Why we are engaging with Parkhead
We are engaging with Parkhead about its governance and financial management.
COVID-19 has significantly impacted the services provided by social landlords in 2020 and will continue to influence how services are provided in 2021. We will continue to monitor, assess and report upon how each landlord is responding and we will keep our regulatory engagement under review so that we can continue to respond to the challenges of COVID-19.
In April 2020, Parkhead commissioned an independent investigation into the recruitment and appointment of staff members and payments and benefits issues. The investigation found a number of breaches in Parkhead’s policies on recruitment; financial regulations and procedures; entitlements, payments and benefits; and staff expenses. The investigation further found that these breaches resulted in non-compliance with a number of the Regulatory Standards of Governance and Financial Management. The breaches included weaknesses in leadership and control of organisational planning, weaknesses in the information to the governing body, and failure to appropriately manage conflicts of interest.
The governing body accepted all of the investigation findings and is taking effective action to address the weaknesses. It has developed an improvement plan and has agreed to commission a full and independent review against all of the Regulatory Standards. Parkhead is engaging openly and constructively with us.
The Housing (Scotland) Act (2010) requires us to monitor and assess the financial well being, governance and performance of each Registered Social Landlord.
Our current assessment is that Parkhead is working towards compliance with the Regulatory Standards of Governance and Financial Management. We set out below the information that Parkhead must provide in order to assure us that it can achieve compliance.
What Parkhead must do
- provide us with bi monthly progress updates on the implementation of its improvement plan; and
- share with us the remit for the appointment of independent support to review compliance with the Regulatory Standards and the outcomes of that review.
What we will do
- liaise with Parkhead to monitor progress with its improvement plan;
- provide feedback on the remit for the appointment of independent support to review compliance with Regulatory Standards;
- consider progress updates on the review of compliance with Regulatory Standards and the implementation of the recommendations once this work has started; and
- update our published engagement plan in light of any material change to our planned engagement with Parkhead.
Parkhead must provide us with the following annual regulatory returns and alert us to notifiable events as appropriate:
- Annual Assurance Statement;
- audited financial statements and external auditor’s management letter;
- loan portfolio return;
- five year financial projections; and
- Annual Return on the Charter.
It should also notify us of any material changes to its Annual Assurance Statement, and any tenant and resident safety matter which has been reported to or is being investigated by the Health and Safety Executive or reports from regulatory or statutory authorities or insurance providers, relating to safety concerns.