Cairngorms Nation­al Park Author­ity Intern­al Audit Report ²⁰²⁰⁄₂₁

LEAD­ER Administration

August 2020

Con­tents

• Exec­ut­ive Summary
• Man­age­ment Action Plan
• Appendix A – Definitions

Audit Team

• Audit Spon­sor: Dav­id Camer­on, Dir­ect­or of Cor­por­ate Services
• Key Con­tact: Brid­get Trus­sell, LEAD­ER Manager
• Audit Team: Chris Brown, Part­ner; Stephanie Hume, Man­ager; Lor­na Mun­ro, Intern­al Auditor

Exec­ut­ive Summary

Con­clu­sion

We have gained assur­ance that the pro­ced­ures in place for the LEAD­ER pro­gramme with­in Cairngorms Nation­al Park Author­ity reflect good prac­tice and are oper­at­ing effect­ively. There are clear roles, respons­ib­il­it­ies and account­ab­il­ity struc­tures in place with­in the organ­isa­tion, guid­ance has been developed and dis­sem­in­ated which is aligned to the Ser­vice Level Agree­ment require­ments and our test­ing of a sample of applic­a­tions and claims iden­ti­fied no issues, with the con­trols out­lined oper­at­ing as expected.

Back­ground and scope

The LEAD­ER Pro­gramme forms part of the Scot­tish Rur­al Devel­op­ment Pro­gramme 2014 – 2020 for which Cairngorms Nation­al Park Author­ity (CNPA) is the Account­able Body. The LEAD­ER Pro­gramme is an ini­ti­at­ive which aims to increase sup­port to rur­al com­munity and busi­ness net­works to tackle loc­al devel­op­ment objectives.

It is a require­ment of the Ser­vice Level Agree­ment (SLA) between the Scot­tish Gov­ern­ment and CNPA that an annu­al intern­al audit takes place to review the func­tions and ser­vices provided by the organ­isa­tion in their role as Account­able Body, and to assess the extent to which they are meet­ing the require­ments out­lined in the SLA.

In accord­ance with the ²⁰²⁰⁄₂₁ Intern­al Audit Plan, we reviewed the con­trols and pro­cesses in place to ensure com­pli­ance with the require­ments of the SLA for the LEAD­ER Programme.

Con­trol Assessment

1. There are effi­cient, effect­ive and well-con­trolled pro­cesses in place to ensure com­pli­ance with the Ser­vice Level Agreement.
2. Pro­ject and fund­ing applic­a­tions are con­sidered and scored in accord­ance with a clearly defined process.
3. Applic­a­tions are approved appro­pri­ately and on a timely basis.
4. Claims sub­mit­ted to the Scot­tish Gov­ern­ment by CNPA are in line with eli­gib­il­ity criteria.
5. Claims sub­mit­ted to CNPA by applic­ants are reviewed and approved appro­pri­ately pri­or to payment.
6. Grant claim reg­u­la­tions are being com­plied with.
7. The Scot­tish Government’s LARC IT sys­tem is being used effect­ively in accord­ance with the SLA.

(All sev­en con­trols received a Green rating)

Improve­ment Actions by Type and Priority

No improve­ment actions have been iden­ti­fied from this review. See Appendix A for defin­i­tions of col­our coding.

Key Find­ings

Good Prac­tice

We have gained assur­ance that CNPA’s pro­ced­ures reflect good prac­tice in a num­ber of areas:

• Over­sight and account­ab­il­ity for the LEAD­ER pro­gramme has been assigned to the Dir­ect­or of Cor­por­ate Ser­vices help­ing to ensure the organ­isa­tion are adher­ing to the SLA requirements.
• A num­ber of guid­ance doc­u­ments are in place for the pro­gramme which our test­ing con­firmed are con­sist­ent with the SLA as far as pos­sible. We also found these doc­u­ments were clear and con­cise and have been made avail­able to both applic­ants and staff.
• Our test­ing of a sample of applic­a­tions and pro­ject claims pro­cessed dur­ing 2019 – 20 iden­ti­fied no issues and con­firmed the con­trols in place are oper­at­ing as expected.
• All claims are sub­ject to review pri­or to pay­ment by a mem­ber of the LEAD­ER team, with approv­al giv­en by the LEAD­ER man­ager pri­or to processing.
• There is clear segreg­a­tion of duties through­out the pro­cesses in place.

Areas for Improvement

No areas for improve­ment were iden­ti­fied dur­ing our review.

Impact on Risk Register

The CNPA cor­por­ate risk register (dated March 2020) included the fol­low­ing risk rel­ev­ant to this review:

• Role as Lead/​Accountable body for major pro­grammes (e.g. LEAD­ER, Land­scape Part­ner­ship) has risk of sig­ni­fic­ant fin­an­cial claw­back should expendit­ure prove to be not eli­gible for fund­ing, while CNPA car­ries respons­ib­il­it­ies as employ­er for pro­gramme staff.

Acknow­ledge­ments

We would like to thank all staff con­sul­ted dur­ing this review for their assist­ance and co-operation.

Man­age­ment Action Plan

Con­trol Object­ive 1: There are effi­cient, effect­ive and well-con­trolled pro­cesses in place to ensure com­pli­ance with the Ser­vice Level Agreement.

Green — No weak­nesses identified

CNPA have imple­men­ted a num­ber of con­trols to ensure com­pli­ance with the Ser­vice Level Agree­ment including:

• Over­sight and account­ab­il­ity being assigned to the Dir­ect­or of Cor­por­ate Ser­vices, who also attends the Account­able Body meetings.
• Hav­ing a num­ber of key con­trols in place, includ­ing hav­ing appro­pri­ate segreg­a­tion of duties, tech­nic­al assess­ments of Expres­sions of Interests, Loc­al Action Group (LAG) approv­al, change pro­cesses, claim checks and signoffs. Our test­ing of a sample of claims con­firmed these were oper­at­ing as expected.
• Hav­ing clear guid­ance and policies in place, which are aligned with the Ser­vice Level Agreement.
• An annu­al Intern­al Audit with sample com­pli­ance checks.
• Annu­al Scot­tish Gov­ern­ment checks of applic­a­tion and claim pro­cesses using inform­a­tion stored in LARC.

Con­trol Object­ive 2 & 3: Pro­ject and fund­ing applic­a­tions are con­sidered and scored in accord­ance with a clearly defined pro­cess, in a timely manner.

Green — No weak­nesses identified

The num­ber of expres­sions of interests and applic­a­tions received dur­ing the peri­od reviewed was lim­ited, how­ever we reviewed one applic­a­tion which fol­lowed the CNPA pro­cess in full and a second which par­tially fol­lowed the CNPA pro­cesses, as a res­ult of being a co-oper­a­tion pro­ject with the High­land LAG. We found no issues with our test­ing and con­firmed the pro­jects were assessed and scored in line with the agreed pro­cess. No spe­cif­ic times­cales have been set for the expres­sion of interest and applic­a­tion approv­al pro­cess under­taken by CNPA. The times­cales are driv­en by applic­ant engage­ment; how­ever, we found the CNPA activ­it­ies, for example, receipt to pro­cessing and approv­al to advising the applic­ant were com­pleted in a timely man­ner. Our test­ing also con­firmed that all doc­u­ment­a­tion requir­ing a hard copy sig­na­ture (e.g. fund­ing applic­a­tion, grant offer and accept­ance) had been appro­pri­ately signed and doc­u­ment­a­tion retained by CNPA.

Con­trol Object­ive 4: Claims sub­mit­ted to the Scot­tish Gov­ern­ment by CNPA are in line with eli­gib­il­ity criteria.

Green — No weak­nesses identified

We con­firmed the eli­gib­il­ity cri­ter­ia is clearly out­lined in the guid­ance avail­able to both applic­ants and staff with­in CNPA. All claims made by applic­ants are sub­ject to review to ensure they are eli­gible, and that appro­pri­ate evid­ence of the expendit­ure incurred has been provided. Claims are signed off by a mem­ber of the CNPA LEAD­ER team and approved, using a sample check meth­od­o­logy, by the LEAD­ER man­ager. Once claims to CNPA by the applic­ant have been assessed and pro­cessed for pay­ment, CNPA makes a cor­res­pond­ing claim to the Scot­tish Gov­ern­ment, thereby min­im­ising the oppor­tun­ity for unclaimed funds and errors occur­ring. We iden­ti­fied no issues with­in our sample test­ing and con­firmed that the claims all had a cor­res­pond­ing and timely claim to the Scot­tish Government.

Con­trol Object­ive 5 & 6: Claims sub­mit­ted to CNPA by applic­ants are reviewed and approved appro­pri­ately pri­or to pay­ment, in line with regulations.

Green — No weak­nesses identified

Applic­ants must sub­mit claims in line with the mile­stones agreed at the time of applic­a­tion and grant offer. Changes to the mile­stones must be agreed, in line with del­eg­ated author­ity, by the LEAD­ER Man­ager or the LAG. All claims must be sub­mit­ted with sup­port­ing evid­ence which is reviewed by the LEAD­ER team pri­or to pro­cessing the pay­ment and record­ing in LARC. We found no issues with the pro­ject claims tested.

Con­trol Object­ive 7: The Scot­tish Government’s LARC IT sys­tem is being used effect­ively in accord­ance with the SLA.

Green — No weak­nesses identified

CNPA has high­lighted to the Scot­tish Gov­ern­ment the lim­it­a­tions to the LARC sys­tem, for example some applic­ants can­not use the sys­tem as their own broad­band access is lim­ited, all LAG mem­bers can­not sim­ul­tan­eously access the sys­tem when assess­ing applic­a­tions. The Scot­tish Gov­ern­ment is aware of these issues and we have assessed com­pli­ance against the revised arrange­ments which have been agreed with the Scot­tish Gov­ern­ment. We found that all the stages of the grant fund­ing pro­cess were appro­pri­ately recor­ded in LARC for those pro­jects included in our sample test, with one excep­tion. A with­drawn pro­ject was noted in LARC as ​‘reworked’ rather than ​‘with­drawn’. CNPA staff have con­tac­ted the Scot­tish Gov­ern­ment on mul­tiple occa­sions to have this inform­a­tion updated how­ever they are await­ing action to be taken.

Appendix A – Definitions

Con­trol Assessments

• R: Fun­da­ment­al absence or fail­ure of key controls.
• A: Con­trol object­ive not achieved – con­trols are inad­equate or ineffective.
• Y: Con­trol object­ive achieved – no major weak­nesses but scope for improvement.
• G: Con­trol object­ive achieved – con­trols are adequate, effect­ive and efficient.

Man­age­ment Action Grades

• 4: Very high risk expos­ure – major con­cerns requir­ing imme­di­ate seni­or atten­tion that cre­ate fun­da­ment­al risks with­in the organisation.
• 3: High risk expos­ure – absence/​failure of key con­trols that cre­ate sig­ni­fic­ant risks with­in the organisation.
• 2: Mod­er­ate risk expos­ure – con­trols are not work­ing effect­ively and effi­ciently and may cre­ate mod­er­ate risks with­in the organisation.
• 1: Lim­ited risk expos­ure – con­trols are work­ing effect­ively, but could be strengthened to pre­vent the cre­ation of minor risks or address gen­er­al house­keep­ing issues.

© Scott-Mon­crieff 2020. All rights reserved. Scott-Mon­crieff refers to Scott-Mon­crieff Audit Ser­vices, a trad­ing name of Group Audit Ser­vices Lim­ited. Registered in Eng­land and Wales. Regis­tra­tion No. 09652677. Registered to carry on audit work in the UK and reg­u­lated for a range of invest­ment busi­ness activ­it­ies by the Insti­tute of Chartered Account­ants in Eng­land and Wales.