greenham parish council parish council bdo control tower review management response ... to...

GreenhamParishCouncil–ControlTowerReviewResponse 1

GreenhamParishCouncilBDOControlTowerReview

ManagementResponse

24May2017


GreenhamParishCouncilResponse&ActionPlanResultingFromBDOAuditReportOverview

InApril2014,GreenhamParishCouncilpurchasedtheformerairfieldcontroltoweronGreenhamCommonwiththeintentiontoconvertintoadedicatedvistors’centreandcelebrationofGreenhamCommon’shistory.Theprojectfacedanumberofcomplicationsresultingindelaystotheplannedopeningofthesite.BDOwerecommissionedtoundertakeaninternalaudittoreviewtheproject’sgovernanceprocessesandprocedures,thefinalauditandrecommendationsbeingdeliveredinJanuary2016.

Theauditidentifiedanumberofdeficienciesinthecontrolsforthemanagementofalargecapitalprojectsuchastherefurbishmentofthecontroltower.13recommendationsweremadetoimproveprojectcontrolsandbringdeliverybackontrack.

GreenhamParishCouncilhaveactedontheserecommendationsandthefollowingresponsesetsoutthemeasuresnowinplaceorintheprocessofbeingimplementedtoaddressprojectmanagementshortfalls.

AreasIdentifiedRequiringManagementResponse

The13recommendationstoimproveprojectcontrolswere:

1) Theneedforaclearlydefinedscheduleofworksthathavebeenaccuratelycosted,providingtransparencyoncostsandcompletiondates.

2) Employmentofacapableprojectmanagerforthedurationoftheproject3) Formaltenderingprocessandduediligenceofcontractors.4) EnhancedreportingfromtheControlTowerCommitteewithscrutinyfromfull

council5) Formalcommunicationplantoupdatethepublicontheprogressofthe

refurbishmentprogramme.6) Increasedfinancialtransparencytopreventperceptionoffavourabletreatment.7) Reviewofworkomittedtoensurehealthandsafetycomplianceandproject

objectivesarebeingmet.8) Reviewthefuturebusinessplanforthebuildingandseekprofessionaladviceon

commercialstructure.9) TheControlTowerCommitteeTermsofReferenceshouldbereviewedandupdated.10) Membersshouldreviewtheirrolesandresponsibilitiesforperforminggovernance

andoversight.Theroleoftheclerkistobereviewed.11) Committeestructuresneedongoingscrutinyandconsideration12) Recordsandminutesofallmeetingtoberecorded.13) Identifyandactonanypotentialconflictofinterest.


RESPONSEANDACTIONUNDERTAKENTheneedtoadoptamorerobustandcautiousapproachtoprojectevaluation,monitoringandcontrolisacknowledged.Thecomplexityandsizeofaprojectthissizeneedsprofessionalprojectmanagementskillsandmethodologytocorrectlyinitiate,executeandcontrolprojectactivity.TheCouncil’sprioritywastoreviewtheprojectinitiationandpreparationphasestoensureaccuratecostingsanddevelopadetailedprojectplan.Toachievethis,thefollowingactionshavebeenimplemented:

• AbuildingsurveyorwasengagedinApril2016toidentifyfutureworksandprovide

someinputforfuturecostings.Thescheduleofworksproducedisattached;

• Aspartofregularscopeandriskmanagement,areviewoftheseworksandcostingwasconductedinJanuary2017toestablishgreaterdetailandprovideenhancedbreakdownofcosts;

• RecruitmentofaprofessionalprojectmanagementfirmbeganinApril2017;oncein

place,aprojectmanagerwillbetaskedwithreviewingremainingworksanddevelopingadetailedscheduleofcostsandworktobecompleted;

• Aspartofroutineriskandsensitivityanalysis,anumberofcontingencyplanshave

beendevelopedtomitigateagainst,forexample,reducedfuturefundinganduncertainrevenuesinthefirstyearofoperation;

BDORECOMMENDATION1

Theneedforaclearlydefinedscheduleofworksthathavebeenaccuratelycosted,providingtransparencyoncostsandcompletiondates.

Thereisanimportantneedtorecognisethatsignificantdecisionsrequiringlargefinancialoutlayshouldfollowaformalprocessofconsiderationandevaluationbeforecommittingtoaproject.GoingforwardstheCouncilshouldensurethatthereisaclearlydefinedscheduleofworksthathavebeenaccuratelycosted,thereforeprovidingcompletetransparencyontheexpectedcompletiondatesandrunningcosts.Thecouncilshouldundertakesensitivityanalysistoidentifytheprobabilityandmagnitudeofanysevereunforeseeneventstotheexpectedcostsoftheprojects.


• Theprojectbudgetcarriesa10%contingencyfundtocaterforunforeseen

circumstances.

ResponsibleOfficer:ChairofControlTowerCommittee

ImplementationDate:ProjectManagerassignedJune2017


RESPONSEANDACTIONUNDERTAKENAsperrecommendation1above,GreenhamParishCouncilarefullycommittedtoemployingasuitablyqualifiedprojectmanagergoingforward.Thiscommitmentisillustratedbythefollowingactions/measures:

• RecruitmentofaprofessionalprojectmanagementfirmbeganinApril2017;oncein

place,aprojectmanagerwillbetaskedwithreviewingremainingworksanddevelopingadetailedscheduleofcostsandworktobecompleted.

• Adetailedjobdescriptionfortheprojectmanagerroleisattached(appendix1).

Withinthisroletheneedtodevelopadetailedcostingfortheremainderoftheprojectishighlighted.Theimportanceofhighlightingkeydatesandprojectelementswhichcouldaffecttheprojectoutcomeisalsodetailed.

• RecruitmentofanewCouncilClerkwithexperiencemanaginglarge,publicsector

projects,inordertoassistwithprojectmanagerrolerequirementsandrecruitment.


ImplementationDate:April2017

BDORECOMMENDATION2

Employmentofacapableprojectmanagerforthedurationoftheproject

ForthedurationoftheprojecttheCouncilshouldconsidertheemploymentofacapableprojectmanagertopreventanyfurtherdelaysorfinancialslippage.Aformalisedscheduleofworkstocompletetheproject(withaccuratecostings)shouldbepreparedwiththeCounciltakingownershipforon-goingscrutinyintheachievementofkeymilestones


RESPONSEANDACTIONUNDERTAKENThefailuretoundergoarigoroustenderingprocessintheearlystagesoftheproject,inpartduetotimeconstraints,iswellrecognised.Moreover,theneedtoensurevalueformoneywhenspendingpublicmoneyisattheforefrontoftheproject’stenderingprocessevidencedbythefollowing:

• TheroleofprojectmanagerhasbeenputtocompetitivetenderusingtheContracts

Finderwebsite.Therolehasthereforebeenadvertisednationallyandhasbeenoverseenbythecouncilclerktoavoidrisksofcouncillorsfacingconflictsofinterest.

• Aspartoftheformaltenderassessmentcriteriaforpublicsectorcontracts,bidders

havebeenaskedtoprovideevidenceoffinancialviabilitytoensuretheirabilitytoadequatelycompletethework.

• Althoughtheprojectisunlikelytoawardanymorecontractsabove£10,000,wheresuchacontractisrequired,asimilarprocessofformalpublicsectorinvitationtotender,independentlyoverseenbythecouncilclerk,isexpected.


ImplementationDate:April2017-ongoing

BDORECOMMENDATION3

Formaltenderingprocessandduediligenceofcontractors

Itisrecommendedthatlargercontractsareplacedonthegov.ukcontractfinder.Thisisdesignedspecificallyforthelocalauthoritiesandotherpublicsectorbodiesseekingcontractorsforover10k

Duediligenceshouldalsobeundertakenonallsupplierstoensuretheirfinancialandoperationallegitimacy–therebyreducingthereputationalrisktothecouncilintheeventofsupplierfailure.


RESPONSEANDACTIONUNDERTAKENThereportrecognisedthatareportingprocedurehadbeenputinplace,whichprovidedfullCouncilwithreportsofhighquality.Goingforwardthisreportingprocedurewillcontinue.Inaddition,withtheappointmentofaprofessionalprojectmanager,reportsaretoinclude:

• Progressandexpenditureagainstbudget.Anyvariationfromthecostschedulewill

berequiredtobereportedtofullcouncil.

