“Significant improvements” are still needed to bring the running of the council up to standard more than a year after it fell victim to a £2 million fraud.

Barnet Council’s internal audit team could only give a ‘limited assurance’ that risks to the council were being adequately managed in 2018-19 – the same overall rating as the previous year.

Despite some improvements, the internal audit team said there were still weaknesses in the council’s framework of governance, risk management and control which “put the achievement of the organisation’s objectives at risk”.

The findings sparked a debate at Tuesday’s (July 16) audit committee about whether the council was being given enough scrutiny – particularly in light of a recent move to limit questions from members of the public.

Committee members also raised concerns about how the council could ensure the culture of firms providing outsourced services was up to standard.

Trishul Shah, a former employee of outsourcing firm Capita, was jailed last year for defrauding the council of more than £2 million.

Ongoing efforts to fix problems that led to the fraud, which was spotted in December 2017, meant auditors had to delay looking into some of the local authority’s other activities.

Richard Harbord, an independent member of the committee, said he was “very disappointed” by the limited assurance rating.

He said: “A third year of limited assurance would be an absolute disaster for an organisation like Barnet. They should be looking to move up. It is going to take a lot of work.

“Until they get to a point where the various parts of Barnet receive internal audit reports with a glow of pleasure and feeling of excitement, I fear there will be difficulties ahead.

“We got to a stage where there was scant attention being paid to the internal audit recommendations. That really isn’t good enough.”

In 2018, Barnet Council also suffered problems with pension data, IT systems and children’s services, which were deemed inadequate by Ofsted but have recently been rated good.

Labour councillor for East Finchley Cllr Arjun Mittra told the committee 2018 would go down in the history of Barnet Council as an “annus horriblis”.

He said: “Reports are often brought to us from an optimistic point of view. It is always after the fact that problems are happening.

“I think one of the things that has saved the council’s bacon is the involvement of members of the public. A number of residents who have brought issues to committees that have been beneficial for the committees to consider.

“I would really urge colleagues to think again about proposals to limit the public’s right to speak at public meetings.”

Leigh Lloyd-Thomas, from the council’s external auditor, BDO, praised Barnet’s “armchair auditors” and said he welcomed “members of the public telling us their concerns”.

Labour councillor for Brunswick Park Cllr Kathy Levine said: “How are you going to change the culture within Capita? I am really struggling with what can we do about a culture of a supplier who we are not managing.”

The council’s chief executive, John Hooton, said people from Capita had been working alongside council staff to make improvements in the way services are run.

Conservative councillor for West Hendon Cllr Alex Prager said it was “very disappointing” to see a second year in a row of limited assurance.

He added: “Hopefully we are improving constantly, and I will be expecting a more substantial assurance report this time next year.”

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