Audit Committee - 060427 - AAIL 2004-05 - App 1
Description
Three Rivers District Council Annual Audit and Inspection Letter 2004/05 March 2006 Three Rivers District Council Contents 1 Introduction and key issues................................................................................ 1 2 Direction of travel ............................................................................................... 3 3 Key Lines of Enquiry........................................................................................... 6 Appendices A Interim Annual Audit and Inspection Letter 2004/05 Three Rivers District Council 1 Introduction and key issues Introduction and scope 1.1 This Annual Audit Letter summarises the findings of the audit and inspection work at Three Rivers District Council (‘the Authority’) for the year ended 31 March 2005. Following a change to the timetable for reporting Direction of Travel work and Key Lines of Enquiry judgements for district councils, the statutory Annual Audit and Inspection Letter is being reported by 31 March 2006 in order to incorporate the results of those pieces of work. 1.2 We have previously reported the bulk of 2004/05 audit and inspection work in an interim Annual Audit and Inspection Letter, presented to Scrutiny, Overview and Audit Committee in October 2005. This interim Letter is included in this statutory report as Appendix A. 1.3 This statutory letter builds upon the audit and inspection work set out in Appendix A and ...
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Informations
| Publié par | Nuzong |
| Nombre de lectures | 93 |
| Langue | English |
Extrait
Three Rivers District Council
Annual Audit and Inspection
Letter 2004/05
March 2006
Three Rivers District Council
Contents
1 Introduction and key issues ................................................................................ 1
2 Direction of travel ............................................................................................... 3
3 Key Lines of Enquiry........................................................................................... 6
Appendices
A
Interim Annual Audit and Inspection Letter 2004/05
Three Rivers District Council
1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10
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Introduction and key issues Introduction and scope This Annual Audit Letter summarises the findings of the audit and inspection work at Three Rivers District Council (the Authority) for the year ended 31 March 2005. Following a change to the timetable for reporting Direction of Travel work and Key Lines of Enquiry judgements for district councils, the statutory Annual Audit and Inspection Letter is being reported by 31 March 2006 in order to incorporate the results of those pieces of work. We have previously reported the bulk of 2004/05 audit and inspection work in an interim Annual Audit and Inspection Letter, presented to Scrutiny, Overview and Audit Committee in October 2005. This interim Letter is included in this statutory report as Appendix A. This statutory letter builds upon the audit and inspection work set out in Appendix A and reports the two elements of audit and inspection work carried out in the period from November 2005 to February 2006, namely the Direction of Travel inspection work and Key Lines of Enquiry audit work. The audit was been carried out in accordance with the Audit Commissions Code of Audit Practice (the Code) and Statement of Responsibilities of Auditors and of Audited Bodies . The responsibilities of Inspectors are included in section 10 of the Local Government Act 1999. The contents of this report should be viewed in the context of this more formal background. Background To ensure that councils receive a tailored and seamless service, integrated with the work of other inspectorates, the Audit Commission has appointed a Relationship Manager for each council, who is the primary contact with you, and for the interface between the Audit Commission and other inspectorates. Your Relationship Manager is Gary Hammersley. The Appointed Auditor, PKF (UK) LLP, is the primary contact for the delivery of the core audit. The main objective of the auditor is to plan and carry out an audit that meets the requirements of the Code of Audit Practice by adopting a risk based approach that focuses work on your significant financial and operational risks. The core audit is structured around three main elements: • aspects of performance management; • financial aspects of corporate governance; and • opinion on accounts (including core financial systems). The Outline Audit and Inspection Plan for 2004/05 was presented to Members in October 2004. Key conclusions In overall terms the Authority has made good progress in implementing the action points arising from the Improvement Plan that was completed following the Comprehensive Performance Assessment in 2004. There are a number of the on-going actions arising from this process that are being carried forward through the strategic planning process, the corporate governance action plan and other performance monitoring arrangements. Through the development of the 2006-2009 Strategic Plan the Authority has taken steps to more clearly identify its priorities, which are being more closely aligned with the developing service plans. Performance monitoring arrangements are also being reviewed to ensure that they more clearly align to the objectives and priorities in both the strategic and service plans.
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Introduction and key issues 1
Three Rivers District Council
1.11 1.12
Risk management arrangements have been further developed to include risk assessment within the service plans, although it is recognised that some further work is required to test the robustness of the identified risks and controls and to establish a process for the regular review and management thereof. The Authority has achieved a sound overall Use of Resources score of 2 overall (adequate performance), and could improve to an overall Level 3 score with some further effort in key areas and including embedding changes made to the financial planning/budgeting processes for 2006/07. An Action Plan for reinforcing and improving arrangements has been prepared and issued to Officers.
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Introduction and key issues 2
Three Rivers District Council
2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10
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Direction of travel Summary The Councils overall performance has generally improved, despite a dip in 2004/5 when the Council was investing in a range of corporate systems and processes. Since 2002/03, the Council has made solid progress in performance across the range of Council activity. In 2003/04, the improvement was substantial, with sixty seven percent of performance indicators above the median. In the following year, performance fell back, with fifty two per cent of PIs above the median. This dip coincided with significant changes in the way the Council planned its activity, with a more systematic approach to achieving the Councils aims. Since then, there is PI data, as yet unaudited, suggesting that those changes are having a positive effect on performance, with improvements in twelve of the performance indicators below the median. Post-CPA improvement planning has been structured around the Councils four key themes: - safe - sustainable - prosperous - healthy. Corporate governance is currently being added to this. In doing this, the Council has addressed each of the areas for improvement identified in the CPA report. Findings Prioritisation The Council has made a number of improvements to prioritisation processes. The Corporate Plan is now on a three year cycle, linked to medium term financial planning. The priorities are defined more closely, and provide a clear framework for the cascade down through service plans to work plans and individual objectives. Enhancements to local consultation processes, including a greater emphasis on harder to reach and minority groups, has ensured a closer fit between the Community Strategy, the Corporate Plan, and the views of the whole community. Activities and their resourcing are now ranked according to a matrix which draws together all local, corporate and statutory factors in weighted scores. Problems of local concern, such as teenage anti-social behaviour, can thus be picked up and tracked through the system right through to new policies with measurable outcomes (in this instance, the provision of free swimming in school holidays leading to a decrease in anti-social activity). But as the Council recognises, there is more work to be done. The balance of activity and PIs across priorities needs further review. For example three of the four themes have a array of programmed activities and related performance indicators while the Healthy theme has fewer programmes and no performance indicators. Ambition The Council has given a sharper focus to its ambitions for the coming years. Improved prioritisation has ensured that staff at all levels have a much clearer sense of direction and purpose. It is also clear that the Council has been drawing local people closer to corporate policy-making through enhanced consultation and communication. The Council has also adopted and is implementing a more ambitious approach to issues of equality and diversity. Future plans
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Direction of travel 3
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The Council is developing a more strategic approach to future planning. The most obvious example of this is the integration of medium term strategic and financial planning, with the recent development of a five year housing strategy is a good service-specific example. This strategy has been developed to address both persistent underperformance (for example, the low proportions of planned maintenance) and issues of fundamental importance to the Council as a whole (the Stock Options ballot of March 2007). In other sectors too, such as leisure, there is more evidence of a multi year approach to service improvement. The appointment of a Partnerships Manager has also had a positive impact on the breadth of the planning process, with a more consistent approach to outreach and partnership. Work is underway on future plans for other key service areas, such as revenues and benefits and building regulations, with neighbouring local authorities. The new housing strategy is also a good example of a systematic approach to partnering. It is therefore a sound basis from which to explore options for a more corporate-wide approach to partnering. Performance Management Performance management has been further improved in the past eighteen months, thereby building on the strengths recognised at the time of CPA. Service Plans are simpler and more robust, and both members and officers have greater confidence in the monitoring systems currently in place. A greater degree of challenge has been built into the system, with member panels now able to review and revise all eighteen directorate service plans. Departments can now apply for a six month injection of extra resources in the event of backlogs or short staffing. The investment of effort in key service areas has resulted in very high recycling rates (albeit with consequences for performance indicators such as volume per household). Internal communication has improved, at all levels. There is, however, more to be done. The performance dip in 2004/5 was not anticipated, and there is no evidence that the reasons for this have been analysed (most staff seemed unaware of it). There is little in the way of benchmarking built into the system (eg in service plans) leaving departments to do limited research on their own. There is no system of oversight geared to the Councils themes; for example Project Boards to periodically review progress on Safe or Prosperous, though this is now under discussion. There is no system of internal efficiency/VFM review, either for Departments or themes. There is no IT-based system for generating PI data (though a tender document has now been issued) and departments are slow at coming up with returns and the website needs to improve. Inspection and Other Performance Work Update Leisure The Audit Commission reviewed the Councils Leisure Services in March 2005. The report concluded that the service was fair with promising prospects for improvement. Strengths included a wide range of services for all age groups, a measurable impact on young people and close links between activities and priorities. Weaknesses included communication with local residents and low satisfaction rates. An improvement programme was agreed and has now been implemented. Trend in key performance indicators 2002/3 to 2004/5 Since 2002/3, 50% of key PIs have improved, with 52% of PIs now above the median. There was a substantial improvement in 2003/4, which put 67% of indicators into the upper quartiles, with a dip, at least in comparative terms, in 2004/5. Unaudited data for the first three quarters of 2005/6 suggests a resumption of improvement across the board.
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Direction of travel 4
Three Rivers District Council
2.21
There were continuing performance weaknesses in some aspects of planning (especially development control), community housing (unplanned maintenance), benefits processing and waste (though at least two of these are due to success in raising levels of recycling well beyond DEFRA targets).
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Direction of travel 5
Three Rivers District Council
3 3.1
3.2
3.3 3.4
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Key Lines of Enquiry Introduction The Use of Resources judgements evaluate how well the Authority manages and uses its financial resources. They are a more stringent test of performance than the auditor scored judgements (ASJs) that have formed part of the comprehensive performance assessment (CPA) framework up until 2004. They focus on the importance of having sound and strategic financial management to ensure that resources are available to support the Authoritys priorities and improve services. There are five themes covering • Financial reporting • Financial management • Financial standing • Internal control • Value for money. The Audit Commission has determined the overall Use of Resources score by combining our separate scores for each of the themes covered. The score is determined by reference to the following scale: Level Performance 1 below minimum requirements inadequate performance 2 only at minimum requirements adequate performance 3 consistently above minimum requirements performing well 4 well above minimum requirements performing strongly Each judgement area consists of a number of key lines of enquiry and areas of audit focus and evidence. There are also descriptions of performance against each key line of enquiry showing performance levels 2, 3 and 4. The Key Lines of Enquiry (KLoE) scoring scale differs notably from that applicable to the ASJ regime, with KLoE reflecting the Audit Commissions Harder Test. Where previously adequate might have been scored as a 3, KLoE guidance would dictate a score of only 2. Further, achievement of higher performance levels is more difficult and arrangements must be seen to be embedded. The KLoE scores awarded need to be seen in this context.
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Key Lines of Enquiry 6
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3.5
3.6 3.7 3.8 3.9 3.10
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Results The Authority has been awarded an overall score of 2 . The underlying component scores for each of the Key Lines of Enquiry and the sub-themes are as follows: Theme and Key Line of Enquiry Score 1.1 Annual accounts 2 1.2 Promotion of external accountability 2 1 Financial Reporting overall score 2 2.1 Medium term financial strategy, budgets and capital programme 2 2.2 Managing performance against budgets 2 2.3 Managing the asset base 1 2 Financial Management overall score 2 3.1 Managing spending within available resources 2 3 Financial Standing overall score 2 4.1 Managing significant business risks 2 4.2 Maintaining a sound system of internal control 3 4.2 Arrangements to promote and secure probity and propriety 2 4 Internal Control overall score 2 5.1 Current achievement of good value for money 2 5.2 Managing and improving value for money 2 5 Value for Money overall score 2 Overall score for the Authority 2 Analysis The scores awarded reflect the solid foundations in place, and are being further developed by the Authority, as referred to in the Direction of Travel statement. The Authority has only scored below Level 2 in one area, managing its asset base, this being an area of poor performance that was noted by Officers in their self assessment. In all other areas it is generally demonstrating at least some of Level 3 criteria for each theme. The Authority was notably close to a Level 3 score in KLoEs 1.1, 1.2 and 4.1. Had the Level 3 criteria been met for all of these sub-criteria, the cascade effect would have been to raise both the overall Financial Standing and Internal Control theme scores to Level 3, although this would not have increased the overall score to a Level 3. The Authority is therefore, using the current scoring weightings, progressing towards the achievement of a Level 3 (or performing well), but currently falls short. The achievement of level 3 in any future assessments is dependent on the Authority reaching the required performance against all of the listed criteria, not just those in bold, as this distinction between criteria will be removed. National and regional context We are unable at this point in time to provide national or regional analysis of scores to provide any context for the Authoritys scores outlined above. Analysis had been expected to be received from the Audit Commission, but, given the need to allow for any appeals against scores awarded, this will not now be able to be provided until after the publication
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Key Lines of Enquiry 7
Three Rivers District Council
3.11
3.12
embargo relating to local elections has been lifted. Local analysis, in co-operation with our regional Audit Commission colleagues, has also been forbidden.
The way forward
A detailed report, setting out scoring and areas that should be addressed to reinforce or progress arrangements, has been prepared and issued to officers.
We have no Member-level recommendations to make in this Letter.
March 2006
Key Lines of Enquiry 8
Three Rivers District Council
Appendix A interim Annual Audit and Inspection Letter 2004/05 The following is a repeat of sections 2 and 3 from the Interim Annual Audit and Inspection Letter that was presented to Members in October 2005. Results of Audit Work Aspects of performance management Improvement planning During the year the Authority has worked to implement the issues identified in its Improvement Plan and we have held quarterly meetings to monitor progress. Project initiation documents have been developed to monitor the implementation of key projects and in Autumn 2004 additional resources were redirected towards priority areas to improve performance. The success of this was mixed, which suggests that the linkage between performance monitoring and performance management could be further improved in some areas. A number of further actions are currently in progress to enhance the performance management areas including: • The development of a Strategic Plan for 2006-2009 which more clearly identifies the Councils priorities and, in particular, areas of lower priority. • Responsibility for delivering the Strategic Plan has been split between the Management Board and the objectives are being cascaded into service plans, which include an assessment of risks within each plan. • The monitoring process for the Strategic Plan is being reviewed, to provide greater focus on the measurement of outcomes than processes. As these changes are currently in progress their success has yet to be proven, however they should provide a sound platform for target setting and monitoring going forward. The extent to which target outcomes are achieved, will then be more clearly linked to the management actions taken in response to the monitoring information available. Members should continue to monitor progress with the development of the performance management arrangements, ensuring that action results in improved outcomes for service users. Inspections The inspection of cultural services which was published in April 2005 rated the services as fair with promising prospects for improvement. There is a good range of provision covering built facilities and targeted outreach development activities and evidence of cultural services contributing significantly to two of the councils local area priorities. However, the services have achieved lower than average satisfaction levels and there has been a lack of strategic direction to what the services have been trying to achieve. Improvement prospects are promising because there are now strong links with the councils corporate strategy and the community strategy and a clear intent to resource the contribution which cultural services can make in these areas. There are robust plans for engaging with vulnerable or disadvantaged groups within the community and an increased emphasis on working with the voluntary sector. Members should continually monitor and assess the contribution of cultural services to the councils priorities, ensuring that the aims and objectives for the services are aligned to the corporate strategy. Preparation for future CPA The CPA process for district councils is still under consultation, although it has been confirmed that there will be no formal published rating of districts in 2006, other than the Use of Resources judgements and the Annual Direction of Travel Statement. We have held discussions with officers on the arrangements for the Use of Resources judgements and our requirements for the provision of evidence against the Key Lines of Enquiry criteria which support these judgements. The findings from this work will be reported in the Annual Audit and Inspection Letter to be published in 2006.
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Appendix A interim Annual Audit and Inspection Letter 2004/05 9
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