Internal Audit Interim Performance Report 2004 2005

D Heath

Informations

• Publié par: Orzu
• Nombre de lectures: 19
• Langue: English

Extrait

Agenda Item No:

Report

No:

Report Title:

Internal Audit Interim Performance Report 2004/2005

Report To:

Audit Committee

Date: 31 January 2005

Ward(s) Affected:

All

Report By:

Director of Finance and Community Services

Contact Officer(s):

David Heath, Chief Internal Auditor

Purpose of Report:

To inform Councillors of the Internal Audit work of the Audit and

Performance Division for the first nine months of 2004/2005.

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 Internal Audit function at Lewes operates in accordance with the

auditing guidelines published as a Code of Practice for Internal Audit by

the Chartered Institute of Public Finance and Accountancy (CIPFA).

2.2

The 2003 version of the CIPFA Code includes revised requirements for

the Chief Internal Auditor’s reporting to the Audit Committee. The Code

now requires that, in addition to the report on the work of the Internal

Audit Section, the interim reports should address emerging issues in

respect of the whole range of areas to be covered in the formal annual

report.

2.3

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

Internal Control Environment at Lewes District Council

3.1

The Annual Report on the Council’s Systems of Internal Control for

2003/2004 included the Chief Internal Auditor’s opinion on the standards

of internal control.

In the nine months since the start of this financial year

there has been nothing to cause that opinion to be changed.

Whilst

recommendations have been made to improve management controls in

some areas, there were no instances in which internal control problems

created significant risks for Council activities or services.

3.2

The Council’s work on risk management has identified that there are

some significant risks that are beyond its control, for example a major

incident or disaster, a downturn in the national economy or a major

change in government policy or legislation.

The Council is examining

ways to mitigate the effects of such occurrences by improved planning

and response measures.

3.3

This report mainly focuses on the work of Internal Audit.

At this stage,

the situation in respect of other review processes is as reported in the

Annual Report on the Council’s Systems of Internal Control for

2003/2004 and no further reference to these other reviews is made in

this report.

4

Internal Audit Performance 2004/2005

4.1

This section of the report informs Councillors of the work undertaken by

Internal Audit during the first nine months of the year, compared against

the Annual Plan that was agreed by the Audit Committee.

Use of Internal Audit resources

4.2

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

for the nine month period from April to December 2004.

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

2004

Audit Area

Plan audit

days for

the year

Plan audit

days to

date

Actual

audit days

to date

Main Systems

110

83

61

Central Systems

60

45

32

Departmental Systems

170

129

144

Performance and Management Scrutiny

105

79

85

Computer Audit

61

46

49

Contract Audit

25

19

5

Environmental Audit

35

27

59

Management Responsibilities/Unplanned

Audits

175

132

115

Total

741

560

550

Note: The ‘Plan audit days to date’ shows a pro rata forecast that provides a

broad 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 workloads and other commitments in the departments to be

audited.

4.3

Table 1 shows that a total of 550 audit days have been undertaken

compared to 560 planned.

The variance of 10 days (1.8%) is explained

by sickness and leave being more than the pro rata forecast for nine

months.

It is anticipated that the present shortfall will be made good by

the end of the financial year.

4.4

Additional work was done on Environmental Audit in the early months of

the year, with Internal Audit reviewing the Council’s annual EMAS

statement for the first time as part of the preparations for the visit of the

Lloyds Register Quality Assurance (LRQA) verifier in April 2004.

Also, it

has been necessary to review the EMAS Strategic Audit Plan in

preparation for the interim visit of the LRQA verifier in September 2004.

These tasks were not forecast when the Annual Plan was compiled, but

it is important that such matters are dealt with thoroughly in order to

safeguard the Council’s EMAS registration.

4.5

A major element of the work under Departmental Systems has been the

completion of the combined audit of Refuse Collection, Recycling and

Street Cleansing that was carried over from 2003/2004, and which was

not forecast when the Annual Plan was compiled.

4.6

The work on the VFM Review of IT Procurement and the further

development of the Council’s Risk management framework in the early

part of the year means that the resources used on Performance and

Management Scrutiny are more than the pro rata forecast for nine

months.

Audit work undertaken

4.7

The paragraphs below summarise the main functional areas reviewed

and the key audits undertaken.

The work has been divided between

completing work and issuing final reports for audits from the 2003/2004

programme, dealing with issues arising from previous audits and making

progress on the programme for the current year. Those audits for which

final issue of reports was covered in the Annual Report for 2003/2004

are not included in this report even though there has been work on these

since April 2004.

