Issue - meetings

Retrospective Purchase Orders (item 15) continue to occur.  Of particular concern are retrospective purchase orders with a value greater than £5,000.  Adding together the orders worth over £5,000 reported to the last 4 Audit Committees (including this meeting) shows that Children’s Services are responsible for 17 of 26 such orders, worth £449,905.51 of the £586,961.60 total, or 65% of the number and over 75% of the value.  Why does Children’s Services contribute such a large proportion of the retrospective purchase orders?

Answer:

During the above period all Purchase Orders (PO) raised across WBC, Children’s Services accounted for 34% with a total value of 38%.  This suggests that the level of Retrospective Purchase Orders (RPO) with a value greater than £5k is around double what would be expected.

Of the 17 RPO with a total value of £450k the highest valued RPO with a value of £166k related to an annual contract for the period April 2016 - March 2017 where the supplier invoiced WBC in advance.  Therefore, on processing the order in early April it was deemed to be retrospective.  The budget manager has been reminded of their requirement to comply with the Financial Regulations, and hopefully that is a diplomatic term that has been used, and ensure no future breach occurs.

Of the 17 RPO 11 relate to early invoicing from suppliers; 4 changes within placements contracts and 2 changes in budget manager.

All budget managers with RPO with a value greater than £5k have been communicated with and are aware of the importance of appropriate commitment to accounting and compliance to the Financial Regulations.

Detailed performance on Retrospective Purchase Orders is shared with Heads of Service on a regular basis with individual managers required to provide explanation for any breaches.  Formal communication to all managers has been issued reinforcing the requirement to comply with Financial Regulations.

Current performance in May and June of this year, demonstrates a marked improvement with just 1 Retrospective Purchase Order exceeding £5k being raised in each month.  The budget manager has been supported to understand the process and implications.

Budget Manager training scheduled to commence August 2016 will include a section on Purchase Orders and compliance to Financial Regulations.  Training will be compulsory where managers have not been compliant to Financial Regulations.

Additionally, Administrative Support has also been reminded of correct processes to follow and will be required to attend training where appropriate.

Councillor Bray commented that she agreed with Councillor Lee that the focus should be on retrospective purchase orders with significant values.  She noted that one of the retrospective purchase orders highlighted in the report contained in the agenda was for £166,267.66 and that 12.1.21.4 of the Financial Regulations within the Constitution stated that purchase orders over £100,000 were the responsibility of Heads of Service.  She requested further training on retrospective orders and continued pressure from the Committee with regards to high value retrospective purchase orders.  This was agreed by the Chairman.