Agenda item
Quarterly Internal Audit Assurance Report December 2009-10
Minutes:
The report was introduced by Mr Jani, who said that the Internal Audit team were on target to complete the Audit Plan. Efforts were being made to bring the percentage of Substantial Assurances up, and there had been improvement, but more needed to be done.
Councillor Eaton expressed concern that the Council might be subject to Judical Review over the legal processes for Child Protection. Mr Jani responded that the audit had been requested by management as Legal Services were setting up something new. Internal Audit had found that the financial infrastructure was there, but some of the administrative areas that were not working, for example, social workers were not signing and dating reports.
Councillor Eaton said that omitting dates and signatures could affect reaching targets, and this is very important.
Councillor Eaton expressed concern about the variations in payments to the Council’s contractor for recycling, and this should by Nil Assurance. Mr Jani said that this assessment was based on findings , and Members should also consider the number of recommendations. Councillor Eaton said that the scale of the service meant that it needed to be right; there needed to be a formalised approach to holding contractors to account. Mr Blake said that the contractor, Veolia, had many contracts; but there was now robust contract management. The variations were due to newly built properties, such as a block of flats and newly introduced services.
In response to Councillor Snowdon, Mr Jani said he would report back on the last audit of Control and Monitoring of Parking Permits. Mr Jones reported that approximately 220 parking permits had been legitimately acquired by non Tower Hamlets residents. Mr Naylor said that the Council’s Parking Policy had allowed these people to acquire permits, and the Policy had now been changed to prevent this situation in future. Mr Naylor confirmed that there was no connection with car-free developments.
ACTION: Mr Jani to report date of last audit of Control & Monitoring of Parking Permits to the next meeting of the Committee.
In response to Councillor Snowdon, Mr Hayes said that he had seen some audits under Full Assurance. Mr Naylor added that there had been some in Tower Hamlets.
Councillor Hawkins said that there were many processes of administration and bureaucracy in the funding and managing of schools. The Councillor expressed concern that the Nil Assurance audit of Langdon Park School might be followed by Nil Assurance audits of other schools, there needed to be training of school governors. Ms Bingham said that the Children, Schools & Families Directorate used Internal Audit to assess the financial probity of schools; schools were encouraged to set up Service Level Agreements with the Council for provision of specialist accounting services, and the external providers used by schools were assessed by the Council to ensure they met the appropriate standards. Forums exist for Governors and administrators, and the Council tried to target those who needed help.
In response to Councillor Eaton’s question on the Council’s financial support for Tower Hamlets Homes (THH), in terms of the £ 500,000 overspend, Mr Warren said that THH was a wholly owned subsidiary of the Council, but was an arms length management organisation (ALMO). THH has its own ‘Finance & Audit Committee’’. Members could draw comfort from this. The Ocean Estate is subject to a significant regeneration project with £200 m to be spend on demolition, rebuilding and sale of property. This is not part of THH’s remit, so additional funding was required to reimburse THH for additional costs to support the programme, for example, dog patrols etc of empty properties.
Mr Naylor said that all of this needed to be resolved by THH, but as a wholly owned subsidiary, final responsibility ends with the Council. This would be managed through the client side of Development & Renewal (D & R), so scrutiny will not just be through the THH Board. Mr Naylor said he was aware of the problem through the client side arrangement, and had been kept informed. Councillor Eaton said that the ownership of security of the Ocean Estate project rested with D & R and THH, and £500,000 was a sizeable sum of money not to be managed.. Mr Naylor said this had only gone to Strategy & Development Committee in the previous fortnight; he would bring officers to the Committee to report on the situation.
In response to Councillor Eaton’s concern about where the £500,000 would come from, Mr Warren said that it was unsatisfactory that THH was going to the Council after the event; this could have been predicted. Internal Audit are working on budget management of the potential overspend; the THH Finance & Audit Committee were also asking why this happened.
Mr Naylor said he had written to the Chief Executive of THH asking for assurances that THH was going to reduce the overspend and ensure this did not happen in future. D & R also needed to assume there were effective processes in place.
RESOLVED: That an update on the THH overspend be brought to the next meeting of the Committee.
Councillor Hawkins said that part of the Ocean Estate was now safer to walk through. Mr Naylor said that the reason the cost arose was to protect vacant properties from squatters and vandals. The project was planned to a tight timetable. Questions would need to be asked about risks in a project environment, rather than a day to day environment, as there will be many big projects in future, so that lessons could be learnt.
Noted.
Supporting documents: