Fouls Within

Nothing about the 19th January Audit meeting could be described as a caper. On the contrary, I found it a bruising and quite stressful affair. Reading a thick wodge of committee papers had eaten into much of Sunday afternoon and I noted cynically that what I felt was the most important item had been “strategically buried” at the back of the agenda. “Surely sheer coincidence!”). My cynicism seemed well placed when I read that this final report was strongly recommending members to dispense with the services of our “external” legal auditors, who fulfilled the crucial internal audit function; and instead; go back to using Flintshire’s staff. Having served in the era of Andy Sutton, the internal auditor who fell foul of his masters when he allegedly delved too deeply into financial affairs and thus the files needed to do his job, were withheld. He commenced legal action but left Flintshire’s employment with no clear victory for either side. Having met him, at his request whilst the legal battle still raged, it seemed he was already a broken man, shocked by treatment from officers and it was alleged that his health was in shreds. The Chief Financial Officer, Sutton’s boss: a woman I had helped to select in the first weeks of the new Unitary Authority in 1995/6:- had left quietly but under a cloud and no one would give a reason why! Wall of secrecy came firmly down on Flintshire. No one was speaking. I was genuinely concerned with this proposal. Savings of some £20K was promised by adopting an in house auditor but how much had Sutton’s Industrial Tribunal cost the taxpayer. I bet that the legal fees to defend the Authority against his allegations would have been far more than the proposed savings on offer by our financial officer and chief executive. Close to lunch and after a long unbroken session on complex audit affairs, the last “contentious” item was reached. The Chief Financial officer cogently explained how necessary it was to dispose of the outside firm of auditors.
Need a more corporate approach, moving into phase two of our financial plan, a huge review embracing four broad areas, better finance reporting and big area that involved lots of work to move towards a robust financial system …..etc, etc.
As a final throwaway remark, as if to sweeten the pill,
promotions within the Financial Department could be in jeopardy
if the committee declined to accept the recommendation! I rather felt the argument strengthened the need to retain outside advisers rather than to pay them off! Foot shuffling under the from some of us. Body language indicated the recommendation did not find unanimous approval by members! Our statutory auditor was asked his opinion. He agreed of course. The financial risk to Flintshire was dropping and it was time to get in line with the procedures of other Authorities, who used internal staff for such audits. The CE regaled us with several reasons as to why we should bring the service in house. No question in his mind. This was the way to go”. Shuffling of feet around the table became quite agitated. We seemed to be under the cosh! Our Chief Legal Officer’s opinion was sought and, he too felt that much had moved on since 2001, better check and balances now existed and he generally approved the move. I was getting very depressed. Every officer had spoken compellingly for acceptance of the recommendation and we left in no doubt this was the required decision demanded of us. Thankfully, the committee had backbone and the fight back started gently with the most senior councillor suggesting that he could not accept the proposal. Although reluctant to dwell on historical issues, he saw the RSM Bentley Jennison’s continued services as crucial and it was just too early to let this company go in the light of the years of financial turmoil and suspicion. He was supported by a new but very well informed ex banker who disliked the proposal greatly and gave very cogent reasons to support his senior colleagues’ opinion. Delay!
“This is no the time to abandon transparency as to how we monitor our financial behaviour”.
Tension grew as the cllrs slowly edged towards delaying the decision and reviewing the matter in twelve months time. Concern was expressed as to why no mention of this proposal had been raised before.” This was definitely not what the top officers wanted to hear. More cogent reasons as to the need to sack the external team were thrown at us. I took no pleasure in ignoring the pleas of all our officers and advisers. I am a team player. My discomfort of challenging my CE knew no bounds but transparency was still needed and why where they all so keen to remove this firm from our trust and comfort zone? £20k savings could not be the full reason, surely? Did no one think ahead either to possible Opposition’s headline grabbing press release-
“ Coalition sacks external auditors in bid for greater secrecy”
! Weeks earlier, we had enjoyed a useful training session with the outside auditor who shared sensitive information with us and gave straight answers to our probings. We all felt happy and knew we were being offered unfettered freedom to make contact direct as required. This openness and level to trust was important to all of us. The Audit Committee’s job is to check the facts, test the systems and then make recommendations to the full Council. We need transparent and impartial advice, not total reliance on an in house official, however well meaning. I did not know if my colleagues would succumb to what I felt was overwhelming heavy pressure! I spoke of my concern to go against such weight of professional opinion but I had a memory of meeting a deeply traumatised ex internal auditor in a pub in Wrexham years ago who felt deeply wounded by some officers. I said that ‘as a Coalition, a wrong message could be signalled if we ditched the external firm’. We needed a safety net and as officers, including our Chief Executive; were dealing with many major issues, this was no time to cut us loose from impartial advice! I said,
‘We have offered you the compromise of a delay and then a reconsideration in the future’.
The air suddenly seemed very frosty indeed. The words, “control freak” kept racing though my mind. Had not the Labour top brass complained of the same phenomenon at a Constitution Committee weeks ago? The accusation was that Directors reports were being rewritten thus causing delays had left a nasty taste if true. I felt numb but took heart when the last cllr to speak mumbled,
“I’ll go with what Mrs Halford has said”.
I could have kissed him for his faith in me. The decision of the Audit Committee to reject our officers’ advice was unanimous. People seemed to be stalking out in fury! Doubtless, after such a long meeting, there was much catching up to do. In the members’ room, we discussed events. That was really heavy, said one. “Ok, I replied, but we stood firm and made the right decision’ ‘Definitely think I’m off the Christmas card list however. Laughter broke out and then we had a well deserved cup of coffee!

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