Agenda item

The Head of Internal Audit will submit a report providing a comprehensive overview of the key activities and findings of Internal Audit based on the Division’s Work to the end of December, 2015.

The Head of Internal Audit submitted a report providing a comprehensive overview of the key activities and findings of Internal Audit based on the Division’s work to the end of December, 2015.  He also submitted, for information purposes only, a copy of his report on the work of the Division to the end of 30^th September, 2015 which was to have been submitted to the meeting scheduled for 4^th November, 2015.  Members were reminded that this meeting had been cancelled to enable a workshop to be held on the future arrangements for and work of the Audit Committee.

         The report covered:

·         The issues arising from the completed Internal Audit work in the quarter incorporating, where appropriate, management’s response to the recommendations made

·         Matters that had required investigation

·         An opinion on the ongoing overall assurance Internal Audit were able to provide based on the work undertaken regarding the adequacy and effectiveness of the Authority’s internal control environment.

·         Progress on the delivery of the Internal Audit Plan for the period to the end of the second quarter of 2015/16

·         Details of Internal Audit’s performance for the quarter utilising performance indicators

Reports issued and internal audit work completed during the quarter had raised three fundamental recommendations relating to the adequacy of contract management arrangements, the effectiveness of safeguarding training relating to Taxi Drivers and a legal issue regarding the Authority’s ability to meet statutory timescales for the completion of Deprivation of Liberties assessments.

Internal control assurance opinion overall remained adequate based upon the results of the work undertaken during the quarter.

Of the 41 recommendations followed up, 34% had been implemented by the target date and a further 51% by the revised target date.  Six  recommendations (15%) remained not implemented and had been given revised implementation dates.

In relation to the Audit Plan, more days than the profile had been delivered within the third quarter.

Overall, Divisional performance remained satisfactory with only the chargeable time performance indicator being slightly less than target due to a higher number of leave and training days.

In the ensuing discussion, and in response to detailed questioning, the following matters were highlighted:

·         There was a discussion of the reasons for the failure to meet the original implementation date for complying with audit recommendations.  It was stressed, however, that whilst 34% were completed by the original date, 86% were completed by the revised date.  Managers were sometimes over optimistic in agreeing when the recommendations could be addressed  and it was also acknowledged that due to the financial constraints on the authority, there was increased pressure on managers which could have a contributing effect on the failure to meet the original date.  The Head of Internal Audit stressed that services were challenged to set realistic target dates, however, if issues were so significant they would be brought to the attention of the Senior Management Team.  In response to questioning, he stated that he would assess the current position and, if required, highlight areas of concern or where he felt little or no progress was being made

·         Referring to the number of audit days allocated it was noted that 36 days had been allocated to the Council above the profile and that there was a shortfall of 187 days primarily accountable to more than budgeted days being spent on training and council wide activities.  This would be regularised during the remainder of the year as priorities were determined and consideration was given to the audit work that could be deferred.

·         Arising out of the above, the Head of Internal Audit made the following comments:

o   He didn’t feel that there would be any financial loss through the shortfall of audit days or for the delay in implementing recommendations.  A track was kept of all target and re arranged target dates

o   He gave a brief outline of the way in which the audit plan was compiled and the assumptions made in relation to the number or days allocated.  He also made reference to the training arrangements in place

o   In relation to the number of days allocated, it was anticipated that this would balance out during the remainder of the audit year

·         In response to questioning, the Head of Internal Audit gave a brief resume of the findings of the three fundamental recommendations referred to above and to the work that was required to address the issues raised.  Particular reference was made to the current position with regard to:

o   The adequacy of the contract arrangements of Home to School Transport and a report commissioned in response to the Casey report

o   The safeguarding training and related issues associated with Taxi Drivers and Licensing

o   The issues relating to the completion of Deprivation of Liberties assessments and possible legislative changes which, if implemented, could ease the current issues faced by the Authority

·         In relation to the internal audit function and performance and within the context of the current financial restrictions and the implementation of the Council’s Job Evaluation scheme, particular reference was made to the current position with regard to the recruitment arrangements to fill two existing vacancies.  Reference was also made to the excellent retention position of the Service.  The Service Director Finance also commented that his service was experiencing similar recruitment issues.  Arising out of this discussion,  Members of the Committee stressed the importance of ensuring that remuneration remained competitive to ensure that the right calibre of staff was recruited.  The

·         The Head of Internal Audit gave an update of the current position with regard to the recommendations made to ensure that the procurement card process was improved and that excessive bank charges were avoided

        RESOLVED

(i)      that the issues arising from the completed Internal audit work for the third quarter along with the responses received from management be noted;

(ii)     that the report on the work of the Division for the second quarter to the end of September, 2015 be noted;

(iii)    that the assurance opinion on the adequacy and effectiveness of the Authority’s Internal Control Framework based on the work of Internal Audit in the period to the end of December, 2015 of the 2015/16 audit year be noted;

(iv)    that the progress against the Internal Audit Plan for 2015/16 for the period to the end of  December 2015 be noted;

(v)     that the performance of the Internal Audit Division for the third quarter be noted.