Why we are engaging with BT Loch Aillse agus an Eilein Sgitheanaich Ltd (Lochalsh and Skye)
We are engaging with Lochalsh and Skye about its governance.
In October 2022 Lochalsh and Skye submitted its Annual Assurance Statement that identified it had not been compliant with regulatory requirements including the Standards of Governance and Financial Management (the Standards) between May and August 2022. In March 2023 Lochalsh and Skye shared an independent audit report with us which identified further non-compliance with Standards one and six and areas for improvement including weaknesses in Lochalsh and Skye’s governance and assurance processes. This information led us to put Lochalsh and Skye’s regulatory status under review. In September 2023 we completed our review of Lochalsh and Skye’s regulatory status and concluded that it was non-compliant with regulatory requirements including the Standards, in particular Standards one, four and six.
Following our engagement, Lochalsh and Skye commissioned an independent review of its compliance with all the regulatory requirements including the Standards and provided us with the results of this review in January 2024. We updated our assessment in March 2024 and concluded that Lochalsh and Skye did not comply with regulatory requirements including Standards one, four, five and six.
During 2024 Lochalsh and Skye developed a revised governance action plan to address the issues identified and to achieve compliance with regulatory requirements including the Standards. In October 2024 Lochalsh and Skye submitted its Annual Assurance Statement that identified that it had largely completed its governance action plan and was non-compliant only with Standard one.
We are engaging with Lochalsh and Skye as we review other information it has submitted since October 2024. We are also engaging to seek further information and assurance about the improvements it has delivered through its governance action plan and to review its compliance position.
Lochalsh and Skye is working openly and constructively with us.
Our current assessment is that Lochalsh and Skye is non-compliant and is working towards compliance with the Standards. We set out below the information that Lochalsh and Skye must provide in order to assure us that it can achieve compliance.
What Lochalsh and Skye must do
Lochalsh and Skye must:
- send us monthly updates on the progress on implementing the revised governance action plan; and
- provide us with the further information and assurance we require on its governance improvements to achieve compliance with regulatory requirements including the Standards.
What we will do
We will:
- review the updates and progress on implementing the revised governance action plan;
- review the information Lochalsh and Skye provides regarding its governance improvements; and
- update our published engagement plan in the light of any material change to our planned engagement with Lochalsh and Skye.
Regulatory Returns
Lochalsh and Skye 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.