Outcome from council's Audit Committee meeting
Following the meeting of the council's Audit Committee on Monday, 11 March 2019, three recommendations were made:
1- To publish a redacted version of the report (with the redactions to be made and explained by the council's legal advisors Eastlaw)
2 - To recommend to council and cabinet that a cross-group working party be established to review the internal auditor's report, explore lessons learnt and agree next steps. It was agreed that this working group would report back to the Audit Committee with their findings.
3 - To recommend that a mechanism be developed for the Audit Committee to monitor all of the current major projects underway.
Speaking after the 3-hour Audit Committee meeting, Ray Harding, Chief Executive, said: "This was a really constructive meeting, and the report has highlighted lots of lessons to be learnt, particularly around our processes. This is the first project of this type that we have been involved in, where a third party has run the project. It has clearly shown gaps in our procedures for monitoring.
"Committee members agreed that it was right that the report in full was considered in closed session as the report contained sensitive information. However, all were in agreement that a version of report should be made available publicly as soon as possible, so that the public can view the findings for themselves. The committee agreed that transparency must be maintained."
"Members also agreed that the Audit Committee would recommend to council and cabinet that a cross group/party working group be established to further interrogate the report and its findings and agree next steps. It was agreed that this group would report back to the Audit Committee, so that those involved in the original decisions, would not be 'marking their own homework'.
"The Audit Committee also recommended that a mechanism be developed for the Audit Committee to monitor all of the current major projects that are underway, so that any lessons learned could be immediately applied to current projects, and additional scrutiny would take place."
Ray Harding added: "This investigation by our audit team has identified problems with our procedures which may not have come to light if the loan had been repaid. It has also highlighted that we have appropriate legal agreements in place to secure the building into council ownership and to collect the income. We are in discussions with the current owners of the building regarding the reimbursement to the council of the outstanding loan amount. Importantly, despite reports to the contrary, millions of pounds of tax payers money have not been 'lost' as the town has a full and functioning Innovation Centre, an iconic building, and businesses that are growing and developing as a direct result of its existence."
He continued: "We will work hard with councillors and the audit team to review and tighten up our processes to ensure we are not exposed to this level of risk in the future."
He confirmed that while the report clearly identified some significant procedural failures, they are not the fundamental cause of the current situation. The cause of the current situation is non repayment of a loan by a third party. It should be remembered that the building is a success, is serving its purpose and is an asset to the town. He also felt that the council should build on the lessons learned, so that the future regeneration of the town is not jeopardised by fear of not taking on ambitious projects.