Council / SIC will have to take concern over ports and harbours finance processes ‘on the nose’
CURRENT financial processes in the council’s ports and harbours team at Sella Ness have been described as “not fit for purpose” by auditors.
Deputy leader Gary Robinson said it was something the council would have to “take on the nose” and keep a close eye on.
The finance processes were one of a number areas within Shetland Islands Council investigated by internal auditors in their latest round of checks, which are reported to elected members on the audit committee.
Auditors concluded: “We observed that the current financial administration arrangements of the dedicated team based at Sella Ness are not working efficiently or effectively, resulting in significant additional work for both the admin team and the central finance teams.”
A key element of concern for auditors was the use of account cards, which were introduced during the Covid pandemic to limit cash handling.
They have been kept on and offer discounted ferry trips which are invoiced and paid monthly.
But auditors pointed to how there is no eligibility criteria for the account cards, meaning some “non-locals and non-regular users” have signed up.
They said the standard adult return fare is £6.20, but the account card fare is £2.60. “This will be leading to loss of income for the council,” auditors added.
The volume of applications has increased “so considerably that the ability of staff to action within the given timescales is becoming increasingly difficult,” a report to members of Shetland Islands Council’s audit committee on Tuesday said.
In response the council said it accepted the findings and agreed to introduce a review of processes in place.
Robinson said he was an account card user and that the auditors’ concerns reflected his own experience, such as around late invoices.
He said he even had trouble paying one bill through internet banking, ending up going into a council office to settle the invoice in person.
“I think this is one that we have to take on the nose because I think it’s entirely accurate,” Robinson said.
“I think it’s one we will need to keep a close eye on.”
But councillors acknowledge that the account card scheme was set up quickly at the time.
“This was done reactively, rather than proactively,” Shetland Central member Catherine Hughson said.
Environment and transport committee chair Moraig Lyall said there was a clear need for modernisation in some of the ports and harbours processes.
She questioned if had been a case of “out of sight, out of mind” for Sella Ness, which is located near to the Sullom Voe Terminal.
But Lyall said it was “opportune” that Shetland Islands Council’s new finance director could look at the issues with fresh eyes.
Audit committee chairman Allison Duncan said the latest audit checks revealed some “serious control deficiencies where the potential financial, operational and reputitional risk is significant”.
He said management should carry out a “root and branch review”, but added that service improvement has already been initiated.
Internal auditors also looked at the council’s compliance with the Protecting Vulnerable Groups (PVG) membership scheme, complaints handling and burial ground safety.
Only the ports and harbours finance processes was deemed unsatisfactory.
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