REV ACTIVE Audit Report Jun 2013 v4democracy.breckland.gov.uk/documents/s26678/REV ACTIVE Audit R… · formal response to the Auditor was immediately agreed. A copy of the Report

BRECKLAND COUNCIL Report of the Cllr Mark Kiddle-Morris, Executive Member for Assets & Strategic Development AUDIT COMMITTEE – 7 June 2013 Author: Mark Stanton, Economic Development Manager REV ACTIVE PROJECT RISK MONITORING REPORT

1. Purpose of Report

1.1 To allow the Committee to continue to review the REV ACTIVE Project on behalf of Council and make any comments or recommendations to Council on the current and future risk management of the REV ACTIVE Project.

2. Recommendations

It is recommended that the Audit Committee:

2.1 Endorse the current internal and external REV ACTIVE monitoring and oversight regime set out in this Report and accompanying documentation.

2.2 The Committee to receive a future update upon completion of the final external audit, due to take place in March 2014.

Note: In preparing this report, due regard has been made to equality of opportunity, human rights, prevention of crime and disorder, environmental and risk management considerations as appropriate.

3. Information, Issues and Options

3.1 Background

3.1.1 REV ACTIVE is a project that is being managed by Breckland Council and delivered in partnership with Norfolk County Council to support regeneration and economic growth, predominantly along the A11 in Norfolk. It has ERDF backing in the East of England, matched with some public sector support and private sector investment. REV ACTIVE provides free, confidential and impartial support to eligible SMEs to reduce costs and carbon footprints.

3.1.2 The Project

REV ACTIVE is a demonstrator project that actively identifies those SMEs with the greatest potential to improve their energy/resource efficiency and reduce carbon emissions, working with them to realise this potential and the associated business benefits: reduced costs; competitiveness; business growth.

The Project is innovative and different due to its focus on proactive – rather than demand-led – business engagement; it doesn’t wait for businesses to come forward and link them into existing ‘off the shelf’ business support.

It addresses market failure; SMEs are failing to access and realise all the support and opportunities available to them, at a time when business resilience is particularly important and other sources of support are being scaled back. The Project and its innovative funding model are eminently scalable and replicable.

Throughout, the focus is on developing and refining an approach that can be ‘replicated’ and then rolled out regionally and beyond. Breckland Council and Norfolk County Council are key project delivery and funding partners with the

Project contributing directly to their strategic objectives.

REV ACTIVE’s timing is critical. It offsets the significant reduction in local business support provision since the end of 2011. All organisations – both private and public – are looking to reduce costs and focus on core services. With public sector budgets under significant downward pressure and England’s RDAs’ single pots closed, there are few alternative opportunities to build or maintain business support capacity.

The project is aligned well with the priorities of Economic Development and the Coalition agenda around creating the right environment for SMEs to flourish and grow whilst tackling climate change and improving efficiency – decoupling sustained and stable economic growth from increased greenhouse gas emissions, resource depletion and environmental degradation.

3.1.3 Achievements

The main focus of delivery until the Project’s conclusion is now verification, evaluation and finalisation of the exit strategy. Follow-up visits to REV ACTIVE beneficiaries are currently being undertaken to secure evidence for contracted ERDF outputs and results and assess Project impact and benefits.

Evidenced savings correlating to implemented initiatives are calculated using a secure methodology for the evaluation and verification of benefits to each beneficiary developed by consultants, Ricardo-AEA. As the Project continues to roll out the verification programme, reported outputs will invariably increase and it is likely that key deliverables will be significantly over-achieved.

Savings attributable to the Project’s interventions and reportable under the ERDF funding agreement are currently £4,376,110 and 18,673 tonnes of CO2e against targets of £1,350,000 and 100 tonnes, respectively.

There are currently 1,006 members of the REV ACTIVE network against a target of 1,000. Network members are information subscribers on ‘sustainable business’.

428 SMEs have received an onsite Efficiency Review and Report against a target of 400. These identified total annual savings of £3,798,081 and 16,621 tonnes of CO2e.

324 SMEs have received Priority 3 Assistance (assistance amounting to either 12 hours of technical support or £1,000 of state aid or combination thereof) against a target of 300.

£584,403 of capital grant support and £7,357 of revenue grant support has been offered to SMEs to assist with the implementation of the Project’s recommendations, of which £394,749 and £2,357, respectively, has been claimed to date.

Beneficiary SMEs have already invested £2,018,057 in the environmental and efficiency measures identified by the Project, against a target of £1,490,000. This ‘private sector match’ is fundamental to the Project’s financial model.

93 attributable jobs have been created and 180 safeguarded.

Of the reported outputs to date that fall within Breckland, grant offers totalling £236,622 have been made, of which £137,837 have been claimed. £1,010,406 has been invested by the District’s SMEs in the environmental and efficiency measures identified by the Project. 35 attributable jobs have been created within the District and 96 safeguarded.

The ERDF Progamme considers REV ACTIVE to be regional exemplar and approached the delivery team about nominating the Project for the European RegioStars2014 awards. This was declined on the grounds that a more complete account of impacts and benefits will be assembled by next year’s nomination deadline, improving its chances of success.

The ERDF initiated informal discussions about extending REV ACTIVE on the basis of its consistent delivery track record, strong governance and exemplary

performance in audits. This was provisionally declined because the delivery team do not want to introduce new risk into the Project so near to its successful conclusion.

The launch of the derivative Grants4Growth project ensures that SMEs still have access to support; Breckland Council has engaged directly with the Region’s LEPs to deliver efficient, responsive services which are aligned to real business demand and need.

3.2 Issues

Not applicable to this Report

3.3 Reasons for Recommendation(s)

The management and oversight structures for the Project, prescribed audit schedule and the fact that many contracted outputs have already been met or exceeded mean that risk to the Council is negligible. Financial management is undertaken by the Economic Development Funding Support Officer and supported by Breckland Council’s Senior Accountant. Please see Section 4, below.

4. Risk and Financial Implications

4.1 Risk

4.1.1 Individual risks are set out within the Project Risks Log, appended.

4.1.2 The management of risk: internal scrutiny and oversight:

REV ACTIVE operates under the direction of a Strategic Board and Operational Team structure, based on similar models successfully used elsewhere. This also meets the requirements of the PRINCE2 project management framework.

The ultimate purpose of this dual Strategic Board and Operational Team structure is to ensure that the Project continues to deliver desired outcomes at the required quality to meet the objectives outlined in the Business Plan and respond appropriately to changing requirements of the business community and the operational environment. Their respective roles are outlined in the appended Terms of Reference.

The Project Manager actively maintains an Issues Log and a Risks Log. Issues that are likely to result in the compromising of prescribed project tolerances around milestones, budgets or outputs are escalated to the Risks Log. Entries on the Risks Log are characterised and managed. The Risks Log is presented to both the Strategic Board (quarterly) and Operational Team (monthly). Items requiring immediate attention are passed to the Strategic Board as formal Change/Exception Reports for immediate resolution.

The Strategic Board is chaired by Cllr Mark Kiddle-Morris and includes representatives from all the key funders and stakeholders with Susan Smith providing the Quality Assurance, Risk and Financial role on behalf of Breckland Council. The current Risks Log and Terms of Reference for the Strategic Board and Operational Team are appended.

The delivery team is also providing some dedicated REV ACTIVE delivery in the North Norfolk and Broadland districts. £40K income from this is directly offsetting some of Breckland’s own investment in the Project.

4.1.3 The management of risk: external scrutiny and oversight:

The REV ACTIVE project’s audit schedule is as follows:

1. ERDF/EEDA Project Engagement Visit (PEV), 16 March 2010

No issues recorded.

2. South Norfolk District Council Audit Management Team, May 2011 (separate

from Breckland Council Audits)

The audit found that “In general, the audit trail used to support entries within quarterly claims submitted is near exemplary, and that strict enforcement of rules exists to ensure grant terms and conditions are met”. The full report is available for inspection if required.

3. PDT: East Programme Delivery Team, 11 August 2011

Report Number AA/EEDA03/10. No issues recorded (The Report was presented to the Audit Committee previously)

4. South Norfolk District Council Audit Management Team, May 2012

Three medium-risk recommendations were made (medium risks are to be addressed within a 4-6 month time period). All three related to a single procurement exercise in February 2011 where the Auditor identified a potential conflict between the requirements for competitive tendering processes conferred by a) Breckland Council Standing Orders, and b) ERDF project management norms/standards. The formal response to the Auditor – new work instructions establishing that “where ERDF project management norms/standards correspond to but exceed Council Standing Orders, the ERDF project management standards will have primacy” – was immediately agreed. Overall, the audit trail used to support claims was found to be “very good”. A copy of the Report is appended.

5. Article 16 Audit – 18 March 2013 onwards

This was a substantive audit carried out by central government to provide assurance to the European Commission that expenditure by member states complies with EU regulations.

The audit scope included detailed testing of financial controls, project performance monitoring, governance and management systems. It examined the appropriateness of delivery structures, independently verified project outputs, tested tendering and procurement compliance and the completeness and accuracy of data provided in support of funding claims to pinpoint irregularities, unmanaged risks and systemic errors.

A formal audit report is due, but the auditor has already fed back that the Project is “well-managed”, “delivering in line with expectations” and considered “low risk”. No irregularities, non-compliance or unmanaged risk were found.

6. Internal Audit Consortium, South Norfolk Council, 7 May 2013

Report Number BRK/14/17. This comprised a detailed testing and review of all claims, timesheets, expenses/expenditure, payments, the eligibility of project costs/payments, procurement activity and document retention. The quality and integrity of the audit trail and record keeping was singled out for specific praise. A single low-risk recommendation was made (defined as a “desirable improvement to the system to be introduced within a 7-9 month period”). The formal response to the Auditor was immediately agreed. A copy of the Report is appended.

7. Final Audit, to be undertaken during March 2014

4.2 Financial

4.2.1 See Appended Risk Log

5. Legal Implications

5.1 None

6. Other Implications [Insert statement or confirm ‘none’ as appropriate at each sub-paragraph]

a) Equalities: none

b) Section 17, Crime & Disorder Act 1998: none

c) Section 40, Natural Environment & Rural Communities Act 2006: none

d) Human Resources: none

e) Human Rights: none

f) Other: [e.g. Children’s Act 2004] none

7. Alignment to Council Priorities

a. Environment: contribute to reducing the causes of climate change

b) Prosperous Communities: developing prosperous and sustainable communities

c) Prosperous Communities: promote the start-up and growth of local businesses and the strengthening of Breckland’s entrepreneurial culture

8. Ward/Community Affected

8.1 Beneficiary SMEs are eligible for support in all wards.

Background Papers The report is supported by:

a) Copies of the current Risks Log and Terms of Reference for the Strategic Board and Operational Team (attached)

b) Copies of Annual Audit Reports for 2012 and 2013 (attached) Lead Contact Officer: Mark Stanton Telephone: 01362 656285 Email: [email protected] Key Decision Status (Executive Decisions only):

APPENDICES Final Audit Report Interim Review - South Norfolk Council - May 2012 Final Audit Report Interim Review - South Norfolk Council - May 2013 Strategic Board Terms of Reference - V05 Operational Team Terms of Reference - V04 Risk Log V12

Final Audit Report Interim Review - South Norfolk Council - May 2012

Final Audit Report Interim Review - South Norfolk Council - May 2013

Final Audit Report

Breckland District Council

Interim Review of Rev Active Project BRK/14/17

Distribution

• Susan Smith, Financial Claims Manager

• Simon Best, Low Carbon Business Growth Programme Manager

• Mark Finch, Assistant Director Finance and Section 151 Officer

• Sandra King, Internal Audit

Consortium Manager

Draft report issued: 7 May 2013 Final report issued: 8 May 2013

Audit Report – Breckland District Council – Interim Review of Rev Active Project – BRK/14/17

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Contents Page No. 1 Introduction, objective and scope 3 - 4 2 Executive Summary, including summary of findings 5 – 8 3 Action Plan 9 Appendix A – Definition of Recommendation Priorities 10 Appendix B – Audit Team and Staff Consulted 11 Appendix C – Audit Timetable 12 This report and the work connected herewith are subject to the Terms and Conditions of the Internal Audit Group Agreement held between Breckland District Council and South Norfolk Council. This report is prepared solely for Breckland District Council and its contents should not be quoted or referred to without prior written consent of the Internal Audit Consortium Manager. The Internal Audit Consortium Manager will not accept any responsibilities to any third party, as the report is not prepared or intended for any other purpose.


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1 Introduction, including audit objective and scope 1.1 Introduction The Rev Active Project has the overriding outcome “for Small and Medium enterprises (SMEs) to recognise and realise the benefits of resources efficiency improvements in their day to day operations to reduce their carbon footprint and cost base, with a view to achieving growth”. The best option for providing this outcome was determined as “targeted support for SMEs using a range of targeting information with network provisions and financial assistance.” Delivery of the project is overseen by the Strategic Board and an Operational Team. The Strategic Board meets quarterly and reviews high level progress, whilst the Operational Team meets monthly. On an annual basis, the Project Team, are required to provide progress updates to Breckland’s Audit Committee, the next update is due to be taken in June 2013. The project is delivered by Breckland District Council and Norfolk County Council. Shaping Norfolk’s Future completed their part of the project in September 2011. Each partner provides staffing resources to deliver the project. Each partner also provides funding to meet the cost of all the other project activities. Match funding is provided by the European Regional Development Fund (ERDF). In addition SMEs also contribute funding and during 2012 Broadland and North Norfolk District Council’s also started to contribute funding to the scheme. ERDF requires an audit at the end of the project to ensure that funding provided has been spent in line with grant terms and conditions. Interim audits have been undertaken on an annual basis. The interim reviews have been as follows:

• Up to December 2010 – 1st audit completed • Up to December 2011 – 2nd audit completed • Up to December 2012 – 3rd audit, reported herein.

1.2 Objective and scope The audit reviewed the controls used to compile the claim; the inherent risk within the claim and the value of the scheme to determine the level of testing required. Testing was apportioned across the claim periods to obtain assurance over the total annual balance claimed. Testing covered the following areas:

• Assessment of the control environment; • Arithmetic of the claims; • Agreeing claim entries to Council’s income and expenditure records; • Agreeing income on claims to funding provided; • Duplication of income and expenditure; • Eligibility of payments; • Reasonableness of expenditure to include a review of supporting

documentation to ensure; only relevant expenditure items are included,


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payments are made after the start date, only eligible costs are included, apportionments are fair and VAT is correctly accounted for;

• Compliance with Procurement rules; • Document retention; • Recording of Capital Assets; and • Support Service Recharges for goods and services are made on the correct

basis. 1.3 Acknowledgement We would like to thank the management and staff of Breckland District Council for their time and co-operation during the course of this audit.


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2 Executive Summary In February 2013, Internal Audit was commissioned to undertake an interim review of the Rev Active Project; this is the third such audit to be undertaken. ERDF requires an audit at the end of the project to ensure that the funding provided has been spent in line with grant terms and conditions. These interim annual audits carry out testing to ensure that to dates the grant terms and conditions have been met. The report sets out our findings from this review and makes recommendations to address and control weaknesses that have been found. No audit opinion has been given, due to the nature of the work performed, i.e. undertaking specific testing in relation to the claim. Summary of Findings Assessment of the control environment As with previous audits of this project it is noted that the audit trail to support entries on the claims is very good. All organisations submit extensive information to support any expenditure included on the claim, and this is strictly enforced. There are controls in place to ensure that grant terms and conditions are met. All supporting working papers to each claim are appropriately cross referenced back to source documentation and these are filed appropriately, ensuring that the audit trail is easy to follow. The officer responsible for completing the claims has extensive knowledge and experience in this area; there is independent checking of quarterly balance sheet reconciliations by the Capital Accountant, whereas the detailed management of the project is subject to continuous scrutiny by the Strategic Board (providing a high level oversight) and the Operational Team (reviewing the running of the project), which meet quarterly and monthly respectively to monitor project development and rollout. There is also further examination of the project’s advancement by the Audit Committee, which receives periodic project update reports. The last position statement to be considered by the Committee was in February 2012 and another update is due in June 2013. The process for submitting claims changed from June 2012. Previously the claim would be submitted via a paper form – “Claim for Grant Payment / Progress Report”, this is now submitted electronically via a system called MCIS. Both submissions have sign off stages in place. However, the MCIS requirements are slightly different to the paper form, and to ensure that all elements of the claim are recorded i.e. confirmation of grant payable, the paper form is still completed and retained on file. In May 2012 a request was made to change the “intervention rate” percentage for capital and revenue as there is more demand for capital grants. The submission was made and approval given for this to be applied from June 2012. However the MCIS system has, as at 31 March 2013, not been updated to reflect the percentage split which is affecting the amount of grant that should be paid to the Council. The “intervention rate” percentage has changed from capital at 28.1951% to 28.56462% and revenue from 54.9577% to 58.56378%. The Council is owed, as at 31 March 2013, £244,852. This is another reason for maintaining the completion of the paper form.


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It is also worth noting that the claim numbers recorded on the paper forms, and used for audit purposes are claim numbers 12 – 18, however the MCIS system shows different reference numbers. Arithmetic of the claims Both the paper and electronic submissions were reviewed as part of testing in this area. A review of the totals of eligible and cumulative expenditure agreed and no errors were found. A review of the total of match funding per quarter initially indicated a few differences in relation to an IEMA subscription payment of £135 and £165.60 for lease car payment, both of these were due to timing differences. The Funding Supporting Officer has fully explained why this has been the case with information provided to substantiate the variations noted and as a consequence, we do not consider that any further action is required and will not therefore be making any recommendations in this report in relation to this matter . It was also noted that adjustments were made to all of the hours worked in relation to claim 14; this is an annual correction that is needed for all salary claims that are based on an hourly rate due to the fact that the hourly rate is estimated at the start of the year, based on one month’s salary, this “tidy up” exercise is then required based on the actual annual salary paid.. A review of the grant payable per quarter has also highlighted “differences” however as with last year’s audit the figures shown related to actual income received rather than claimed for, as the funding can be up to 2 months in arrears. This has been further compounded this year by the aforementioned split between capital and revenue not being updated by ERDF. The Funding Support Officer has taken all possible action to address this issue and is waiting for the situation to be rectified by ERDF. There are also some historic differences that need rectifying on the MCIS system by ERDF, again the Funding Support Office has raised these issues each time a claim is submitted, i.e. monthly / quarterly and is waiting for the figures to be corrected by ERDF. Agreeing claim entries to Council’s income and expenditure records All income and expenditure within the claims has been agreed to supporting records; the general ledger and the supporting timesheets. The testing involved extensive review of all timesheets and expenses associated with the claim to ensure that the amounts recorded on the transaction sheet and ultimately on the claim were correct. No errors were found of note and the audit trail is place is exemplary. Agreeing income on claims to funding provided “Payments In” for the Rev Active project was reviewed and all payments as per the Integra print were agreed to the balance sheet and back to the supporting documentation. Duplication of income and expenditure All income agreed to the general ledger and through to the balance sheet, no duplication was noted.


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All expenditure was agreed back to the supporting documentation, no duplication was noted. Eligibility of payments All direct expenditure incurred is reviewed by the Funding Support Officer before it is claimed, each item of expenditure is individually referenced and the supporting documentation retained on file. The main items identified for reimbursement concern officer time spent on the project and where this is apportioned there are detailed records to support the figures shown. Review of supporting documentation to ensure; only relevant expenditure items are included, payments are made after the start date, only eligible costs are included, apportionments are fair and VAT is correctly accounted for A sample of 25 supporting invoices, timesheets and expenses were reviewed to ensure that they were Rev Active related, that the costs were eligible in accordance with the guidance, that apportionments had been undertaken correctly, where appropriate and that VAT had been correctly accounted for. We have been able to confirm through our testing that all 25 cases were appropriately processed. Procurement In year the thresholds for the tender process have been revised and this mirrors guidance from the Department for Communities and Local Government – “ERDF National Procurement Requirements”.

• If the estimated value of goods or services is under £20,000 VFM must be demonstrated by obtaining 3 quotes or prices.

• If the estimated value of goods or services is over this amount but under the OJEU threshold when a formal invitation to tender process must be followed.

• If the estimated amount of good or services is over the OJEU threshold then full advertisement in OJEU is required.

A register is maintained recording all procurement activity and it could be seen that 6 procurement exercises have been undertaken in year. At the time of the audit the procurement register reflected an incorrect date of procurement, this was a “typo” and has since been rectified, therefore no recommendation has been raised within this audit. The tender for an Environmental Facilitator was chosen (the largest amount at £20,000) for walk through testing. On the procurement file there is a “Note on the procurement of a consultancy to provide 40 REVACTIVE Level 2 Interventions (comprising onsite reviews, reports and associated deliverables(, June / July 2012”.This note is an extremely useful document as it records the process followed, the reason for the procurement and is supported by all relevant documentation. 3 invitations for quotes were sent to 3 existing consultancy suppliers and written responses were received. Of the 2 suppliers that were accepting of the work, the work was provided to the contactor on a best value basis i.e. overall cost, day rates and travel being the lowest and on overall capability and added value i.e. in terms of existing links to potential local beneficiaries.


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It is however worth highlighting that the “procurement note” did not record the estimated value of the service being procured, In this case 2 quotes were received, one for between £15,000 and £20,000 and one for £25,900. As one of the quotes was over £20,000 it may indicate that a fuller procurement exercise should have been undertaken. By ensuring that the estimated amount is recorded at the outset this mitigates the risk of not following the correct procurement process. A recommendation has been made in respect of this. Document retention The Standard Conditions of the ERDF grant state that all original documentation must be retained until 31 December 2025. All files are clearly marked and the retention period is clearly stated on the Council’s Retention and Disposal Schedule. Assets As part of the project all equipment procured within the project is recorded on the Project Equipment Register i.e. office equipment, sat navs, laptops etc. The detail recorded is as per the ERDF conditions. In addition an asset register currently has no entries recorded, however since March 2013 the project has started to gather information that relates to assets that the grants awarded have bought, and these details are due to be input onto the register for completeness. Charges for goods and services are made on the correct basis The rates charged for services were reviewed and the hourly rate that is charged for officers where the time is apportioned was found to be correct and in line with ERDF guidance. As previously mentioned supporting records are maintained in relation to these charges. Additional Items This audit has covered the revenue expenditure for 2012 in relation to all of the above points; the audit did not include a review of capital expenditure due to the small amounts involved. In addition the audit has not reviewed the process involved for the application and subsequent award of the grants, an Economic Development audit is due in 2013 / 14 and it is planned that this element will be covered within this review.

Audit Report – Breckland District Council – Interim Review of Rev Active Project – BRK/14/17 9

3 Action Plan Procurement Recommendation 1 – Recording estimates for procurement exercises Finding and Risk Recommendation and

Rationale Priority Management response and action Deadline and

responsibility Finding – The Note on the Procurement, which is stored on the procurement file, provides a full audit trail of the process followed for each particular procurement exercise. The note does not currently record the initial step of estimating the value of the contract, which indicates which procurement route to take. Risk – In not recording the estimated value, if quotes are received above a threshold amount, the Council is at risk of not having followed the correct procurement route, which could result in legislative penalties at the extreme.

Recommendation - To ensure that the Note on the Procurement includes a record of the initial assessment of the service required and thus an estimate of the value. Rationale – By documenting an estimate of the service required it ensures a full audit trail is maintained, which justifies the reason for the chosen procurement route.

Low Discussed on last day of audit with Financial Claims Manager. Formal response to be provided on issue of draft report. Work instruction developed to address recommendation, to be signed off by all relevant officers and then followed with immediate effect,

Implemented with immediate effect Low Carbon Business Growth Programme Manager


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Appendix A – Definition of Recommendation Priorities High A fundamental weakness in the system that puts the Council at

risk. To be addressed as a matter of urgency, within a 3 month time frame wherever possible, or, to put in place compensating controls to mitigate the risk identified until such time as full implementation of the recommendation can be achieved.

