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CONTROLLER OF AUDIT REPORTS ON NORTH LANARKSHIRE DLO

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A public interest report by the controller of audit, Robert Black, confirms the main factors which led to the£4.66...
A public interest report by the controller of audit, Robert Black, confirms the main factors which led to the£4.66m deficit at North Lanarkshire Council's buildings and roads direct labour organisation (DLO). The report establishes why the deficit was not identified earlier by the council and draws out lessons for the future for North Lanarkshire Council in particular and for local government as a whole.

The controller of audit did not set out to attribute responsibility to individuals, but he does draw conclusions about failings by accountable managers, at a senior level. Mr Black reports that councillors were not well served by officers of the council but he goes on to say that in future councillors should take a greater role, through committees, in monitoring the performance of direct labour organisation.

Mr Black confirms that a significant number of failures undoubtedly occurred, but he says they must be viewed in the context of the disruptive effects of local government re-organisation. Nine factors which are likely to have contributed to the deficit are identified. These are: bonus and overtime payments; home to work travel allowances; overhead recovery; transport, subcontractor and material costs; working practices and workflow. The main reasons for failing to identify the deficit earlier are confirmed as:

- misleading or wholly inadequate financial monitoring reports produced by the DLO

- insufficient financial expertise within the DLO

- failure within the council's central finance department to scrutinise closely the financial monitoring reports produced by the DLO

In his concluding remarks the controller of audit highlights certain striking features which he believes should be addressed by the council. These include: contracting arrangements; the need for improved communications; the decentralised management approach; and the need for a performance management system for staff.

The report has been sent to North Lanarkshire council, individuals referred to in the report, the Accounts Commission and the secretary of state and local MPs. The report is also being made available to other local authorities and to the wider public.

The report will now be considered by the Accounts Commission which hopes to report its findings early in the new year. 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 33 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-mail by mailing: publications@scot-ac.gov.uk

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