Agenda item

To consider the Internal Audit work undertaken and the assurance given on the adequacy of internal controls operating in the systems audited for the period February to March 2014.

10.1           The report of the Policy and Performance Group Manager, circulated at Pages No. 45-62, summarised the work undertaken in relation to the 2013/14 internal audit plan for the period February to March 2014.  Members were asked to consider the audit work completed and the assurance given on the adequacy of internal controls operating in the systems audited.

10.2           Members were advised that this was the final monitoring report for the year 2013/14 and the work undertaken was set out at Appendix 1.  As at 31 March 2014, 92% of the audit plan had been completed i.e. 23 out of 25 audits.  Of the two audits outstanding, the housing benefit creditors audit had now been completed and the opinion was included in Appendix 1.  One fraud investigation had been brought to the attention of internal audit during the period.  The work undertaken had included audits in relation to the ICT Public Services Network Code of Connection, a multi-agency network which allowed key services to communicate with other Government departments.  Whilst a satisfactory level of compliance had been found, a number of recommendations had been made regarding procedural matters.  The Business Transformation Group Manager would be bringing a report to the next meeting of the Committee to explain more about the Public Services Network and the process for accreditation.  One of the key recommendations arising from the audit in relation to housing benefit fraud was that revenues and benefit fraud activity was reported regularly to the Audit Committee.  On that basis, the Revenues and Benefits Group Manager would bring a report to the next meeting which would include an update on the impact of the transfer of the housing benefit fraud team to the Single Fraud Investigatory Service.  With regard to the procurement audit, it was essential that contracts were in place for each service area due to the enhanced Local Government Transparency Code and this was something which Officers were currently trying to facilitate.  Furthermore, a formal procedure needed to be put in place for dealing with the Community Right to Challenge in the event that any bids were received. 

10.3           The housing benefit creditors audit had investigated how benefits claimants were processed and paid and a good level of control had been found to be in place.  A Member indicated that she had been approached by a local resident who was partially sighted and had requested that the benefits department send him a letter on yellow paper, however, he had been informed by the Revenues and Benefits Group Manager that this was not possible.  She raised concern that this request could not be actioned as she felt that this was something the Council was required to do under the public sector equalities duty.  The Policy and Performance Group Manager explained that he was aware of this issue and had been informed by the Revenues and Benefits Group Manager that the letters were printed in bulk and therefore it would be difficult to identify one particular letter.  His opinion was that the request should have been accommodated and he undertook to follow this up after the meeting. 

10.4           Audits had also been completed in relation to the monitoring of the car parking contract; the housing benefit social sector size criteria, commonly referred to as the ‘bedroom tax’; and the office refurbishment.  A Member questioned why the Office Refurbishment Working Group had not met between October 2013 and June 2014 given that a decision had been taken that it would meet at the end of each phase of the contract.  The Finance and Asset Management Group Manager advised that the work had not yet commenced when the decision in relation to the frequency of meetings had been taken at the meeting in October.  Work had started in January 2014 with the first phase being completed mid-April 2014.  Unfortunately it had taken some time for the Working Group to be re-established and as such, the meeting had been arranged for June 2014 at which point Members had been appraised on the completion of phases one and two.  It was hoped that the Working Group would meet again in early September as the whole project was due to be completed by the end of August, ahead of schedule.

10.5           An audit in respect of flood alleviation grants had been given a limited level of assurance, as set out at Appendix 2 to the report, and the Environmental Health Manager had attended the meeting to take any questions which Members might have.  Members were advised that Gloucestershire County Council had given Tewkesbury Borough Council a grant of £200,000 to put towards flood alleviation schemes within the Borough, however, no formal grant terms or conditions had been put in place between the two authorities.  Whilst there was a good working relationship between the Borough and County Councils, it was important that a robust mechanism was in place for monitoring the grants and establishing accountability, ownership and ongoing maintenance responsibility for each of the schemes.  The grant had been put towards funding six schemes and only one had been completed to date.  This was a flood bund at the Leigh which was being maintained by the Parish Council, however, there was no evidence of a formal agreement being in place at the time of the audit.  The Environmental Health Manager advised that the Borough Council had another opportunity to bid for Gloucestershire County Council grants and, as such, it was important to ensure that the audit recommendations were implemented swiftly.  A number of actions had been put forward in order to address Recommendation 1 - a robust mechanism for monitoring the flood alleviation grants should be established.  With regard to the first recommended action, discussions had taken place with the Lead Officer at Gloucestershire County Council in terms of how the Borough Council could enter into a formal agreement for grants and he had indicated that he would be happy to work with the Borough Council to ensure compliance with this action.  With regard to the second recommended action, that progress reports should be enhanced with additional details, the Environmental Health Manager explained that, to date, information had been fed back to County Council Officers in a format of their choosing and the audit had been useful to identify where the recording mechanisms fell short.  He was working with the audit team to ensure that proper processes were in place to capture information and this would be shared with the Lead Officer at the County Council.  He went on to advise that, in respect of the third recommended action, the progress of the partnership schemes had been reported to the Flood Risk Management Group at its meeting on 16 June and it was proposed to continue to provide updates at each meeting.  This would also form part of the quarterly report to the Overview and Scrutiny Committee on the progress of the Flood Risk Management Group.  With regard to the fourth recommended action, the Lead Officer at the County Council had confirmed that he was happy to provide regular reports in respect of the schemes which the County Council was leading on.  Electronic project folders had now been set up within the drainage drive and these would be kept up to date with relevant documentation which complied with recommended action five.  Recommended action six, a review of the capital/revenue split and use of cost codes for the work undertaken in conjunction with financial services, had been noted and would be implemented in due course.  In terms of Recommendation 2 - accountability, ownership and ongoing maintenance responsibility should be established for each of the schemes and agreements but in place, the Environmental Health Manager explained that the flood bund scheme at the Leigh had been driven by a community group and it had always been envisaged that it would be maintained by that group going forward.  The group had confirmed that it would be happy to enter into an agreement to ensure that this was the case. 

10.6           In response to a Member query, clarification was provided that, despite the lack of formal grant terms, there had been no adverse impact upon payments or projects.  A Member questioned whether the report on the progress of the partnership schemes which was provided to the Overview and Scrutiny Committee was the same report that was taken to the Flood Risk Management Group.  In response the Environmental Health Manager explained that the Flood Risk Management Group had been established with the primary purpose of overseeing the Flood Response Action Plan which had been compiled following the floods in 2007.  The Flood Response Action Plan had been completed earlier in the year and a report had subsequently been taken to the Overview and Scrutiny Committee meeting recommending that the Flood Risk Management Group continue to meet and that it would provide regular reports to the Committee on progress against its work plan.  In addition to the updates on the partnership projects, the Flood Risk Management Group received updates and information in relation to a range of flood risk matters including the internal work on the watercourses owned by the Council, other grants etc.  The reports received by the Flood Risk Management Group were summarised in the report which was taken to the Overview and Scrutiny Committee.  The Member went on to query who summarised the report and whether the terms and conditions between the Borough and County Councils could be formalised by the Flood Risk Management Group, or whether this needed to be done by another Committee of the Council.  The Environmental Health Manager reiterated that the report taken to the Overview and Scrutiny Committee was a summary of what had been considered by the Flood Risk Management Group.  He was responsible for writing the report to the Committee which was approved by the Environmental and Housing Services Group Manager.  The Borough Solicitor indicated that, if a legal contract was required, this would be picked up operationally and would not need to go before a Committee.  If it came to light that this was not being done then the matter would be taken to the Executive Committee.  The Member raised concern that the Executive Committee had not been informed since this issue had been identified and she was advised that the problem had been picked up by the audit and was being monitored as a result.  The audit had provided an opportunity to correct the issue and the Executive Committee would only get involved if Officers failed to take steps to do this.  The Policy and Performance Group Manager clarified that the audit would be subject to follow-up by internal audit and would be brought back to the Audit Committee in due course.

10.7           With regard to a query in respect of the corporate improvement work on the contract registers which had been programmed for quarter 1 2014/15, the Policy and Performance Group Manager explained that this was being facilitated by the internal audit team and had been discussed by the Corporate Leadership Team earlier that morning.  It was a requirement of the Local Government Transparency Code (2014) which had been highlighted as a significant governance issue within the Annual Governance Statement.  The internal audit team was currently working to pull the contract registers together; he provided assurance that the Committee would be notified should there be any obstructions going forward.

10.8           A Member sought further information regarding the fraud investigation.  The Policy and Performance Group Manager advised that this had related to the electoral registration annual canvass.  The issue had been identified by the electoral registration team and had been referred to the Police for investigation.  The Borough Solicitor clarified that the investigation had not resulted in prosecution and had instead involved a restorative justice solution.  In terms of the issues this had raised for the Council, the main concern had been to ensure that there was no adverse impact on any electors.  She explained that the electoral registration team had immediately remedied the situation once it had been identified and nobody had therefore been disadvantaged.

10.9           Having considered the information provided it was

RESOLVED          That the internal audit plan monitoring report be NOTED.