‘Serious deficiencies’ identified with inter-island ferry finances

The Bressay ferry. Photo: SIC.

Inter-island ferry finances are “not fit for purpose”, a senior councillor has warned.

Audit committee chairman Allison Duncan said today (Tuesday)  he was “disappointed” with a report on the service.

“The audit identified serious control deficiencies where the potential for financial, operational and reputational risk is significant,” he added.

“The current arrangements are not ft for purpose, which requires systems to be reviewed and implemented – in other words a root and branch review is necessary.”

Despite his concerns, he said he was assured that some service improvements had already been initiated

The Audit Glasgow report found the ports and harbours team’s financial processes to be “unsatisfactory” and called for immediate action.

The use of “accounts cards” was highlighted as a particular concern.

Introduced as a temporary measure during the pandemic, the cards were supposed to allow regular passengers to continue to travel at a discounted rate and pay invoices retrospectively.

However, auditors found that without a formal policy, anyone who applied for a card was approved, including non-locals and non-regular users, who were all benefiting from the reduced fare – £2.60 compared to £6.20 for a standard return.

“This will be leading to a loss of income for the council,” the audit stated.

The cards also led to a substantial increase in the number of invoices being issued by the staff at Sella Ness – so much so that they were struggling to send them in time.

Since April 2021, the auditors noted more than £50,000 worth of invoices had been issued, almost half of which were for less than £30.

They also found there had been an increase in the number of people failing to pay invoices.

There was evidence some people had refused to pay if the invoice was not received within an “adequate timescale”.

One invoice was found to have been issued two years after the date it related to.

Depute leader Gary Robinson said the criticisms reflected his own experience with the service, such as late invoices.

Mr Robinson said he had been unable to set up internet banking to pay a ferry invoice because the account number had been flagged as “for council tax only’.

“So I think this is one that we very much have to take on the nose, because I think it’s entirely accurate,” he added.

Mr Robinson acknowledged, however, that the account cars had been brought in very quickly during the pandemic and the troubles were “in some ways to be expected”.

ZetTrans chairwoman Moraig Lyall also noted she had experienced similar issues with the service.

She said the process was “clearly in need of updating and modernisation”.

“I was half wondering whether, with Sella Ness being 30 miles up the road it was a case of being out of sight out of mind with the rest of the updating of process across the council,” she said.

Mrs Lyall said it was “probably opportune” that a new finance manager had recently joined the council to look at the issue with a “fresh pair of eyes”.