News
Improvements still required following Orkney Health and Care payments audit
29 September 2026
A follow-up internal audit report considered at a meeting of the Council's Monitoring and Audit Committee has highlighted substantial progress made in strengthening financial controls and payment processes across Orkney Health and Care (OHAC) – but that important work remains ongoing.
The follow-up audit was carried out following an internal audit of OHAC payment processes in 2024/25, which identified a number of significant areas requiring improvement.
The latest report acknowledges the considerable work undertaken by officers over the past 18 months to address the issues identified and improve governance, oversight, record-keeping and financial controls.
However, auditors have also confirmed that a number of recommendations remain outstanding and will require further action before all improvements are fully implemented
The audit found that 15 of the original 22 recommendations have been fully implemented, with a further three partially implemented and four still in progress.
Improvements highlighted in the report include:
- The introduction of registers for agency workers across adult and children's services.
- The approval and implementation of updated fostering, kinship care and adoption allowance policies.
- Stronger governance arrangements for discretionary payments, including improved recording of decisions and supporting evidence.
- New procedures for resource-intensive support and care packages, with greater financial oversight and regular review requirements.
- Introduction of procedures covering payments to adults with incapacity and the recording of financial decisions.
- Updated policies governing Section 12 and Section 22 expenditure.
- Improved controls around travel claims, agency worker hours and eligibility for Distant Islands Allowance.
- Enhanced contract management arrangements, including a central register of contracts and clearer management responsibilities.
- Better recording of financial arrangements and care package decisions within service records.
The audit also notes progress in reducing reliance on agency staff within children's social work services, supported by successful recruitment to permanent positions and continued efforts to fill remaining vacancies.
Councillor Lindsay Hall, Chair of the Council's Monitoring and Audit Committee, said:
"This follow-up audit shows that a significant amount of work has been undertaken in response to the concerns identified in the original report, and it is important to recognise the progress that has been made.
"However, the report is equally clear that some key actions remain outstanding. While 15 recommendations have now been fully implemented, there are still recommendations that are only partially complete or remain in progress.
"The Committee expects the remaining improvements to be delivered and embedded as quickly as possible. Strong financial controls, robust governance arrangements and clear accountability are essential to maintaining public confidence in how public funds are managed.
"We will continue to monitor progress closely and expect a further update report before the end of the year, providing assurance that the remaining actions have been completed and that the improvements identified through the audit process are fully in place."
The outstanding actions identified by the audit include completion of a council-wide agency worker policy, further procurement-related work and additional improvements to record-keeping processes. Action plans and target completion dates have been agreed for each of these areas.
Committee members agreed that, while the follow-up report demonstrates that meaningful progress has been achieved, continued focus will be required to ensure all outstanding recommendations are delivered and the remaining risks addressed.
A further report will be brought to the Monitoring and Audit Committee in early 2027 to provide an update on progress against the outstanding actions.
The report, and a recording of the meeting, can be accessed on the Council website here -Monitoring and Audit Committee - 24… | Orkney Islands Council