Annual Audit Letter

V-Matthews

Description

Annual Audit Letter National Probation Service - London Audit 2007-2008 October 2008 Contents Summary 3 Purpose, responsibilities and scope 5 Audit of the accounts 6 Use of resources 7 Closing remarks 10 The Audit Commission 11 Status of our Reports The Statement of Responsibilities of Auditors and Audited Bodies issued by the Audit Commission explains the respective responsibilities of auditors and of the audited body. Reports prepared by appointed auditors are addressed to non-executive directors/members or officers. They are prepared for the sole use of the audited body. Auditors accept no responsibility to: • any director/member or officer in their individual capacity; or • any third party. Summary Summary Overview 1 Once again it has been a busy and challenging year for London Probation. At the start of the financial year 2007/08 the new board was appointed and inducted, and LP embarked on a major redesign and restructuring exercise with the aim of delivering more efficient and effective offender management. This exercise is now complete and a new operational structure based around 12 borough clusters has been implemented. 2 LP has, for the first time, produced a three year strategic plan that covers 2008-11 and sets out LP's vision as 'achieving public confidence in our work to protect the people of London' and its mission, 'cutting crime for a safer London'. The plan also articulates the strategic results LP ...

Sujets

• management
• managers

Informations

• Publié par: Rozis
• Nombre de lectures: 18
• Langue: English

Extrait

Annual Audit

Letter

National Probation Service - London

Audit 2007-2008

October 2008

Status of our Reports

The Statement of Responsibilities of Auditors and Audited Bodies issued by the Audit

Commission explains the respective responsibilities of auditors and of the audited

body. Reports prepared by appointed auditors are addressed to

non-executive directors/members or officers. They are prepared for the sole use of the

audited body. Auditors accept no responsibility to:

•

any director/member or officer in their individual capacity; or

•

any third party.

Contents

Summary

3

Purpose, responsibilities and scope

5

Audit of the accounts

6

Use of resources

7

Closing remarks

10

The Audit Commission

11

Summary

Summary

Overview

1

Once again it has been a busy and challenging year for London Probation. At the start

of the financial year 2007/08 the new board was appointed and inducted, and LP

embarked on a major redesign and restructuring exercise with the aim of delivering

more efficient and effective offender management. This exercise is now complete and

a new operational structure based around 12 borough clusters has been implemented.

2

LP has, for the first time, produced a three year strategic plan that covers 2008-11 and

sets out LP's vision as 'achieving public confidence in our work to protect the people of

London' and its mission, 'cutting crime for a safer London'. The plan also articulates the

strategic results LP seeks to achieve and its priorities for action.

3

During the first half of 2008 Her Majesty's Inspectorate of Probation (HMIP) completed

its Offender Management Inspection (OMI) in London. The primary purpose of the

inspection was to assess the quality of start to end offender management and HMIP is

visiting all 42 National Offender Management Service areas over a three-year period

from May 2006. The report found that there was a mixed picture of practice, but that

following reorganisation LP is 'travelling in the right direction under committed

leadership.' It was the first full inspection concluded at LP without HMIP requiring a

follow-up inspection. The OMI action plan has been completed and sent to HMIP.

4

There continue to be national developments, that impact on all probation areas, with

the National Offender Management Service (NOMS) that oversees offender

management, becoming an Executive Agency of the Ministry of Justice in April 2008,

bringing the probation and prison service closer together. The first probation trusts

were established in April 2008 with six boards becoming trusts, however there has

been a delay in the original timetable which envisaged all boards becoming trusts over

a three year period and no new trusts are expected to be establish in April 2009.

NOMS has also been consulting on introducing a best value regime into probation

boards and trusts, but no final decision has yet been reached.

5

NOMS introduced a new performance framework in 2007/08 setting out national

performance targets for probation boards. HMIP recognised in its OMI report that LP

has made sustained improvement against its performance targets, but that some areas

of performance continued to require attention. LP recognises that it needs to improve

its performance and has drawn up a performance plan to help deliver this

improvement. LP received the maximum performance bonus available for 2007/08 of

£1.8m.

6

LP continues to develop its arrangements to meet the challenges it faces. Both

members and senior managers should continue to promote and support sustained

improvement in performance and delivery. Looking forward LP has begun to take the

action necessary to help deliver its objective of achieving trust status.

3

National Probation Service - London

Summary

Key messages

•

We gave an unqualified opinion on the LP's financial statements and an unqualified

value for money conclusion for the arrangements made for the use of resources.

•

LP continues to respond well to the key challenges it faces, senior management

are aware that they need to continue to focus on improving performance and

developing governance arrangements towards meeting the standards required to

obtain trust status.

Recommendations

•

The Board should continue to remain vigilant to ensure threats to financial health

are promptly identified and addressed.

•

The Board should ensure that the medium term financial plan is kept under review

and developed as needed to help deliver LP's priorities.

•

The Board should ensure that the recommendations from our reviews as set out in

action plans continue to be implemented in accordance with agreed timetables.

National Probation Service - London

4

Purpose, responsibilities and scope

Purpose, responsibilities and

scope

7

This Annual Audit Letter (letter) summarises the key issues arising from our work

carried out during the year. We have addressed this letter to Board members as it is

the responsibility of the Board to ensure that arrangements are in place for the conduct

of its business and that it safeguards and properly accounts for public money. We have

made recommendations to assist the Board in meeting its responsibilities.

8

The letter also communicates the significant issues to key external stakeholders,

including members of the public. We will publish this letter on the Audit Commission

website at

www.audit-commission.gov.uk

.

9

We have prepared this letter as required by the Statement of Responsibilities of

Auditors and Audited Bodies issued by the Audit Commission. This is available from

www.audit-commission.gov.uk

.

10

As your appointed auditor we are responsible for planning and carrying out an audit

that meets the requirements of the Audit Commission’s Code of Audit Practice (the

Code). Under the Code, we review and report on:

•

the Board's accounts; and

•

whether the Board has made proper arrangements for securing economy,

efficiency and effectiveness in its use of resources.

11

This letter summarises the significant issues arising from both these areas of work and

highlights the key recommendations for the Board to consider. The closing remarks

section at the end of this letter contains a list of all reports issued to the Board relating

to the 2007/08 audit.

5

National Probation Service - London

Audit of the accounts

Audit of the accounts

12

Before giving my opinion we presented the Annual Governance Report to the Audit

Committee on 17 June 2008.

13

We gave our unqualified opinion on the financial statements on 10 July 2008. This was

after the submission deadline of 27 June 2008. However, the delay was not due to LP,

but was a result of outstanding pension assurances from the auditor of the London

Pension Fund Authority (LPFA). This was because the LPFA works to a different

accounts closedown timetable to that followed by the LP. We will continue to work with

the auditor of the LPFA to improve the timeliness of pension assurances.

14

LP produced a comprehensive account closedown plan, and the draft financial

statements were again produced in a timely manner, well constructed and the quality

of working papers provided was good.

15

As part of our audit we identified and reviewed the key controls within the LP’s material

financial systems and sought to place reliance upon their operating effectiveness to

provide us with an assurance that the financial statements were free from material

misstatement. We were able to conclude, as last year, that the LP’s material financial

systems have adequate controls in place to ensure that that the risk of a material mis-

statement to the financial statements from the information produced by these systems

is low. As part of this process we worked closely with Internal Audit and placed

reliance on their findings wherever possible. Our review of work undertaken by Internal

Audit found that their work was of a sufficient standard for us to place reliance upon it.

National Probation Service - London

6

Use of resources

Use of resources

Financial position

16

Public sector bodies are required to have in place proper arrangements to ensure

soundly based financial standing.

17

In last year's letter we reported that LP faced significant financial pressures in 2007/08.

Substantial savings were required, including a service redesign and restructuring, and

a freeze on non-business critical recruitment to achieve a balanced budget for

2007/08. The financial constraints, particularly the freeze on recruitment enabled the

LP to achieve an underspend for 2007/08 of £2.4m, which NOMS allowed LP to carry

over into 2008/09.

18

The positive impact of the financial constraints and the reorganisation were

contributory factors in enabling a balanced budget for 2008/09 to be agreed by the

Board, at its meeting on 20 March 2008, without recourse to the strict measures that

had been required to achieve a balanced budget for 2007/08.

19

Subsequent to the budget for 2008/09 being drawn up the Ministry of Justice allocated

additional funding of £40m to probation boards and trusts to provide 'more tough and

effective community sentences'. A project board has been established to manage LP's

£6.8m share of this allocation. The full year budget has now been amended to reflect

this additional allocation.

20

To help improve the monitoring of LP's financial position two revised forecasts are

planned during 2008/09. The current outturn projection for the year end 2008/09 is that

there is likely to be an underspend within the 2 per cent NOMS budget carry over

criteria, mainly due to unfilled vacancies. However, the Board should continue to

remain vigilant to ensure threats to financial health are promptly identified and

addressed.

21

For the first time a strategic plan incorporating a medium term financial plan that

covers the three financial years to the end of March 2011 has been drawn up, this

should help LP to make best use of its financial resources to achieve its strategic

objectives. The Board should ensure that the medium term financial plan is kept under

review and developed as needed to help deliver LP's priorities.

Recommendation

R1

The Board should continue to remain vigilant to ensure threats to financial health

are promptly identified and addressed.

R2

The Board should ensure that the medium term financial plan is kept under review

and developed as needed to help deliver LP's priorities.

7

National Probation Service - London

Use of resources

Value for Money conclusion

22

We concluded that the LP did have proper arrangements in place to secure economy,

efficiency and effectiveness in the use of resources against the criteria for probation

boards set out in Table 1 and we issued an unqualified value for money conclusion on

10 July 2008.

Table 1

Value for money conclusion

LP satisfied all the criteria.

Criteria

Satisfied?

The probation board has put in place arrangements for

monitoring and scrutiny of performance, to identify

potential variances against strategic objectives,

standards and targets, for taking action where

necessary, and reporting to board members.

3

The probation board has put in place arrangements to

maintain a sound system of internal control.

3

The probation board has put in place arrangements to

manage its significant business risks.

3

The probation board has put in place arrangements to

ensure that its spending matches its available resources.

3

The probation board has put in place arrangements for

managing performance against budgets.

3

The probation board has put in place arrangements to

manage and improve value for money.

3

The probation board has put in place arrangements that

are designed to promote and ensure probity and

propriety in the conduct of its business.

3

Other use of resource work

23

Our review of fraud risks reported to the Audit Committee in June 2008 included:

•

a review of specific areas identified as potentially at risk from fraud; and

•

the results of the Audit Commission's 'Your business@risk' survey that focuses on

the business risks associated with information and communication technology.

National Probation Service - London

8

Use of resources

24

We concluded that the control environment for the specific areas reviewed was

generally sound with a low risk that undetected fraud could occur. Some scope for

improvement was identified and was set out in an action plan agreed with

management. The survey's results were analysed and were found to be broadly in line

with the national comparators. Where inconsistencies with national comparators were

identified they have been explored by management and used to help inform

improvement.

25

In addition to this review the LP continues to fully participate in the Audit Commission's

National Fraud Initiative which is a data matching exercise that compares sets of data

to identify inconsistencies or other circumstances that might indicate fraud or error.

26

During the year we also undertook a survey to assess how board members and senior

managers view existing ethical governance arrangements, identifying any areas of

concern on which further action may be needed. A draft report has been issued and

discussed with management and a workshop to explore some of the issues further has

been arranged. The final report will be presented to the Audit Committee.

27

Our review of the Integrated Probation Performance Framework is nearing completion

and will be issued to management shortly and presented to the Audit Committee when

finalised.

Recommendation

R3

The Board should ensure that the recommendations from our reviews as set out in

action plans continue to be implemented in accordance with agreed timetables.

9

National Probation Service - London

Closing remarks

Closing remarks

28

We have discussed and agreed this letter with the Chief Office and the Director of

Finance and Facilities. We will present a copy of the letter at the Audit Committee on

30 September 2008, and provide copies to all Board members.

29

Further detailed findings, conclusions and recommendations on the areas covered by

our audit are included in the reports issued to the Board during the year. These are

listed in the following table.

Table 2

Report

Date of issue

Audit plan

March 2007

Annual governance report

June 2008

Opinion on financial statements

July 2008

Value for money conclusion

July 2008

Review of fraud risks

June 2008

Ethical governance

July 2008 (draft)

Annual audit letter

September 2008

30

The Board has taken a positive and constructive approach to our audit. We would like

to thank the Board for its help and cooperation during the audit.

Les Kidner

District Auditor

September 2008

National Probation Service - London

10

The Audit Commission

The Audit Commission is an independent watchdog, driving economy, efficiency and

effectiveness in local public services to deliver better outcomes for everyone.

Our work across local government, health, housing, community safety and fire and rescue

services means that we have a unique perspective. We promote value for money for

taxpayers, covering the £180 billion spent by 11,000 local public bodies.

As a force for improvement, we work in partnership to assess local public services and

make practical recommendations for promoting a better quality of life for local people.

Copies of this report

If you require further copies of this report, or a copy in large print, in Braille,

on tape, or in a language other than English, please call 0844 798 7070.

© Audit Commission 2008

For further information on the work of the Commission please contact:

Audit Commission, 1st Floor, Millbank Tower, Millbank, London SW1P 4HQ

Tel: [phone]

Fax: [phone]

Textphone (minicom): 0844 798 2946

www.audit-commission.gov.uk