Mr Paul Rock, Head of Internal Audit, Fraud and Risk presented the Internal Audit and Anti-Fraud progress report. Mr Rock said the report provided an update on the progress made against the delivery of the 2020/21 Annual Internal Audit Plan and highlighted any significant issues since the last report to the Audit Committee in January 2021. He said an update on anti-fraud activity was also included.

Mr Rock referred Members to the tables at paragraph 3.1 and said several reports had moved to the draft stage and were being discussed with management. He said (1) the Place Directorate Governance (2) the Contract Monitoring of Children’s Commissioned Services (3) Private Sector Compliance with Fire Risk assessments and (4) the Drugs and Alcohol Service – contract monitoring, audits had all been completed. Mr Rock said of the two reports where management responses were awaited, management responses had been received and reports were being finalised. He said he was pleased the Treasury Management audit had achieved a substantial rating and said significant improvement and strong controls were now in place.

Mr Rock said presently he’d be inclined to give an overall ‘limited assurance’ opinion for this year however there were a total of fifteen reports in the pipeline which could sway his opinion, when he presented his final opinion report to the Audit Committee in July 2021.

In reference to Anti-Fraud activity, Mr Rock said this had been hindered by the pandemic however a further property had been recovered bringing the total to twenty. In relation to the Governance report, Mr Rock said Internal Audit had supported management with advice and guidance pertaining to the improvement plan and the reviewing of financial procedures. Mr Rock said he had attended the Finance Improvement Board and had observed the Board, providing challenge and advice to them.

The Chair thanked Mr Rock for his report before inviting the Officers to address their individual reports which had received ‘limited’ assurance following Internal Audit’s assessments.

Staff Declaration of Interests

Ms Amanda Harcus, Divisional Director for Human Resources and OD said the Chief Executive had touched on the issues experienced with automation of systems. She said the switch to providing an online platform had significantly made a difference in the service’s ability to report and monitor declaration of interest returns from officers in the organisation.

In response to questions and comments from Members the following was noted:

• Councillor Wood asked if the system evidenced an employee’s secondary employment, as direct level authorisation was required from managers. He asked if employees were not declaring secondary employment and how many employees had outside interests that maybe of concern to the Council? Ms Harcus responded stating when using the paper-based system a 95% completion rate had been achieved, however this required a lot of manual resource. She said with automation, the declaration was part of the annual review process and therefore prompted employees to complete it. She said thorough checks were undertaken when new employees joined the organisation with responsibility to complete the declaration being with the employee. Ms Harcus said reminders had been sent over the last six months and HR were beginning to see the number of declarations go up.
• In relation to reporting on how many employees have secondary jobs, she said HR system could be manipulated to produce a report if desired. She said it was common for junior staff to hold secondary employment elsewhere, especially in London. Ms Harcus continued saying that more senior staff knew and understood their responsibilities and accountabilities in completing the declaration.
• Mr Paul Rock added that through the National Fraud Initiative, Internal Audit were able to run reports of payroll against Company House records to see if there was a match; whereby someone who was on the payroll but also had a company. Mr Rock said checks could be done to see if the declaration of interest had been made and if the Council had traded with that company. Mr Rock also added that it would be helpful if HMRC shared their data for secondary employment matches, however HMRC were hesitant in doing so and therefore they were working with the Cabinet Office to increase awareness.
• Councillor Edgar asked if the system showed the number of rejections and the reasons for this. He said the mandatory training on declarations was a positive step and should be encouraged. Ms Harcus responded saying qualitative and quantitative measuring was essential to achieve a balanced view. She said she was working with Internal Audit so dip sampling could take place, to test the whole system and to see how robust it is.
• In response to if there were consequences for not completing the declaration of interest, Ms Harcus said HR’s role was not to police the organisation but to support and enable employees to complete and submit their form. Ms Harcus said CLT had discussed consequences for not declaring and said remedial action such as warnings would only be considered on a case by case basis.
• Ms Harcus said she would be reporting to CLT, on a quarterly basis as part of her dashboard, the performance on the completion of the declarations and would work with Strategy, Policy and Performance team to see how many declarations have been made, the status of them and how many have been rejected.

Pensions Administration

Mr Kevin Bartle, Interim Corporate Director for Resources and Section 151 officer provided an update on the Pension Administration assessment of ‘limited assurance’. He said whilst this rating had been given, he was pleased with the progress that had been made in pensions administration. He said processes had been improved and weaknesses referred to regarding contributions and payroll had been fixed but required further testing before it could be fully asserted to be the case. He said the issues identified had been picked up by internal and external auditors and considerable work had been undertaken to resolve them. Pensions administration had its own improvement plan, with regular updates provided to the Pensions Committee and Pensions Board on the progress being made.

• Members had no questions for Mr Bartle.

The Chair on behalf of the Committee, acknowledged the positive outcome of the Treasury Management audit, which had achieved substantial assurance and thanked Mr Bartle and his team for their work and achievement.

Housing Allocations and Lettings 

Ms Ann Sutcliffe, Corporate Director for Place thanked internal audit for undertaking the review and said although the report made a total of six recommendations there were areas of good practice which had been acknowledged in the main report. She said work had started on the recommendations and asked Mr Rafiqul Hoque, Head of Housing Options to explain the action being taken.

Mr Hoque provided an analysis of the recommendations made within the internal audit report and said some of the issues identified stemmed from various software systems being used for data storage. He said the Registered Providers managed their own applications, which meant not all the data was on one system. Mr Hoque said they were looking to introduce a checklist so applications made could be verified, with managers undertaking random checks to ensure the application had been correctly processed. Mr Hoque said they were working with Internal Audit on income, evictions and owner occupation checks and would be updating their website to warn applicants their applications would be credit checked and further verified against the death list, to ensure they had been notified of anyone who had passed away.

Mr Hoque said IT solutions were being explored to automate reviews once the back- office integration had occurred on housing applications. He said they were looking to automate the review process so to avoid duplications and manual input.

In response to questions and comments from members the following was noted:

• Councillor Wood stated he was surprised to find there were 19,000 people on the housing waiting list. He said the report implied that this may not be a true figure and asked if the actual number of applicants was known. He asked why homeowners could be on the waiting list when they were owned their own home? Mr Hoque explained that in exceptional circumstances, the housing policy allowed for people to be added. He said of the two cases referred to, one related to an elderly gentleman who needed sheltered accommodation however had died before this could be actioned and the other related to an elderly couple, where one spouse had died. Mr Hoque said they’d be looking to provide an exceptions report in the future, to explain additions and anomalies.
• In respect to the number of applicants on the waiting list, Mr Hoque said work was underway to cross-reference data from the NFI with a high number of cases being closed off.
• Councillor Edgar commented that systems and processes had to be strong especially as housing was a scarce resource which everyone was interested in. He said a well working system was required with clear steps outlining the process.
• In reference to page 265, Councillor Edgar asked if the mandatory checklist had been reinstated. Mr Hoque confirmed the checklist would be reinstated. Mr Hoque explained why and how various software systems meant the checklist had been overlooked but said this would be rectified.
• Ms Ann Sutcliffe said the Housing Options team had been in the queue for IT improvements for some time but was now at the front of that queue. She said Karen Swift, Divisional Director for Housing and Regeneration would be leading the project team on the IT changes required and improving the customer journey by working with stakeholders and residents. She said the service was moving in the right direction with performance data being provided to the lead Cabinet Member.

The Chair thanked Officers for their contributions and said she hoped individual services would strive to improve their areas of responsibility.

The Audit Committee RESOVLED to:

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