Mr Paul Rock, Head of Internal Audit, Fraud and Risk introduced this report stating that the report provided an update on the progress made against the delivery of the 2019/20 Annual Internal Audit Plan, as well as the current counter fraud performance and audits which have received limited assurance ratings.

Mr Rock referred to paragraph 3.1 and said the recruitment of two auditors was progressing well and he hoped the team would be at full strength soon. Mr Rock updated Members regarding the overall view of assurance to date and informed the Committee that 50% of audits has been finalised with either none or limited assurance and 50% had been finalised with substantial assurance.

Mr Rock said going forward the Committee would receive exception reports giving a better oversight of outstanding management actions from audits carried out. Regarding fraud investigations Mr Rock referred to paragraph 3.13 and said the Insurance Investigator was having a positive impact on the number of fraud cases identified and resolved.

In response to questions from Members the following was noted:

·         In reference to paragraph 3.8, high and medium priority recommendations were currently followed up six months after the final reports had been issued. However, the team was looking to put in place a new follow up process whereby high priority recommendations would be followed up when they are due and medium priority recommendations would be followed up on a risk basis.

·         The overall view of assurance relates to data provided at paragraph 3.6. Fourteen audits have been completed of which seven have limited or no assurance and seven have substantial assurance.

The Chair, Councillor Whitehead stated that there was one limited assurance report in the agenda pack, relating to Children’s Social Care. Mr Richard Baldwin, Divisional Director for Children’s Social Care had been invited to the meeting but regrettably he could not attend. Mr Baldwin had provided a written update which had been circulated to the membership.

o   ACTION: The Chair proposed and Members of the Committee AGREED Mr Baldwin should attend the next meeting of the Audit Committee to explain the remedial action taken in relation to the limited assurance report on Quality Assurance Systems in Children’s social care.

Notwithstanding this, the Chair was delighted to welcome Ms Karen Swift, Divisional Director for Housing and Regeneration who had been invited to the Committee to talk about the limited assurance relating to ‘Client Monitoring of Fire Safety in Residential Dwellings’. Mr Dan Jones, Divisional Director for Public Realm was also present to update Members regarding the limited assurance relating to ‘Management and Control of Electronic Parking Income’. The Chair clarified for Members that both the limited assurance reports were due to be discussed at the last meeting of the Committee, namely 14^th November 2019, however as written responses had been received, this was an opportunity for Officers to update Members on the remedial action taken in areas which had achieved an limited assurance.

Client Monitoring of Fire Safety in Residential Dwellings

Ms Karen Swift said fire safety was a big priority for her Directorate. The client monitoring team was working with Tower Hamlets Home (THH) to identify risks and to mitigate this. She said a Fire Safety summit had taken place in November 2019 with THH, to identify housing stock at high risk. Front entry doors would need to be replaced with fire doors however it was sometimes difficult to gain access to properties. She said visits had been made to more than 8,000 tenants to identify older people and vulnerable adults. Ms Swift said her team was under resourced but was working hard with THH and contractors to ensure fire safety standards are adhered to. Ms Swift said mixed methodology was being used, and whilst progress had been made, it was essential to standardise and regularise the process. She said her team would be working with strategic partners to ensure buildings are fire safe and well managed.

In response to questions from Members the following was noted:

·         Ms Swift reassured Members communication between the Council’s insurers had improved. She said her predecessor had met with the Insurance manager. An update had been provided to the Insurance Company in December 2019, regarding substantial and moderate fire risks to buildings.

·         Councillor Francis made reference to a fire risk survey in 2015/16 and asked if the client side were aware of all incidences of fire in residential buildings. For example, are incidents such as fires in rubbish chutes, logged and reported back to the Council?

o   ACTION: Councillor Francis asked that this be incorporated into the action plan, if not already done.

·         Ms Swift stated THH had undertaken a considerable amount of work prior to the Grenfell Tower tragedy, engaging with tenants to improve fire safety such as clear stairwells and hallways. She welcomed the suggestion put forward by Councillor Francis and said this would be a good way forward.

·         In response to why improvements suggested in the 2016 survey on fire risk management had not been implemented, Ms Swift said a set amount of capital expenditure is identified for repairs and improvements every year as part of the Capital Works plan. Work to improve properties such as front doors needs to be planned and executed properly.

·         The Chair asked what was being done with regard to the unwillingness of some tenants to replace front doors and remove metal gates. Ms Swift said some landlords had a zero tolerance approach whilst others would risk assess the front doors and grills, with the expectation these are removed once a double-locking fire proof front door is fitted.

The Chair, thanked Ms Swift for her update and attendance at the meeting.

Management and Control of Electronic Parking Income

Mr Dan Jones, Divisional Director for Public Realm, stated progress had been made in relation to the recommendations in the internal audit report.

Recommendation one had been completed; the Council has access to a live portal which can generate audit reports for the Council to reconcile payments. In relation to why income was collected for fewer than the 334 parking locations, Mr Jones explained this had been benchmarked with other local authorities, and it was clear not all locations would result in income. For example, Islington Council had one thousand parking locations of which ten had no income being generated from them.

Mr Jones explained the Council’s contractor Capita collected income from the pay by phone payments which had been in place since December 2019. Mr Dan Jones said the Ringo system was used for this. The 3% charge for banking seemed reasonable however for commercially sensitive reasons more details cannot be shared. Checks and balances had been put in place to ensure the effective monitoring of income generated through electronic parking.

In response to questions from Members, the following was noted:

·         Mr Jones clarified that Ringo was the system used to collect the payments and the income received is then passed to Capita at the end of the day for verification and reconciliation.

·         In respect to how much money had been collected by the third party collectors, Mr Jones said the live shared portal allowed for both the contractor and the council to share and audit data. There were written procedures in place regarding the collection of monies.

The Chair, thanked Mr Jones for his update and attendance at the meeting.

Further discussion took place regarding the table at page 33 of the agenda and the summary of recommendations implemented. Councillor Wood asked why ‘Staff Declarations of Interest’ and ‘DBS’ checks remained red rated. Mr Paul Rock explained that updates had been sought and management had indicated that the actions had yet to be implemented. Mr Rock suggested that the Divisional Directors responsible for those areas be invited to the Audit Committee to provide an update and reassure the Committee. However, after advice from the Monitoring Officer, the Committee came to the view the Corporate Directors ought to be invited, where recommendations had been outstanding for more than a year.

o   ACTION: The Corporate Directors, with responsibility for those areas where recommendations from an internal audit review have not been implemented, be invited to the next meeting of the Audit Committee to explain why the recommendations remain outstanding and/or the remedial action taken to mitigate the risk.

The Audit Committee RESOLVED to:

1.    Note the contents of the report and the overall progress and assurance provided, as well as the findings/assurance of individual reports.