• Riskandmitigation.Aspartofthenewprojectcontrols,monthlyreportingtoFullCouncilwillincludeareviewoftheprojectriskregister,ensuringappropriateriskmitigationandownership.

ResponsibleOfficer:ChairofControlTowerCommittee&ClerktotheCouncil

ImplementationDate:June2017

BDORECOMMENDATION4

EnhancedreportingfromtheControlTowerCommitteewithscrutinyfromfullcouncil

TheControlTowerCommitteeshouldcontinuetoproducemonthlyprogressreportshighlightingKeyareasforconsideration.TheseshouldbereviewedinfullbytheCouncilandchallengedprovidedwherethereareareasofconcern

The report should specify any deviations from the original project plan andfactorthis intothebudgetcalculationstoprovideamoreaccurateassessmentofoverspend.

GoingforwardstheCouncilshouldworktogethertoachievethe


RESPONSEANDACTIONUNDERTAKENTheneedtoengagewithallstakeholdersisrecognisedasvital.Generatingandmaintainingpublicsupportfortheprojectisvitalfortheproject’ssuccessinthelongerterm,whilstkeepingotherpartnersandgrantfundersinformedastoprojectprogressisanessentialpartofprojectoversight.Anumberofmeasureshavebeentakentoaddressthis:

• AllmeetingoftheControlTowerCommitteenowtakeplaceatatimewhere

membersofthepublicaremorelikelytobeabletoattend.

• Thecontroltowercommitteewillonlyexcludethepublicandmediafrommeetingswherediscussionsareofaconfidentialnaturesuchasemployment,contractmatters,whenanyitemcouldbreachDataProtectionorwhereprofessionaladvicehasbeenreceivedsuggesting“Part2”tobeappropriate.

• ACommunicationPlanfortheprojecthasbeendeveloped(attachedappendix2).

• AspartoftheCommunicationPlan,asurveyofpublicopinionhasbeenimplemented.Thisextensivesurveyisbeingundertakenwithaviewtoengagingandupdatingthepubliconthecurrentstatusoftheproject.Thesurveyhasbeenpublicisedinlocalpressandonthecouncil’swebsite.1

1ThePublicSurveyendson6May2017.Resultsareexpectedsoonafterandwillbepublicisedonthecouncil’swebsite.

BDORECOMMENDATION5

Formalcommunicationplantoupdatethepublicontheprogressoftherefurbishmentprogramme.

ThecouncilshouldconsiderpreparingaformalcommunicationplantoupdatethepublicontheissuesthathaveariseninthedevelopmentandrestorationofTheControlTower.

TheControlTowerCommitteeshouldensurethereisfulltransparencyformeetingsandnotprecludeallkeydecisionsuntilthePart2element.

GoingforwardstheCouncilshouldworktogethertoachievethecommongoalofdeliveringtheprojecttoitsagreedtimescale.Failuretodosowillfurtherincreasetheriskofdelaysandprojectcostsmaycontinuetoescalate.


• SocialmediaforTheControlTowerhasbeenre-activatedandisprovidingafeedofinformation.


ImplementationDate:March2017


RESPONSEANDACTIONUNDERTAKEN

Theawardoffuturecontractsofmorethat£10,000valuewillbesubjecttoanopentenderprocess,usingappropriatetenderportals(e.g.thegovernmentContractsFinderwebsite)toensureopennessandensurethereisnoperceptionoractualityoffavourabletreatment.

ResponsibleOfficer:ClerktotheCouncil


BDORECOMMENDATION6

Increasedfinancialtransparencytopreventperceptionoffavourabletreatment.

Thecouncilshouldensurethatitadherestothefinancialregulationstherebyensuringthatservicesarebeingobtainedfromlegitimateandreputableorganisationsbutalsotoensurevalueformoneyisobtained.

Anyongoinguseofcompaniesforconsultingandplanningworkaswellascompliance(eitherecologicalorregulatory)shouldbeverycarefullyconsideredtodemonstratetherearesufficientsafeguardsandsegregationofdutiestopreventtheperceptionoffavourabletreatment.



Partoftheprojectmanager’srolewillbeathoroughhealthandsafetycompliancereview.Thecouncilisalsocurrently(May2017)undertakingawholesaleriskassessmentofallitsactivitiesandareviewofriskinthecontroltowerprojectwillformpartofthis.


ImplementationDate:onappointmentofPMinJune2017

BDORECOMMENDATION7

Reviewofworkomittedtoensurehealthandsafetycomplianceandprojectobjectivesarebeingmet.

Thecouncilshouldformallyriskassesstheworksthathavebeenomittedtoensurethattheydonotposeahealthandsafetyrisknorwilltheirexclusionimpactsignificantlyontheoriginalobjectivesoftheprojectsenttograntfundingbodies.



Afullcomprehensivebusinessplanhasbeendevelopedandisattached.Keypointsofmethodologytoaddresstheauditreport’sconcernsare:

• ThecashflowmodelsfortheControlTowerworkonthebasisthatthecaféelement,

officespaceandstoragespaceisletonacommercialterms.Topresentarealisticcaseinthecashflowmodels,adviceonrentslikelytobeachievedforthespaceattheControlTowerandonannualrunningcostswasobtainedfromlocalprofessionals.

• Theexpenditurefiguresareallbasedonknownrunningcostsassociatedwiththebuilding(heatingoil,water,telecoms,etc).Estimatesforexpenditureonbuildingmaintenance,electricsupply,andwastecollectionarebasedpartlyonfiguresfromTheGreenhamCommonTrustwhichhasextensiveexperienceinthemanagementofcommercialandpublicbuildingsandpartlyonfiguresestimatedbymembersoftheControlTowerCommitteewithexperienceinthesubject.

• ProfessionaladviceisbeingtakenontheappropriatestructureoftheentitythatwilloperateTheControlTower.Engagementwithsolicitorsregardingformationoftheoperatingentitybeginsweekcommencing1May17.Onceoptionsforformationofthatoperatingentityareestablished,thecouncilwillactivelyworkwithHMRC.


ImplementationDate:June2017

BDORECOMMENDATION8Reviewthefuturebusinessplanforthebuildingandseekprofessionaladviceon

commercialstructure.

Thecouncilshouldreviewthecommercialplanindetailtoensureitissatisfiedwiththemethodologyusedtheprinciples/assumptionsinitsrationale.Wherethereareconcernstheseshouldbereflectedtoensureanaccuratemodelisproduced.

ThecouncilshouldseekprofessionalguidanceregardingthefuturecommercialstructureoftheenterpriseoverseeingthecommercialactivitiesattheControlTower.

ThecouncilshouldproactivelydiscusstheapproachwithHMRCtoensurecompliancewithVATregulations.


RESPONSEANDACTIONUNDERTAKENThetermsofreferencefortheCTChavebeenreviewedandareupdatedonaregularbasiswhichclearlyspecifiesthecomposition,rolesandresponsibilities(includingkeydeliverables)andreportingagreedbyfullcouncil.AcopyoftherevisedtermsofreferencefortheControlTowerCommitteeisattachedandisavailabletobeviewedontheGreenhamParishCouncilWebsite.

ResponsibleOffice:ChairofGreenhamParishCouncilandClerktotheCouncil

ImplementationDate:March2017(ongoing)

BDORECOMMENDATION9

TheControlTowerCommitteeTermsofReferenceshouldbereviewedandupdated.

Thetermsofreferenceshouldbeupdatedtoclearlyspecifythecomposition,roleandresponsibilities(includingkeydeliverables)oftheControlTowerCommittee.Thisshouldincludethefrequencyanddetailoftheupdatestobeprovidedtoensureappropriateaccountability.


RESPONSEANDACTIONUNDERTAKENTheabsenceofqualifiedindividualsinthefirstpartoftheconstructionprojectisrecognised.TheappointmentofaProjectManagerisdesignedtoovercomemanyoftheproblemsencountered:

• TheCouncilhasidentifiedinthejobdescriptionfortheProjectManageraclear

reportingstructurewheremembersofthecouncilperformanoversightrole.

HighlightedintheroleprofilefortheProjectManageristheneedto:

• Establishacommunicationscheduletoupdatestakeholdersincludingappropriate

representativesoftheControlToweroperatingcompanyontheprogressoftheproject

• Monitorandreviewallexpenditureagainstbudgets

• MonitorcashflowprojectionsandreportpotentialvariationstoGreenhamParish

Councilonaregularbasis(bi-weekly)

Thefuturebuildschedulehasbudgetedforsuitableprofessionaladvicetobesoughtinareasincluding:

• Provisionofdetailedsitedrawingstomeetfuturelistedbuildingandplanningneeds

• Promotionoftheopportunitiestooperatethecaféandoccupyanofficeandthesubsequentdraftingofcontracts.

• LegalfeesfordraftingcontractbetweenGreenhamParishCouncilandtheoperating

entity

• FeesforregisteringtheoperatingentitywiththeCharityCommission.

BDORECOMMENDATION10

Membersshouldreviewtheirrolesandresponsibilitiesforperforminggovernanceandoversight.Theroleoftheclerkistobereviewed.

TheCouncilshouldremindmembersoftheirrespectiverolesandresponsibilitiesforperforminggovernanceandoversightrolesandtheClerkshouldensurethatprofessionalguidanceandsupportisprovidedwhenrequired.


TheroleoftheClerkisthatofasupervisoronbehalfofTheCouncil,notanactiveprojectmanager.AnewClerkhasbeenrecruited,however,whohasextensiveprojectmanagementexperiencetoenablethemtofulfilasupervisoryrole,providingprofessionaladviceandguidancewhenrequired.




RESPONSEANDACTIONUNDERTAKENAnumberofgovernancestructureshavebeenimplementedtounderscoretheneedforoversightbyFullCouncilinlinewithStandingOrders:

• TheChairmanoftheControlTowerCommitteeisrequiredtoreporttoGreenham

ParishCouncilonaregularbasis.Itemsreportedtobechallengedandopenconstructivediscussionencouraged.

• The‘ControlTowerReport’iscirculatedtoCouncilmembersinadvanceofmeetings

toallowadequatetimeforscrutiny.

• SignificantdocumentsproducedbymembersoftheControlTowerCommitteewhichmayhaveimplicationsforGreenhamParishCouncile.g.businessplans,budgetsarecirculatedindraftformandcommentsencouraged.

• TheClerkmanagesthedistributionofdocuments,sharingbydefaultratherthanbyrequestorexception.

ResponsibleOffice:ClerktotheCouncil


BDORECOMMENDATION11

Membersshouldreviewtheirrolesandresponsibilitiesforperforminggovernanceandoversight.Theroleoftheclerkistobereviewed.

WhilsttheCouncilhavetakenappropriateactiontoformalisetheCommitteestructuresinplacethereneedstobeon-goingscrutinyandconsiderationofthegovernancestructuresinplacesurroundingtheprojecttoensureallCouncillorsaresatisfiedwiththerevisedarrangements.


RESPONSEANDACTIONUNDERTAKENMinutesfromtheControlTowerCommitteehavebeenmaintainedsinceitsinceptioninAugust2015.Thenewclerkensuresthiscontinues.MinutesfortheControlTowerCommitteearecirculatedtoallcouncilmembersindraftformpriortoapproval.ApprovedMinutesarepublishedontheCouncil’swebsite.SignedminutesandcopiesofanyconfidentialmeetingnotesproducedbytheControlTowerCommitteeareheldattheClerk’sOffice.

ResponsibleOffice:ChairofGreenhamParishCouncil

ImplementationDate:Ongoing

BDORECOMMENDATION12

Recordsandminutesofallmeetingstoberecorded.

RecordsandminutesshouldbemaintainedofallworkinggroupsandCommitteestosupportthedecisionsbeingmadeandtoensurethatthemeetingwasquorate.



Therecommendationisacknowledgedandamorerobustapproachisnowbeingtakentoidentifyingconflictsofinterestandensuringanysuchconflictisproperlyrecordedintheminutes.Thisshouldaddressthisissuegoingforward

ResponsibleOfficer:ChairofGreenhamParishCouncil/ClerktotheCouncil


BDORECOMMENDATION13

Identifyandactonanypotentialconflictofinterest.

TheCouncilshouldensurethatallconflictsofinterestareappropriatelyidentifiedandrecordedandmitigatingactionistakenwhereitisfelttoimpactupontheachievementoftheCouncil’sobjectives.

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