Agenda item

This report identifies potential procurement and other issues that have arisen from works carried out at Woodlands Primary School, Gillingham.

The Monitoring Officer and Chief Finance Officer submitted a report and an accompanying addendum report that identified potential procurement and other issues that had arisen from works carried out at Woodlands Primary School, Gillingham.

The Monitoring Officer detailed the contents of the report, advising the Committee that the report specifically addressed the Council’s control mechanisms; as other matters were the subject of ongoing disciplinary investigations. Officers advised Members as to the background to this project, which included details of:

·               how and when the scheme had been included within the capital programme (budget allocation authorisation) and the absence of a written record of the reason for the decision to approve costs and a formal proposal

·               how budget monitoring had failed to identify any potential problems arising with the project until the request for further funding at the end of September 2009

·               project management, specifically the absence of a proper project plan and cost plan and the lack of clarity as to who was managing the project

·               the procurement for the building works. That the project had not followed the Council’s usual procurement processes, which would have provided an opportunity for scrutiny and challenge at an early stage as it involved Members and senior officers.

·               the lessons learnt and the view of the Monitoring Office and Chief Finance Officer that it was not proposed to make any changes as a consequence of this project to the Council’s own procurement process, as that contained all necessary control mechanisms. Noting that this project had not been subjected to the proper procurement process.

The Committee was also informed that Cabinet had considered a report earlier on 28 September 2010 setting out a range of options for delivering the additional works needed. Cabinet had agreed ‘Option D’, as detailed within the Cabinet report.

Members questioned the contents of the report and sought clarity as to the admission arrangements at the school. They were advised that the school had 1.5 forms of entry (FE) when the works started. The school had already admitted 2 forms of entry and it was noted that funding had been allocated for phase 1. Additional sources of funding would need to be sought for phase 2 and added to the capital programme to enable the school, in line with the decision by Cabinet in 2008, to continue with 2 FE rather than 1.5 FE throughout the school.

The Chief Finance Officer explained to Members in detail the stages contained within the project approval process for all Children and Adults Capital projects, which had been set out within the addendum report tabled at the meeting and agreed by Cabinet earlier on 28 September 2010. This included the requirement for outline business cases for each project, which for projects with a value in excess of £500,000 would require approval by Cabinet. He noted that the process would ensure greater scrutiny of projects and addressed the failings identified by the Woodlands Primary School building project.

The Committee critically considered the Council’s control mechanisms and expressed their concern as to the failings identified.

Members discussed the strengths of the Council’s procurement process and sought assurances as to the ability of the agreed approval process to safeguard against a reoccurrence, as it was not known how this project had been able to operate outside of the Council’s procurement procedures. The Committee was advised that such issues would be investigated as part of the current disciplinary investigations and the Monitoring Officer agreed to report back to the next meeting of the Committee on any specific lessons learnt.

In relation to the capital budget monitoring process Members were concerned that this had reported that the project had been proceeding satisfactorily until September 2009 rather than identifying problems. The Chief Finance Officer confirmed that officers had reviewed the other schemes within the programme and that the new approval process would ensure that no major scheme was able to bypass control processes. Members were also informed of officers’ intention to present the 2011-2012 capital programme in greater detail to aid transparency; specifying wherever possible specific projects and providing an analysis of how the programme would be funded. The role of the Education Programme Board, which considered progress on all school projects on a six weekly basis, was also explained and the Committee was advised that there was only one other project, using Council funding, being managed directly by a school. This was being closely monitored by officers and was on track in terms of time, cost and agreed specification. The Committee requested that the report to next meeting provides assurances as to the certainty of the capital budget monitoring controls across the Council to safeguard against this occurring again.

Members were informed that the use of the Section 106 Contribution for Grange Farm to fund this work was within the terms of the Section 106 Agreement and advised of the rationale for retaining a 2 form of entry at this school. Members also questioned the role of school governors but were informed that this was not within the remit of this report.

Decision:

(a)                                      The Audit Committee noted that Cabinet had agreed the proposed project approval process outlined in the addendum report.

(b)                                      The Audit Committee agreed that a further report be submitted to the next meeting of the Committee addressing the concerns expressed by Members as to project management and budget monitoring controls, together with any further lessons learnt concerning control issues arising from the ongoing disciplinary investigations.