Agenda item

2017/18 INTERNAL AUDIT SERVICE PROGRESS REPORT - 19:45 - 19:55

To receive the report of the Executive Director of Finance, Resources & Customer Services summarising the work that the Internal Audit and Risk Management Service (ARMS) has completed for the period 1 April 2017 to 23 October  2017.

(Report No.84)

 

 

 

Minutes:

RECEIVED the report of the Director of Finance, Resources & Customer Services (No.84) summarising the work of the Internal Audit & Risk Management Service for the period between 1 April and 23 October 2017.

 

NOTED

 

  1. During the review period, the Internal Audit Team had commenced 58 assignments of which 14 had been completed, as detailed at 3.4 and Chart 1 (page 10) of the report.
  2. As detailed at 3.4/Chart 1 (page 10) of the report, 4% of assignments were at draft report stage but the team were on track to achieve their performance indicator of 95% by the year end.
  3. As summarised in 3.5/Chart 2 (page 11) of the report, there had been some changes to the audit plan since it was agreed. With 11 assignments added to the plan and 2 deferred/cancelled. More detail of these can be found in Appendix 2 (page 21) of the report.
  4. As detailed at 3.6/Table 1 (page 11) of the report, there is a list of completed audits along with audit opinions for each one. There have been 2 audits with limited assurance so far, as detailed at 3.8 & 3.9 (pages 12 – 13) of the report. Chart 3 (page 12) of the report highlights the number of findings for different risk themes identified from the completed audits.
  5. Details for the 2 audits with limited assurance opinions are as follows:

a.    Regeneration projects – where the team looked at the governance structure and financial controls for the Meridian Water Development Programme and identified 2 main risks relating to:

·         Format and information for budget reporting of the programme which had not been clarified at the time.

·         The governance structure, which was relatively cumbersome given the size of the project.

b.    St. Pauls CE Primary School – two high risk issues were identified relating to:

·         Expenditure

·         Private Fund Records

  1. Managers’ progress with implementing internal audit recommendations, as detailed at 3.10 (page 13) of the report. Since the start of the year, the team have followed up 220 recommendations and as of October 2017 42% of high risk actions have been fully implemented and 38% of medium priority risks have been implemented. Chart 4 (page 14) summarises the progress for the different departments in implementing management actions. This was an improvement since the last meeting.
  2. In terms of counter fraud actions, para 3.13/table 2 (page 14) of the report summarises the teams progress against annual targets. Whilst the team are doing well on the savings from the investigations and preventative work, they have fallen slightly behind on council housing recoveries. However, they are ahead from where they should be, at this time of the year, for temporary accommodation recoveries.

Table 3 (page 15) of the report provides more detail of counter fraud savings, broken down by different types of activity.

8.    In terms of quality assurance, as detailed at para 3.17 (page 15) of the report and at table 4 (page 16). The Key Performance Indicator (KPI) that hadn’t made the target related to days between the team issuing the draft report to management and then receipt of their comments. The team feel that this KPI has been skewed because a number of draft reports were issued to schools just before the summer holidays and therefore staff were away and could not respond to the team until they returned.

  1. The following issues raised in response to the report:

a.    The Chair’s comments that more progress was needed in implementing management actions by managers. The Chair also asked if Christine Webster could further comment about the annual target regarding council housing recoveries. Christine Webster clarified that the team relied heavily on the neighbourhood team for referrals in order to investigate where there could be potential sub-letting or issues for council housing. The neighbourhood team have been pre-occupied with visiting high rise flats after the fire at Grenfell Tower. So no referrals were received around that time.

However, the team have had many referrals recently regarding high rise towers and identifying people who should not be in the high rise blocks or suspicions. Under staffing, in the early part of this year, is the other reason why the counter fraud team have fallen behind with council housing recoveries.

b.    The Chair was also concerned with the days taken from issue of draft report to receipt of management comments (table 4, page 16). The target is 15 days but the actual average figure is 31 days. The Chief Executive would raise this issue at the next Executive Management Team meeting.

  1. The Chair thanked Christine Webster for her report.

 

AGREED to note the progress made in delivering the Audit and Risk Management Service’s 2017/18 work plan and the outcomes achieved and to note managers’ progress with the implementation of internal audit recommendations.

 

Supporting documents: