Narrow support

I’m sure that Mr Bluh will claim that the uncritical report by Swindon Borough Council’s internal auditor is an unadulterated vindication of the way the council has spent almost £½M of our money on a loan to Digital City (UK) Ltd for wireless internet. I’m equally sure that Mr Bluh will claim that the absence of any investigation yet by the District Auditor shows that he has no concerns either. However, as Mr Bluh likes to tell us, ‘language is important’, so let’s look at exactly what the council’s internal audit report into wifi says.

The remit of the internal auditor’s report is quite narrow. It addresses six specific issues set by the chair of the council’s audit committee, Mr Dickinson.

  • The arrangements regarding the security of the Council’s investment including assessment of credit worthiness of Digital City (UK) Ltd.
  • Whether the Council has complied with its own Treasury Management policy and the best practice set out by CIPFA.
  • What profit-sharing arrangements are in place.
  • Whether EU directives have been breached in particular Article 87.
  • Whether value for money can be demonstrated.
  • What, if any, lessons can be learned for the future.

That means there are some significant omissions, as noted in the report.

Since the commencement of the investigation a number of further concerns have been raised in two letters and an e-mail addressed to the Council’s External Auditors…. At the meeting on 15th March 2010, the Council’s Scrutiny Committee raised concerns regarding the possible conflict in interests of the Group Director: Business Transformation who was listed as a Director of Digital (UK) Ltd and the author of the Cabinet report requesting release of the second phase of the loan…. The internal audit investigation has not covered the additional areas of concern mentioned in the correspondence to the External Auditor, or the issues raised at Scrutiny.

The scope also specifically excluded ‘whether due process has been followed as this has already been examined by the Scrutiny Committee who confirmed that it had.’ The report is also unusual in that it includes a disclaimer.

This investigation focussed on the areas agreed in the terms of reference for the investigation only. It did not include a full internal audit of all Council systems mentioned in the areas of concern nor did it include a full review of the adequacy, or robustness, of the documents listed in Appendix 3. Any recommendations relating to Council policy and procedure generally which arise from the findings of this review will be addressed in a separate internal audit report.

Clearly, there’s far more that could have been investigated, but wasn’t. And not only is it not a full audit, but any recommendations that have resulted from it are to be hidden away in a separate later report which Mr Bluh will no doubt hope appears after the present furore has passed.

Let’s also look at what the District Auditor has said.

The External Auditor (Martin Robinson — District Auditor) has confirmed to the Chief Executive that there is nothing contained in the correspondence that requires investigation by him at this stage.

That doesn’t mean he will not investigate. Indeed, correspondence from the District Auditor that komadori has seen indicates that he might.

You will be aware that the council’s Internal Auditors are currently reviewing various aspects of this issue. I am awaiting the outcomes of their review before giving the matter my own consideration as a prelude to deciding whether there are any aspects of it that I would wish to pursue any further…. I therefore hope to be able to respond more fully to the issues raised… by mid-May.

The scrutiny of Swindon Borough Council’s wi-fi deal is not yet over. Far from having a clean bill of health, it remains under close clinical supervision.