PO003  Annual Audit and Inspection Letter  Draft
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PO003 Annual Audit and Inspection Letter Draft

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20 Pages
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audit 2003/2004 ANNUAL AUDIT AND INSPECTION LETTER Structural review The most significant internal development this Executive summary year has been the appointment of a new Chief Executive and the subsequent re-organisation of The purpose of this letter the council’s senior management structure, following the ‘Moving Towards Excellence’ This is our audit and inspection ‘Annual Letter’ to review. This process has been effectively project Members for 2003/04, presented by the managed against a tight timetable with council’s Relationship Manager and District extensive consultation and engagement with Auditor. The letter summarises the conclusions staff. The aim of this was to put new and significant issues arising from our recent arrangements in place as soon as possible and audit and inspections of the council. so minimise any disruption to delivery of We have issued separate reports during the year services and priorities. The outcome has reduced for the specific aspects of our programme that the number of directorates to five, based on the we have completed. These reports are listed at corporate strategy themes, given strategic Appendix 1 for information. management roles and responsibilities to the directors and created a Strategic Management Appendix 2 sets out the scope of audit and Board of six senior officers. Rationalisation of inspection. the top structure is an important step in Appendix 3 provides information about the fees addressing ...

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audit 2003 2004
Annual Audit and Inspection Letter Portsmouth City Council
I N S I D E T H I S L E T T E R
P A G E S 2 – 1 6  Executive summary  Key messages  Council performance  Accounts and governance  Other work  Looking forwards Closing remarks   
P A G E S 1 7 – 2 0
Appendices  Appendix 1 – Audit and inspection reports issued  Appendix 2 – Scope of audit and inspection  Appendix 3 – Audit and inspection fees
PO003 Annual Audit and Inspection Letter (Draft) December 2004
audit 2003/2004
Executive summary The purpose of this letter This is our audit and inspection ‘Annual Letter’ to Members for 2003/04, presented by the council’s Relationship Manager and District Auditor. The letter summarises the conclusions and significant issues arising from our recent audit and inspections of the council. We have issued separate reports during the year for the specific aspects of our programme that we have completed. These reports are listed at Appendix 1 for information. Appendix 2 sets out the scope of audit and inspection. Appendix 3 provides information about the fees we have charged the council.
Key messages
Council performance Over the last 12 months the council has continued to make progress on its priorities. Recently, the ‘Moving Towards Excellence’ review has led to rationalisation of the senior management structure, which should enhance cross-service working, capacity and the focus on priorities. Although progress on some other development areas and initiatives has slowed to accommodate the review, these changes have been planned and managed. In terms of service performance, 46 per cent of the council’s Best Value Performance Indicators (BVPIs) show improvement in the year, while 37 per cent show some deterioration. The best performing service on this basis was environment, with the poorest being housing benefits. An inspection by OFSTED of the council’s education function rated it as highly satisfactory and effective. This is a notable achievement, especially when compared with the results of the last inspection in 2000. The inspection by the Benefit Fraud Inspectorate also indicated some improvement. 
Annual Audit and Inspection Letter – Audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
Structural review The most significant internal development this year has been the appointment of a new Chief Executive and the subsequent re-organisation of the council’s senior management structure, following the ‘Moving Towards Excellence’ review. This process has been effectively project managed against a tight timetable with extensive consultation and engagement with staff. The aim of this was to put new arrangements in place as soon as possible and so minimise any disruption to delivery of services and priorities. The outcome has reduced the number of directorates to five, based on the corporate strategy themes, given strategic management roles and responsibilities to the directors and created a Strategic Management Board of six senior officers. Rationalisation of the top structure is an important step in addressing the corporate management issues raised in the 2002 CPA corporate assessment and in our 2003 Annual Letter. It should create the strategic focus and capacity to ensure that corporate objectives for service improvement can be delivered.
Community safety Our interim inspection of the council’s progress with its Community Safety Best Value review suggests it has lost impetus and needs early attention to ensure it gets back on track. In particular, there needs to be full corporate and member commitment to the review, and closer involvement of the crime and disorder unit. There are now plans in place to regain focus and commitment, and the council must ensure they are implemented effectively. Supporting people Our inspection of the council’s Supporting People service judged it to be fair (one star) with uncertain prospects for improvement, although the council has provided additional evidence to support its case for a higher assessment on ‘improvement prospects’.
Portsmouth City Council (Draft Version 1) – Page 2
audit 2003/2004
The main strengths of the service were found to be around financial management and monitoring, value for money and outcomes for users. However, there is a need to strengthen:  governance arrangements for the programme, including the role of the accountable officer;  corporate ownership, by recognising its importance in the Corporate Plan; and  arrangements for involving users, and for providing information to users and carers. Housing benefits During 2003/04, the council’s performance in processing residents’ claims for housing benefits deteriorated from an already low level. This was largely because of the substantial backlog of claims that had accumulated and the lack of capacity to deal with it. In the current year, the council has been able to clear the backlog, is improving its performance on the speed of processing claims and is taking action to increase the accuracy of processing. It is also making significant organisational changes in order to sustain this trend of improvement. The report on the Benefits Service by the Benefit Fraud Inspectorate acknowledges this improvement, while recognising there is still much to do. Effectiveness review In accordance with statutory requirements, the council has included a ‘Statement on Internal Control’ with its Financial Statements for 2003/04. The Statement should be supported by an annual review of the effectiveness of internal controls, but the council has made no arrangements to carry out such a review. While this is acceptable for 2003/04, which is regarded as a transitional year, a review is needed for 2004/05.
Annual Audit and Inspection Letter – Audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
In practice, most of the elements required to support such a review, including an effective Internal Audit and a sound corporate governance framework, are already in place. However, there is no corporate process for drawing together and evaluating these elements, or for reporting the results to members. This is necessary if members are to have the assurance they need before signing the 2004/05 Statement. Arrears and debt collection We have commented in the last two years on the relatively high, and rising, level of the council’s arrears. In 2003/04 there were problems with the debt collection modules of the council’s financial computer systems, and this limited the availability of management information on debts and the action taken to collect them. Collection rates for council tax and non-domestic rates showed a marked deterioration, which has been corrected in the current year. The remaining problems now need to be resolved as a matter of urgency. Risk management At the beginning of the year the council’s Risk Manager resigned and his post has remained vacant pending the outcome of the structural review. As a result, the development of the council’s risk management arrangements lost some momentum. It is important that this is regained as soon as possible. The accounts The council’s financial statements were produced in line with the new statutory deadline, one month earlier than in previous years. However, there were some significant errors in the statements. While none of these errors affected the council’s net spending or usable reserves, they undermine our confidence in the council’s financial accounting and reporting processes. We issued an unqualified opinion on 30 November.
Portsmouth City Council (Draft Version 1) – Page 3
audit 2003/2004
Action needed by the Council The council needs to take action on the following matters arising from our key messages:  ensure that focus and momentum continue to be restored in priority development areas such as risk management, following the reorganisation;  take urgent action to provide essential management information on arrears levels, pursue the collection of debts and write-off items that are uncollectible;  put in place a corporate process for evaluating internal controls and reporting conclusions to members;  ensure that action is taken to bring the crime and disorder best value review back on track as quickly as possible; and  improve processes for compiling the council’s financial statements, to ensure that figures can be supported and lessons are learned from previous years.
Council performance Over the last 12 months the council has continued to make progress on its priorities. Recently the ‘Moving Towards Excellence’ review has led to rationalisation of the structure, which should enhance cross-service working, capacity and the focus on priorities. Although progress on some other development areas and initiatives has slowed to accommodate the review, these changes have been planned and managed. In terms of service performance, 46 per cent of the council’s Best Value Performance Indicators (BVPIs) show improvement in the year, while 37 per cent show some deterioration. The best performing service on this basis was environment, with the poorest being housing benefits. An inspection by OFSTED of the council’s education function rated it as highly satisfactory and effective. This is a notable achievement, especially when compared with the results of the last inspection in 2000. The inspection by the Benefit Fraud Inspectorate also indicated some improvement. 
Annual Audit and Inspection Letter – Audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
CPA scorecard The council’s Comprehensive Performance Assessment (CPA) Scorecard for 2004 shows little change from last year. The Housing Benefit service has improved, although performance is still poor in a number of areas including speed and accuracy of claims processing. Performance on child protection issues within Social Care services for children worsened slightly in the year, but action has been taken to address this. The standard of adult services has been maintained. There is clear evidence that Education services have improved and that there is capacity to improve schools further after a slight drop in GCSE results this summer. Waste minimisation and recycling rates are good and public satisfaction with the cleanliness of the city has improved. The council is investing in upgrading its deteriorating roads and maintaining them for the future, through a private sector partnership. The council is undertaking a major management restructuring and is continuing to develop systems to ensure improvement, although progress has slowed during the re-organisation. Based on current plans, the council is well placed to improve further the services it provides to local people. Element Assessment 2003 2004 Overall Good Good education 3 3 housing 3 3 use of resources 3 3 social care (children) 3 2 social care (adults) 3 3 benefits 2 3 environment 3 3 libraries & leisure 3 3 Capacity to improve 3 3 (not reassessed in 2004) (Note: 1=lowest, 4=highest)
Portsmouth City Council (Draft Version 1) – Page 4
audit 2003/2004
CPA improvement report In this section of the Letter we comment on the progress the council has made since last year’s CPA. Our commentary is structured around the council’s six main priorities for improvement. Background The most significant corporate development over the last nine months has been the appointment of a new Chief Executive and the subsequent re-organisation of the senior management structure through the ‘Moving Towards Excellence’ review. This process has been effectively project managed against a tight timetable with extensive consultation and engagement with staff. The aim of this was to put new arrangements in place as soon as possible and so minimise any disruption to delivery of services and priorities. The outcome has reduced the number of directorates to five, based on the corporate strategy themes, given strategic management roles and responsibilities to the directors and created a Strategic Management Board of six senior officers. Rationalisation of the top structure is an important step in addressing the corporate management issues raised in the 2002 CPA corporate assessment and in our 2003 Annual Letter. It should create the strategic focus and capacity to ensure that corporate objectives for service improvement can be delivered. We refer in this letter to a number of development areas and initiatives where progress over the last year slowed. These changes have been managed to fit with the complex and demanding agenda of the Moving Towards Excellence review. Performance management The Local Strategic Partnership (LSP) has produced a new Community Strategy for 2004-2009, based on the views of local people. The council is now working with its LSP partners to develop a performance management structure to ensure delivery of the community strategy targets.
Annual Audit and Inspection Letter – Audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
The council has continued to develop its own approach to performance management over the last year. The corporate scorecard now provides clear evidence of how the council is performing, both against its own targets and compared to other councils. It enables members and senior officers to identify readily the key performance issues and trends. Members are now more involved in the performance management process:  performance reports are being provided regularly to both the Performance Panel and the Executive;  members were consulted on the selection of the high level performance indicators for the 2004/05 scorecard;  there are plans for members to have increased involvement in the selection of the 2005/06 key performance indicators; and  the role of the Performance Panel in performance management has been enhanced. Comprehensive business planning guidance has been provided to service managers, stressing the need to link service objectives to the Community Strategy and corporate priorities, and the importance of cascading objectives to individuals. However, there is still inconsistency in practice, and further work to embed this will be a priority for the new management hierarchy. A key strength of the council’s approach to performance management has been the Performance Monitoring and Improvement Board (PMIB). This grouping of senior officers played an important role in monitoring the council’s performance and holding front-line officers to account for service performance. Within the new corporate structure, this responsibility has now passed to the Strategic Management Board. In order to ensure that the greater focus the former group brought to the performance management process is maintained under the new arrangements, a part of each SMB agenda will be devoted to performance management priorities.
Portsmouth City Council (Draft Version 1) – Page 5
audit 2003/2004
Priority driven corporate resource management The council aims to ensure that it aligns the management of finance, property, IT and human resources with the delivery of its corporate priorities. As part of the ‘Moving Towards Excellence’ review, task groups are now looking at how corporate and departmental support services in each of these areas should be structured in the new organisation. This should help to re-focus working in these areas, and ensure effective support to services. A medium-term resource strategy was developed for the 2004/05 budget process, in order to ensure that the allocation of resources reflected the council’s priorities. The intention is to refine this for the 2005/06 process. The Executive now monitors spending monthly against the budget, to ensure that action can be taken promptly if there are variances. We have carried out a short review of how the council has implemented the improvement plan from its 2001 best value review of Human Resources (HR) and responded to the HR issues raised in the 2002 CPA corporate assessment. We found that there has been significant progress in these areas. However, both the HR Strategy and the Business Plan have expired and not been replaced because of the volume of HR work created since March by the ‘Moving Towards Excellence’ review. While the review is addressing many of the council’s HR issues, and seeking to improve the effectiveness of the HR support, this is without the benefit of an agreed HR strategy to drive the change. We have suggested that:  priority should be given to completing a strategy once the re-structuring is complete;  key components of that strategy should be workforce planning, staff development, and recruitment and retention policy; and  a continuing focus is needed on achieving consistent application of HR policy and practice across the council.
Annual Audit and Inspection Letter – Audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
Last year we reported the urgent need to tackle the council’s property maintenance backlog and to tailor the estate more closely to what is affordable. This involved identifying surplus properties and opportunities for sharing properties, while giving appropriate priority to funding the maintenance of retained buildings. There has been some progress on these issues, but measurable results are slow to appear. The management restructuring should help to break down departmental boundaries and facilitate a more effective corporate approach. Project and risk management The resignation of the council’s Risk Manager early this year and the subsequent restructuring, during which the post remained vacant, has meant that little progress has been made this year. Consideration is now being given to engaging external risk management expertise, in an interim capacity. The priorities remain to complete the assessment of risks and controls for all services and units, and to agree the corporate risk register and the action plans for managing the risks identified. The newly created Corporate Management Board has been asked to take ownership of this issue. On project management, the new process that was introduced last year has now been piloted and is being applied to current major projects. The Prince 2 project management methodology has been adopted and 12 staff trained in its application. The Chief Executive is setting-up a crosscutting team on project and risk management to ensure that guidance and support are available across the council. We will be reviewing progress early in the new year. Medium-term communication strategy In 2001 we carried out a desktop inspection of the council’s communications strategy. This year we revisited the topic and found that few of the recommendations from our inspection had been addressed, despite the priority given to the topic following the 2002 CPA. We concluded that the main reasons for slow progress were a lack of corporate ownership and uncertainty about roles and responsibilities. A draft three-year strategy had been produced shortly before our review, but it dealt only with external communications and was of uncertain status. Portsmouth City Council (Draft Version 1) – Page 6
audit 2003/2004
A ‘communication and customer service’ Corporate Priority Team has now been established and has been asked to develop and take forward a medium-term communication strategy. We have briefed the director on the conclusions from our review, so that the team can take account of them in their own deliberations. We will be revisiting the topic in 2005 to assess progress. Housing benefits Over the last two years the council has been taking action to control a substantial backlog of benefits claims and to improve its service to benefit claimants. The problems had arisen following introduction of the Verification Framework, a Government standard for benefits administration, and the installation of a new computer system. During 2003/04 the problem reached its peak, and the performance indicators for that year reflect this. Six of the seven BVPIs that are comparable between years show a deterioration in performance. In the current year the council has been able to clear the backlog, is improving its performance on the speed of processing claims and is taking action to increase the accuracy of processing. Other changes are now being made to ensure performance continues to improve, including centralising processing, working more closely with claimants and increasing the levels of quality checks. However, it is very unlikely that the council will meet its demanding LPSA targets for benefit processing speed and accuracy within the required timescale. The Benefit Fraud Inspectorate (BFI) issued an improvement report to the council in September. This accorded the service a CPA score of 3, compared with 2 last year. The report identifies a range of issues that need to be addressed if the service is to meet fully the BFI performance standards.
