Audit Committee, Report 8, 19 January 2004

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• Publié par: Erzo
• Nombre de lectures: 20
• Langue: English

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Agenda Item No:

Report No:

Report Title:

Internal Audit Interim Performance Report 2003/2004

Report To:

Audit Committee

Date: 19 January 2004

Ward(s) Affected:

All

Report By:

Director of Finance and Community Services

Contact Officer(s):

David Heath, Chief Internal Auditor

Purpose of Report:

To consider the Internal Audit work of the Audit and Best Value Division for the

period 1 April 2003 to 31 December 2003.

Officers Recommendation(s):

1

To receive and consider the report.

Reasons for Recommendations

1

The remit of the Audit Committee includes a duty to agree a three-year Strategic Audit

Plan and an Annual Plan, and keep them under review.

Information

2

Background

2.1

The purpose of this report is to inform members of the work undertaken by

Internal Audit in the first nine months of the financial year 2003/2004 compared

to the Annual Plan.

2.2

The work of Internal Audit for each year is set out in the Annual Plan. The

audits for 2003/2004 have been drawn from the three-year Strategic Audit Plan

for the period 2003/2004 to 2005/2006.

2.3

This Interim Performance Report deals with the activities of the Internal Audit

team that is dedicated to audit work and which is not normally involved in Best

Value and Corporate Governance duties.

2.4

Members are reminded that any detailed discussion in open session of the

conduct of audits, or the content of audit reports, may disclose exempt

information as defined in the Local Government Act 1972.

Any such

discussions should be dealt with in closed session.

3

Planned audit days for 2003/2004 compared to actual audit days for the first nine

months of the financial year

3.1

Table 1 shows the planned audit days compared to the actual audit days for the

seven month period from April to December 2003.

Table 1: Plan audit days compared to actual audit days for April to December 2003

Audit Area

Plan audit

days for the

year

Plan audit

days to date

Actual audit

days to date

Main Systems

115

85

62

Central Systems

60

45

18

Departmental Systems

195

145

79

Best Value & Management Scrutiny/VFM

Reviews

90

67

96

Computer Audit

70

52

75

Contract Audit

40

30

15

Environmental Audit

20

15

77

Management Responsibilities/Unplanned

Audits

168

124

109

Total

758

563

531

Note: The ‘Plan audit days to date’ shows a pro rata analysis that provides a guide to the resources

required to carry out planned audits in each area.

The actual timing of the individual audits will depend

on a variety of factors, including the work loads and other commitments in the departments to be

audited.

3.2

Table 1 shows that a total of 531 audit days have been undertaken compared to

563 planned.

The shortfall of 32 days is explained by:

•

Internal Audit staff have provided 35 days support to urgent corporate tasks.

•

The Chief Internal Auditor has spent six days less on audit work than was

forecast in the budget.

•

Training for the audit team has been earlier than originally planned, taking

six days from the time available for audit work.

•

Savings in management, administration and sick leave, and extra time

worked by the Audit Assistant, have contributed 15 days to audit work.

3.3

The time spent on non audit matters has had some adverse impact on the

progress achieved in some areas.

Further savings in management and

administration are anticipated in the remaining months of the year, but there is

likely to be some shortfall in direct days at the end of the year.

3.4

The work on Environmental Audit is over budget because of the need to assign

extra resources to the audits brought forward from last year’s programme, and to

examine fully the complex issues that have been noted in some of the audits that

have been completed this year.

It is important that such matters are dealt with

thoroughly in order to safeguard the Council’s EMAS registration.

3.5

Computer Audit and Best Value & Management Scrutiny are over budget

because of the work in these areas being more extensive than was originally

forecast, the main audits being a major study of the Council’s preparations for

E-Government and the study of the Performance Indicator procedures ahead of

the CPA inspection.

4

Audit work undertaken

4.1

The paragraphs below summarise the main functional areas reviewed in the six

month period and the key audits undertaken.

Management agreed all the

recommendations in the final reports issued.

Recommendations were made to

enhance procedures and controls and, in some cases, the issues were addressed

by managers before the final report was issued.

4.2

Main Systems

: A final audit report has been issued for the joint audit of National

Non-Domestic Rates (NNDR) and Council Tax.

Preparatory work for the audit

of Housing Benefits included a review of the draft Council’s new Anti-Fraud

and Corruption Strategy, and the main audit is scheduled to begin in late January

2004.

