Agenda item
Internal Audit Annual Report 2010/11
Minutes:
The Committee considered a report of the Corporate Director (Resources), circulated with the agenda papers, which set out the annual internal audit opinion in accordance with the CIPFA Code of Practice for Internal Audit.
MineshJani, Service Head Risk Management, introduced the report and highlighted the key points. Overall the report concluded that the Council has an effective system of internal control which was in operation throughout 2010/11. The basis on which this opinion had been reached was set out in the report which also summarised the audit resources utilised during the year, the range of work undertaken and the performance of the Internal Audit team for 2010/11.
In response to a question from the Chair, Mr Jani acknowledged that the percentage of priority 1 and 2 recommendations followed up that had been implemented by the 6 month review date (93% and 90% respectively) was still below the target figures (100% and 95%) although performance was much improved on last year. Corporate Directors were now informed directly when there were any concerns about speed of implementation and a number of directorates had introduced monitoring systems which Mr Jani felt could be utilised across the Council.
Information was not held on implementation rates after the 6 month review, although if an area was identified as high risk it would be scheduled for further review as part of a future audit plan.
The report also included a summary of each audit report not previously submitted to the Committee. In relation to the five reports that had identified a ‘limited’ assurance level, officers gave further information and answered questions from Members as follows:-
Creditors and R2P
Richard Parsons, Service Head Procurement and Corporate Programmes, reported that the R2P project had achieved significant efficiencies and improved payment performance. The audit had identified an number of issues particularly around links between R2P and legacy systems. All of the recommendations had been addressed as set out in the report and strengthened arrangements were in place in relation to avoiding incorrect payments and supplier set up, reconciliation and suspense account matching.
Effectiveness of Probationary Tenancies (Tower Hamlets Homes)
The Audit had found that very good procedures had been developed around probationary tenancies but that these were not being fully implemented and monitored in all cases.
Les Warren, Director of Finance and Customer Services, Tower Hamlets Homes (THH), reported that this review had been included in the audit workplan at the request of management. He felt that in the housing sector generally the value of probationary tenancies was not always fully recognised or utilised.
Following the audit review an interim solution had been put in place, utilising a spreadsheet to ensure that key stages in the procedure are adhered to. In the longer term a dedicated ICT solution would be developed.
In response to questions from Members, Mr Warren reported as follows:-
- In relation to the minor breaches of probationary tenancies identified in the report, it was unclear whether the warning letters had not been sent or alternatively had been sent but not recorded. It was important that all actions were documented and the new spreadsheet system would ensure this.
- Regarding the development of a longer term ICT solution, THH officers had obtained information on systems in use by other providers in the sector. The software currently used by THH (Northgate) did not currently support a number of the triggers required for probationary tenancies, reflecting the relatively recent focus on this area of work. Officers would feed back via user groups to promote improvements in this regard.
- There were currently 60-70 new tenancies per month on average. This volume could be managed by the interim spreadsheet solution.
- The timetable for workshops with key personnel had slipped slightly as a result of a number of new Area Housing Manager appointments but would be in place by the end of July.
Members welcomed the report, feeling that probationary tenancies were a valuable initiative and it was important that the procedures worked effectively.
Management of Garages, Sheds and Parking Spaces (Tower Hamlets Homes)
Les Warren, Director of Finance and Customer Services, Tower Hamlets Homes (THH), reported that this was one of a number of detailed areas on which THH was now focussing following the initial work to establish the basics of the service and secure the 2 star status achieved in the last year. The Continuous Improvement Plan would give prominence to this area of work and a team of staff with good knowledge of the relevant systems had recently been TUPE-transferred from the Council to provide more focus to the work.
In response to a Members’ question, Mr Warren confirmed that underground parking spaces were included in this project and that a bespoke approach would be required depending on the circumstances and needs of each particular estate or neighbourhood.
Registration Service
John Williams, Service Head Democratic Services reported that a number of the issues identified in the audit, including the weaknesses in the accounting arrangements and the maintenance of four separate cash books, reflected the historic structure of the service which was fully transferred from the Registrar General to the local authority in 2007. In accordance with the recommendations of the audit report an external consultant (a senior Registrar from a neighbouring local authority that had already modernised its service) was engaged to advise on modernisation and a full restructure of the service had now been completed. This provided for an integrated management structure and addressed the accountability issues identified.
In the longer term the service would seek approval from the Registrar General to move to ‘New Governance Arrangements’ which would provide greater flexibility to develop services to meet local requirements.
In relation to the budgetary control issues raised in the audit report, these had now been addressed and the income targets for the service revised to a more realistic level taking into account the much increased income generated by the Nationality and Citizenship aspects of the service in recent years.
Control and Management of Blue Badges – follow up report
John Chilton, Head of Parking Services, reported that the 11 unimplemented recommendations of the 28 included in the audit report mainly related to the ICT issues. As set out in the management comments, it had been decided to address the matters raised as part of an overall ICT improvement programme which would now see the introduction of a new system in October 2011.
RESOLVED
That the Committee note the content of the Annual Audit Report, the summary of audits undertaken which have not been previously reported and the Head of Audit opinion.
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