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
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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
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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
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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???
martyn.kenyon@wigan.gov.uk
01942 827550
John.midlane@bolton.gov.uk
01204 331620