A draft report on the audit of Loans and Investments has been issued, and

the audits of Creditors and Housing Rents are underway.

4.3

Central Systems

: These are the remaining systems that are administered

centrally that have a significant effect on the Council’s activities. Final reports

have been issued for the audits of VAT and Insurance.

4.4

Departmental Systems

: These audits focus on key areas of activity in the

departments.

Final reports for the audits of Housing Strategy, Newhaven Fort,

Cemeteries, Renovation Grants, the Right to Buy scheme and the Lifeline

service have been issued.

The draft report on the audit of the Seaford Head Golf

Club is being considered as part of the Community Leisure review of the future

management of the course, which is not yet complete.

An audit of Coastal

Protection is underway.

4.5

Best Value & Management Scrutiny/VFM Reviews

:

The report of the VFM

Review of the income earning potential of TICs was presented to the last

meeting of the Committee.

The report for the VFM Review of the Council’s use

of temporary staff is presented to this meeting.

The audit brief for the VFM

Review of IT Procurement will be presented to the March 2004 meeting of this

Committee.

Internal Audit has undertaken a major review of Performance Indicator

procedures as part of the preparations for the Council’s Corporate Performance

Assessment (CPA).

The final report has been circulated to the Best Value

Officer and members of CMT.

The Audit Commission used the results of this

work for their external review of Performance Indicators for CPA.

Internal

Audit has examined the ongoing development of the Council’s approach to Risk

Management, providing review comments to help guide the process.

4.6

Computer Audit

: The main work to date has been the review of the Council’s

preparations for E-Government, for which a draft report has been issued.

An

audit of the Council’s Internet/Intranet facilities is underway.

4.7

Contract Audit

: Our main work in this area has been as part of a small team that

has reviewed the tendering documents and specifications for the new contracts

of Office Cleaning, Public Conveniences and Leisure Management (Outdoor).

Internal Audit has also monitored the contract tendering procedures via

attendance at ten contract tender openings, and has provided advice on contract

related issues to a number of departments.

4.8

Environmental Audit

: There has been considerable activity in this area so far this

year.

The EMAS audits of Recycling Services and Council Contracts that were

begun in 2002/2003 have been completed and final reports issued.

Final reports

have been issued for this year’s audits of Management and Coordination of

EMAS and Environmental Health and Services, and draft reports have been

issued for the audits of Community Services and Recycling/LA21.

4.9

Management Responsibilities/Unplanned Audits

: This category provides

resources for special projects or investigations requested by Chief Officers,

Internal Audit advice on internal control and probity, and requests for unplanned

audits.

Internal Audit continues to provide support to the Lewes Flood Appeal

Trust Manager, although the work has reduced substantially.

Internal Audit has completed its review of data supplied from the National Fraud

Initiative (NFI 2002) data matching exercise.

There have been three main investigations.

Two cases examined allegations of

misconduct, but there was no evidence to support the allegations.

One case has

concerned a housing renovation grant, but there was no evidence of impropriety.

5

Follow up of Internal Audit recommendations

5.1

As part of the control procedures detailed in the Internal Audit Manual all audit

recommendations are followed up.

The purpose of this is to check whether all

accepted recommendations have been implemented, and the timing of the follow

up process is dependent on the agreed implementation dates for

recommendations.

Since August 2002, Internal Audit has operated more

frequent follow up routines (normally monthly) to help ensure closer monitoring

of progress, and there is now greater awareness of the importance of follow up

among managers.

As a consequence the emphasis here will be on reporting that

follow up is carried out on regular basis, and on highlighting any key

recommendations that have not been implemented.

5.2

Follow up is operating satisfactorily, and there are no major recommendations

outstanding.

5.3

At the year end stage, we will continue to report the % of recommendations

agreed compared to the number made and the % of recommendations

implemented by the agreed date.

Customer Satisfaction Surveys/Performance Indicators (PIs)

6

The results of the customer satisfaction surveys and PIs for 2003/2004 will be presented

to the Audit Committee meeting in June 2004.

Financial Appraisal

7

There are no additional financial implications from this report.

Environmental Implications

8

I have completed the Environmental Implications Questionnaire and there are no

significant effects as a result of these recommendations.

Background Papers

9

Strategic Audit Plan 2003/2006 presented to the Audit Committee on 3 March 2003.