Issue - meetings

A review has been undertaken of the Council’s proposal to build a waste transfer station at Lyme Green Depot, Macclesfield. The report details the review’s findings, recommendations and proposed management actions.

The Audit and Governance Committee on 31^st January 2012 had resolved that:

“a thorough and robust investigation of all issues surrounding the expenditure incurred on the proposed waste transfer station at Lyme Green be added to the work plan; in particular to identify any governance issues and whether all financial and contractual regulations have been complied with.”

At its meeting on 27^th March, 2012 the Committee had further resolved that a special meeting be held to consider the outcome of the investigation.

Lorraine Butcher, Strategic Director for Children, Families and Adults, had been appointed in March to complete a review, commissioned by the Chief Executive and Leader, of the Council’s proposal to build a waste transfer station at Lyme Green Depot, Macclesfield. The Committee had before it the report of the Strategic Director, together with a detailed Internal Audit report.

The Strategic Director’s report began by setting out what had happened, and was supported by detailed timelines and the analysis undertaken by Internal Audit. From the analysis it was evident that a project group had been tasked with providing a new waste transfer site at Lyme Green and that towards the end of 2011, while risks were being identified, and even though the timetable involved was compressed, the development commenced without planning permission. Work ceased following objections and complaints from local residents and the local ward Member. The approved capital budget for the scheme had been £650,000, although the value of the works based on feasibility costs was approximately £1,500,000. As at mid-May 2012, total anticipated spend for the Lyme Green Scheme stood at approximately £810,000.

The Internal Audit report considered management’s compliance with established policies, procedures, laws and regulations, particularly with regard to the use of assets and resources entrusted to it. The review had aimed to establish whether controls, procedures or policies had been compromised and to identify the steps that needed to be taken to prevent a recurrence.

The key findings of the review as set out in the report were that:

1.      development work had commenced on the project in advance of the appropriate planning permissions;

2.      on the face of the evidence, the Council had not complied with EU procurement Regulations;

3.      despite the cost of the project rising significantly above the budget approved by Council, a revised Business Case had never been submitted to the Capital Asset Group and expenditure had been committed without a virement or supplementary capital estimate being approved by Cabinet; and

4.      Management had breached Finance and Contract Procedure Rules relating to Managing Expenditure and Capital Monitoring and Amendments to the Capital Programme. Capital expenditure had been approved without fully understanding whether building a Waste Service Transfer Station was the most suitable option, or whether the proposed scheme was viable, affordable and achievable.

The detailed findings and recommended actions arising from the review were set out in Appendix 2 to the Internal Audit report. It was evident that a number of key processes would need to be strengthened  ...  view the full minutes text for item 4