To consider the audit work undertaken and the assurance given on the adequacy of internal controls operating in the systems audited for the period April to August 2015.

22.1           The report of the Corporate Services Group Manager, circulated at Pages No. 164-204, was the first monitoring report of the financial year and summarised the work undertaken by the Internal Audit team during the period April to August 2015.  Members were asked to consider the audit work completed and the assurance given on the adequacy of internal controls operating in the systems audited.

22.2           Members were advised that the Internal Audit team consisted of two full time equivalent posts.  Due to maternity leave, one of the posts had been covered by a secondment arrangement, however, that employee had recently been successful in obtaining a permanent position within the Corporate Services team and a temporary resource would need to be brought in between now and the end of quarter 3.  It was noted that no incidents of fraud, corruption, theft or whistleblowing had been reported during the period.  As advised at previous Audit Committees, the Internal Audit team had been commissioned by Tewkesbury Town Council to undertaken its internal audit.  The 2014/15 year end audit had concluded during the first quarter of 2015/16 and had been formally reported to the Town Council at its Council meeting on 29 June 2015.  An audit plan had been approved and the delivery of the action plan was monitored by the Town Council’s Finance Committee.

22.3           Full details of the work undertaken were attached at Appendix 1 to the report and a list of audits within the 2015/16 Audit Plan and their progress to date could be found at Appendix 2 to the report.  The Corporate Services Group Manager drew attention to the Local Government Transparency Code audit set at Page No. 167 of the report.  He explained that there was a Government drive to ensure that Councils were accountable for their spending and there had been a need to ensure that the relevant information was published on the Council’s website in accordance with the Code.  A number of days had been allocated within the 2015/16 Audit Plan and the audit had indicated that the Council was generally compliant overall.  The Department of Communities and Local Government was not monitoring compliance and therefore risk was minimal, however, it had indicated that it would react if complaints were received under the Freedom of Information Act.  It was noted that improvements were currently being made to the system used for recording Freedom of Information Act requests and this would be maintained by the Corporate Services team.  Members were informed that a limited opinion had been issued in relation to the audit of the complaints framework.  The main concerns were around the way that the data was logged as some entries were not complete; access to the log meant that there was potential for live entries to be deleted; the log did not record the date acknowledgements were sent which meant that it could not be demonstrated that they were being sent within the requisite time period; and there was no monitoring of complaints until the six monthly report was produced for the Overview and Scrutiny Committee.  The Council generally received a low number of complaints but it was felt that the system for recording complaints could be more robust and that improvements could be made to allow trend analysis and corporate learning.  The recommendation arising from the review was for a fundamental review of the complaints framework which would commence the following month.  In response to a Member query, the Corporate Services Group Manager advised that an update would be brought to the next meeting of the Committee in accordance with the usual procedure for those audits with a limited or unsatisfactory opinion.  A Member questioned whether changes would be implemented throughout the course of the review, as opposed to waiting until the review had been completed, and was advised that some things could be implemented quickly, for example, access to the spreadsheet for recording complaints, however, some actions, such as the online system for recording Freedom of Information complaints, would take longer to put in place.

22.4           With regards to the business rates audit, there was a good level of assurance that the information provided in the annual NNDR3 return was accurate and the supporting documents were good quality, which reiterated Grant Thornton’s audit findings, discussed under an earlier Agenda item.  In terms of the Repair and Renew Grants audit, Members were informed that approximately £570,000 had been obtained through the scheme.  The Memorandum of Understanding between the Council and Defra required the Council’s Chief Internal Auditor to give an audit opinion to provide assurance that invoices submitted by the Council were in compliance with the grant scheme.  The Corporate Services Group Manager advised that the grants that had been reviewed had complied with the criteria of the scheme and the quarterly invoices had been raised and sent to Defra within the agreed timescales, therefore, the overall opinion was that there was a satisfactory level of control in terms of conforming to the scheme.  A Member queried whether the work which had been carried out to properties would be subject to inspection and the Environmental and Housing Services Group Manager explained that, whilst some were carried out, it was impossible to inspect all of the properties so there was some reliance on the invoices provided by builders.  Members were advised that a 5% inspection sample was required as a minimum and that level had been exceeded.  The Corporate Services Group Manager went on to advise that the Council was required to provide a return to the Department of Communities and Local Government to confirm compliance  with the conditions attached to the Disabled Facilities Grant determination.  A sample of grant applications had been reviewed and it was found that they were processed in accordance with the regulations.  The Overview and Scrutiny Committee had established a Working Group to review the Disabled Facilities Grants process and the Working Group had met for the first time the previous week.  The Disabled Facilities Grants process was also part of the Environmental Health systems thinking review.

22.5           Members were informed that an unsatisfactory opinion had been issued in relation to the tree inspection audit.  The manual records demonstrated that tree inspections had taken place in both high and medium risk land assessment areas, however, there was limited assurance as to the robustness and completeness of the inspection process as there was no clear audit trail from the land assessment to the inspection records; the manual records did not retain sufficient detailed information e.g. tree species, map co-ordinates; several areas of land were still awaiting investigation in respect of land ownership liability; tree tag reference numbers had been duplicated for different trees on the same site; and some trees had been inspected and tagged in error as the maps did not show the location of Council land.  Inspection information within the Uniform system was found to be incomplete and could not be used to produce notification reports for Ubico to generate next inspection dates.  The Environmental and Housing Services Group Manager provided assurance that she was working with the Asset Manager to rectify the issues and she indicated that new hardware and software was being trialled which could be used on site and could pinpoint trees to within 10cm.  A Member felt that the system for reporting back to Councillors when they had raised issues with a tree needed to be improved so that they were able to keep members of the public abreast of what action was being taken.  Another Member requested details of protected trees on Council land and the Environmental and Housing Services Group Manager undertook to ensure that both requests were addressed.  A Member questioned how much the new equipment was likely to cost and was advised that the system which the Asset Management team was looking at could be used to manage other assets such as play areas.  There would be a one-off cost of approximately £4,000 to purchase the tablets which were needed and an ongoing cost of approximately £4,000.  It was understood that the tablets came with pre-loaded templates and that certain fields must be completed before the user would be allowed to move on which would address some of the issues which had been identified during the audit.  In response to a query as to whether the Tree Panel could be used to carry out inspections, the Borough Solicitor clarified that the Tree Panel was in place to assess the amenity value of trees protected by Tree Preservation Orders in the event of an appeal; this was a completely different function and was unrelated to technical risk-based assessment of trees which was the focus of the audit.  The Corporate Services Group Manager indicated that a progress report would be brought to the Audit Committee meeting in March 2016.

22.6           In terms of the car park audit, Members were advised that there was a satisfactory level of control in terms of the income relating to car parking tickets, permits and penalty notices being banked and allocated correctly to the general ledger, however, there was a minor issue regarding the recovery of unpaid direct debit instalments in relation to permits.  The main items of expenditure claimed in relation to the car parking contracts of Security Plus and APCOA were verified for accuracy prior to payment and the contracts were well-managed and maintained.  It was noted that corporate improvement work had been carried out in respect of the ICT asset inventory and fraud arrangements.

22.7           Appendix 3 to the report contained a summary of all audit recommendations and their status.  The Corporate Services Group Manager explained that there was a need to consult with Group Managers as to whether the recommendations contained within the audits added value to the organisation and that was a piece of work which needed to be undertaken.  In addition, he explained that it was a requirement of the Public Sector Internal Audit Standards that an independent review of the Internal Audit section be carried out every five years.  It was intended that this would be implemented in the latter part of 2016 and a report would be brought to the Audit Committee setting out a brief for the review.

22.8           Having considered the information provided, it was

RESOLVED          That the Internal Audit Plan Monitoring Report be NOTED.