Agenda item

To consider the internal audit work completed and the assurance given on the adequacy of internal controls operating in the systems audited.

13.1          The report of the Head of Corporate Services, circulated at Pages No. 147-168, was the final monitoring report of the financial year and detailed the findings of Internal Audit for the remaining audits within the Audit Plan 2017/18.  Members were asked to consider the audit work completed and the assurance given on the adequacy of the internal controls operating within the systems audited.

13.2          Members were advised that full details of the work undertaken were attached at Appendix 1 to the report and Appendix 2 included a list of all recommendations reviewed in the period and their status.  It was noted that a number of recommendations had been identified as a result of a previous audit of the leisure centre, particularly in respect of the importance of client monitoring, and a follow-up audit had provided good assurance that those recommendations had been implemented.  An audit of the Council’s Occupational Road Risk Policy had found that the policy had been appropriately approved and communicated to staff, and Managers/Heads of Service had received training and were carrying out checks.  This was something which would be incorporated into the new HR ‘Breathe’ system and would be subject to a further audit review when the system was live.  As such, a ‘good’ audit opinion had been issued.  It was noted that volunteers were incorporated in the policy; however, it was considered unlikely that they would be classed as driving whilst at work and therefore the risk was minimal.  Given the difficulty enforcing this policy it was considered reasonable not to complete these checks, although volunteers should be made aware of the policy.  The audit on housing benefit and the current controls in place in respect of Universal Credit had resulted in a good level of assurance and the arrangements in place between the Council and the Department for Work and Pensions were adequate.  Training had been provided for staff on the introduction of Universal Credit, the Council’s website had been updated with relevant information and a leaflet had been produced for residents.  The Public Services Centre refurbishment had also been audited and there was a satisfactory level of control in relation to the project management arrangements. In terms of risk management, a detailed risk register was in place for the project which identified key risks and was frequently updated.  The risks were reported at monthly progress meetings and discussed at the Transform Working Group.  Health and safety issues formed part of the risk management process and were also discussed at meetings.  With regard to the budgetary element of the project, it was noted that there had been an increase from £1.8M to £2.2M due to a change in the design brief which had been reported to Transform Working Group.  Overall there was a good level of budgetary control and audit testing on expenditure had confirmed it was valid and within the remit of the project.

13.3           In terms of corporate improvement work, the Internal Audit team had worked with Housing to address an outstanding audit recommendation relating to the storage of personal belongings for homeless individuals and discussions had taken place in relation to a draft specification.  Prior to the introduction of the General Data Protection Regulation (GDPR) in May 2018, work had also been carried out to quality assure the Council’s retention schedules for the go live date.  Trade waste debt recovery had been an outstanding audit recommendation since 2015/16 and corporate improvement days had been used to review the level of debt for the service and test the procedures currently in place.  The audit review had established that the majority of customers with debt exceeding a year, and/or with one or more outstanding debts, were still receiving collections.  34 customers had been identified who should potentially have their service suspended therefore this recommendation was still outstanding and was included in Appendix 2.  In addition, Internal Audit had helped to review the processes and controls in place for the dissemination of Section 106 monies.  A survey undertaken by staff some 18 months ago had resulted in a number of management commitments and Internal Audit had been tasked with identifying how well these had been embedded.  This work had confirmed that team meetings were held on a monthly basis for the majority of services and, where a monthly meeting did not take place, this was reasonable for the size of the service; a core briefing note of key issues arising from Management Team meetings was posted on the intranet; staff briefings were programmed in advance on a quarterly basis and attendance had improved dramatically following a change in timings and since all staff had been formally invited through their Outlook diaries; 12 out of 20 staff confirmed they had had a Personal and Professional Development  (PPD) meeting and a further three had stated they had regular one to one’s with their manager – there was a management instruction that all PPDs must be completed by September; and it had been established that sickness was being managed in accordance with the Council’s Absence Management Policy.

13.4          With regard to the outstanding audit recommendations, attached at Appendix 2, it was noted that there were a number of recommendations on cemeteries one of which had only been partially implemented; this was around payments and Members were informed that a new platform was in place and ready to go live imminently.  A recommendation about the monitoring of Freedom of Information (FOI) requests was outstanding as priority had been given to the garden waste project.  The FOI system had been in place for 18 months and was a much-improved system; however, it had been recommended that this be reviewed after 12 months and a new target date had now been set for the end of September 2018.  The Head of Corporate Services explained that there was a long-term recommendation outstanding regarding the Council’s discretionary policy and the changes to business rates introduced by the Localism Act 2011; this would be picked up over the summer as part of a wider agenda in relation to economic development.  The audit of risk management had identified that refresher training should be provided to staff and Members involved with the risk management framework and a session had been held for Members and senior management in June.  It was noted that a new Corporate Risk Register was currently being developed and follow-up training on risk appetite would be held in September and would inform the scoring of the register.  Two audit recommendations were outstanding in respect of trade waste, one around debt recovery and one to ensure it was operating on a commercially viable level.  It was intended to undertake a review of the service in its entirety and this was a Council Plan action.  Trade waste had also been discussed by the Overview and Scrutiny and Executive Committees where assurance had been given that the full review would be undertaken by March 2019.

13.5           With regard to the housing benefit audit, a Member noted that a sample of 20 Universal Credit accounts had found that seven had variances in the information manually input into the system and two additional cases had an incorrect housing benefit stop date.  Furthermore, a sample of five overpayment returns had found one had been incorrectly coded.  This meant that half of the 20 sampled had something wrong with them and yet the audit had still found a good level of assurance.  In addition, she queried whether the additional training that was to be provided to staff by the end of July 2018 had been delivered.  In response, the Head of Corporate Services explained that, of the seven variances, three had not been relevant so, overall this was a good materiality level.  Whilst some had been incorrectly inputted this was very low and was not a significant financial risk.  In terms of the sample of five overpayments, the one which had been incorrectly coded had been attributed to an internal sundry debt and should have been a Department for Work and Pensions error therefore this was not for the Council to chase.  In terms of the training, he understood this had taken place.  Overall the framework for how the team had handled Universal Credit was good.

13.6          In response to a query regarding the overspend on the Public Services Refurbishment, the Head of Finance and Asset Management advised that this was as a result of taking the opportunity to do additional work which was planned for future years in order to benefit from efficiencies associated with already having the contractors on site.  This had been funded through asset management reserves which had already been approved and he had delegated authority to expend.

13.7          Having considered the information provided, it was

RESOLVED          That the Internal Audit Plan Monitoring Report be NOTED.