark performance. There is presently inconsistency in the use of local PIs. Some services make
good use of local PIs; however the Corporate Improvement Plan recognises that there are services that
have no local PIs. Those local PIs that have been disclosed in the Corporate Improvement Plan do not
have targets set for 2004/05.
The Authority recognises that there is scope to further develop this area and anticipates that
all services will have a minimum of one local PI for the 2005/08 Corporate Improvement
Plan and also intends to align local PIs where possible with the Community Strategy. While
we agree that it is important to roll out local PIs across the Authority, there is a risk from
measuring single PIs in isolation. Service areas may focus on the single PI to the exclusion
of other important factors. A simple example might be an area that increases its outputs
successfully, but increases costs to do so.
The Authority has benchmarked its PIs against average statistics for England and Wales. It
has not, however, used information from similar Authorities to compare performance.
Benchmarking against peer groups would provide the Authority with useful information that
could help in assessing performance and setting future targets.
Recommendation
(R7) The Authority should continue to support the development of the PI processes and
encourage their use as a tool in the performance management process.
Performance indicators should not be used in isolation, but in a “balanced” group that deals
with all the major issues facing a service area.
PIs, national or local, should be used consistently to measure performance both internally
and also against other comparable Authorities.
© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.
The KPMG logo and name are trademarks of KPMG International.
8
Recommendations: Performance management
Observation: Performance Management Framework
Observation: Collation of Performance Information
Performance Management is an end to end process. It involves identifying objectives, preparing
detailed strategies, action plans and targets, finding measures (performance indicators) that can be
used to track progress against the plan, having a reliable process for reporting the key PIs to line
managers, directors and members, taking action if the PIs are out of line, and ensuring that
individuals’ personal objectives and appraisals are focused on the achievement of the Authority’s
objectives.
The Council has a system in place for the quarterly collation of NAWPIs. The system is
labour intensive and potentially distracts the performance management unit from its core role
of analysing, interpreting and reporting performance information. The performance
management unit recognise this and has considered alternative solutions such as IT packages;
they are now awaiting guidance from the National Assembly regarding future changes to the
performance management framework before making an investment.
The Authority has recognised that its performance management processes need further
development, and that a cultural change is necessary if services are to be managed more
effectively. A Performance Improvement Group has been established at a very senior level in
order to make this happen. The group will initially be primarily responsible for ensuring that all
risks identified as part of the Joint Risk Assessment are being dealt with appropriately and that
any significant issues are escalated to the Corporate Management Board. The group will also
work closely with the Performance Management Unit. It is important that the new group takes a
key role in considering and addressing the issues concerning the quality and use of performance
information across the Authority as a whole.
The Authority should aim for a position where performance indicators are actively used to
manage the Authority’s performance throughout the year. Managers and directors should
identify the key performance indicators in the service areas under their responsibility and
monitor them at appropriate intervals. For some severe risks, that frequency could be daily.
Significant deviations in performance should always be reported upwards so that remedial
action can be taken. The Corporate Management team should review the PIs that relate to
the Authority’s top level objectives and risks.
Recommendation
R8 The Authority should review its Performance Management Framework, to define clearly the
links between objectives, service plans, budgets, indicators, targets and individuals’ objectives and
appraisals. It should communicate the need for performance management to all staff.
Recommendation
R9 The anticipated work programme for the Performance Improvement Group should include
provision to address the issue of the quality, use and interpretation of performance
information.
© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.
The KPMG logo and name are trademarks of KPMG International.
9
Recommendations: Track record
The Council has made significant effort during the year to consider how it will be best placed to drive the WPI agenda in the future. It has made good progress in some areas, particularly with
regard to adopting a new 3 year framework for its strategic planning, which should help to drive real improvement in the longer term. There remains, however, a significant number of issues raised
in the prior year audit that have yet to be fully addressed (as set out in the table below). It is crucial that the Authority endeavours to address recommendations, as many of them are fundamental in
determining whether or not the Authority will be able to meet its objectives.
2003/04
ACiW ref
Recommendation
Comments
S2
The Improvement plan for 2004/05 should include a clear statement of agreed
corporate objectives which inform priorities and the allocation of resources
The Corporate objectives have been clearly identified, however the issue of allocating
resources to support them will not be fully addressed until the change in the planning
process anticipated for compilation of the 2005/08 Corporate Improvement Plan
S4
Service managers should produce detailed under pinning action plans which include
cause of risk, action proposed, resources required(or saved) milestone dates,
accountable officer and expected improvement to service
The Authority continues to work towards the strengthening of all its action planning,
but recognises that the work is not complete. One key factor identified is the need to
develop SMART objectives for plans.
S5
Service managers should be provided with guidance and training to ensure that
target setting is robust and undertaken consistently
The Authority organised training for over 60 officers during the year, however, there is
scope to further develop this area by setting and communicating policies internally.
S6
The future plans should include data from peer groups along with appropriate
narrative to explain performance
The 2004/05 plan provides Welsh and English average statistics but has not included
information relating to similar Authorities.
© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.
The KPMG logo and name are trademarks of KPMG International.
10
Recommendations: Track record (continued)
2003/04
ACiW ref
Recommendation
Comments
S7
i) Corporate objectives should be fully reflected in directorate and
departmental/service plans
The Authority recognises that this will not be fully effective until the intended
changes in the planning process take place for the 2005/8 Corporate Improvement
Plan.
ii) Links between departmental/service plans and individual targets should be
strengthened
S8
i) The Council needs to progress as a matter of priority the development of its
consultation strategy and community plan
The Authority continues to progress the Community Strategy. There is a significant
level of further development necessary which must be undertaken and monitored over
the coming months.
S9
Local PIs and targets should continue to be developed to enable performance of all
services to be measured against key objectives. Where possible performance should be
compared with other councils.
The Authority needs to further develop PIs and to benchmark its performance against
similar Councils.
Trend in performance
The overall trend in performance as measured by the PIs reported in the Corporate Improvement Plan is positive. Of the readily comparable PIs, 65% showed improvement in 03/04 (53%
reported in 02/03); however only 57% met or exceeded their target.
© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.
The KPMG logo and name are trademarks of KPMG International.
11