Annual Audit and Inspection Letter

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Annual Audit Letter

December 2005

Last saved: 21/12/2005 08:43:00

Annual Audit and Inspection Letter

Dorset County Council

 

Audit 2004-2005

 

                                     

 

  The Audit Commission is an independent body responsible for ensuring that public money is spent economically, efficiently and effectively, to achieve high-quality local services for the public. Our remit covers around 11,000 bodies in England, which between them spend more than £180 billion of public money each year. Our work covers local government, health, housing, community safety and fire and rescue services. As an independent watchdog, we provide important information on the quality of public services. As a driving force for improvement in those services, we provide practical recommendations and spread best practice. As an independent auditor, we ensure that public services are good value for money and that public money is properly spent.  

Status of our reports to the Council Our reports are prepared in the context of the Statement of Responsibilities of Auditors and Audited Bodies issued by the Audit Commission. Reports are prepared by appointed auditors and addressed to members or officers. They are prepared for the sole use of the audited body, and no responsibility is taken by auditors to any member or officer in their individual capacity, or to any third party. Copies of this report If you require further copies of this report, or a copy in large print, in Braille, on tape, or in a language other than English, please call 0845 056 0566. © Audit Commission 2005 For further information on the work of the Commission please contact: Audit Commission, 1st Floor, Millbank Tower, Millbank, London SW1P 4HQ Tel: [phone] Fax: [phone] Textphone (minicom): 020 7630 0421 www.audit-commission.gov.uk 

Annual Audit and Inspection Letter │ Contents 3 

Contents Key messages 5   Council performance 5   The accounts 5   Financial position 5   Other accounts and governance issues 6   Action needed by the Council 6   Performance 7   CPA scorecard 7   Direction of Travel report 8   Best value performance plan 11   Working with other inspectorates and regulators 11   Accounts and governance 13   Audit of 2004/05 accounts 13   Report to those with responsibility for governance in the Council 13   Financial standing 14   Systems of internal financial control 15   Standards of financial conduct and the prevention and detection of fraud and corruption 17   Legality of transactions 17   Use of resources judgements 18   Other work 20   Grant claims 20   National Fraud Initiative 20   Looking forwards 21   Future audit and inspection work 21   Revision to the Code of Audit Practice 21   Closing remarks 22   Availability of this letter 22  

Dorset County Council

4Annual Audit and Inspection Letter │ Contents

Appendix 1  Background to this letter The purpose of this letter Audit objectives

Appendix 2  Audit reports issued

Appendix 3  Audit fee  

 

Dorset County Council

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Annual Audit and Inspection Letter │ Key messages 5 

Key messages

Council performance 1 Under the revised CPA methodology this year, the Council has been assessed as a three-star authority, the second highest rating. Last year, it was rated as excellent, the highest rating under the old methodology. This underlines that the Audit Commission's new methodology represents a harder test for all councils, particularly as we have concluded from our Direction of Travel work that the Council has improved well over the last 12 months. 2 One of the key reasons that the Council did not achieve the highest, four-star CPA rating in 2005 was the assessment of its adult social care services as 2 out of 4, serving some adults well. Clearly this is one of the service areas  where the Council needs to prioritise its improvement activities over the coming year. 3 The Council scored 3 out of 4 (performing well) on the Audit Commission's new use of resources assessment. The value for money (VFM) theme within that overall assessment also scored 3, both in terms of current achievement of VFM and its arrangements for securing improvements in VFM. However, one area where improvement is needed is in providing a clearer focus on VFM in the Council's routine performance management reports.

The accounts 4 We have given an unqualified opinion on the Council's financial statements for 2004/05. No significant issues arose during the audit. However, we have recommended that the Council review its processes for accounts approval to ensure that there is more opportunity for robust and probing member scrutiny of the accounts prior to approval.

Financial position 5 The Council has a sound track record of delivering expenditure within budget, and working balances are well within the target range agreed by members. However, officers have identified significant overspendings in Education and Social Care budgets in the current year, which will probably be met in large part from use of balances and reserves. There are also a number of other pressures on budgets for future years, and members will be faced with difficult choices and decisions when setting budgets for 2006/07 and later years.

Dorset County Council

6Annual Audit and Inspection Letter │ Key messages

Other accounts and governance issues 6 In the Statement of Control (SIC) included within the 2003/04 financial statements, the Council identified project management as an area of weakness that needed to be addressed. Since then, it has agreed new corporate standards for project management, but the Council acknowledges in its 2004/05 SIC that it will need to monitor the effectiveness of these new arrangements in addressing the weaknesses that have been identified. 7 There have been particular problems with the management of a major building project at Lytchett Minster School. The Council has carried out three internal reviews into the delays in progressing this project, and has now set itself a deadline of the end of this financial year for agreeing a final project design. 8 a significant impact on costs, and have resultedDelays to date have already had in prolonged use of mobile classrooms at the school. It is essential that the Council provides strong and effective leadership for the remainder of this project, preferably with the support of the school. Most importantly, the Council needs to ensure that the project is now progressed without any undue further delay.

Action needed by the Council • a strong focus on adult  Providesocial care services within the programme of improvement activities planned for the next year. •a clearer focus on VFM in the routine performance management Provide  reports. • that members have the opportunity for a robust discussion of key Ensure issues arising from the financial statements prior to their approval. •the effectiveness of the measures introduced by the Council to  Review improve project management. • Ensure that the building of a new maths/science/humanities/dining facilities block at Lytchett Minster School is completed without any further undue delay.

Dorset County Council

Annual Audit and Inspection Letter │ Performance 7 

Performance  The Council has been assessed this year as a three-star council under the Audit Commission's revised, harder test CPA methodology. We have assessed its Direction of Travel as improving well.

CPA scorecard Table 1 CPA scorecard, December 2005  

Element Assessment Source of assessment Direction of Travel judgement 3 (improving well) Audit Commission Overall Three stars Audit Commission Current performance    Children and young people  3 out of 4  Ofsted/CSCI Social care (adults)  2 out of 4  CSCI Use of resources  3 out of 4  Audit Commission Environment 2 out of 4  Audit Commission Culture 4 out of 4  Audit Commission Corporate assessment/capacity 3 out of 4 Audit Commission   to improve (not reassessed in 2005) (Note: 1=lowest, 4=highest) 9 The CPA judgements this year have been made using the revised methodology; as described in the Audit Commission's publication‘CPA - the harder test’. As the title implies, CPA is now a more stringent test with a greater emphasis on outcomes for local people and on value for money. We have also added a new dimension, a Direction of Travel judgement, that measures how well the Council is improving. 10 Under the new framework the Council is improving well and its overall CPA category is three star, the second highest rating. Last year it achieved the highest rating of excellent under the old methodology, which underlines that the new methodology does indeed represent a harder test for all councils.  

Dorset County Council

8Annual Audit and Inspection Letter │ Performance

Direction of Travel report Dorset County Council is improving well and is a three-star council. 11 The Council has made some significant improvements to priority services. Educational performance remains strong and improving, with pupils achieving the Council's best-ever results in national tests and at GCSE. Achievements in social care services include the opening of new sheltered accommodation, reduced delays for older people moving from hospital back to their own homes, and improvements in the education and training of young people in care. However, the Council has made little progress in increasing availability of intensive home care for vulnerable people aged 65 or over. Environmental and transport services have generally improved, with an increase in the recycling of household waste, a reduction in road deaths and serious injuries, increased use of local buses, and improvements in the condition of roads. 12 The Council has strengthened its performance management and improvement planning. It has a proactive approach to partnership working to help improve services. It is piloting a Local Area Agreement and a DEFRA rural pathfinder project, and is using the South West Centre of Excellence and the National Leadership Centre for Local Government to further improve Dorset public services. Service improvement 13 The Council sets well-defined improvement priorities, supported by a range of performance targets. It delivered some significant improvements last year for each of the six high-level aims set out in the corporate plan, and some key examples are shown in Table 2. Table 2 Major improvements in 2004/05 against the Council's high-level aims. The Council has secured improvements for each of the six aims Corporate aim Examples of improvements Safeguarding • An increase in the recycling of household waste to Dorset's unique  34 per cent, exceeding the government target of environment 30  per cent for 2005/06. Promoting active and •16 per cent in passenger journeys on increase of  An inclusive communities  community and demand-responsive bus service supported by the Council. Supporting learning • Dorsets best ever results in national tests for pupils and achievement aged 7, 11, 14 and 16, and also its best ever results in English and mathematics at Key Stage 2.

Dorset County Council

 

Annual Audit and Inspection Letter │ Performance 9 

Corporate aim Examples of improvements Improving health, • A reduction of 11 per cent in delayed transfers of community safety and  care from hospitals, and a reduction of 6 per cent in well-being road  deaths and serious injuries. Strengthening • in the condition of Dorsets principal Improvements Dorset's economy  and non-principal roads. Being a • with other Dorset councils, launch of a joint Working well-managed council  website, Dorset for You, which was the first such website nationally and has achieved national awards. • Establishment of an efficiency review process in advance of the Gershon requirements.

