Agenda item
Internal Audit Quarterly Report 2015/16 - Quarter Ended 31st March, 2016
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 March, 2016.
Minutes:
The Head of Internal Audit submitted a report providing a comprehensive overview of the key activities and findings of Internal Audit based on the Divisions work to the end of March, 2016.
The report covered:
· The issues arising from the completed Internal Audit work undertaken within the quarter
· Matters that had required investigation
· An opinion on the ongoing overall assurance Internal Audit was 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 fourth quarter of 2015/16
· Details of Internal Audit’s performance for the quarter utilising performance indicators
Reports issued and the Internal Audit work completed during the quarter had raised two fundamental recommendations relating to the adequacy of IT change management control processes and compliance failures in relation to the administration of personal budgets.
Internal control assurance opinion overall remained adequate based upon the results of the work undertaken during the quarter.
Of the 29 recommendations followed up, 10% had been implemented by the original target date and a further 52% after that date. Eleven recommendations remained not implemented and had been given revised implementation dates.
In relation to the Audit Plan, slightly less than the profiled days had been delivered at the end of the fourth quarter.
Overall, Divisional performance remained satisfactory with only the chargeable time performance indicator being slightly less than target due to a higher number of special leave and training days.
In the ensuing discussion, and in response to detailed questioning, the following matters were highlighted:
· It was noted that issues relating to fraud were now picked up and addressed within the Corporate Anti- Fraud Team report which was to be discussed later in the meeting
· The low number of recommendations implemented by the original target date was disappointing and the reasons for this were discussed as were the actions taken to address the issue. It was noted that none of the cases raised any specific concerns. It was important to realise, however, that the implementation dates were agreed with the individual service but Internal Audit would ask for earlier implementation dates in the event of significant/fundamental issues being identified. Unrealistic dates might be attributable to an over ambitions desire to address issues identified. Many delays, however, were attributable to issues arising which were outside the service area control. In addition, the failure to implement recommendations was not attributable to the same service areas as if this were the case, the matter would be escalated to the Senior Management Team.
· Arising out of the above discussion, the Director of Finance, Assets and Information Services commented that the Senior Management Team now regularly programmed consideration of audit, finance and governance issues so that matters of concern could be addressed as a matter of urgency. The Director of Legal and Governance stated that issues identified would be dealt with via the appropriate Executive Director, in this way it was hoped that no ‘regular trends’ would arise and that there would be no need to escalate to this Committee for consideration. Arising out of this discussion, the Head of Internal Audit commented that procedures had been put in place to ensure that the Director of Finance, Assets and Information Service, Director of Legal and Governance and Service Director Finance had the necessary information to ensure that recommendations were implemented appropriately. These procedures would also be reviewed to ensure that they remained fit for purpose
· The Head of Internal Audit’s annual report would be submitted to the Committee meeting in June and would provide an overall opinion, details of the recommendations made and implemented and the performance of the function
· In relation to the limited assurance opinion with regard to IT change management and control procedures, it was noted that the issues identified via the audit were previously known and recognised by the Service which had commissioned a piece of work to review the issue and make recommendations
· With regard to Personal Budgets reference was made to the limited assurance in relation to identified shortfalls in compliance with established processes and controls. In addition, limited work had been undertaken to recover excess monies (around £47,000 at the time of the Audit) from service users and in relation to delays in issuing recharges to recover money due to the Council. These matters were now being addressed as a matter of urgency
· Following an analysis of creditor payment data matches arising from the National Fraud Initiative a recommendation had been made to improve the internal controls framework in respect of the creditor payments system. It was noted that £129,000 of duplicate payments had been identified. In response to detailed questioning the Committee was informed of how these issues had been identified, the reasons for them and the steps taken to prevent a recurrence. In response to specific questioning, an assurance was given that all duplicate payments had now been captured, tracked and appropriate action taken to recover the overpayments
· In quarter 4, there were three fundamental recommendations not yet completed and a revised target date agreed. Details of these were outlined but, in summary, related to
o the allocation of roles regarding the SAP system
o issues relating to Home to School Transport – it was noted that the Head of Service had also requested a further audit
o Procedures relating to the control of small plant and equipment
· The Head of Internal Audit updated the Committee of the current position with regard to the recruitment to the posts of Senior Auditor and Auditor. It was noted that the Auditor post had been filled as at 15th February, 2016 but that the post of Senior Auditor was to be re-advertised. The Service was exploring various options to aid recruitment
RESOLVED:
(i) that the issues arising from the completed Internal audit work for the fourth quarter along with the responses received from management be noted;
(ii) 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 March 2016 of the 2015/16 audit year be noted;
(iii) that the progress against the Internal Audit Plan for 2015/16 for the period to the end of March 2016 be noted;
(iv) that the performance of the Internal Audit Division for the fourth quarter be noted.
Supporting documents: