Auditing the risks in service contracts CIPFA Procurement and Contracts Audit Forum 2013 Summit Birmingham – 11th September 2013
Background – ICT services • Pressure on ICT services – need to invest, day to day demands increasing, but…. • 30% efficiency targets (Wigan/Bolton - £1m pa each) • Needed something radical
Solution • Shared procurement opportunity : • 4 client partners – Bolton & Wigan Councils, Wigan and Leigh Housing, Wigan Leisure & Culture Trust • Different approach to procurement – asking providers about their offering, how they propose to add value to our arrangements
Choose your partners… Client side • • • •
Bolton experience of outsourced ICT Bolton’s contract due for renewal Wigan partners in Housing and Leisure Synergy between organisations
Choose your partners… Competitive dialogue. Looking for Contractor who: • Best aligned with collective cultures • Offerings were realistic and relevant • Ideas on improvements and innovation
New Ways of Working • 7 year, £47m shared contract awarded to Agilisys • Inter authority agreement & Head of Strategic ICT Partnership • Outcome based contract supported by KPI’s/ SLA framework • 46 in house ICT staff TUPE transferred/ supported by new resources from Agilisys • Reduced costs for day to day delivery • Expertise/ industry standards • Economies of scale/ shared working
Risks • • • • • • • • •
Service continuity Staff morale and motivation Partner relationships Audit regime Managing costs and quality Service development Longer term integration Exit strategy / renewal Reputation
Managing costs and quality • Project board includes all partners • Clear standards/deliverables – objective, measurable and auditable. • Accepted process for sign off • Agreed timescales/rewards and penalties. • Agreed understanding of “service” and “project” work.
Role of Internal Audit • • • • • • • •
Collaborative Audit Plans Auditing of “home” functions Shared auditing of common areas Validation of KPIs Ensuring effective client role Reliance on contractor’s controls ? Consistent reporting style Agreed reporting lines
Any Questions???
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