Medium A weakness within the system that leaves the system open to risk. To be resolved within a 4 – 6 month timescale.

Low Desirable improvement to the system. To be introduced within a 7 – 9 month period.


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Appendix B – Audit Team and Staff Consulted Audit Team Staff Consulted South Norfolk Council: Sandra King, Head of Internal Audit [email protected] 01508 533863 Emma Hodds, Deputy Audit Manager [email protected] 01508 533791

Breckland District Council Susan Smith, Financial Claims Manager [email protected] 01362 656235


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Appendix C – Audit Timetable Expected Date Actual Date Fieldwork Start 10/04/2013 10/04/2013 Fieldwork Completion 18/04/2013 18/04/2013 Draft report issued to Client 01/05/2013 07/05/2013 Final report issued to Client 08/05/2013 08/05/2013

Strategic Board Terms of Reference - V05

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REV ACTIVE Strategic Board Document title: Terms of Reference Draft date: 30.01.2013 Version: 5

File location: G:\REV‐ACTive Document Structure\Stakeholders & Partners\S5 ‐ Proj. Board & Stake. forums\REV ACTIVE Strategic Board Terms of Reference ‐ V05.doc

Overview of REV ACTIVE REV ACTIVE is a demonstrator project that actively identifies those SMEs with the greatest potential to improve their energy/resource efficiency and reduce carbon emissions, working with them to realise this potential and the associated business benefits: reduced costs; competitiveness; business growth. The Project is innovative and different due to its focus on proactive – rather than demand‐led – business engagement; it doesn’t wait for businesses to come forward and link them into existing ‘off the shelf’ business support. It addresses market failure; SMEs are failing to access and realise all the support and opportunities available to them, at a time when business resilience is particularly important and other sources of support are being scaled back. The Project and its innovative funding model are eminently scalable and replicable. Throughout, the focus will be to develop and refine an approach that can be ‘replicated’ and then rolled out regionally and beyond. Breckland Council and Norfolk County Council are key project delivery and funding partners with the Project contributing directly to their strategic objectives. Strategic Board and Operational Team structure REV ACTIVE will operate under the direction of a Strategic Board and Operational Team structure, based on similar models successfully used elsewhere. This also meets the requirements of the PRINCE2 project management framework. Their respective roles are as follows: Strategic Board: The senior management body for the Project, comprising membership representing suppliers to and users of the project. Members of the Strategic Board will champion and communicate key messages about the project at a local and regional level. The Strategic Board will direct the Operational Team’s delivery of the Project to ensure that it fulfils the aspirations and expectations of key stakeholders and customers in line with the business plan. The Strategic Board will also direct future development and replication. Operational Team: The Project delivery team comprises officers from the key delivery partners – Breckland Council and Norfolk County Council. They will be responsible, at an operational level, for day to day delivery of the Project, dealing with technical delivery matters, financial monitoring and compliance, funder interaction etc. The ultimate purpose of this dual Strategic Board and Operational Team structure is to ensure that the Project continues to deliver desired outcomes at the required quality to meet the objectives outlined in the Business Plan and respond appropriately to changing requirements of the business community and the operational environment.

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Strategic Board responsibilities The Strategic Board will:

→ be led by the ‘Executive/Chair’; → manage largely on a ‘by exception’ basis with limited day‐to‐day involvement in the Project; → champion the Project and act as the Project’s ‘voice’ to the outside world; → ensure that overall management and direction of REV ACTIVE proceeds as planned; → approve all major plans and any major deviations from the agreed plans where tolerances are likely to be

exceeded; → receive major news stories and serve as a channel for disseminating these; → provide strategic guidance, scrutiny and instruction to the Operational Team and Project Manager; → meet approximately quarterly; → receive at each meeting (as a minimum):

i. an overall Highlight Report (from the Project Manager) including full financial and outputs breakdown against profile/budget;

ii. Change/Exception Reports where significant changes are required/tolerances released; iii. an updated Risk Register; iv. plus any other information requested by the Strategic Board or relevant to matters being discussed.

→ have its meetings formally minuted by the Project’s Technical Support Officer; → have formal papers and minutes signed off by the Executive/Chair at each meeting.

Strategic Board commitment Meetings for the Strategic Board are to be held quarterly. Members of the Strategic Board will be expected to prioritise and attend these meetings. In exceptional circumstances, it may be necessary to call emergency meetings of the Strategic Board. Outside of these meetings, Strategic Board members are expected to act as champions and representatives of REV ACTIVE. The REV ACTIVE Project Manager and Technical Support Officer will also attend meetings. Additional members may be added to the Strategic Board, subject to approval by the Strategic Board. Decision‐making Decision making is by a simple majority with the Executive/Chair having the casting vote if required. A quorum is a majority of the Strategic Board members and the minimum number of members necessary to transact business at a meeting. Decisions made by absent members and communicated to the Executive/Chair (or their chosen representative) prior to the meeting can be counted. Decisions can also be made via email or other media should the need arise on the same basis (these will be formally documented at the next Strategic Board meeting). Strategic Board meetings are not public meetings. A non‐Strategic Board member can, however, request an audience with the Strategic Board, subject to the Executive/Chair’s permission. All Strategic Board minutes will be published on the REV ACTIVE website, along with meeting dates and this document. Declarations of interest A declarable conflict of interest is a set of circumstances that creates a risk that professional judgment and actions regarding and influence of a primary interest – the business of the Strategic Board – will be unduly influenced by a secondary interest. For these purposes, secondary interests include financial/pecuniary interests and strategic interests relating to a third party. Strategic Board members must declare an interest to the Chair if in the course of the business of a meeting they become aware that they have or may have a financial or other beneficial interest in a specific item of business to be transacted at the meeting.

