Tag: audit

May 13, 2016 Nick Kempe No comments exist

In April the Standards Commission decided that  Owen McKee, the former  convener of Planning for the Loch Lomond and Trossachs National Park who had been trading in the shares of the Cononish goldmine, had breached the Code of Conduct for Standards in Public Life.  They would have suspended him  if he had not resigned http://parkswatchscotland.co.uk/2016/04/20/owen-mckee-hearing-standards-commission-2/    Clearly what Owen McKee had done was wrong.  However, what I believe was more serious was that the LLTNPA had tried to cover this up and then failed to report this to Audit Scotland http://parkswatchscotland.co.uk/2016/04/22/owen-mckee-case-lltnpa-audit-scotland-3/

 

I was slightly surprised therefore that the Government has now revealed that it was informed about Owen McKee’s share-trading, at the time,  in December 2014  Scottish Government EIR Response 4 May Cononish goldmine  through a telephone call from the LLTNPA Convener, Linda McKay, to the lead civil servant for the Park, Keith Connal.  What we still don’t know – and I suspect never will as there appears to be no written record of the conversation – is actually what was discussed or decided in the conversation or if Scottish Ministers were informed.

 

However, what the information does tell us is that a) the Government received a copy of the Investigation Report and b) knew that the full report had not been seen by Board Members .  This suggests that civil servants in the Scottish Government – and I would be very happy to offer them space on parkswatchscotland to refute this –  were, at the very least, content that the matter should be taken no further:   no need for anyone to report Owen McKee to the Commissioner for Ethical Standards; no need for anyone to report the matter to Audit Scotland.   The implications are that officials in the Scottish Government believe it is acceptable for breaches of the Code of Conduct not to be reported to the Commissioner for Ethical Standards and also that is acceptable for Audit Scotland to produce their Annual Reports on non-departmental public bodies, which include a section on sound governance, without being in possession of the relevant facts.   I believe this is serious.

 

What is more, the original response to my information requests to the LLTNPA (http://parkswatchscotland.co.uk/2016/04/05/owen-mckee-hearing-standards-commission/)  showed that one Board Member, David McKenzie, to his credit, had raised the need to call in the Standards Commission.  Linda McKay had replied on 18th December 2014  “I have been considering at what point to draw in the Standards Commission” but there was no further information supplied about why this was never progressed.   It now appears possible, depending on the date of the telephone call, that  it could have been the telephone conversation between Linda McKay and Keith Connal at the Scottish Government where it was decided  not to refer the matter to the Standards Commission and even perhaps not to make the report public and keep the involvement of other Board Members to a minimum.   In other words that there was a telephone discussion raises questions of how far Scottish Government involvement in the Owen McKee cover-up might have been pro-active, not just complicit.

 

There are still no definite answers to the question as to why would the civil servants and the LLTNPA Board wanted to cover up Owen McKee’s share-trading?    There was little to no risk, as the Park Investigation Report concluded, of Owen McKee’s share-trading undermining the original planning approval for the Cononish goldmine, so why not let the matter become public?    A more likely answer is the Park were worried that any publicity about Owen McKee’s resignation as convener of planning might be difficult to manage and could influence people’s response to the Your Park consultation on the camping bye-laws and these worries were shared by the civil servants, if not the Scottish Government.   In other words nothing was to be allowed to get in the way of the approval of the camping bye-laws.

 

Whatever the reasons for the cover-up, I believe the handling of the Owen McKee case has implications for the civil service and all non-departmental public bodies which needs to be considered by the new Scottish Parliament.  Specifically there needs to be a public duty on all Board Members AND civil servants to report breaches of the Code of Conduct to the Commissioner for Ethical Standards.    If a Board Member knows someone on the same Board has breached the Code of Practice – and the LLTNPA did know this, they accepted Owen McKee’s resignation – there should be a duty to report this.  Similarly, if a senior official within a NDPB or the civil service becomes aware, they should also have to report this.  Otherwise we are keeping the doors to corruption wide open.

 

March 20, 2016 Nick Kempe No comments exist

KPMG, one of the big four accountancy firms, have acted as internal auditors for our two National Parks from 2011/12.   Just why public authorities would want to appoint KPMG, who have as auditors failed to pick major failings with banks such as HBOS or the Coop and organisations such as FIFA, is a mystery to me.    KPMG are still at the forefront of the tax avoidance/low tax industry http://www.taxresearch.org.uk/Blog/category/kpmg/ which results in our National Parks, among other public bodies, being underfunded.  It would be nice therefore if the announcement at the December LLTNPA Board Meeting that KPMG’s appointment was being reviewed was a consequence of the  Scottish Government’s stated intention that public procurement should help drive wider social objectives such as equality and fairness.   I expect the outcome of that review will be included in the LLTNPA Audit Committee papers that are due to be published next Thursday http://www.lochlomond-trossachs.org/looking-after/audit-committee-meetings/menu-id-425.html.

 

 

I hope the deliberations at the the LLTNPA  Audit Committee will be informed by the response to a Freedom of Information request I received on Friday  FOI 2016-007 Response.  This, I believe, demonstrates KPMG audits of our National Parks complaints procedures has been both unprofessional and incompetent.  The background to this is that I wrote two letters of complaint to the Convener of the LLTNP, Linda McKay,  about the Park’s former and new Chief Executives misleading statements in the media about the Park’s case for extending camping byelaws.  I suggested to Ms McKay that because the complaints were about the Chief Executive they should be investigated by a Board Member.  This point was ignored and the complaint passed down to the Park’s Legal and Governance Manager to investigate.  I then found out this was in breach of the Park’s own complaints procedure (which I had to obtain through another FOI request) which requires complaints against senior staff to be investigated by a legal Director of the Park.     I appealed against the decision but  the review, undertaken by Jaki Carnegie who was a legal Director of the Park,  simply glossed over the breach of procedure.  Ms Carnegie was directly managed by Gordon Watson, the new Chief Executive,  and it came as little surprise when she decided her boss had done no wrong.

 

 

Nine months later, in December 2015, I found out KPMG had just completed an internal audit of both National Park’s complaints procedures http://www.lochlomond-trossachs.org/images/stories/Looking%20After/PDF/Audit%20Committee/2015/Agenda%20Item%205%20-%20Complaints%20Handling.pdf.  This audit found LLTNPA to be fully compliant with their own complaints procedures.  I knew this was not true so wrote to  Andrew Shaw KPMG complaints audit letter 151214   asking if my complaints had been included in the KPMG audit and raising wider issues about LLTNP’s complaints process.   Andrew Shaw emailed me back to say it was not part of KPMG’s remit to respond to the issues I had raised KPMG response151218.    This raises issues about what then is the purpose of internal audit and why were we paying for this from the public purse?    It prompted me to write to Audit Scotland.

 

 

What the FOI response shows is first that Andrew Shaw then forwarded my letter to LLTNPA  – I believe this was underhand and unprofessional and shows they were far too close to the people they were meant to be auditing.    Second, it shows that my complaint about the two Chief Executives (COMP 2015-001) was included in the KPMG audit and that either they did not do their job and read the file or simply ignored the evidence therein about the breach of the Park’s procedures.   I think therefore that FOI 2016-007 Response shows KPMG are unfit to continue as auditors of the National Parks and that their other internal audit reports should be read with a large degree of scepticism.

 

 

While the FOI Response shows the audit sample was chosen by KPMG, not the Park, the refusal by the Park to answer my question about whether they alerted KPMG to this breach of their own procedures is also significant.     What should have happened of course is that the body being audited should be upfront about issues that are relevant to the audit and should be considered by it.    If the Park has kept quiet about breaches of its own procedures in this case, there can be no confidence that it has not done this in other cases.

 

 

The key issue therefore is how we establish credible audit processes in our National Parks. This means thinking about what audits cover, who does them and how we can ensure the Parks operate openly and transparently.   I believe that audits that simply look at processes are a waste of time and money.  For example, on complaints, what is really important is not so much whether they have been responded to on time but whether the response is fair and how many complainants were satisfied by the response they received.     While the LLTNPA is too small to conduct its own internal audits –  any auditor would inevitably end up trying and failing to scrutinise their own line-managers – there is no reason audits should not be undertaken by staff from other organisations that answer to the Scottish Government.   Above all we need a Park Board and Audit Committee that is self-critical and open to dialogue.  This would help ensure proper scrutiny of reports instead of leaving this to members of the public.