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CONTROLLER OF AUDIT REPORTS ON DLO DEFICIT AT EAST AYRSHIRE COUNCIL

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A report into the£2.5m commercial operations deficit at East Ayrshire Council has been published by the Controller...
A report into the£2.5m commercial operations deficit at East Ayrshire Council has been published by the Controller of Audit, Robert Black. Mr Black reports on the principal factors which contributed to the deficit, establishes why the deficit was not identified during the year and records the remedial action taken by the council in response to the situation.

In his concluding remarks to the 20 page report Mr Black says:

'While I have to conclude that the deficit of£2.5m incurred in 1997/98 was undoubtedly due to serious and fundamental failings in the management of the commercial operations department I would also acknowledge the expeditious, open and comprehensive manner in which the council has acted to address the factors which gave rise to this situation.

'I note that the commercial operations department is being broken up to be replaced by business units located in most service departments including both client and contractor responsibilities at chief officer levels. It is essential, under these proposals, to ensure transparent accounting for each business unit which present fairly its financial performance. There should also be regular monitoring of the performance of all business units to ensure that value for money is being delivered. I shall ask the external auditor to keep these arrangements under review and to report next year on their effectiveness.'

The Report was produced in the public interest and has been sent to the East Ayrshire Council, individuals referred to in the Report and the secretary of state. The public can access the Report through the Accounts Commission's web site.

The Report will now be considered by the Accounts Commission. It will probably be the new year before the commission makes its findings. Because of the need to follow due process it is not appropriate for the Controller of Audit or the Commission to make any comment at this stage.

The report is 20 pages long and is available on the Accounts Commission web site: www.accounts-commission.gov.uk or, you can ask for a copy to be sent to you by e-mailing: publications@scot-ac.gov.uk

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