Auditing the risks in service contracts

1. Auditing the risks in service contracts CIPFA Procurement and Contracts Audit Forum 2013 Summit Birmingham – 11th September 2013

2. Background – ICT services • Pressure on ICT services – need to invest, day to day demands increasing, but…. • 30% efficiency targets (Wigan/Bolton - £1m paeach) • Needed something radical

3. 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

4. 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

5. Choose your partners… Competitive dialogue. Looking for Contractor who: • Best aligned with collective cultures • Offerings were realistic and relevant • Ideas on improvements and innovation

6. 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

7. Risks • Service continuity • Staff morale and motivation • Partner relationships • Audit regime • Managing costs and quality • Service development • Longer term integration • Exit strategy / renewal • Reputation

8. 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.

9. 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

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