Schools Finance Admin Meeting Contracts & Joint Services – Audit Test Richard Gray – Governance Team 25th February 2015

Contracts and Joint Services Schools are required to procure and manage a number of contracts for services provided to the school (e.g. grounds maintenance, catering and cleaning). The LA can procure general contracts that schools can buy into – LA has influence in terms of purchasing power through economies of scale. The school is responsible for monitoring these contracts and ensuring that an appropriate service is delivered.

Audit Tests Determine what contracts the school has and: 1) Ascertain how these have been procured. Was the contract procured through the LA? If not can the school determine the method of procurement and demonstrate value for money? So….. Do you have evidence to hand as to how you procured a contract? Did you follow your policy guidelines? Can you justify your decision?

Types of Contracts There are two distinct types of contract: Service Contracts; and Capital Contracts. The Audit Test focuses on service contracts however there are important considerations you need to be aware of BEFORE becoming involved in capital contracts:

Contracts and Joint Services – Audit test 2) Ascertain whether the school has access to or holds a copy of the contract? So…. Did the supplier provide you with a detailed contract giving clarification of the quality and specification of the goods / services to be delivered? Is the contract “life” specified? Is there clarification in relation to escalation of issues? Is there a process to exit / cancel contract should certain criteria be met?

Capital Contracts Need to get expert advice; Often entwined with statutory requirements (e.g. Health & Safety – need to comply with law, need to keep H & S file, school held liable); Consultants don’t always act in schools best interests or do what you need them to do; and Need intensive and robust contract management

Contracts and Joint Services – Audit Tests 3) Determine how the school monitors the services provided under the contract and whether defaults or rectification notices are issued? So…. Does the contract detail Service Level Agreements (SLA’s)? Does the contract detail specifications agreed? Is there an escalation procedure agreed? How do you monitor? Do you maintain an audit trail?

Contracts and Joint Services – Audit Tests 4) Determine if the school has considered joint services with other schools or local organisations to achieve better value for money? How could joint services work for you? Can you partner with non-schools e.g. leisure centres, care homes etc.? Use of SME’s Can you ensure safeguarding responsibilities fulfilled?

Contract Management – Best Practice The 5 key elements for successful contract management are: Getting started / Planning Managing performance Managing relationships Managing the contract itself Managing change

Contract Management – audit issues Signed copy of the contract not available; Monitoring – quality; Monitoring – core conditions (DBS/Insurance/Corgi certified); Payments – raise an order at beginning of year (understand for catering contract this is difficult); Review meetings not happening; Retention monies – must only pay what's been certified

Contact us Governance Team Chief Executive's Department London Borough of Croydon 12th Floor, Zone B Bernard Weatherill House 8 Mint Walk Croydon CR0 1EA Governance@croydon.gov.uk 0208 760 5489 Internal.audit@croydon.gov.uk 0208 760 5771 caft@croydon.gov.uk 0800 328 9270