SCOTTISH Borders Council should ensure that allowing its staff to leave its employment with “golden goodbye” packages represents value for money to the local authority.

And that process should also be transparent, according to the council’s external auditor KPMG.

The observations are contained in the company’s report on the council’s annual accounts for the year ended March 31 which were noted at Monday’s meeting of SBC’s audit and risk committee.

Councillors heard that the council had made savings of £7.8m over the year and that 85 per cent of these were permanent, recurring savings which had resulted in a £1.3m underspend on the revised revenue budget for 2015/16.

Contributing to this saving was a cut in employment costs as a result of staff over the age of 50 being able to apply for early retirement and other employees being invited to seek voluntary severance with a compensation payment based on age and length of service.

The scheme is particularly aimed at staff working in departments where the need for specific budget reductions has been identified. KPMG, which charges the council an audit fee of £316,000, said it had reviewed the exit packages offered to employees under this policy over the year and had no quibble with they way they were approved.

However, the auditor expressed misgivings over one package agreed between the council and an unnamed member of staff.

“We noted one exit package which was a compromise agreement reached with a former employee where there were limited records to support the value of the agreed and approved package,” stated the KPMG report.

“Compromise agreements are a specific type of exit package…which have a particular legal form requiring a high degree of confidentiality. The existing policies and procedures of the council do not currently provide guidance around the steps to be followed or data to be retained when it is considered that a compromise agreement is required to achieve an optimum outcome for all involved.

“While we found that the specific payment in question was approved in line with delegated authority within the council, there was no central file created to support the package nor the rationale for the payment. In such circumstances, it is difficult to assess the extent to which the council has achieved value for money in the payment of this exit package.”

The auditor concluded: “There is a need to establish a process which will meet the requirements of ensuring value for money and transparency, while complying with the legal agreements surrounding compromise agreements.”

The committee agreed with the KPMG recommendation that SBC’s head of human resources Clare Hepburn should be charged to establish the required process by the end of this financial year.

Meanwhile, the full council, meeting tomorrow, will be asked to approve another two exit packages in a bid to achieve annual savings of over £82,000. The unnamed employees are a peripatetic building standards surveyor on a salary of £45,000 and a senior access officer earning £37,500.

Councillors will hear that the cost of letting the duo go will be £62,000 and that this will be recouped in less than one year.