Agenda item

To consider the Internal Audit work undertaken and the assurance given on the adequacy of internal controls operating in the systems audited.

49.1           The report of the Head of Corporate Services, circulated at Pages No. 97-119, was the third monitoring report of the financial year and summarised the work undertaken by the Internal Audit team since the report to the Audit Committee on 13 December 2018.  Members were asked to consider the audit work completed and the assurance given on the adequacy of the internal controls operating in the systems audited.

49.2           The Head of Corporate Services advised that the full details of the work undertaken in the period were attached at Appendix 1 to the report.  A list of audit recommendations that were due to be followed-up could be found at Appendix 2 to the report; of those recommendations, 11 had been implemented, four partially implemented and five were yet to be implemented.  It was noted that there had been no incidents of fraud or corruption reported during the period.  Gloucestershire Counter Fraud Unit had provided fraud awareness training for Members in September 2017 and over 100 staff had attended two sessions held during March 2018.

49.3           Two Council Tax audits had been carried out in respect of write-offs and recovery and a ‘satisfactory’ level of assurance had been found in both instances.  The Revenues and Benefits Manager, who had been in post since September 2017, had been tasked with looking at the policy framework and an updated write-off policy had been taken to the last Executive Committee.  Testing had demonstrated that write-offs were being carried out in accordance with the policy although there were a couple of discrepancies between what had been written-off and the information on the system and a process had been put in place to address this.  Furthermore, it had not been possible to find documentary evidence to support the last quarterly return to central government which had been completed by the previous Revenues and Benefits Manager and a recommendation had been made to ensure this was addressed.  As part of the recovery audit, the contract between the Council and the external recovery agency had been assessed.  The contract made reference to an Order Form - which should include performance measures, commencement dates and additional information regarding exit strategies - which could not be obtained during the audit.  It had therefore been recommended that a set of measurable performance indicators be developed to enable service delivery to be monitored and provide grounds for challenging the enforcement companies if, and when, necessary.

49.4           The audit on budgetary control had shown there was a ‘good’ level of assurance across the three control objectives and the approved budget had been successfully loaded to the general ledger.  There was evidence that training had been provided for budget managers and Members; monitoring reports were produced on a regular basis; quarterly meetings took place between the relevant Finance Officer and budget holder; and budget information was being reported to management and the Executive Committee.  There was also a ‘good’ overall level of control in respect of land charges although it was found that some information needed to be updated on the website.  The regulations required an annual summary of total income and costs relating to access to property records and answering enquiries which was up-to-date.  All fees had been appropriately approved and accurately applied.  It was noted that searches were being turned around within an adequate time – it was generally expected to take between 12 and 15 days but the Council was currently achieving 9 days on average.  Search requests could include Gloucestershire County Council questions; payment was taken by the Borough Council and repaid to the County Council and there was appropriate reconciliation to ensure these payments were accurate.  The Head of Corporate Services went on to explain that there was a national move to introduce one local land charges system and assurance was obtained that procedures had been put in place to ensure a smooth transfer of the land charges records to the Land Registry when a timescale had been agreed.  He indicated that he sat on the Programme Board and this would come forward as a horizon project.  An audit of payroll had also been carried out to review the effectiveness of the framework to ensure compliance with IR35 legislation and a ‘good’ level of assurance had been found in respect of that audit.

49.5           The Audit Plan also included a number of days which could be used for corporate improvement work and further support had been provided in the production of ICT risk assessment.  Consideration was being given to identifying the mitigating controls against the risks identified and to scoring of those risks.  With regard to the Tewkesbury Leisure Centre, the Internal Audit team had produced a draft monitoring guide to support the monitoring of key contract requirements.  The Head of Corporate Services went on to advise that a series of management commitments had been introduced in response to the findings of a staff survey, e.g. regular team meetings and Professional and Personal Development (PPD) appraisals, and Internal Audit would be undertaking a short piece of work to establish if these had been embedded.  The Head of Corporate Services indicated that he hoped to bring this information to the next Audit Committee.

49.6           In terms of Appendix 2 to the report, Members were advised that all recommendations due to be followed-up had been and the current recommendation status for each was shown using a RAG rating (Red, Amber, Green).  Particular highlights included updating of service-specific business continuity plans, although work on the corporate business continuity plan was ongoing. One recommendation around flood alleviation was outstanding in respect of procurement for a contract and this had been given a new implementation date of May 2018.  A recommendation around organisational awareness of the open access arrangements within the Public Service Centre had been postponed as a full review of security and data protection issues would need to be carried out at the end of August when the office refurbishment was complete.  It was noted that the three recommendations around Ubico had all been implemented.

49.7           A Member asked for further detail to be provided in respect of each of the ‘red’ recommendations which had not already been referenced.  The Head of Corporate Services advised that the first related to updating of the data sharing protocol to reflect that the Joint Waste Team, which was part of the County Council, responded to Ubico complaints.  This work had been delayed pending the update of the new protocol in line with the General Data Protection Regulation (GDPR).  The audit of Disabled Facilities Grants (DFGs) had recommended that regular review of unapproved eligible claims be undertaken and this would be taken into account in the service plan being drawn up by the new Environmental Health Manager.  The final recommendation related to a recycling protocol between the Borough Council, Joint Waste Team and Ubico but this had not been completed due to a lack of resources.  The Head of Community Services had confirmed that there were mechanisms in place for checking recycling data and a protocol would be developed by the new deadline of September 2018.  A Member raised concern that this would be a year after the initial expected implementation date which she felt was unacceptable.  The Head of Corporate Services indicated that Officers tried to ensure implementation dates were feasible when they were agreed but this was a challenging environment and there were competing priorities which could not always be foreseen.   If the recommendation continued to slip, the Committee could ask for this to be included as a specific Agenda Item in order to question the relevant Head of Service.  A Member asked why the revised implementation date was so late and was advised this was not set by Internal Audit, rather it was the date by which the Head of Service felt it could be achieved.  Another Member noted that this had slipped due to lack of resources and he sought assurance that this could be achieved within six months.  The Borough Solicitor indicated that this had been discussed by the Management Team prior to the revised date being agreed so she was hopeful this would be the case.  She reiterated that Managers were encouraged to give realistic dates from the outset based on resources and competing priorities.  It was suggested that it might be useful to assign a priority to the recommendations when they were identified in the audit so that Managers could make an informed decision about how to approach them.  The Head of Corporate Services confirmed that, as part of the audit review, consideration was being given as to how the audits could be made more meaningful, for example, by re-categorising the audit definitions, and this was something that could be taken into account during that work.

49.8           Having considered the information provided, and views expressed, it was

RESOLVED          That the Internal Audit Plan Monitoring Report be NOTED.