  14 The main areas where progress has been more limited are two key social services improvement areas: • provision of intensive home care for those aged over 65, where despite some improvement in 2004/05, the Council's performance remains in the lower quartile; and •elderly helped to live at home declined in 2004/05, where again of  numbers the Council's performance remains lower quartile. Contribution to wider community aims 15 The Council has played an active leadership role in the work of the Dorset Strategic Partnership (DSP). It has aligned its corporate aims with those in the community strategy, with the result that many service improvements over the past year have also contributed to the implementation of that strategy  for example, improvements in roads and public transport. It has also used the council tax raised on second homes to finance community planning at district, borough and parish council level, and to provide community grants in support of community needs. 16 Many of the Councils major service improvements were delivered in partnership with other bodies; for example, the Council collaborated with Weymouth and Portland Housing Association and South West Dorset PCT to build the Westhaven development in Weymouth which provides extra care housing for older people, helping to reduce delayed discharges from hospital and prevent avoidable admissions.

Dorset County Council

10Annual Audit and Inspection Letter │ Performance

Access to services and diversity 17 to 88 per cent in 2004/05 and isThe electronic delivery of priority services rose forecast to reach close to100 per cent by December 2005. The availability of direct social care payments is providing people with disabilities and older people with the option of buying their own care services, rather than having them provided by the Council. 18 We have referred above to the weak progress in some key areas of social service provision. Progress in achieving some LPSA targets has also been disappointing, for example, there has been only marginal improvement in Key Stage results for specified primary schools in Christchurch and Weymouth and Portland. Progress towards level 2 of the equality standard has also been slower than expected. Value for money 19 The Council receives the lowest share of government formula grant for English shire counties. In spite of this, it continues to provide good quality services, with 62 per cent of its core service indicators in the best or second quartiles, and 51 per cent of indicators improving compared to 2002/03. 20 The Council drives improvements in value for money by a range of initiatives, including: • imposing budget reduction on all non-school budgets each year, and re-allocating these savings to service priorities; • working and co-location of services with the NHS, thereby providing joint integrated services for clients with reduced support costs; and • achieving savings in procurement, such as the significant savings achieved last year in computer procurement costs. 21 There are still some areas where unit costs are high, for example home care costs. There is also scope for providing a greater focus on value for money in the regular performance monitoring reports to members. Planning for improvement 22 has strengthened its arrangements for improvement planning overThe Council the last year. • Improvement priorities are supported by SMART action plans and performance targets, and there are regular reports to members on actual performance against these targets. • Service plans are more closely linked to the corporate planning and to with financial planning. • strategies and plans have been produced over the last year to support New service improvement, such as the access to services and the communications strategies.

Dorset County Council

Annual Audit and Inspection Letter │ Performance 11 

Investing for improvement 23 The Council has made some significant investments in building capacity to deliver service improvement over the past year, including: • piloting an LAA agreement with Dorset Strategic Partnership, linked to priorities and targets in the community plan; • a DEFRA rural delivery pathfinder project, that is designed to tackle piloting disadvantage and social exclusion, protect the natural heritage and foster local economic growth; • and providing leadership for the South West Regional Centre of hosting Excellence, which provides support and guidance on procurement for public sector bodies in the region; • successful bid on behalf of  athe Dorset Chief Executives Group to the ODPMs capacity building fund for financial support for a Dorset performance management improvement programme; and • pilot work with the National Leadership Centre for Local Government.

Best value performance plan 24 The audit of your best value performance plan 2005 has been completed and we have issued our statutory report, confirming that there are no matters to report to the Council. The plan is compliant with standard requirements and includes all the required performance information.

Dorset Local Area Agreement 25 Dorset was chosen as one of 21 areas to pilot local area agreements (LAAs), a key central government initiative which is designed to improve coordination between central government and local authorities and their partners, working through the local strategic partnership. The benefits anticipated from this new approach include:  a strong focus on outcomes; • • simplification of the funding streams for the LAA partners; and • devolution of responsibility and decision-making to the local level. greater 26 LAA was signed in March 2005 and links to another scheme beingThe Dorset piloted in the county, the DEFRA Rural Pathfinder Initiative. The Council's Chief Executive has recently presented a progress report to members on the first six months of the LAA. This report concludes that the LAA is already delivering significant benefits, including: • encouraging greater partner engagement through the Dorset Strategic Partnership;

Dorset County Council