Annual Audit and Inspection Letter – Audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
We have continued to track the council’s benefits performance and our most recent report was issued in September. We acknowledged the significant improvements that had been made since our 2003 review but pointed to the need to maintain the trend of improving processing speeds, to set targets for reducing overpayment debt, which had risen by about £1 million to £5.5 million, and to ensure that the implementation of the new computer system is completed effectively. We have agreed a way forward with officers and will be reviewing progress in April 2005. Clean and Tidy City The council is seeking to achieve integrated management of the street scene, with the aim of increasing public satisfaction with street cleansing to 65 per cent by March 2005. As satisfaction increased from 50 per cent in 2000 to 62 per cent in 2003, the council appears to be on target. There has been some progress on the main actions planned, including co-ordination of enforcement activity, improved communication between services and common badging and uniforms. In addition, the council recently won a national award for the best management of litter and refuse. However, there continue to be problems in achieving a common standard of cleansing across the various contracts. This will be a priority for the newly appointed strategic Director of Environment and Transport. Other improvement areas In May this year the council’s education service was inspected by OFSTED and was judged 'a highly satisfactory and effective local education authority with good capacity for improvement’. This is a very creditable achievement and a major step forward from where the council was judged to be in the 2000 inspection. Nevertheless, the council recognises that the focus on school improvement must continue. After the significant improvement in GCSE results last year, this summer’s results slipped back a little and the council will not now be able to achieve its related strategic targets.
Portsmouth City Council (Draft Version 1) – Page 7
audit 2003/2004
In recent months the council has signed an innovative major contract with a private sector provider under the Private Finance Initiative (PFI), for the management and maintenance of its highways, footways, signs and streetlights over the next 25 years. This is designed to resolve the problem of deteriorating roads and insufficient council resources to improve them. It provides for the city’s roads to be upgraded in the early years of the contract and maintained thereafter, at an annual cost of around £12 million net of contributions from the Government. Other services Outside of the council’s improvement priorities, social services have been successful in overcoming the budget problems they experienced in 2002/03 and delivered services within budget for 2003/04. However, this has inevitably had an impact on performance. Indicators for children’s social care services have slipped-back in some areas, but problems with the backlog in reviews of children on the child protection register and the allocation of social workers to cases in this high-risk area have now been addressed. Performance on care services for adults and older people has been maintained despite the difficult budget constraints. The council’s performance across a whole range of waste minimisation and recycling indicators continues to improve and reflects good practice in a number of cases. Other performance work Over the last year we have carried out performance work in some areas that do not relate directly to the council’s priorities for improvement. The results are reported below. ICT and e-Government In 2002 we carried out reviews of the council’s arrangements for managing IT and preparing for e-Government. Early this year we followed-up those reviews to assess progress made on the issues raised.
Annual Audit and Inspection Letter – Audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
On IT management we fo und that good progress had been made in strengthening corporate standards and improving communications with departments. We had expressed concerns previously that corporate standards in the provision of IT services were not being as effectively applied by service departments as they could be, and we urged that the proposed Best Value review be brought forward to enable this problem to be addressed council-wide. No action was taken on this, but the subsequent ‘Moving Towards Excellence’ review, which is now considering how support services should be delivered to the new directorates, provides the opportunity to address these concerns. The Best Value review is also now being progressed. On e-Government, we found there had been good progress in re-aligning responsibilities to focus more on customer service and on developing arrangements to enhance the impact and effectiveness of the City Helpdesk. IT security We carried out a high-level assessment of the actions the council is taking to safeguard information and systems, based on the ten key areas of the British Standard for Information Security Management (BS7799). We found that the council has most elements of a secure environment in place, but we have recommended that existing guidance should be updated and consolidated, that a system should be introduced for monitoring adherence to operating procedures, and responsibilities for IT security should be recognised within job descriptions. We have also pointed to the need for the IT business continuity plan to be updated and incorporated into a corporate business continuity process. Education SEN In March this year we reported on our review of the council’s management of special education. This was prompted by performance figures suggesting that a relatively high proportion of city pupils go to special schools rather than mainstream schools when formally identified (‘statemented’) as having special needs.
Portsmouth City Council (Draft Version 1) – Page 8
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Our review showed that the council has been active in developing its approach through restructuring its assessment team, revising policies and procedures, and reviewing special school provision. We suggested that there is now a need to support and encourage secondary schools, in particular, to accommodate newly statemented pupils, whilst also strengthening processes for re-integrating pupils from special schools. OFSTED, in their May 2004 inspection of the education authority, identified the need for schools to be convinced of and committed to the council’s inclusive education and SEN strategies, and the council has an action plan for addressing this. Democratic arrangements In May 2004 we reported on aspects of the council’s democratic arrangements, including scrutiny processes, health scrutiny and the ethical framework. We concluded that scrutiny processes were making a good contribution to performance monitoring and policy development, and that useful work is being done on individual scrutiny reviews and oversight of the Best Value process. However, we suggested that the contribution from scrutiny might be enhanced if its work were aligned better with the council’s improvement priorities. We were satisfied that the council has complied with ethical framework requirements. We have pointed out that having a member of the governing party as chair of the Standards Committee is contrary to accepted good practice, and that an independent chair would reinforce the committee’s independence. At the time of our review, health scrutiny work was constrained by the lack of officer capacity to support it, but this has now been addressed. Partnerships follow-up In August 2003 we reported on the council’s management of partnerships and agreed an action plan. In March this year we reviewed progress with implementing that action plan.
Annual Audit and Inspection Letter – Audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
We found that the council has implemented all recommendations except one. There are now clear criteria in place to guide the council’s decisions on participating in new partnerships, helping to ensure they make a significant contribution to the council’s priorities, and good practice guidance on partnership working has been issued to all city partnerships. The only outstanding issue is a review of the effectiveness of the 2004/05 business planning process in ensuring that community strategy targets are met. Performance information We have completed the audit of the council’s Best Value Performance Indicators (BVPIs). As a result, 18 of the 94 indicators published required amendment, but only 6 of these had material errors likely to give a misleading view of the council’s performance. In addition, there were two required indicators not published and four indicators on which we had to express reservations because we could not confirm that the published data was correct. The level of errors and uncertainties was similar to the previous year, and demonstrates the need to continue driving for improvement in data quality. Other Audit Commission inspections Crime and disorder inspection Last year we reported on the first stage of our inspection of the council’s crime and disorder Best Value review, which assessed the objectives and scoping of the review. We have recently carried out the second stage inspection, with the aim of assessing progress after the information has been gathered and before improvement planning begins.
Portsmouth City Council (Draft Version 1) – Page 9
audit 2003/2004
We have concluded that the council has started to deliver on some of the objectives of the review but progress in completing others has been mixed. In our view, the review has lost impetus, for a variety of reasons. The council now needs to ensure that there is:  full corporate commitment to the review and better support from councillors; and  closer involvement by the crime and disorder unit. Priority should now be given to:  improving the ‘user focus’ of the review by accessing the views and needs of local people;  making better use of comparative information to challenge the council’s current approach to, and organisation of, crime and disorder related activities; and  assessing whether the crime and disorder service is providing value for money, and considering alternative methods of delivering services. The council will then need to analyse and prioritise the review findings and carry out a thorough options appraisal before developing a ‘user focused’ improvement plan. The Deputy Leader has now been given responsibility for overseeing this review, and the council expects to complete it by June 2005. We will then carry out our third stage inspection. Other housing inspections Housing repairs and maintenance We carried out an inspection of the council’s housing repairs and maintenance service in September. We assessed the service as performing at a ‘good’ (two-star) level with promising prospects for improvement. This indicates a significant improvement since our inspection of responsive repairs in 2001. We concluded that there are clear aims for the service, an ability to prioritise effectively and good performance management arrangements in place. In addition, customer satisfaction with the service is generally high.
Annual Audit and Inspection Letter – Audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
There are some areas highlighted for further improvement, principally the need to:  establish basic standards for the service;  offer repair appointments outside office hours;  ensure consistent quality of voids re-let to tenants, and clarify who is responsible for any outstanding repair issues; and  improve the effectiveness of councillors’ use of management information to manage areas of under-performance. Supporting people In partnership with th e Commission for Social Care Inspection and Her Majesty’s Inspectorate of Probation, we carried out an inspection of the council’s ‘Supporting People’ service in July 2004. The council was selected for inspection because it had relatively high service costs, and the work focused on the effectiveness of current service delivery, the value for money presented by contracted services and the outcomes for vulnerable people. The inspection team assessed the council as providing a fair (one-star) service with uncertain prospects for improvement, although the council has provided additional evidence to support its case for a higher assessment on ‘improvement prospects’. Inspectors identified some real strengths of the service, particularly around financial management and monitoring, value for money and outcomes for users. However, they highlighted a range of weaknesses, including:  poor governance arrangements for the programme and a need to strengthen the role of the accountable officer, to accord with grant conditions and guidance from the Office of the Deputy Prime Minister;  a lack of corporate ownership, with no reference to supporting people as a priority or any related targets reported in the Corporate Plan;  a lack of direct service-user involvement; and  little easily accessible information about the service and variable awareness amongst front line reception staff.
Portsmouth City Council (Draft Version 1) – Page 10
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There is clearly a need for the council to take action on these and other weaknesses identified in our inspection report, and an action plan is being agreed. Working with other inspectorates and regulators An important aspect of the role of the Relationship Manager is to work with other inspectorates and regulators who also review and report on the council’s performance. These include:  Office for Standards in Education (OFSTED);  Commission for Social Care Inspection (CSCI);  Benefits Fraud Inspectorate (BFI);  Department for Education and Skills (DfES); and  Government Office for the South East (GOSE). We share information and seek to provide ‘joined up’ regulation to the council. During the last year the council has received the following assessments from other inspectorates:  OFSTED review of the education authority;  CSCI Annual Review of Social Care services; and  BFI Improvement Report on Benefits administration.
Accounts and governance Audit of 2003/04 accounts We have completed our work on the council’s financial statements and have issued an unqualified opinion. Matters arising from the final accounts audit The published accounts are an essential means by which the Council reports its stewardship of the public funds at its disposal and its financial performance in the use of those resources. Members approved the council’s annual accounts at the General Purposes Committee meeting on 31 August 2004. Annual Audit and Inspection Letter – Audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
In last year’s Annual Audit and Inspection Letter we emphasised that timeliness in producing the accounts will become increasingly important over the next few years as the deadline for completion of the accounts is brought forward in line with Government requirements. While the council has successfully met the requirements this year, the advancing deadlines over the next two years will be increasingly challenging and will require early planning and careful scheduling of key meetings. Report to those with responsibility for governance in the council We are required by professional standards to report to those charged with governance (in this case the General Purposes Committee) certain matters before we give an opinion on the financial statements. This year your officers made adjustments in the accounts for the misstatements we identified, so we have not issued a formal report to the committee but have written to the Chairman summarising the main issues arising. These are:  a general suspense account had not been cleared and led to a significant overstatement of both debtors and creditors;  the accounts receivable control account had not been reconciled;  deferred charges had not been treated correctly, leading to misstatement of capital charges in the revenue account; and  there were gaps in the documentation supporting the accounts which adversely affected the efficiency of the audit process. While none of these errors affected the council’s net spending or usable reserves, they undermine our confidence in the council’s financial accounting and reporting processes. Nevertheless, through working with the accountants to resolve the problems, we were able to issue an unqualified opinion on 30 November. There remains a need to improve supporting documentation for the accounts and to ensure that the financial statements are internally consistent before submission for audit. We will be working with officers to help them achieve this for 2004/05.
Portsmouth City Council (Draft Version 1) – Page 11