But too early to tell if levels of progress can be sustained, says Auditor General
Corporate governance failings at Caerphilly Council were caused by a combination of weaknesses and, while the authority is improving now, it is too early to tell if this progress can be sustained. That is the conclusion of a special inspection report from the Auditor General for Wales, which is published today.
The report points to a number of factors that led to the governance failings at Caerphilly council. For example, the tone at the top of the organisation changed with the appointment of a new Chief Executive in September 2010. Then, the Council became more action oriented with a greater appetite for risk and pressure for an increased pace of working. But, key governance arrangements were not reviewed or changed to reflect this, the potential for conflicts of interest inherent in the new structures were not considered and key statutory officer roles did not have sufficient profile or influence.
The report highlights a number of decisions taken by the Council which did not follow appropriate governance procedures. There were also weaknesses in the way business cases were prepared to support decisions and in the transparency and comprehensiveness of reports prepared to support decisions.
Risk management arrangements were also weak. The Internal Audit service was not used effectively. Scrutiny arrangements were not sufficiently effective and there were weaknesses in performance management arrangements. This increased the risk that governance failures would not be prevented or detected.
The Council is now improving its governance structures and is embracing the need to change. But, while the Council has developed an action plan to improve, it needs to implement the plan fully and further strengthen certain key governance functions such as risk management and internal audit.
The Council also needs to make sure that it continues to embed and maintain the more robust arrangements it is putting in place – even though financial pressures look set to increase and there is a large change agenda ahead.
The report makes 8 recommendations for improvement, including calls for the Council to:
- Clarify in an easily understandable way, the governance and decision-making roles of - the Cabinet; Chief Executive; Corporate Management team; Corporate Directors; scrutiny committees and Audit Committee.
- Ensure that it maintains appropriate documents of all decisions made and by whom, to provide assurance that decisions made are appropriate and transparent.
- Strengthen risk management processes further to embed it across the Council.
- Ensure that the actions identified to improve the HR function and workforce planning are implemented.
Auditor General for Wales, Huw Vaughan Thomas, said today:
Caerphilly Council is already taking steps to address fundamental weaknesses in governance. It now needs to continue this road to recovery and apply the same levels of energy to improving other aspects of its Corporate Services. Further changes are likely following the completion of the police investigation. The Council needs to ensure that the changes it is making, and planning, are robust enough to be sustainable for the future.