The way consultancy contracts were awarded by Cardiff and Vale University Health Board "fell short of expected standards"

17 Jul 2017 - 9:18am

Auditor General publishes report in the public interest

The way in which Cardiff and Vale University Health Board procured and managed HR consultancy contracts fell short of the standards that the public has a right to expect of a public body. That is according to a report, issued in the public interest, by the Auditor General for Wales.

The report concludes that the Health Board failed to comply with its own procurement requirements when it awarded consultancy contracts to RKC Associates Ltd in November 2014 and June 2015 and failed to ensure the integrity of the procurement process that led to an additional contract being awarded in February 2016.

The award of these contracts breached public procurement rules and exposed the Health Board to unnecessary financial and reputational risk. As a result, the Health Board cannot demonstrate that the contracts were awarded fairly, transparently, lawfully or that they obtained value for money.

The contracts were awarded to address a shortfall in HR leadership capacity at the Health Board after the Director of Workforce and Organisational Development was seconded to another NHS organisation at short notice. RKC Associates Ltd were paid over £290,000 for the service provided.

When the Director of Workforce and Organisational Development subsequently left the employment of the Health Board, a recruitment exercise proved unsuccessful in appointing a replacement because the shortlisted candidates withdrew for various reasons. While the position was not re-advertised, the then sole director of RKC Associates Ltd was interviewed and subsequently offered the position on a one-year fixed-term contract on an annual salary of £150,000. The report found that this appointment process was fundamentally compromised, lacked transparency and was poorly documented.

Auditor General for Wales, Huw Vaughan Thomas said:
“This is the first time as Auditor General that I have issued a report in the public interest on an NHS body. There were numerous and significant failings and the actions of the Health Board fell well short of expected standards which has led to me taking this highly unusual step.

“There are clear procedures that need to be followed to ensure that taxpayers’ money is spent efficiently and effectively and, in this case, they were disregarded.

"I’ve issued this report to highlight these failings, to hold Cardiff and Vale University Health Board to account, and in the hope that other organisations will take heed and not repeat these mistakes.”

Ends

Notes to editors:

  • The Auditor General’s conclusions relate to the procurement and recruitment actions of Cardiff and Vale University Health Board. The Auditor General did not assess the quality of work undertaken by RKC Associates Ltd under the contracts awarded by the Health Board.
  • The sole director of RKC Associates Ltd referred to in this press release and the report terminated her appointment as a director of the company on 28 October 2016 and ownership of the company transferred.
  • This report was prepared in accordance with Paragraph 19 of Schedule 8 to the Government of Wales Act 2006, which provides that if the Auditor General believes that it would be in the public interest to bring a matter to the public’s attention he may prepare a report on that matter.
  • The Auditor General is the independent statutory external auditor of most of the Welsh public sector. He is responsible for the annual audit of the majority of public money spent in Wales, including the £15 billion of funds that are voted on annually by the National Assembly. Elements of this funding are passed by the Welsh Government to the NHS in Wales (over £5 billion) and to local government (over £4 billion).
  • The Auditor General is the external auditor of most of the Welsh public sector. The audit independence of the Auditor General is of paramount importance. He is appointed by the Queen, and his audit work is not subject to direction or control by the National Assembly or government.
  • The Wales Audit Office is a corporate body consisting of a nine member statutory Board which employs staff and provides other resources to the Auditor General, who is also the Board’s Chief Executive and Accounting Officer. The Board monitors and advises the Auditor General with regard to the exercise of his functions.
  • The Wales Audit Office mission is to promote improvement, so that people in Wales benefit from accountable, well-managed public services that offer the best possible value for money. It is also committed to identifying and spreading good practice across the Welsh public sector.