Audit raises concerns over some council contracts

Richard Youle, local democracy reporter

Some contracts awarded by Swansea Council didn’t comply with the rules, a report by auditors has said.

In-house auditors checked 15 “contract waivers” for contracts issued by the council with a combined value of more than £2 million.

Contract waivers enable the council to partly suspend compliance with its contract procedure rules and allow a service to directly award a contract to a single supplier. But such contracts must still abide by rules such as the waiver generally being requested in advance of the contract being awarded, a check that the supplier has insurance cover, and a formal contract being signed by the council and the supplier.

Waivers can be applied for retrospectively but only in exceptional circumstances, and it emerged that of the 15 waivers tested, eight had been submitted retrospectively without meeting the exceptional criteria.

Insurance 

The council’s governance and audit committee was also told that for six of the 15 waivers, there was no evidence of the supplier’s insurance being checked. And contracts for five of the 15 waivers could not be provided by the relevant council service. Another issue identified was that three contracts exceeding £140,000 in value had not been forwarded to legal officers as they should have been.

There was no suggestion of wrongdoing, and the assurance level given by auditors was “moderate”, which is a level above “limited”.

The audit had been requested by Chris Williams, head of commercial services, who told the committee about various measures which had or were being put in place to ensure extra “corporate grip”.

Approval

One of the measures is that the legal services team will track all contracts valued at more than £140,000. Also, contracts must be signed between relevant parties for all waiver applications, and applications submitted for approval before work is carried out.

There’ll also be a review of contract management, and consideration given to whether a pool of contractors can be placed on stand-by for emergency requirements.

The 15 waivers sampled covered a range of contracts, from adult social care, agency workers, building services, landscaping work and security. The highest was for £800,000, the lowest £17,900. A contract for lock gates on the River Tawe was worth just over £210,000, said the report, and it was awarded to the only company which could do the work.

Mr Williams’s report said council directors had reviewed the 15 waivers highlighted and were happy that their use was appropriate, while acknowledging that improvements were needed to reflect the circumstances noted and overall compliance. Sessions have taken place with heads of service about the risks.

Mr Williams told the committee that new procurement legislation was being drafted which would require all contracts worth over £25,000 to be published on the Welsh Government’s Sell2Wales website. He said he would ensure that all appropriate training would be offered.

Cllr Jeff Jones said he found it “quite worrying” that some waiver contracts had been signed by one party and not the other, or submitted after the contract had been awarded.

Cllr Andrea Lewis, cabinet member for service transformation, described the audit as “very proactive” and providing “much better clarity” regarding gaps in the process.

Committee chairwoman, Paula O’Connor, who is a lay member, said Cllr Jones had been “absolutely right” to make his comments as it was, she said, an area of risk.