Agenda item
Audit Commission review of Council arrangements in respect of Copland School
This report introduces the Audit Commission’s report on the council’s arrangements in respect of Copland School both prior to and subsequent to receipt of allegations of financial mismanagement. This report provides some additional background to the arrangements and sets out the council’s response to the recommendations made.
Minutes:
Duncan McLeod introduced the report which included the Audit Commission’s review of the internal audit carried out in respect of Copland School. The Audit Commission had made a number of recommendations in respect of this and Duncan McLeod then referred to the council’s responses to these as set out in the report.
Andrea White then presented the Audit Commission’s report on the review of Council arrangements in respect of Copland School. Members were provided with the background to the Copland School case and the approach taken by the Audit Commission in reviewing arrangements. Andrea White then highlighted some of the weaknesses identified in the review, which included the fact that although there were checks to ensure compliance with council’s scheme for financing schools, Copland School did not have satisfactory internal audit coverage and so this control had not worked in practice. However, once the council was alerted to Copland School’s failings, it acted swiftly and decisively to ensure that those responsible were held to account and suitably replaced. Members noted the recommendations made by the Audit Commission in the report. Andrea White advised that the Audit Commission were not issuing a public interest report as matters were already in the public domain. In addition, the council had recognised that its arrangements did not work effectively and was taking action to strengthen these arrangements.
Simon Lane added that as a foundation school, Copland School had chosen the option of being audited by an external provider rather than the council. All schools that had decided to use an external provider were provided with guidance as to what would be required of them. However, the external auditor for Copland School had failed to identify problems and Simon Lane acknowledged that the council had not monitored such schools as closely as they may have done. He advised that the recommendations of the Audit Commission had been taken on board and all foundation schools were now required to be audited internally.
During Members’ discussion, Councillor Cummins, in acknowledging that all foundation schools were now internally audited, enquired whether problems at other schools had been identified and would such anomalies now be spotted more rapidly. Councillor Cummins also enquired about the possibility of asking schools to introduce a skills matrix when appointing governing body members to ensure that those appointed had the necessary skills with regard to auditing issues. Councillor Van Kalwala referred to paragraph 30 of the Audit Commission’s report and suggested that the council should have requested a copy of the audit engagement letter or written reports produced by the external auditor in order to be able to check more thoroughly for any anomalies. He asked for timeframe details in respect of implementing the Audit Commission’s recommendations.
The Chair enquired whether a record of Copland School’s payroll was retained by the council and he suggested that the accountant for each school should receive training every six months.
In reply, Andrea White stated that she was content with the council’s responses to the Audit Commission’s recommendations and that it may be appropriate for an update on the council’s progress in actioning these to be reported back to the committee in six months.
Simon Lane advised that all other foundation schools had since been written to with regard to staff payments and no other similar issues had come to light. He explained that because the bursar position was more junior than the headteacher at Copland School, it was more difficult to question staff payments, whilst the problem would have been identified much earlier if staff were on the council payroll. However it was noted that the council could not insist that school staff were paid through the council’s payroll system. Although the council would have details of school salary costs, it would not have payroll details unless it also undertook an audit. Simon Lane referred to pages 68 and 69 of the report outlining the council’s response to the recommendations and the timescale for each. He explained that a more robust approach was being taken to schools and training was also being provided to school staff, with a session arranged for headteachers and bursars on 14 October and audit issues were also being discussed with the Director of Children and Families. Simon Lane advised that the council was raising the issue of the inherent financial risks in respect of school academies with the Department for Education and the National Audit Office.
Clive Heaphy added that it was important that headteachers and bursars had sound financial awareness regarding their responsibilities and that the proper controls were in place to minimise the possibility of situations occurring like those at Copland School.
RESOLVED:-
that the report from the Audit Commission review of council arrangements in respect of Copland School report and the council’s response to the Audit Commission’s recommendations be noted.
Supporting documents: