Cairngorms Nation­al Park Authority

Intern­al Audit Report ²⁰²¹⁄₂₂

Peat­land Action Pro­gramme Set Up

March 2022

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CAIRNGORMS NATION­AL PARK AUTHORITY Audit & Risk Com­mit­tee Paper I Annex I 30/09/22

Cairngorms Nation­al Park Authority Intern­al Audit Report ²⁰²¹⁄₂₂ Peat­land Action Pro­gramme Set Up March 2022

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Cairngorms Nation­al Park Authority Intern­al Audit Report ²⁰²¹⁄₂₂ Peat­land Action Pro­gramme Set Up

Cairngorms Nation­al Park Author­ity 1 Exec­ut­ive Sum­mary 1 Man­age­ment Action Plan 5 Appendix A – Defin­i­tions 21

Audit Spon­sor	Key Con­tacts	Audit team
Andy Ford, Dir­ect­or of Nature and Cli­mate Change	Colin Mclean, Head of Land Man­age­ment Steph­en Corcor­an, Peat­land Action Pro­gramme Man­ager Dav­id Camer­on, Dir­ect­or of Cor­por­ate Ser­vices Matt Wat­son, Peat­land Action Pro­ject Officer Daisy Whytock, Peat­land Action Pro­ject Officer Emma Stew­art, Peat­land Action Pro­ject Officer Thomas Plant, Peat­land Action Pro­ject Officer Dot Har­ris, Peat­land Action GIS & Data Analyst	Eliza­beth Young, Engage­ment Lead Stephanie Hume, Seni­or Man­ager Lor­na Mun­ro, Intern­al Auditor

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Exec­ut­ive Summary

Con­clu­sion

CNPA has adop­ted a ​‘full ser­vice’ approach to the deliv­ery of the Peat­land Action Fund Pro­gramme that involves Pro­ject Officers tak­ing a hands-on approach through­out the life­cycle of each pro­ject, from applic­a­tion through deliv­ery to pro­ject clos­ure. Whilst there are advant­ages to this in terms of ensur­ing pro­jects are delivered effect­ively, it also cre­ates a sig­ni­fic­ant num­ber of risks to CNPA that have not yet been fully con­sidered or mit­ig­ated. These risks include poten­tial expos­ure in a wide num­ber of areas includ­ing leg­al, fin­an­cial, repu­ta­tion­al, fraud and staff resourcing.

We also found there to be a lack of stra­tegic dir­ec­tion for the pro­gramme, due to con­straints in man­age­ment capa­city to main­tain an over­view of activ­it­ies, which has res­ul­ted in issues with key con­trols, doc­u­ment­a­tion and pro­cesses, com­mu­nic­a­tion approach, pro­gramme man­age­ment and report­ing, pro­ject apprais­al, claim check­ing and governance.

The issues with the cur­rent arrange­ments have an impact on CNPA’s read­i­ness to move to an ​‘open call’ for applic­a­tions and we believe that a sig­ni­fic­ant amount of work remains to ensure that CNPA is fully pre­pared for such a move.

Back­ground and scope

The CNPA became a full Peat­land Action deliv­ery part­ner in April of 2021, fol­low­ing approv­al by the Scot­tish Gov­ern­ment in Novem­ber 2020, man­aging a three-year pro­gramme with a £9.92million budget – with the aim of deliv­er­ing over 2,750 hec­tares of restored peat­lands in the Nation­al Park.

Organ­isa­tions apply to CNPA, as deliv­ery part­ner, for fund­ing related to on-the-ground res­tor­a­tion activities.

The short lead in time to devel­op­ing the pro­gramme frame­work res­ul­ted in resources being dir­ec­ted to the imme­di­ate need i.e. ​‘deliv­ery phase’ whilst plan­ning to address the gaps in the frame­work. Man­age­ment there­fore iden­ti­fied the need for a review of the con­trols and pro­cesses in place to man­age the Peat­land Action fund with­in CNPA due to the evolving nature of the pro­gramme frame­work, in par­tic­u­lar the full-ser­vice approach. They felt inde­pend­ent input would help to ensure that con­trols con­tin­ued to evolve in tan­dem with the changes to ensure that risks con­tin­ued to be man­aged appropriately.

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Con­trol assessment

1. Scot­tish Gov­ern­ment stip­u­la­tions have been iden­ti­fied and built into the CNPA Peat­land Action fund processes.
2. Appro­pri­ate mech­an­isms and con­trols are in place to identi­fy, appraise and agree pro­jects to take for­ward with­in the pro­gramme, with pro­jects form­ally approved pri­or to commissioning.
3. CNPA con­firms that claims sub­mit­ted meet eli­gib­il­ity cri­ter­ia and are reviewed and approved pri­or to payment.
4. There is appro­pri­ate doc­u­ment­a­tion in place to sup­port the grant awards, mon­it­or­ing and pay­ment activities.
5. There is suf­fi­cient mon­it­or­ing and report­ing to man­age­ment on pro­ject pro­gress, with appro­pri­ate scru­tiny and fol­low up action taken when required.

(Image of pie chart show­ing con­trol assess­ment results)

(Image of bar chart show­ing improve­ment actions by type and priority)

Nine improve­ment actions have been iden­ti­fied from this review, eight of which relate to the design of con­trols. See Appendix A for defin­i­tions of col­our coding.

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Key find­ings

Good prac­tice

CNPA’s pro­ced­ures reflect good prac­tice in a num­ber of areas:

• There is a pro­ject under­way to identi­fy all peat­lands with­in the Cairngorms Nation­al Park bound­ary, which will sup­port the pri­or­it­isa­tion and tar­get­ing of activ­ity for the most bene­fit with­in the Peat­land Action Fund Programme.
• We con­firmed that del­eg­ated author­ity approv­al pro­cesses are in place for the approv­al of new pro­jects with­in the pro­gramme. In par­tic­u­lar, we noted that there is sup­port­ing doc­u­ment­a­tion for pro­jects above the CNPA author­ity that are approved by the Scot­tish Government.
• In respect of cur­rent pro­cesses, we found that where Pro­ject Officers are identi­fy­ing gaps, they are pro­act­ively devel­op­ing their own tools and doc­u­ments and shar­ing these with­in the team in an attempt to con­tinu­ally improve and ensure consistency.
• The Peat­land Action Pro­gramme is util­ising some learn­ing and doc­u­ments from oth­er projects/​programmes (e.g. NatureScot and Her­it­age Hori­zons and LEAD­ER at CNPA) to improve the scheme approach and pro­cesses. This shows a good com­mit­ment to learn­ing from best prac­tice across the sec­tor and to con­tinu­ous improvement.

Areas for improvement

We have iden­ti­fied a num­ber of areas for improve­ment that, if addressed, would strengthen CNPA’s con­trol frame­work. These include:

• Car­ry­ing out a risk assess­ment of the adop­ted full-ser­vice approach and imple­ment­ing mit­ig­at­ing actions to man­age this with­in the risk appetite/​tolerance of the CNPA Board. CNPA should also con­sider obtain­ing leg­al advice regard­ing any poten­tial liab­il­it­ies related to the full-ser­vice pro­vi­sion, cla­ri­fy­ing roles and respons­ib­il­it­ies and seek­ing reim­burse­ment of Pri­or Noti­fic­a­tion costs from grantees.
• Doc­u­ment­ing the pro­gramme require­ments, ensur­ing that an appro­pri­ate suite of guid­ance and tem­plates are in place for each stage of the pro­cess from ini­tial applic­a­tion to pro­ject closure.
• Imple­ment­ing set cri­ter­ia for applic­a­tion apprais­als, ensur­ing there is adequate segreg­a­tion of duties.
• Devel­op­ing a com­mu­nic­a­tions approach that sup­ports deliv­ery of the cur­rent and future pro­gramme require­ments, tak­ing into account resourcing capacity.
• Imple­ment­ing a gov­ernance struc­ture that allows CNPA to dir­ect the stra­tegic pro­gramme and provide assur­ance over the Peat­land Action programme.

These are fur­ther dis­cussed in the Man­age­ment Action Plan below.

Impact on risk register

The CNPA cor­por­ate risk register included the fol­low­ing risks rel­ev­ant to this review:

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• Risk A11.1: Resourcing: 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.

Whilst we do not con­sider the risk of claw­back as a sig­ni­fic­ant issue at this time, our report has iden­ti­fied sig­ni­fic­ant risks to the organ­isa­tion due to its approach in imple­ment­ing the Peat­land Action Pro­gramme, includ­ing poten­tial liab­il­it­ies with under­tak­ing the full-ser­vice approach, the incon­sist­ency or lack of doc­u­ment­a­tion being util­ised to man­age pro­jects and the gov­ernance arrange­ments in place.

In addi­tion, there are inher­ent fraud risks in all grant fund­ing pro­cesses that are not cur­rently being well mit­ig­ated due to a defi­cien­cies in key counter-fraud con­trols and poor admin­is­trat­ive pro­ced­ures. The level of fraud in the eco­nomy has increased in recent years and CNPA’s counter-fraud approach should reflect that. There is there­fore a risk of repu­ta­tion­al dam­age to CNPA should fraud occur, which may be heightened where that fraud was able to be per­pet­rated due to a lack of due dili­gence over the dis­tri­bu­tion of pub­lic funds.

We recom­mend man­age­ment con­sider and fully doc­u­ment the key risks to CNPA from the Peat­land Action Pro­gramme, tak­ing account of the issues high­lighted in this report, escal­at­ing with­in the risk frame­work as appropriate.

Acknow­ledge­ments

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

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Man­age­ment Action Plan

Con­trol Object­ive 1: Scot­tish Gov­ern­ment stip­u­la­tions have been iden­ti­fied and built into the CNPA Peat­land Action fund processes.

1.1 PA Pro­gramme set up

CNPA provided a pro­pos­al to the Scot­tish Gov­ern­ment to admin­is­ter the grant scheme from ²⁰²¹⁄₂₂ for an ini­tial three-year peri­od. This pro­pos­al was refined, and fund­ing con­firmed in Novem­ber 2020.

The Septem­ber 2020 pro­pos­al con­firmed some ele­ments of the scheme expect­a­tions and set up. This included the ​’full ser­vice of sup­port for land man­agers’ which we con­firmed has been imple­men­ted, how­ever oth­ers such as the ​‘Peat­land Pro­ject Pan­el cov­er­ing gov­ernance and grant assessment/​approvals’ has not yet been put in place. The evolving pro­gramme has out­paced these plans and there­fore do not provide suf­fi­cient clar­ity on the roles of the Peat­land Action Team nor the oper­a­tion­al and stra­tegic governance.

In addi­tion, we noted a num­ber of oth­er key aspects of both the gov­ernance of the over­all pro­gramme and the grant fund­ing pro­cess itself that were either not in place or had not been clearly doc­u­mented. These include:

Pro­gramme governance

• The rel­at­ive roles and respons­ib­il­it­ies of CNPA, Scot­tish Gov­ern­ment and oth­er Peat­land Action part­ners with­in the programme.
• Per­form­ance tar­gets, short-and long-term out­comes and out­puts linked to the stra­tegic aims of the Peat­land Action Pro­gramme. While we note there are cur­rently two KPI’s focussed on res­tor­a­tion and fin­ance, addi­tion­al KPI’s related to impact on the envir­on­ment, new sup­pli­er entrants etc are not documented.
• A mon­it­or­ing, report­ing and man­age­ment frame­work includ­ing an intern­al com­mu­nic­a­tions approach. CNPA’s cur­rent approach is intern­ally focussed and does not address report to Scot­tish Gov­ern­ment or oth­er Peat­land Action Deliv­ery Partners.

Grant fund­ing process

• Sep­ar­ate tem­plates and approv­al pro­cesses for request­ing fin­an­cial approv­al for pro­jects both with­in and out­with CNPA’s del­eg­ated author­ity lim­its (we evid­enced the same pro­cess in use for all pro­jects irre­spect­ive of value which is not in line with the cur­rent pro­cess design).
• A clear pro­cess on how to handle vari­ations to indi­vidu­ally fun­ded pro­ject costs includ­ing when vari­ations let­ters and new grant offers will be used as well as reduced final pay­ments and poten­tial write-offs.
• Vari­ation of arrange­ments to scheme – such as who makes such decisions and what doc­u­ment­a­tion is required when the Scot­tish Gov­ern­ment is provid­ing addi­tion­al fund­ing or impos­ing restric­tions on how a spe­cif­ic ele­ment of the fund­ing can be spent.
• Del­eg­ated financial/​decision mak­ing frame­work, spe­cific­ally around pro­ject assess­ment and approv­al and also includ­ing escal­a­tion (linked to MAP 4.1 on a lack of evid­ence of key steps).

Risk

There is a risk of inef­fect­ive pro­cesses and unclear stake­hold­er expect­a­tions, due to scheme require­ments not being clearly com­mu­nic­ated and doc­u­mented, neg­at­ively impact­ing rela­tions with the Scot­tish Gov­ern­ment and res­ult­ing in inef­fect­ive Peat­land Action Pro­gramme arrangements.

Recom­mend­a­tion

Man­age­ment should doc­u­ment the scheme require­ments, ensur­ing that this is rep­res­ent­at­ive of the arrange­ments cur­rently in place or in devel­op­ment, and com­mu­nic­ate these clearly to staff.

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Man­age­ment Action

Grade 3 (Design)

Agreed. We have increased man­age­ment capa­city with­in the peat­land team with effect from Spring 2022 and will deploy ele­ments of this increased man­age­ment capa­city in doc­u­ment­ing and com­mu­nic­at­ing peat­land pro­gramme pro­cesses and requirements.

Action own­er: Head of Ser­vice, Land Man­age­ment, with Peat­land Action Pro­gramme Man­agers Due date: Novem­ber 2022

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Con­trol Object­ive 2: Appro­pri­ate mech­an­isms and con­trols are in place to identi­fy, appraise and agree pro­jects to take for­ward with­in the pro­gramme, with pro­jects form­ally approved pri­or to commissioning.

2.1 Full-Ser­vice Support

Red

The Septem­ber 2020 CNPA pro­pos­al to the Scot­tish Gov­ern­ment on cre­ation of the fund­ing pro­gramme iden­ti­fied that a full-ser­vice approach would be taken. We have been advised by CNPA staff that this decision was taken as a res­ult of NatureScot, who man­aged the single Peat­land Action Pro­gramme pri­or to ²⁰²¹⁄₂₂, identi­fy­ing that the pro­ject man­age­ment ser­vice provided extern­ally had not been as effect­ive and this had impacted the pro­gramme outcomes.

CNPA’s pro­pos­al iden­ti­fied that Pro­ject Officers would provide sup­port to land man­agers in designing/​scoping a pro­ject, survey/​mapping, draft­ing grant applic­a­tions, assist­ing in ten­der­ing for con­tract­ors, site super­vi­sion of con­tract­ors, pro­ject man­age­ment and draft­ing reports and grant claims. Although there is a grant offer let­ter with asso­ci­ated terms and con­di­tions, there is no form­al agree­ment between CNPA and the poten­tial grantee for the ser­vices being provided and there­fore roles, respons­ib­il­it­ies and liab­il­it­ies are not clearly documented.

We note that this approach was imple­men­ted, to address deliv­ery of hec­tares in the short term, though without a form­al risk assess­ment being under­taken. Our work has high­lighted that this approach to pro­gramme deliv­ery does expose CNPA to a num­ber of risks, including:

• Pro­ject Officers approv­ing applic­a­tions and claims that they have cre­ated, and there­fore appro­pri­ate segreg­a­tion of duties and inde­pend­ent chal­lenge to applic­a­tions are not in place, though we note Man­ager over­sight dur­ing the grant award pro­cess. This is a fun­da­ment­al counter-fraud con­trol. (MAP 2.5)
• A poten­tial leg­al liab­il­ity for areas over­seen by Pro­ject Officers, for example health and safety acci­dents, fail­ure to deliv­er the expec­ted out­comes or unin­ten­ded impacts on oth­er parts of the site.
• A poten­tial leg­al liab­il­ity for CNPA for instruct­ing con­tract­ors on behalf of landown­ers when no form­al agree­ment between the landown­er and CNPA is in place.
• As CNPA is provid­ing a ser­vice not expec­ted as part of their remit, there may implic­a­tions on the VAT status of the organ­isa­tion. (We under­stand that the VAT liab­il­ity will be con­sidered as part of an upcom­ing VAT audit being organ­ised by the Dir­ect­or of Cor­por­ate Services).
• The poten­tial resourcing pres­sure on staff to sup­port any increase in the num­ber of pro­jects (MAP 2.4), par­tic­u­larly if there is an ​‘open call’ for projects.

Risk

There is a risk that the approach being used for the Peat­land Action pro­gramme is cre­at­ing risks to CNPA out­with the risk appet­ite of the organ­isa­tion, as the approach was developed without a full risk assess­ment, lead­ing to increased fin­an­cial and leg­al liab­il­it­ies in addi­tion to non-com­pli­ance with expec­ted good prac­tice in grant scheme design.

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Recom­mend­a­tion

Man­age­ment should doc­u­ment the risks asso­ci­ated with the full-ser­vice approach and put mit­ig­at­ing con­trols in place to man­age this with­in the risk appetite/​tolerance of the CNPA Board. This should include obtain­ing leg­al advice in rela­tion to the poten­tial liab­il­it­ies related to the full-ser­vice pro­vi­sion and award of con­tracts on behalf of the landowners.

Roles and respons­ib­il­it­ies of each of the parties sub­ject to the full-ser­vice approach should be doc­u­mented and com­mu­nic­ated pri­or to ser­vices being provided. We recom­mend this is split by each step in the pro­cess, e.g. pre-applic­a­tion, applic­a­tion, pro­ject man­age­ment and post pro­ject monitoring.

Man­age­ment Action

Grade 4 (Design)

Agreed. Man­age­ment are aware that the required deliv­ery of activ­it­ies ​‘on the ground’ needed to secure the peat­land res­tor­a­tion object­ives of the pro­gramme are far bey­ond the ori­gin­al grant giv­ing powers on which the oper­a­tions were ori­gin­ally based. Hence this audit has been com­mis­sioned in part to provide clear under­stand­ing of the dir­ec­tion of work to be under­taken. We have com­mis­sioned leg­al advice in par­al­lel with the con­duct of this intern­al audit review in order to estab­lish a suite of doc­u­ment­a­tion to estab­lish a more expli­cit, clear and form­al rela­tion­ship between the Cairngorms NPA, the land man­agers who are tak­ing for­ward pro­jects, and the contractors.

We will doc­u­ment the risks around the full-ser­vice approach and estab­lish the extent to which the leg­al advice and doc­u­ment­a­tion developed mit­ig­ates those risks and wheth­er any resid­ual risks remain. In the event of any resid­ual risk, we will devel­op a fol­low up action plan to resolve any more minor matters.

Action own­er: Dir­ect­or of Nature and Cli­mate Change Due date: Septem­ber 2022 for leg­al advice and imple­ment­a­tion; Decem­ber 2022 for risk map­ping and action plan to address resid­ual risk.

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2.2 Con­tract Awards

As part of the full-ser­vice approach CNPA Pro­ject Officers can under­take pro­cure­ment exer­cises on behalf of the landown­er, includ­ing devel­op­ment of state­ments of require­ments, pub­lic­a­tion of tender oppor­tun­it­ies, assess­ment of tender sub­mis­sions, award recom­mend­a­tions and draft­ing con­tract awards.

It is the respons­ib­il­ity of the landown­er to agree an appro­pri­ate con­trac­tu­al arrange­ment with the suc­cess­ful con­tract­or as the con­trac­tu­al rela­tion­ship is between the landown­er and the con­tract­or, with the landown­er being respons­ible for issu­ing the con­tract award. The gen­er­al terms and con­di­tions attached to the Grant Awards state that CNPA must receive cop­ies of all con­tract awards.

In two (Carn Deag sub-site B and Cairn Gel­die) of the four pro­jects reviewed the Pro­ject Officers could not con­firm wheth­er this had been issued. Through dis­cus­sions with Pro­ject Officers we con­firmed that land man­agers do not always advise CNPA that they have awar­ded a con­tract to the suc­cess­ful con­tract­or fol­low­ing the tender exer­cise. In prac­tice there­fore, when the pro­ject moves into deliv­ery stage the Pro­ject Officer may be verbally award­ing a con­tract when liais­ing with the con­tract­or to arrange site works etc.

Risk

There is a risk CNPA instruct con­tract­ors on behalf of landown­ers without a form­al con­tract in place, res­ult­ing in a poten­tial leg­al liab­il­ity for CNPA.

Recom­mend­a­tion

Man­age­ment should ensure that con­tract award respons­ib­il­ity is included with­in MAP 2.1 and CNPA Pro­ject Officers obtain con­tract awards before liais­ing with contractors.

Man­age­ment Action

Grade 3 (Oper­a­tion)

Agreed. Peat­land pro­gramme man­agers have received an expli­cit instruc­tion to ensure con­tracts have been awar­ded and signed off as received by CNPA pri­or to author­isa­tion to inter­act on post-pro­cure­ment pro­ject deliv­ery as an imme­di­ate con­trol to this risk.

More gen­er­ally, con­tract award and ​“full ser­vice” activ­it­ies out­with grant applic­a­tion and grant award pro­cesses includ­ing post-pro­cure­ment pro­cesses such as con­tract­or engage­ment will be included in con­trol struc­tures as covered under MAP 2.1 (pre­vi­ous recommendation).

Action own­er: Deputy Chief Exec­ut­ive for instruc­tion to enforce terms and con­di­tions require­ments for assur­ance of con­tract in place between land man­ager and con­tract­or Due Date: August 2022

Action own­er: Head of Ser­vice, Land Man­age­ment with sup­port from Peat­land Action Pro­gramme Man­agers Due Date: Septem­ber 2022

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2.3 Pri­or Notifications

Per­mit­ted devel­op­ment rights apply to works car­ried out on land to restore peat­land. All such pro­jects require the Pri­or Noti­fic­a­tion of a ​‘peat­land res­tor­a­tion scheme’ to the plan­ning author­ity. Although the cost of each applic­a­tion is min­im­al¹, as is the num­ber CNPA have sub­mit­ted on behalf of landown­ers (approx­im­ately 12 at the time of field­work), CNPA is cur­rently absorb­ing the cost of this. The costs are not covered in the grant offer tem­plate or terms and conditions.

This approach is incon­sist­ent as landown­ers under­tak­ing their own pro­ject man­age­ment pay for Pri­or Noti­fic­a­tions them­selves and this is not reim­bursed by CNPA through the grant offer

Risk

CNPA are incur­ring addi­tion­al costs as a res­ult of the Pri­or Noti­fic­a­tion applic­a­tion costs not being reimbursed.

Recom­mend­a­tion

CNPA should ensure the con­sist­ent treat­ment of Pri­or Noti­fic­a­tion costs, mean­ing that those should be reim­bursed if incurred by CNPA and appro­pri­ately reflec­ted in grant offer letters.

¹ £78 — The High­land Council

Man­age­ment Action

Grade 2 (Design)

Agreed. Grant applic­a­tion and wider ser­vices agree­ments pro­cesses and timelines will be reviewed in order to ensure the tim­ing of pri­or noti­fic­a­tion applic­a­tions can be appro­pri­ately accom­mod­ated in eli­gible grant awards and / or ser­vices agree­ments. It is noted that the Cairngorms NPA receives a resource alloc­a­tion for deliv­ery of peat­land res­tor­a­tion activ­it­ies in addi­tion to the cap­it­al alloc­a­tions which cov­er grant awards to land man­agers. It is equally pos­sible that use of the resource alloc­a­tion for peat­land res­tor­a­tion to cov­er the costs of these pri­or noti­fic­a­tions is a more straight­for­ward and admin­is­trat­ively less bur­den­some approach to ensur­ing pri­or noti­fic­a­tions are in place to sup­port pro­jects in development.

Action own­er: Peat­land Action Pro­gramme Man­agers Due date: Novem­ber 2022

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2.4 Com­mu­nic­a­tion

Landown­ers

It would not be unusu­al for a grant scheme to have Expres­sions of Interest or hold ​‘open calls’ for grant applic­a­tions. The Peat­land Action Team have there­fore developed an Expres­sion of Interest tem­plate for this pur­pose, though this has not yet been used. The stra­tegic dir­ec­tion of Peat­land Action Pro­gramme is not yet defined (MAP 1.1) and there­fore it is unclear wheth­er an ​‘open call’ will be required. Until such time as a decision is taken the aware­ness of the Peatland’s pro­gramme may be impacted. In addi­tion, the Peat­land Action Team have high­lighted that they are already work­ing at full capa­city ser­vi­cing the cur­rent pro­jects, which would need to be addressed if an ​‘open call’ is imple­men­ted (MAP 2.1)

Whilst the Peat­land Action Team are aware of the landown­ers with­in the Nation­al Park, there is cur­rently a lack of clar­ity over all peat­land sites, nor is intel­li­gence on under­stand­ing and will­ing­ness of each site own­er to engage with the res­tor­a­tion pro­gramme. We note that a pro­ject to identi­fy the peat­land sites and status with­in the Nation­al Park bound­ary is under­way and this may there­fore allow CNPA to take a more tar­geted and man­aged approach to com­mu­nic­a­tions which would sup­port bet­ter resource man­age­ment, how­ever the approach to com­mu­nic­a­tions is yet to be con­sidered in this context.

The CNPA web­site includes detail on the Peat­land Action Pro­gramme that mainly cov­ers the pur­pose of the scheme in sup­port­ing the recov­ery of Peat­lands. A scheme con­tact at CNPA is provided how­ever the details are included in the con­text of the NatureScot Peat­land Action Pro­gramme and haven’t yet been updated to reflect that CNPA are now offer­ing grants to landown­ers with­in the Nation­al Park boundaries.

Con­tract­ors

Fur­ther, there is no inform­a­tion on the CNPA web­site, e.g. new entrant sup­pli­er form or oth­er inform­a­tion out­lining that new entrants (con­tract­ors) are being sought to increase the deliv­ery of peat­land res­tor­a­tion. CNPA is liais­ing with High­lands and Islands Enter­prise (HIE) on this issue but giv­en the lack of avail­able con­tract­ors to under­take this work nation­ally it is vital that CNPA com­mu­nic­ate their require­ments for new entrants either through their intranet or exist­ing social media activities.

Risk

There is a risk that the inform­a­tion avail­able on the Peat­land Action Pro­gramme is insuf­fi­cient to obtain engage­ment of landown­ers and poten­tial new con­tract­ors, impact­ing the abil­ity of the CNPA to deliv­er the pro­gramme out­comes. In addi­tion, there is a risk that CNPA does not have capa­city to offer the ​‘full ser­vice’ approach to all the poten­tial pro­jects if an ​‘open call’ to com­mu­nic­a­tions is used, increas­ing the like­li­hood of risks occur­ring and impact­ing the over­all pro­ject and pro­gramme outcomes.

Recom­mend­a­tion

Man­age­ment should devel­op a com­mu­nic­a­tions strategy for the pro­gramme, includ­ing a review of the CNPA web­site and aware­ness rais­ing activ­it­ies for the Peat­land Action Pro­gramme and con­sider how the work to identi­fy peat­land sites will inform the com­mu­nic­a­tion activ­it­ies undertaken.

Fur­ther, man­age­ment should take a stra­tegic decision on wheth­er an ​‘open call’ approach will be taken in the future and fully doc­u­ment the capa­city and pro­cesses required to fully sup­port this approach.

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azets​.co​.uk Cairngorms Nation­al Park Author­ity Intern­al Audit Report ²⁰²¹⁄₂₂ 12

Man­age­ment Action

Grade 3 (Design)

The value of this recom­mend­a­tion is recog­nised for the medi­um to long term suc­cess of the programme.

The ini­tial approach to deliv­ery of the peat­land res­tor­a­tion pro­gramme has been neces­sar­ily driv­en by short­er term goals: estab­lish­ing and review­ing the in-house team; secur­ing good deliv­ery against ini­tial pro­gramme object­ives of areas of res­tor­a­tion achieved and util­isa­tion of fin­an­cial resources made avail­able; and devel­op­ing pro­cure­ment approaches while sup­port­ing the devel­op­ment of con­tract­or capa­city in this new area of the ​“green eco­nomy”. These drivers have been essen­tial in order to val­id­ate the recog­ni­tion of Cairngorms Peat­land Action as a viable area and secure longer-term resourcing while con­trib­ut­ing to the devel­op­ment of this eco­nom­ic sec­tor nationally.

The tim­ing of a more com­pre­hens­ive com­mu­nic­a­tions strategy for the pro­gramme, includ­ing any decision to make an open call for pro­jects, needs to be care­fully judged against the capa­city of the staff team to plan and import­antly meet any expect­a­tions of stake­hold­ers estab­lished by the strategy. With the ongo­ing review and recruit­ment to the team, this area of longer-term approach will be con­sidered over the end of the cur­rent oper­a­tion­al year.

Action own­er: Head of Land Man­age­ment Due date: April 2023

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azets​.co​.uk Cairngorms Nation­al Park Author­ity Intern­al Audit Report ²⁰²¹⁄₂₂ 13

2.5 Pro­ject Appraisal

Applic­a­tions are made on a tem­plate doc­u­ment which can be draf­ted by the Landown­er, Land Agent or CNPA Pro­ject Officer. The applic­a­tions are then assessed by the CNPA Pro­ject Officer. As such, where the applic­a­tion has been draf­ted by the Pro­ject Officer it can then also be assessed by the same indi­vidu­al, mean­ing there is no segreg­a­tion of duties in place at the pro­ject apprais­al stage (though we did note that there is man­age­ment over­sight of team activ­ity by the Peat­land Action Man­ager). As the applic­a­tion forms are sub­sequently signed by the landown­er, we were unable to sub­stan­ti­ate this dur­ing our test­ing, how­ever Pro­ject Officers con­firmed that this was the case dur­ing discussions.

Dur­ing our test­ing we noted that the assess­ment is unique to each pro­ject applic­a­tion, with no set fund­ing cri­ter­ia or assess­ment of how the pro­ject fits into the over­all stra­tegic dir­ec­tion of the Peat­land Action Pro­gramme. We found that with pro­jects being assessed on an incon­sist­ent basis, there were vary­ing degrees of inform­a­tion and rigour sup­port­ing dif­fer­ent applic­a­tions. It is acknow­ledged the CNPA have been faced with con­tract­or sup­ply dif­fi­culties along­side landown­er engage­ment issues, mean­ing the decision has been more about who is will­ing and is there a con­tract­or avail­able in order to deliv­er the expec­ted tar­get Hectares.

We are aware that a set of draft fund­ing cri­ter­ia has been developed by CNPA but is yet to be implemented.

Risk

There is a risk that applic­a­tions are not assessed con­sist­ently, aligned with the stra­tegic dir­ec­tion of the Peat­land Action Pro­gramme, nor inde­pend­ently veri­fied, as sup­port­ing pro­cesses are not in place, lead­ing to fail­ure to achieve the pro­gramme objectives.

Recom­mend­a­tion

Man­age­ment should final­ise and imple­ment the fund­ing cri­ter­ia for applic­a­tion apprais­als. This cri­ter­ia should be signed off at a level where stra­tegic pro­gramme decision mak­ing occurs.

Where the CNPA Pro­ject Officer has com­pleted the applic­a­tion or been involved in the pre-applic­a­tion stage of the pro­ject, the applic­a­tion should be assessed and approved by either the Peat­land Action Pro­gramme Man­ager or anoth­er Pro­ject Officer to ensure segreg­a­tion of duties is in place and an appro­pri­ate level of inde­pend­ent chal­lenge takes place.

Man­age­ment Action

Grade 3 (Design)

Agreed.

The team will seek to estab­lish a set of trans­par­ent cri­ter­ia for assess­ment of peat­land res­tor­a­tion pro­ject applic­a­tions, which should as a min­im­um assist the team in pri­or­it­ising work­loads and help stake­hold­ers under­stand our pro­gramme deliv­ery objectives.

We will ensure there are appro­pri­ate and evid­enced divi­sion of respons­ib­il­it­ies between the team in con­duct of decision making.

Action own­er: Peat­land Action Pro­gramme Man­agers Due date: March 2023

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Con­trol Object­ive 3: CNPA con­firms that claims sub­mit­ted meet eli­gib­il­ity cri­ter­ia and are reviewed and approved pri­or to payment.

Yel­low

Claims are made on a tem­plate doc­u­ment by the Landown­er or Agent. The claim form includes ques­tions and cost break­downs to ensure that suf­fi­cient inform­a­tion is provided to determ­ine eli­gib­il­ity (e.g. is it in line with the Grant Offer and Pro­ject Outputs/​Outcomes). The form is reviewed by the CNPA Pro­ject Officer, who may have also pre­pared the claim and asso­ci­ated doc­u­ment­a­tion (as high­lighted as an issue under MAP 2.5).

We tested two pro­jects with claims (three claims in total) and found that these were sub­mit­ted on the rel­ev­ant forms, with asso­ci­ated doc­u­ment­a­tion to sup­port the claim. We con­firmed that the forms had been author­ised by the Peat­land Action Pro­gramme Man­ager and escal­ated to the appro­pri­ate indi­vidu­al with Del­eg­ated Fin­an­cial Author­ity for sign off. We note how­ever (as dis­cussed in MAP 4.1) that CNPA is yet to final­ise the guid­ance and require­ments for sub­mit­ting a claim as well as the expect­a­tions around sup­port­ing documentation.

Although we found the claims tested to have been sup­por­ted with rel­ev­ant doc­u­ment­a­tion and approvals, the impact of the segreg­a­tion of duties issues at the pro­ject apprais­al stage increases the asso­ci­ated risks of ineligible pay­ments which are not in line with the over­all scheme pri­or­it­ies. There­fore, we have assessed the over­all con­trol object­ive as yellow.

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Con­trol Object­ive 4: There is appro­pri­ate doc­u­ment­a­tion in place to sup­port the grant awards, mon­it­or­ing and pay­ment activities.

4.1 Tem­plates, pro­cesses and key controls

We found there to be some evid­ence of learn­ing from oth­er CNPA grant scheme pro­grammes such as Her­it­age Hori­zons and LEAD­ER along with learn­ing from the NatureScot Peat­land Action Pro­gramme used in the design of the Peat­land Action Fund Programme.

Whilst all grant applic­a­tions and award doc­u­ment­a­tion was reviewed by leg­al advisors, there were gaps in Seni­or Man­ager over­sight (Dir­ect­or and Head of Ser­vice roles vacant for a peri­od) which res­ul­ted in the pro­gramme devel­op­ing based on the exper­i­ence of the Peat­land Action Pro­gramme Man­ager; with lim­ited engage­ment with the wider organ­isa­tion for advice on exist­ing prac­tices and les­sons learned. We noted a num­ber of risks relat­ing to the approach adop­ted in MAP 2.1 and found that the grant pro­cess has evolved to meet the basic needs of deliv­er­ing the hec­tar­age iden­ti­fied in the pro­gramme out­comes at short notice.

We noted that devel­op­ment and improve­ment activ­ity has been ongo­ing dur­ing the peri­od of the audit, how­ever our test­ing found that:

Pro­gramme Management

• A doc­u­mented grant pro­cess and asso­ci­ated pro­ced­ures were still being developed, mean­ing that:
  • High­light reports includ­ing risk register and les­sons learned log are not yet in place.
  • Segreg­a­tion of duties are not in place.
  • A del­eg­ated decision-mak­ing frame­work and team action track­er were not being kept up to date or used in practice.
  • The pro­gramme pro­ject track­er did not clearly identi­fy which pro­jects were at the vari­ous stages of the process.
  • A con­tract award was not evid­ent in two cases we reviewed (Mar Lodge Cairn Gel­die and Tulchan Carn Dearg sub-site B).
  • The applic­a­tion for one pro­ject (Mar Lodge Cairn Gel­die) was not evid­ent in our testing.
  • Del­eg­ated Author­ity approv­al was not evid­ent in two pro­jects (Mar Lodge Cairn Gel­die and Atholl Clunes Beat).
  • There were gaps in the audit trail of key doc­u­ments and decisions in each of the five pro­jects reviewed (Tulchan Cairn Dearg Sub Site B, Mar Lodge Cairn Gel­die, Atholl Clunes Beat, Glen­fe­sh­ie An Eil­rig and Aber­nethy An Lurg).
• The fund­ing eli­gib­il­ity cri­ter­ia was in draft.
• Mak­ing the grant pro­cess doc­u­ment­a­tion avail­able to the pub­lic was noted as an out­stand­ing action on the Pro­ject Team action tracker.

Pre-Applic­a­tion

• The Expres­sion of Interest pro­cess was in devel­op­ment with asso­ci­ated forms in draft format.

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• Con­struc­tion (Design & Man­age­ment) Reg­u­la­tions 2015 (CDM) tem­plates were in place, how­ever there were mul­tiple doc­u­ments some of which are not used.
• A num­ber of doc­u­ments were in place, but in mul­tiple formats includ­ing a Pro­ject Scop­ing pro­cess and asso­ci­ated doc­u­ments, Tem­plate State­ment of Require­ments and tender eval­u­ation matrix.
• Tech­nic­al guid­ance, e.g. Spa­tial data sub­mis­sion (GIS), was not in place or is still being developed.
• Com­mu­nic­a­tion, decision mak­ing, and oth­er doc­u­mented evid­ence of ongo­ing engage­ment and site vis­its were in place, though these var­ied in qual­ity and format depend­ing on the pro­ject and Pro­ject Officer.

Applic­a­tion

• Applic­a­tion assess­ment cri­ter­ia (fund­ing cri­ter­ia) and asso­ci­ated sign off by the Pro­ject Officer (check­list) were in draft format.

Pro­ject Management

• Tem­plate inter­im reports were in draft.
• Site work pro­gress updates were in in place, though the format was variable.
• Claim guid­ance in rela­tion to expenses, non-eli­gible items, sup­port­ing reports or oth­er evid­ence e.g. pho­tos, pro­ject man­ager cer­ti­fic­a­tion, receipts for expenses, timesheets were not in place. A monthly claim sum­mary report was in place, how­ever, the format was variable.

Pro­ject Closure

• A tem­plate final report, includ­ing les­sons learned, was not in place.
• Final claim guid­ance was not in place.
• A clos­ure let­ter affirm­ing the expect­a­tion of longer-term man­age­ment of the site and any records, was not in place.

Risk

There is a risk that the grant pro­cesses are not adequate to ensure that the Peat­land Action Pro­gramme is man­aged effi­ciently and effect­ively, due to lack of doc­u­mented and agreed processes/​templates, which increases the like­li­hood of resourcing pres­sures, repu­ta­tion­al dam­age and pro­gramme object­ives and out­comes not being maximised.

Recom­mend­a­tion

CNPA should ensure that the min­im­um con­trols, pro­cesses and doc­u­ment­a­tion iden­ti­fied below are in place and being used:

• Pro­gramme Man­age­ment Frame­work – doc­u­mented grant inform­a­tion which includes file man­age­ment struc­ture, del­eg­ated author­ity frame­work, report­ing arrange­ments includ­ing post pro­gramme audit­ing, fund­ing cri­ter­ia, pro­ject vari­ation arrange­ments, appro­pri­ate roles and respons­ib­il­it­ies which takes account of segreg­a­tion of duties and del­eg­ated decision-mak­ing frame­work. (Linked to MAP 1.1 and MAP 5.1)
• Pro­gramme Man­age­ment Tem­plates and Tools – tem­plate high­light reports and a pro­gramme track­er that shows the stage of the grant pro­cess for each, a pro­gramme risk register, a les­sons learned log that is added to as the pro­gramme pro­gresses, a pri­or­it­ised action track­er with action own­ers and times­cales, a com­mu­nic­a­tion plan and along term action plan­ner includ­ing audit­ing of closed pro­jects (where neces­sary). (Linked to MAP 1.1 and MAP 5.2)
• Pre-applic­a­tion Tem­plates – pro­cess doc­u­ments includ­ing pro­ject scop­ing doc­u­ments, CDM tem­plates, Pri­or Noti­fic­a­tion applic­a­tion form/​link and sub­mis­sion report, tem­plate design brief, expres­sion of interest forms for grants, and pro­cure­ment doc­u­ment­a­tion (state­ment of require­ments that meets pro­cure­ment stand­ards, weighted eval­u­ation mat­rix, con­tract and asso­ci­ated terms and conditions).
• Pre-applic­a­tion Pro­cesses – doc­u­ment­a­tion sup­port­ing an appro­pri­ate audit trail of com­mu­nic­a­tions, engage­ment and decision making.
• Applic­a­tion Tem­plates — tem­plate applic­a­tion form, fund­ing assess­ment cri­ter­ia, timeline for grant assess­ment, assess­ment form which allows sign of by Pro­ject Officer and anoth­er indi­vidu­al with­in the team (not fin­an­cial author­ity), tem­plate grant offer/​letter of intent and sup­port­ing terms of ref­er­ence, tem­plate let­ter reject­ing applic­a­tion. (Linked to MAP 2.5)
• Pro­ject Man­age­ment – a claim form, asso­ci­ated guid­ance on sup­port­ing doc­u­ments required along with the claim form, a tem­plate inter­im report and a tem­plate vari­ation letter.
• Pro­ject Clos­ure – a final claim form, asso­ci­ated guid­ance on the sup­port­ing doc­u­ments required along with the claim form, tem­plate final report which should include les­sons learned, tem­plate clos­ure let­ter identi­fy­ing grantee leg­acy require­ments and audit­ab­il­ity, intern­al clos­ure pro­cess includ­ing updat­ing pro­gramme track­ers, clos­ing files, updat­ing fin­ance etc.

The Peat­land Action Pro­gramme Man­ager should seek con­firm­a­tion from the Peat­land Team on the effect­ive­ness of the cur­rent arrange­ments at their reg­u­lar team meet­ings to identi­fy fur­ther improve­ments or con­sider altern­at­ive approaches.

Man­age­ment should also review exist­ing files to ensure that there is a suf­fi­ciently clear audit trail of the key steps to date.

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Man­age­ment Action

Grade 4 (Design)

Agreed, there is an urgent need to con­sol­id­ate the team’s pro­cesses and pro­ced­ures and to evolve and final­ise those aspects of pro­ced­ures not yet in place. The team has been restruc­tured to move to two Pro­gramme Man­agers rather than one in order to provide addi­tion­al man­age­ment capa­city to ensure the intern­al sys­tems can be developed at a pace to match the extern­al deliv­ery demand.

Action own­er: Head of Ser­vice with Peat­land Action Man­agers Due date: Feb­ru­ary 2023

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Con­trol Object­ive 5: There is suf­fi­cient mon­it­or­ing and report­ing to man­age­ment on pro­ject pro­gress, with appro­pri­ate scru­tiny and fol­low up action taken when required.

Amber

5.1 Gov­ernance – mon­it­or­ing and reporting

As high­lighted in MAP 1.1 the pro­pos­al for the Peat­land Action Pro­gramme iden­ti­fied a ​‘Peat­land Pro­gramme Pan­el cov­er­ing gov­ernance and grant assessment/​approvals’ and we con­firmed this is not in place, nor is a sub­sti­tute for­um operating.

There has been some oper­a­tion­al over­sight via the line man­age­ment chain and the Dir­ect­or of Cor­por­ate Ser­vices (fin­ance related, with ele­ments of leg­al, gov­ernance and pro­cess) dur­ing the pro­gramme set up and the Board, com­men­cing in Octo­ber, have received reports on the pro­gramme via the Per­form­ance Com­mit­tee. How­ever, as noted in the recent audit of Assur­ance Map­ping of Major Projects/​Programmes the inform­a­tion provided was not adequate to provide assur­ance over the Peat­land Action Pro­gramme. The cur­rent gov­ernance arrange­ments are not there­fore con­sidered suf­fi­cient to provide stra­tegic dir­ec­tion and over­sight to the Peat­land Action Programme.

Fur­ther, while ad hoc fin­ance reports have been provided, there is no clar­ity on wheth­er form­al­ised report­ing to the Scot­tish Gov­ern­ment is required, though this action is on the Peat­land Action Pro­gramme Team Action Tracker

Risk

There is a risk that the gov­ernance arrange­ments in place for the Peat­land Action Pro­gramme are insuf­fi­cient to provide effect­ive assur­ance over pro­gramme fin­ances, out­comes and risks to oper­a­tion­al, board and extern­al stakeholders.

Recom­mend­a­tion

Man­age­ment should imple­ment a gov­ernance struc­ture which is able to dir­ect the stra­tegic dir­ec­tion of the pro­gramme and provide assur­ance over the deliv­ery of pro­gramme. The committees/​panels/​boards with­in this struc­ture should have form­al terms of ref­er­ence which clearly out­line their respect­ive respons­ib­il­it­ies and attend­ance and report­ing requirements.

In addi­tion man­age­ment should seek con­firm­a­tion on Scot­tish Gov­ern­ment report­ing expect­a­tions, bey­ond reg­u­lar and ad choc fin­an­cial reports, e.g. out­comes, man­age­ment of risk etc, with the doc­u­mented expect­a­tions being defined per MAP 1.1.

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Man­age­ment Action

Grade 3 (Design)

Agreed that as a new and sig­ni­fic­ant pro­gramme of work the intern­al gov­ernance arrange­ments and struc­tures need to be set out in order to cla­ri­fy roles and respons­ib­il­it­ies for estab­lish­ing and man­aging the deliv­ery of the peat­land res­tor­a­tion programme.

Action own­er: Dir­ect­or of Nature