A report to the Council's Monitoring and Audit Committee has set out the findings of an investigation into the ordering of stone from outwith Orkney for Cursiter Quarry - and made recommendations to prevent failings in the process from occurring again.
Interim Chief Executive John Mundell said the review, conducted by the Council’s Internal Audit team, had highlighted serious breaches of OIC’s own purchasing policies and procedures.
“This is completely unacceptable and I will do everything possible to make sure this cannot happen again,” Mr Mundell said. “The fundamental failings the review identified should never have occurred. This is a very serious matter and it is only right that I offer an apology to our community on behalf of the Council.”
The audit concluded that the actions taken in ordering 80,000 tonnes of stone for Cursiter from a quarry near Oban had been conducted in an ‘unsatisfactory’ way, with ‘fundamental weaknesses’ in the way the orders were placed.
It found that the purchasing activity was carried out by obtaining quotations and raising of purchase orders in a manner outwith the open procedure which is required within the Council’s own policies and by law.
The purchase ordering process for the stone, its haulage and unloading from delivery ships was carried out with ‘substantial non-adherence to the Council’s own policies for contract standing orders, financial regulations and sustainable procurement’.
This had resulted in reputational damage to the Council, ‘in particular by a lack of inclusiveness towards local businesses, which has caused understandable widespread concern and furore throughout the community’.
Five high priority recommendations made by the audit team were agreed by the Committee:
- The Council must ensure that it has robust and effective monitoring of compliance with its financial regulations, contract standing orders and sustainable procurement policy.
- The Council should have procedural processes and arrangements for monitoring and governance over the use of lotting strategies – where a number of small lots are sought to fulfil a broader order, which offers smaller companies the opportunity to supply.
- A sustainability impact assessment should be carried out for contracts of this nature.
- The Council should review the setting of unlimited amounts for purchase orders.
- Elected Members must be briefed in sufficient detail to be able to scrutinise proposed activity effectively.
The full audit report and an audio recording of yesterday’s Monitoring and Audit Committee meeting are available here: https://www.orkney.gov.uk/Council/C/monitoring-and-audit-committee-11-march-2021.htm
Mr Mundell said: “I instructed the Chief Internal Auditor to investigate compliance with our policies and procedures as soon as practicable after I became aware of the circumstances involved in the importation into Orkney of around 80,000 tonnes of stone.
“It is clear that the internal audit was conducted in a thoroughly professional, objective, open and transparent way. The report speaks for itself - serious mistakes have been made and these are highlighted in detail.
“The Council has robust purchasing procedures in place, but they were not followed or complied with on this occasion. I very much regret these circumstances. You have my absolute commitment that I will do everything in my power to ensure that, as far as practicable, these mistakes cannot be repeated.”
He added: “I have spent many years working in local government in Scotland and I believe there is much to be proud of in Orkney. I value this Council’s workforce. Our staff our dedicated and loyal. But we are all human and all capable of making errors of judgement.
“It is how effectively matters are now handled that will prove the worth of the organisation moving forwards.”
The Monitoring and Audit Committee keeps a close eye on the way Council policies and decisions are implemented. The Committee has a responsibility to make sure arrangements are in place to ensure the Council’s resources are used to best effect.