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Strategic Board membership

Role Name / Organisation / Position Responsibilities

Executive/Chair

Cllr Mark Kiddle‐Morris, Executive Member for Assets & Strategic Development, Breckland Council

To lead and chair the Strategic Board and meetings

Senior Supplier and Deputy Chair

Mark Stanton, Economic Development Manager, Breckland and South Holland Councils

To represent the interests of the accountable body and main delivery organisation, Breckland Council

Senior User Currently vacant To represent the interests of the end user, SMEs

Norfolk County Council Representative

Cllr Joe Mooney, Deputy Cabinet Member for Sustainable Development, Norfolk County Council

To represent the interests of funder and partner, Norfolk County Council

North Norfolk District Council Representative

TBC To represent the interests of partner, North Norfolk District Council

Broadland District Council Representative

Kevin Philcox, Private Sector Housing Manager, Broadland District Council

To represent the interests of partner, Broadland District Council

ERDF Representative David Morrall, Head of East of England Unit, Department for Communities and Local Government

To represent the interests of funder, the East of England ERDF programme

Quality Assurance, Risk and Financial

Susan Smith, Funding Support Officer, Breckland Council

To monitor the financial performance and risks for the Project

Carbon Partner Simon Drury, Senior Project Manager, AEA Technology plc

To provide technical advice the Strategic Board and Project Manager

Technical Advisor, Products and Services

Kevin Scobell, Commercial Director, Buildings Research Establishment (BRE)

To provide technical advice the Strategic Board and Project Manager

Delivered by Funded by

Operational Team Terms of Reference - V04

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REV ACTIVE Operational Team Document title: Terms of Reference Draft date: 15.04.2013 Version: 4

File location: G:\PROJECTS\REV‐ACTive Document Structure\Stakeholders & Partners\S5 ‐ Proj. Board & Stake. forums\REV ACTIVE Operational Team Terms of Reference ‐ V04.doc

Overview of REV ACTIVE REV ACTIVE is a demonstrator project that actively identifies those SMEs with the greatest potential to improve their energy/resource efficiency and reduce carbon emissions, working with them to realise this potential and the associated business benefits: reduced costs; competitiveness; business growth. The Project is innovative and different due to its focus on proactive – rather than demand‐led – business engagement; it doesn’t wait for businesses to come forward and link them into existing ‘off the shelf’ business support. It addresses market failure; SMEs are failing to access and realise all the support and opportunities available to them, at a time when business resilience is particularly important and other sources of support are being scaled back. The Project and its innovative funding model are eminently scalable and replicable. Throughout, the focus will be to develop and refine an approach that can be ‘replicated’ and then rolled out regionally and beyond. Breckland Council and Norfolk County Council are key project delivery and funding partners with the Project contributing directly to their strategic objectives. Strategic Board and Operational Team structure REV ACTIVE will operate under the direction of a Strategic Board and Operational Team structure, based on similar models successfully used elsewhere. This also meets the requirements of the PRINCE2 project management framework. Their respective roles are as follows: Strategic Board: The senior management body for the Project, comprising membership representing suppliers to and users of the project. Members of the Strategic Board will champion and communicate key messages about the project at a local and regional level. The Strategic Board will direct the Operational Team’s delivery of the Project to ensure that it fulfils the aspirations and expectations of key stakeholders and customers in line with the business plan. The Strategic Board will also direct future development and replication. Operational Team: The Project delivery team comprises officers from the key delivery partners – Breckland Council and Norfolk County Council. They will be responsible, at an operational level, for day to day delivery of the Project, dealing with technical delivery matters, financial monitoring and compliance, funder interaction etc. The ultimate purpose of this dual Strategic Board and Operational Team structure is to ensure that the Project continues to deliver desired outcomes at the required quality to meet the objectives outlined in the Business Plan and respond appropriately to changing requirements of the business community and the operational environment.

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Operational Team key points The Operational Team will:

→ be led by the ‘Senior Supplier’ and by the Project Manager in the absence or at the direction of the Senior Supplier;

→ be directed and managed by the Project Manager to deliver the outcomes and scope items outlined in the REV ACTIVE business plan;

→ monitor all aspects of project delivery – work packages, schedule, outputs, financial performance etc. → ensure the Project’s compliance with funder requirements and contracts; → manage and approve minor changes or deviations from the Project plan and business plan, subject to the

changes being within defined/agreed tolerances; → act as a channel for messaging and information for the Strategic Board; → troubleshoot and resolve delivery issues and negotiate solutions with appropriate parties; → meet approximately monthly; → receive news stories and serve as a channel for disseminating these; → provide strategic guidance, scrutiny and instruction to the Operational Team and Project Manager; → receive at each meeting (as a minimum):

i. verbal/documentary updates from all partners on progress with key work packages and associated issues;

ii. an updated Issue Log; iii. plus any other information requested by the Senior User, Project Manager or Operational Team or

relevant to matters being discussed. → have its meetings formally minuted by the Project’s Technical Support Officer; → have formal papers and minutes signed off by the Senior User or Project Manager at each meeting.

Operational Team commitment Meetings for the Operational Team are to be held monthly. Members of the Operational Team will be expected to prioritise and attend these meetings. In exceptional circumstances, it may be necessary to call emergency meetings of the Operational Team. Outside of these meetings, Operational Team members are expected to act as a champions and representatives of REV ACTIVE. Decision‐making Decision making is by the Senior User and/or Project Manager, following input from Operational Team members. Input from absent members and communicated to the Senior User and/or Project Manager prior to the meeting will be included. Decisions can also be made via email or other media should the need arise on the same basis (these will be formally documented at the next Operational Team meeting). Operational Team meetings are not public meetings. A non‐Operational Team member can, however, request an audience with the Operational Team, subject to the Senior User and/or Project Manager’s permission. Operational Team minutes are not communicated externally as they are likely to contain Company‐specific or sensitive/confidential information. This document will, however, be published on the REV ACTIVE website. Declarations of interest Operational Team members must declare an interest to the Chair if in the course of the business of a meeting they become aware that they have or may have a financial or other beneficial interest in a specific item of business to be transacted at the meeting.

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Operational Team membership

Role Name / Organisation / Position Responsibilities

Senior Supplier and Chair

Mark Stanton, Economic Development Manager, Breckland and South Holland Councils

To represent the interests of the accountable body and main delivery organisation, Breckland Council

Project Manager and Deputy Chair

Simon Best, REV ACTIVE Project Manager, Breckland Council

Management of the REV ACTIVE Project and Deputy Chair of the Operational Team

Assistant Project Manager Paul Bourgeois, REV ACTIVE Assistant Project Manager, Breckland Council

Management of the REV ACTIVE Project

Financial Monitoring Officer

Susan Smith, Funding Support Officer, Breckland Council

Monitor and advise on financial performance for the Project and the ERDF claims process

Norfolk County Council Contract Manager

Ian Roe, Community and Business Waste Manager, Norfolk County Council

Management of the delivery and administration of Norfolk County Council’s work package(s)

Resource Efficiency Facilitator

Chris Handley, REV ACTIVE Resource Efficiency Facilitator, Norfolk County Council

Delivery of frontline business support services in line with the REV ACTIVE Business Plan

Resource Efficiency Facilitator

Laura Dopping‐Hepenstal, REV ACTIVE Resource Efficiency Facilitator, Norfolk County Council

Delivery of frontline business support services in line with the REV ACTIVE Business Plan

Marketing Contract Manager

Ben Handford, Director, Naked Marketing

Managing delivery of contracted marketing, publicity and communications services

Network Co‐ordinator Dan Cox, Senior Economic Development Officer, Breckland Council

Managing development of the Network/products, strategic publicity and communications

Technical Support Officer Jo Mysko REV ACTIVE Technical Support Officer, Breckland Council

Processing claims, administrative and technical support to the Operational Team and Project Manager


Risk Log V12

REV ACTIVE Risk Log

Project name REV ACTIVE Risk Log

Release Draft date: 26.04.2013

Ownership Author: Simon Best Owner: Simon Best Client: Breckland Council / Norfolk County Council Document Number: G5RR – V11

File location G:\PROJECTS\REV‐ACTive Document Structure\Governance & Management\G5 ‐ Project Management Documentation\Risk & Issue Logs\G5 ‐ Risk Log V12.doc

Revision history Date of next revision: N/A

Revision No. Previous revision date Summary of Changes Changes marked

V12 06.03.2013 Closure and updating of various risks No

V11 18.01.2012 Closure of Risk No. 14, addition of Risk No. 15 No

V10 20.10.2011 Minor updates and revised formatting No

V09 20.07.2011 Addition of Risk No. 14 No

V08 19.04.2011 Minor changes and commentary, no significant updates to risk ratings No

V07 15.01.2011 Minor updates and revised formatting No

V06 18.01.2011 Removal of Risk No.3 and No.11 No

V05 11.10.2010 Removal of Risk No.1, addition of Risk Nos.12 & 13 and other updates No

V04 19.07.2010 Addition of Risk No.11 No

V03 21.04.2010 Revision of risks associated with contractors/partners No

V02 30.03.2010 2nd draft No

V01 N/A 1st Draft following extract from Business Plan. No

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Approvals This document requires the following approvals. Signed approval forms are filed in the project files.

Name Signature Title Date of issue Version

Mark Stanton Senior Supplier / Economic Development Manager 26.04.2013 V12

Mark Kiddle‐Morris Chairman, Strategic Board 26.04.2013 V12

Distribution This document has been distributed to:

Name Title Date of Issue Version

Strategic Board members Current Strategic Board 18.07.2013 V12












As per approvals Project team and project partners 30.03.2010 V01

Purpose To provide a repository of information about risks, their analysis, countermeasures and status

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Risks register

Gross Risk Net risk

Ref Risk Category Risk Description Risk owner

Likelih

ood

Impa

ct

Score Mitigation Plan (Actions & Controls in / to be put in place)

Action timescale

Likelih

ood

Impa

ct

Score

1 Operational Team

Delays / in ability to recruit Operational Team

Senior Supplier until Project Manager Recruited

H M M

The recruitment process (i.e. job descriptions, person specifications production, advertisement) will commence prior to the formal approval of the project. Breckland Council already has a defined recruitment process in place. Note: This is complete and the risk is closed.

CLOSED

N/A N/A N/A

2 Beneficiary Lack of engagement from SMEs in the project

Project Manager

L H M

Research carried out on a sample of the SMEs to be targeted has indicated SMEs will be willing to engage in the project. The model of engagement has been designed to be attractive to SMEs, with minimal action required and lots of benefits. Through previous projects Breckland Council & Norfolk County Council have a lot of experience in engaging with business. This experience & relationship will be used. Note: This is complete and the risk is closed.

CLOSED

N/A N/A N/A

3 Contractor / Partners

Thermal imaging fly over not completed by end of April 10

Project Manager

H H H

Procurement & tendering process Completed. Survey part completed so evaluation can go ahead. Survey completed when conditions are more suitable. Note: This risk has been closed and superseded by Risk 14.

CLOSED

N/A N/A N/A

4 Finance Budgeted levels of private matched funding not reached.

Project Manager

L L L

This dependency will be monitored regularly throughout the project to ensure private matched funding levels remain as profiled. £1,800 (capital) or £3,000 (revenue) financial assistance is available to each SME to encourage them to make their investment now. The investment made by the SMEs (private matched funding) is on the basis of a financial

Ongoing throughout the project

L L L

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return, i.e. spend to save over a couple of years. £2m investment was achieved through the previous REV project focused on advanced engineering and motorsport. Therefore the amount of private matched funding requested in this project is seen as realistic. Note: Risk level reduced – private sector matched funding has effectively been achieved in full.

5 Finance Adequacy of project costings

Senior Supplier

M H H

All project management and associated costs have been based on previous projects delivered (within budget) by the Council. All the main contracts to be procured have been budgeted based on estimates received from contractors through preliminary discussions. Regular monitoring of the financial position will take place – as outlined in the Governance & management section. Note: No change in risk level.


