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Agenda item

Internal Audit Plan Monitoring Report

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

Minutes:

10.1           The report of the Head of Corporate Services, circulated at Pages No. 67-86, summarised the work undertaken by the Internal Audit team since the last Committee.  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          The Head of Corporate Services explained that the report summarised the work completed by internal audit during the period January-March 2020 and full details of the audits undertaken were attached at Appendix 1 to the report.  A list of the audit recommendations that were due to be followed-up could be found at Appendix 2 to the report; of the 15 recommendations, 11 had been followed-up and four could not be followed-up due to the responsible officer being involved in the flood emergency response.  As previously reported, all recommendations would need to be reviewed, particularly in terms of implementation dates, to ensure they remained relevant and feasible in light of the impact of COVID-19 on service delivery.

10.3           Members were advised that an audit of the risk management strategy had demonstrated there was a satisfactory level of control and the Council had a Corporate Risk Register in place that was monitored by the Corporate Management Team and reviewed at each Audit and Governance Committee – it was noted that this was not included as an item on the Agenda for the present meeting due to the impact of COVID-19 but would be brought to the September meeting.  All projects required a completed risk register prior to consideration by the internal Programme Board which had also been found satisfactory.  It was noted that the Serious and Organised Crime Checklist suggested that the Council should have a fraud risk register in place and the Counter Fraud Unit had been tasked with developing this in accordance with the recommendation.  The audit of discretionary housing payments had been undertaken following a report to Executive Committee in January 2020 which had requested £40,000 from reserves to support the budget.  The updated Discretionary Housing Payment Policy had been approved by Executive Committee in March 2018 and key elements of the policy had been reviewed against a sample of applications during the audit in order to ensure that payments were being awarded in line with policy.  Members were informed that three months of bank statements must be provided by the applicant; however, the audit had shown that, in seven of the nine cases sampled, bank statements had not been provided.  This was essential in order to confirm the accuracy of the claimant data and mitigate potential fraud or overpayment.  Of the two applications where bank statements had been provided, no further checks had been carried out to verify this information, for example, irregular credit may indicate another income source so there was an expectation this would be followed-up.  A personal budget sheet must also be completed as part of the application but the audit had found there was limited review or challenge of that information, for instance, the level of expenditure on non-essential items such as cigarettes, satellite television, alcohol etc. and it was recommended that this be reconsidered as part of the annual review.  In addition, applicants were required to demonstrate attempts to move to more suitable accommodation, where appropriate, as discretionary housing payment was intended to be a short term solution to help with rent shortfalls; however, in a  number of cases, applicants had been found to be under-occupying social housing and not bidding on suitable accommodation - one of the applicants had been receiving discretionary housing payments since 2011 which went against the entire ethos of the scheme.  Given the findings of the audit, it was not possible to give assurance that the payments were being made in accordance with the policy and an unsatisfactory audit opinion had been issued as a result.  The Revenues and Benefits Manager indicated that she was incredibly disappointed with the unsatisfactory opinion, particularly as she had requested the audit, but it had highlighted issues with the assessment process which she had thought might be the case.  She explained that she had been redeployed to assist with business grants over the past few months so there had been limited opportunities to understand whether the recommendations had been implemented, as such, she proposed to bring a progress report to the Audit and Governance Committee meeting in September where she would be able to provide a full update.

10.4           A Member sought clarification as to whether the £40,000 of Council reserves that had been approved by Executive Committee was in addition to the £108,061 annual funding allocation and whether the amount being spent could be reduced going forward given that quite a lot of payments had been made without due process being followed.  In response, the Revenues and Benefits Manager advised that £108,061 was the annual amount that had been allocated by the government for 2019/20 and this could be topped up from the Council’s own resources.  It had got to the point where the allocated funding had been spent and therefore it had been necessary to take a report to Executive Committee for additional funding; however, of that additional funding only approximately £14,000 had been spent which was a total of around £122,000 for 2019/20 overall.  In terms of the procedure for allocating payments, she had sensed something was not quite right and acknowledged that processes needed to ensure money was being allocated in accordance with the policy.  In terms of 2020/21 to date, only £22,000 had been spent against a budget of £142,000 so there was some early evidence that the team had taken on board the need to assess cases properly and make payments to people who met the eligibility criteria.  The Member sought confirmation that the payments made to date had been due to negligence as opposed to with malice and that there had been no co-operation between officers and those making the claims.  In response, the Head of Revenues and Benefits advised that it was more about the view of the officers assessing the case who tended to see discretionary housing payments as being there to help people but they needed to accept there were parameters.  She acknowledged that a lot of non-essential expenditure was being authorised which was not included as part of the assessment process but she felt this was down to officers wanting to do their best to help residents of the borough as opposed to anything else.  The Head of Corporate Services advised that the recommendations arising from the audit were set out at Pages No. 72-75 of the report with the first one being the introduction of a checklist to support the collection and assessment of discretionary housing payment information to ensure all claims were correctly processed; he confirmed that the checklist had been developed by internal audit and was ready to be deployed.  He also pointed out that he was responsible for overseeing the Revenues and Benefits team so was particularly keen to ensure this matter was addressed as swiftly as possible and he hoped that the recommendations and the progress report that would be brought to the next meeting would give assurance to Members that it was being dealt with.

10.5          Having considered the information provided, it was

RESOLVED          That the internal audit monitoring report be NOTED.

Supporting documents: