Thursday, 13 December 2018

Capita reject the Grant Thornton Audit Report as incompetent

This morning my attention was drawn to an item on the Barnet Council website that has just appeared. It is the full, unredacted Grant Thornton report into Capita's cock ups

Perhaps the most worrying aspect of all is the response from Capita

Capita statement in response to Grant Thornton report

Capita wholeheartedly refutes the conclusions of this highly caveated and limited report, which Grant Thornton themselves admit is not a comprehensive formal audit. 

The report’s conclusions regarding financial controls across the council and Capita’s CSG and DRS contracts have not been independently verified, are not underpinned by clear evidence, and in many instances seem to be based on opinion and hearsay. 

Capita accepts that this case highlighted failings, which we have worked in partnership with the council to overcome. All the actions raised as a result have already been delivered by Capita and are in the process of being audited. We are committed to continue working with the London Borough of Barnet to deliver all of the activities in its rectification plans to achieve improved financial controls across Re, CSG and the Council. 
This is clearly the most crass example of an organisation in denial that I have ever seen. Does it not occur to Capita that Grant Thornton are independent? Furthermore, they call into doubt the professional competence and integrity of Grant Thornton. There are only three possible conclusions that can be drawn from this statement.

1. Grant Thornton are incompetent and Barnet Council should commission a new report from a company that is recognised as capable of doing the job and not presenting "opinions and hearsay" as fact. If this is the case, Capita should demand that a new report is commissioned by a company that can be deemed "independent". If this report exonerates Capita, Grant Thornton should pick up the tab. If it confirms Grant Thorntons findings, then Capita should issue an apology and pick up the tab.

2. Capita have issued a defamatory statement that is both misleading and libellous. If this is the case, then presumably Grant Thornton will sue Capita (and possibly Barnet Council) for publishing it. No potential customers of Grant Thornton could possibly consider working with a company that has such serious doubt cast on its professional integrity.

3. Both Grant Thornton and Capita are equally culpable. Capita have failed to deliver the services that they were commissioned to provide and Grant Thornton have failed to provide a competent assessment of the failings. The only way that this can be proven would be to commission a new, independent report. Should this be proven, then both Grant Thornton and Capita should pick the tab up between them.

It is quite clear what should happen now. Grant Thornton must issue proceedings against Capita for defamation and seek a full retraction and apology. If they do not, they have no credibility. If they do, then Barnet Council will have to await the outcome of the case.

If Grant Thornton do not, then either scenario 2 or 3 are clearly the likely outcomes. Barnet Council should immediately commission a new report from an independent firm and explain that they will expect whoever is found to be incompetent to pick up the bill. If indeed it is Capita, they should be summarily ejected from the Council.

 I have written to the CEO of Barnet Council, Chair of Audit, Leader and Deputy Leader this morning to express my concerns

I will keep you informed of any response


Dear Sirs,

I read in disbelief the response from Capita to the Grant Thornton report. This response, in effect calls Grant Thornton incompetent and unprofessional.  (Financial controls - barnet.gov.uk)




The response states
"Capita statement in response to Grant Thornton report

Capita wholeheartedly refutes the conclusions of this highly caveated and limited report, which Grant Thornton themselves admit is not a comprehensive formal audit.

The report’s conclusions regarding financial controls across the council and Capita’s CSG and DRS contracts have not been independently verified, are not underpinned by clear evidence, and in many instances seem to be based on opinion and hearsay.

Capita accepts that this case highlighted failings, which we have worked in partnership with the council to overcome. All the actions raised as a result have already been delivered by Capita and are in the process of being audited. We are committed to continue working with the London Borough of Barnet to deliver all of the activities in its rectification plans to achieve improved financial controls across Re, CSG and the Council.  "

There are only three possible conclusions that can be drawn from this statement.
1. Grant Thornton are incompetent and Barnet Council should commission a new report from a company that is recognised as capable of doing the job and not presenting "opinions and hearsay" as fact. If this is the case, Capita should demand that a new report is commissioned by a company that can be deemed "independent". If this report exonerates Capita, Grant Thornton should pick up the tab. If it confirms Grant Thorntons findings, then Capita should issue an apology and pick up the tab.
2. Capita have issued a defamatory statement that is both misleading and libellous. If this is the case, then presumably Grant Thornton will sue Capita (and possibly Barnet Council) for publishing it. No potential customers of Grant Thornton could possibly consider working with a company that has such serious doubt cast on its professional integrity. In this case, the Council should call time on the Capita Contract in short order.
3. Both Grant Thornton and Capita are equally culpable. Capita have failed to deliver the services that they were commissioned to provide and Grant Thornton have failed to provide a competent assessment of the failings. The only way that this can be proven would be to commission a new, independent report. Should this be proven, then both Grant Thornton and Capita should pick the tab up between them.
It is clear that Barnet Council need to take this accusation seriously. Unless Grant Thornton seek a retraction and apology in short order, a new report is required that is beyond reproach. At a recent Audit meeting the chair assurred me that Grant Thornton were a professional company with great integrity. Given that Barnet Councils chosen partner and procurement agent have issued such a scathing assessment of their work, this assessment has clearly been called into question. I seek your assurance, as  council tax and business rates payer that Barnet Council will take immediate action to ensure that residents can have confidence in the management of the Capita account. Following this statement, there can be none until either Grant Thornton are exhonourated or a new report has been published.
Regards
Roger Tichborne

Just for the record, I see no reason at all to believe that Grant Thornton have not done an entirely professional job. If Capita can support their assertion, they really will have to provide some serious evidence.

+++++ Updated 20/12/2018
As promised, I said I'd update if any response was received. After a week and a blog berating the council for their rudeness in not replying on Tuesday, I received this belated response

From: Tatlow, David
To: roger tichborne
Cc: Hooton, John
Sent: Thursday, 20 December 2018, 09:00:10 GMT
Subject: Grant Thornton Report - Capita

Dear  Mr Tichborne
Your email dated 13th December has been passed to me by the Chief Executive for response.
It may be the case that the Council holds information which may assist you and I am therefore liaising with Information Services to identify any such information which may be relevant to your enquiry and if available this will be provided to you.
Whether or not the Council holds relevant information I am passing your email to the Director of Commercial Services so that he may take such action as he considers to be necessary.
Thank you for your interest in this matter.
Yours sincerely
David Tatlow
Chief Legal Advisor & Monitoring Officer

We will keep you posted.
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