L M L

6 Operational Team

Sickness / absence of key personnel

Project Manager

M M M

Breckland Council has defined procedures for managing sickness/absence. Budget levels within project allow for additional salary costs if required to employ temporary resource. Solid PRINCE2 management structure and shared knowledge approach reduces dependency on one individual. The following is conveyed to employees: clear lines of reporting and job tasks understood; work‐life balance understood; understanding of team roles amongst staff; openness required over workloads so prevent against stress related illness. The project team will be supported by the Breckland Economic Development department who have a good track record of delivery with projects of this nature and will be able to ‘plug any gaps’. Some flexibility around workflow – within tolerances – during 2011 Q4 enabled the Operational Team to respond to scheduled surgery on one of the REFs. Note: The operational team (Norfolk County Council‐based REFs) remain subject to illness and incapacity. Consultancy support has been and will be procured to backfill as necessary. There was no change in risk level.

L L L

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7 Finance Inability to meet requirements of funders / investors

Project Manager / Funding Support Officer

M H H

Breckland Council is the accountable body and has had previous experience with meeting funder requirements.

Systems / expertise already built to manage projects and monitor projects and individual elements.

PRINCE2 project management approach provides the process and mechanism for issues & problems to be highlighted, resolved and communicated to stakeholders.

Tolerance built into outputs & financials to allow flexibility.

Training of Project Team on funders requirements. Note: No change in risk level. Funders’ requirements have been tested at audit on a number of occasions.


L H M


Contractor / partners not delivering as required

Project Manager

M H H

Norfolk County Council was chosen as partner for this project because of the expertise and experience they have. They have been involved in the development of the project so they are aware of their role. The ability to deliver will be a key factor in the selection criteria used to select external contractors. Service level agreements with partners and contracts with external contractors will have defined deliverables linked to payments, which minimise the risk to the project’s financial model. Performance of partners and contractors is regularly monitored. The PRINCE2 manage‐by‐exception model provides for the Project Manager to intervene directly where performance does not meet expectations and this option has already been invoked to positive effect. Note: No change in risk level.

Ongoing throughout the project, initial work prior to the project start and during first 6 months of project.

L H M

9 External Complementary business support provision changes e.g. Carbon Trust loans cease

Project Manager

H M M

The project will regularly keep up to date and will build good relationship links with other business support providers so it knows what is going on in the support ‘market place’. The project is designed to be able to ‘fill gaps’ therefore if some complementary support provision did disappear it is possible the project will be able to adapt to fill this gap. Initial discussions with existing providers, Business Link, Carbon Trust, MAS East, Envirowise etc. indicated their support offerings are secure for the period of the REV ACTIVE project. Changes initiated by the Coalition Government have significantly altered the support landscape and there is

Ongoing throughout the project, initial work during first 6 months of project.

L L L

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little one‐to‐one support available. A Governmental landscape review in may yet result in significant changes to the Carbon Trust. The loss of Carbon Trust grants/loans could reduce the project’s ability to deliver business investment in initiatives. The effects of the loss of Business Link in late 2011 has yet to be fully assessed. It is thought unlikely to have an immediate and material impact upon the Project’s ability to deliver. Note: Increased risk of change in the provision of complementary business support due to central Government priorities. Risk level reduced – complementary business support provision has not been and will not be central to the Project achieving its objectives.

10 External Inability to collect evidence to prove outcomes / benefit achievement

Project Manager

M H H

Systems previously used for collecting information from SMEs on previous projects to be refined and implemented, i.e. to receive intervention SMEs will need to sign up and agree to certain principles / requirements re: access to information. The Project dedicates much of its first year of operation in terms of creating appropriate mechanisms, systems and methodologies to be able to acquire and produce the appropriate evidence. Later on in the project timetable a key element is to verify all benefits to the project. AEA Technology plc has been appointed as Carbon Partner and data capture/evidence is part of their remit. Note: No change in risk level.

Ongoing throughout the project predominately in the first 12 months and months 18‐40.

L H M


Dissolution or withdrawal of a Project partner

Project Manager

M H H

The Coalition Government’s new Local Enterprise Partnerships (LEPs) will replace the existing Local Strategic Partnerships, including Shaping Norfolk’s Future. It is unclear what resources the New Anglia LEP will have at its disposal through the Regional Growth Fund. Fiona Keysell left Shaping Norfolk’s Future in early 2011 and the Project Manager and Head of Economic Development moved quickly to re‐assign her work packages to Dan Cox at Breckland Council. There will, therefore, be little operational impact. Note: Shaping Norfolk’s Future ceased to exist when the New Anglia LEP was established. Whilst New Anglia is supportive of the Project, they will not be taking an operational or strategic role. Risk rate reduced – the Project is nearing completion and Norfolk County Council has not indicated that they wish to withdraw at this stage. Consultancy support could be mobilized to backfill capacity if necessary.

Immediate and ongoing

L L L

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13 Finance Failure of a contractor or partner to provide complete claims records to the Funding Support Officer

Funding Support Officer

M H H

Full documentary evidence must be provided in support of travel and subsistence claims by all Project staff, including those working outside Breckland Council. This is necessary to ensure that funding drawdowns progress as anticipated and that the Project’s audit trail is complete. Note: The Funding Support Officer has advised all concerned that due to the amount of effort required in reversing errors within claims, no expenditure will be accepted without the correct information/invoice or back up paperwork. If no evidence can be produced for expenditure, the associated claim will not be accepted. This will be monitored closely.


L H M


Delays to or quality issues with data from the aerial thermal survey

Project Manager

M H H

The Project Manager will liaise closely with both BlueSky (and through them, Manchester Geomatics Ltd) to ensure that the data are verified at the earliest opportunity and presented to AEA Technology. Note: This is complete and the risk is closed.

CLOSED

N/A N/A N/A

15 Partners Delays to completion and evidencing of contracted outputs in Broadland and North Norfolk.

Project Manager

M H H

Dan Cox (via work packages S2C and S2D) has been tasked sub‐management of REV ACTIVE delivery within North Norfolk and Broadland in direct support of the overall objectives of the REV ACTIVE project and the direction of available resources to realise, monitor and evidence the contracted outputs within agreed tolerances and to applicable definitions. The achievement of these in a timely fashion is an issue that will need to be managed. Note: This is a priority risk management issue.


L H M


Documents

REV ACTIVE Audit Report Jun 2013 v4democracy.breckland.gov.uk/documents/s26678/REV ACTIVE Audit R… · formal response to the Auditor was immediately agreed. A copy of the Report