Governance, risk management and controls

30-05-2018

Do local authorities involve stakeholders enough and do internal auditors evaluate ‘stakeholder engagement’? 

"Ensuring openness and comprehensive stakeholder engagement" says the CIPFA/Solace Framework. All councils have mechanisms in place for public consultation and feedback along with partnership protocols etc. I’m sure many in local government think that they’ve ticked that box. But have they? 

In the recent Audit Scotland report Councils’ Use of Arm’s-Length Organisations, the auditors say that councils could do more to involve local communities and businesses in their choice of options: 

“We saw limited evidence of public opinion shaping options appraisals. The choice of option is treated mainly as a technical issue, but we would expect councils to show how they have considered the views of the public. This could include their expectations over service quality and the standard of facilities. Such dialogue can also make councils aware of options they may not have otherwise considered.”

It is likely that similar points could be made across other parts of the UK and for a range of service delivery options, including shared services, outsourcing, trusts and local authority companies. Hopefully any change to the delivery of council services has at its heart a goal to optimise the achievement of the intended outcomes, (the Framework Principles again), but even so the voice of the stakeholder should still be heard during the planning stages while the vision is being shaped. Otherwise the stakeholder is presented with a ‘fait accompli’ and consultation looks much more like top-down communication.

Another aspect highlighted by the Audit Scotland report is the need to make arm’s-length bodies more accountable. While the council oversees the contract or service agreement with the service provider, this is a less direct relationship than in-house delivery. Only about half of the bodies examined in the audit published performance data or board meeting information on their websites.

To what extent are internal auditors considering the ‘softer’ issues when they provide assurance on these delivery arrangements? Focusing on the financial analysis and project delivery plans is necessary, but internal audit assurance will benefit from a wider consideration of governance principles too.

Essential_Governance_Risk_Management_and_Control

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