Agenda item

(Chief Internal Auditor) To consider the attached report (AGC-016-2015/16).

The Chief Internal Auditor presented the Internal Audit Monitoring Report for the period December 2015 and January 2016, which provided a summary of the work undertaken by the Internal Audit Service during this time.

The Chief Internal Auditor advised the Committee that four reports had been issued since the previous meeting, of which 3 had been given Substantial Assurance – Community Partnerships, Council Housebuilding Programme and Licensing – and one had been given Limited Assurance. The Limited Assurance audit had been issued for Planning Fees; the recommendations made in the 2014/15 report had yet to be implemented and the main concern was the ability to ensure that all of the income due was collected and accounted for. The ICT team had been unable to effect regular reconciliations between the Northgate M3 system and the General Ledger, making reconciliations a largely manual process. This issue had been raised with Northgate.

The Chief Internal Auditor reported that the Recommendation Tracker contained three recommendations which had passed their due date, one of which replaced a previous Priority 1 recommendation for the reconciliation of Planning Fees (as outlined above). A Priority 3 recommendation had also been issued for the Planning Fees audit, for invalid applications to be returned to applicants within three months of submission, as per the Council’s policy. The final overdue recommendation concerned the management of sickness absence and a pilot exercise was being carried out within the Communities Directorate.

The Chief Internal Auditor highlighted that the Corporate Fraud Team was continuing to focus on the large number of Right-to-Buy applications being received by the Council, which had resulted in five applications being found as ‘suspicious’. A three-bedroom semi-detached property in Ongar had been recovered following a long investigation and one individual had been successfully prosecuted in relation to Local Council Tax fraud. A housing fraud case was due to commence in February 2016.

The Chief Internal Auditor stated that work had continued on the Audit Plan for 2015/16, but the Committee was requested to approve the deferral of the following audits:

            (i)         Gifts & Hospitality – to allow for the introduction of a new electronic system;

            (ii)        Grants to Voluntary Organisations – a bereavement within the section;

            (iii)       Facilities Management Contracts – to be included in next year’s e-   invoicing audit as the new system was being piloted in Facilities Management;

            (iv)       Equality & Diversity – staffing vacancies, and not deemed a high risk           area; and

            (v)        ICT Asset Management – to be removed as a stock check was being          undertaken following an internal theft.

Despite the need to defer/remove the small number of audits outlined above, the Chief Internal Auditor expected that sufficient audit work would be undertaken to give the annual audit opinion for 2015/16.

The Committee was surprised that Equalities & Diversity appeared to be never audited, as it had been deferred in 2014/15 as well; were there other means of assurance available for such areas? The Chief Internal Auditor reassured the Committee that her opinion would be based on discussions with Directors and Assistant Directors, as well as the audit reports issued throughout the year, and she had an impression of the assurance levels in such areas. The Director of Governance added that the Equalities Corporate Working Group also monitored Equalities activities and the minutes from this Group was submitted to the Management Board for monitoring. The Chief Internal Auditor was very confident about being able to give her audit opinion at the end of the year.

In respect of the Limited Assurance audit report for planning fees, the contracted Auditor had reached the same conclusions as the Internal Audit report. The Chairman commented that the planning fees issue was taking a long time to resolve. The Chief Internal Auditor stated that the reporting function in the Northgate M3 system was not designed to perform fee reconciliations; this also was not a priority previously for the Development Management department, but it was now and they would implement monthly reconciliations of the planning fees received. The Director of Governance, as the Director responsible for Development Management, assured the Committee that the planning fees issues would be resolved. In addition, the outstanding Priority 3 action for planning fees was more concerned with the return of the fee within three months to the applicant if their application was invalid, not whether the application was checked for validity within three months.

The Chairman enquired whether the Corporate Fraud Team was providing the Council with a value for money service? The Chief Internal Auditor stated that the team was inaugurated in April 2015 and it was possibly too early to ascertain at the current time, but this could be reported on at the next meeting as part of the Corporate Fraud Strategy. It was acknowledged that Community Safety Partnerships were not currently included in the Audit Plan; this was being considered for 2016/17, and the Chief Internal Auditor would respond in writing to the Committee when a decision had been made.

Resolved:

(1)        That the progress being made both against the 2015/16 Internal Audit Plan and by the Corporate Fraud Team be noted; and

(2)        That the following audits in the Audit plan for 2015/16 be either dropped or deferred to 2016/17:

            (a)        Gifts & Hospitality;

            (b)        Grants to Voluntary Organisations;

            (c)        Facilities Management Contracts;

            (d)        Equality & Diversity; and

            (e)        ICT Asset Management.