QUESTIONS Audit Committee Thursday 26 September 2013

http://www1.somerset.gov.uk/council/board9/2013%20Sept%2026%20Agenda.pdf

 

Q.1 The most recent accounts available for Southwest One state:

 

“…the directors are aware that at the end of the contract life, the company is due to settle its inter-company loan balance with IBM, which at 31 December 2012 was £47.9 million (2011 £38.2 million). Currently it is felt there are insufficient cash flows to be generated in the remainder of the contract to settle this loan balance. Accordingly, the directors are in preliminary discussions with IBM to consider the possible options available including potential restructuring of the amounts due.”

 

a) What impact will this have (including liabilities) on SCC and the respective partners in the Joint Venture?

 

b) What steps and measures are being taken to minimise any increased risks?

c) As a “partner” in the JVC what practical steps can SCC take to influence the potential restructuring?

 

d) How will service provision and business continuity be affected?

 

Q.2 Staff were recently advised that “IBM has made a strategic business decision to sell part of its worldwide business that runs customer care business process outsourcing services. We are currently working through exactly what this might mean for Southwest One.”http://www.infoworld.com/d/the-industry-standard/ibm-sells-customer-care-outsourcing-unit-505-million-226604

 

a) What impact will this have on SCC and the joint venture partners, service delivery, business processes and the potential restructuring mentioned in Q1?

 

b) It is rumoured that IBM will retain the IT element of the SWO contract. Is it possible that the existing contract(s) will become more complex and consequently there may fewer resources available to direct to service delivery?

 

c) What record has Synnux/Concentrix in providing/supporting public services in local authorities and the police?

 

d) When will a review of SWO take place as a consequence of IBM selling part of its services? 

 

Q.3 In June (Q.3 a) i)) we asked whether the Council would obtain Value for Money from its reviewed arrangements with SWO. Can you provide an update to this question?

 

Q.4 Can assurances be provided that SCC will not contribute (financially or by redirecting resources and/or reserves) to the settlement of the (SWO-IBM) inter-company loan (mentioned in Q.1) or that the unitary charge will not be affected? 

 

Q.5 Will there be a “Lessons Learnt Log” (based on the experiences of SWO) for commissioning managers/directors across SCC? 

 

Q.6 (Item 6.The Audit Findings for Somerset County Council – Grant Thornton)

 

a) The Risk Identified (p 20): Will there be an update and subsequent revised risk assessment following the issues identified (see Q.1) in the SWO company accounts and IBM selling part of its business?

 

b) The Action plan (p 27): SAP review. What methods will be used to monitor the “necessary assurance around database controls” (management response)?

 

Q.7 Paper B Item No 6 Approval of Accounts 2012/13

 

In Paragraph 5.3 it is noted that there is an increase in non current assets of £2.941m (and the same amount of increase in the revaluation reserve). Will this have an impact on the future of children’s and learning disability centres?

 

Q.8 Relates to Item 11 and 12 Southwest One update:

 

a) What information is public and what is commercially confidential?

 

b) Are the issues discussed in Q.1 and Q.2 above being discussed?

 

c) What organisation(s) requested that these items are heard in private session?

 

d) When will information about SWO (contract monitoring etc) and SCC’s financial and operational relationship with SWO be made available?

Q.9 Relates to the Report of Internal Audit Activity-Item 8.

 

The “Report on Significant Findings” (p2) notes: 

 

“Appendix A is a summary of the Annual Plan for 2012/13 – I have

highlighted those reviews that have progressed since my last report.

There are nine reports at draft report and with the client with one in

progress. The one in progress and six of the draft reports are IT

related. This matter has been escalated to Senior Management who are

prompting the necessary response from SWOne. I will continue to update

the Committee on these reviews through to completion.”

 

a) Can copies of the outstanding reports be supplied?

 

b) What progress is being taken to address the ICT, Financial controls

issues identified in the report?

http://www.computerweekly.com/blogs/public-sector/2013/02/how-somerset-strangled-southwe.html

 

Q1. How much in cashable savings have now been received from SW1?

 

Q2. Allowing for the reconfiguration of the SW1 contract after the legal

dispute then what are the forecast savings to 2017 end of contract?

 

Q3. Can I have a copy of the IT Asset log including IT in SW1 please?

 

 

http://www1.somerset.gov.uk/council/meetings/reports.asp?item=1013

 

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