4.8

Main Systems

: The final report on the audit of Housing Rents has been

issued.

Audits of Housing Benefits and Capital Accounting are

underway.

4.9

Central Systems

: These are the remaining systems that are administered

centrally that have a significant effect on the Council’s activities: The

audit of Service Charges that was carried over from 2003/2004 has been

completed and a final report issued. The audits of Land Charges, and

Banking Arrangements and Reconciliations are at the draft report stage.

4.10

Departmental Systems

: These audits focus on key areas of activity in

Council departments. Final reports have been issued for the audits of

Seaford Head Golf Course, Tourism and Waste and Recycling Services,

and the audits of Car and Travel Allowances and Team Briefing

Arrangements are at the draft report stage.

Audits of Homelessness,

and the Leisure Management (Outdoors) contract are underway.

4.11

Performance and Management Scrutiny:

Internal Audit has been fully

involved in developing the Council’s Risk Management framework, and

working with CMT to report on the results of the service plan risk

assessments and establish the Councils register of strategic risks.

In

June 2004, a representative of the Audit Commission carried out a

‘Health Check’ on the Council’s risk management arrangements, which

resulted in very positive feedback that included a list of priorities for

further development work.

An audit of departments’ compliance with

aspects of the Risk Management Strategy is at the draft report stage.

A final report has been issued on the audit of the Council’s Asset

Management arrangements, the audit focussing on the Annual Report on

the Non Housing Property Portfolio.

The report for the VFM Review of IT Procurement was presented to the

September 2004 meeting of this Committee, and the recommendations

from the Review are being presented for Cabinet approval on 16

February 2005.

4.12

Computer Audit

: The final reports have been issued on the audits of the

Council’s Internet/Intranet facility and the arrangements for E

Government. An audit of IT Security is underway.

Internal Audit is

represented on the IT Steering Group and the working group assessing

the impact of new FOI legislation to help ensure that control issues are

fully considered in all key developments.

4.13

Contract Audit

: The main focus in this area has been input to both the

Corporate Procurement Working Group’s research into partnership

working and its review of Contract Procedure Rules.

4.14

Environmental Audit

: During April 2004, Internal Audit reviewed the

Council’s annual EMAS statement prior to its submission to the LRQA

verifier. The verifier’s review of the statement and the successful Internal

Audit coverage of EMAS during 2003/2004 helped to confirm the

Council’s EMAS registration for the year 2004/2005.

This year is the final part of the three year EMAS audit cycle 2002 to

2005.

The Council’s EMAS registration will be reviewed in April 2005 for

the new registration period that runs from May 2005 to May 2008. It is

important that this year’s programme of eight audits is completed

satisfactorily. The audits of Water and Energy Usage, Housing Services

and Property Services are at the draft report stage, and final reports

have been issued for the audits of Finance, Transport, and Purchasing

and Office Waste.

The final report has been issued for the audit of

Community Leisure that was begun in 2003/2004.

4.15

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 has provided advice on tendering for several key contracts,

and given guidance on control issues in response to eight other

enquiries. The audit of the Council’s complaint procedures that was

requested by the Chief Executive is at the draft report stage.

A review of

IT applications within the Housing Needs and Strategy Section that was

requested by the Housing Strategy Manager has been completed; the

findings and conclusions have been advised to management and will be

incorporated into the report on the audit of Homelessness.

Internal Audit has joined the Council’s Resilience Planning Group to

provide advice on risk and internal controls to help in the development of

updated business continuity plans for key services.

Follow up of Internal Audit recommendations

4.16

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.

4.17

In the first two months of 2004/2005 the focus for follow up was on

confirming the implementation of the recommendations that had been

agreed during 2003/2004.

These results were reported to the June 2004

meeting of the Committee.

Since then, the follow up procedures have

largely operated satisfactorily although the summer leave period delayed

some responses from managers.

At present, responses are up to date.

Customer Satisfaction Surveys/Performance Indicators (PIs)

4.18

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

were reported to the June 2004 meeting of the Audit Committee.

The

corresponding information for 2004/2005 will be reported to the June

2005 meeting of the Committee.

5

Financial Appraisal

5.1

There are no additional financial implications from this report.

6

Environmental Implications

6.1

I have completed the Environmental Implications Questionnaire and

there are no significant effects as a result of these recommendations.

7

Risk Management

7.1

I have completed the Risk Management questionnaire and this report

does not require a risk assessment because the issues covered by the

recommendations are not significant in terms of risk.

8

Background Papers

1.1

Strategic Audit Plan 2004/2007 presented to the Audit Committee on 1

March 2004.