Agenda item
Quarterly Internal Audit Assurance Report
- Meeting of Audit Committee, Wednesday, 27th September, 2017 7.00 p.m. (Item 4.2)
- View the background to item 4.2
Minutes:
Minesh Jani, Divisional Director for Risk Management presented the Quarterly Internal Audit Report covering the period of July 2017 to August 2017.
The report set out the assurance rating for each audit finalised in the period and gave an overall assurance rating. He made reference to page 186 and the table which showed the total number of audit’s conducted and the assurance level they had achieved. He also referred Members to the table on page 187, 6.1 which showed how the internal audit service was performing against KPI indicators and the targets achieved.
Minesh Jani informed the committee the Council would cease using Mazars, for auditing council services and this would lead to a slight dip in performance over the next quarter. However he was hopeful to recover the position before the end of the financial year.
He said 30% of services had achieved ‘limited’ assurance and Officers from the services’ were present to answer questions from Members.
Members of the Committee asked the following questions in relation to the report itself.
· Are recommendations classified as Priority 1, reported to the Corporate Leadership Team?
The Audit Committee heard further from Officer in the following services:
Control and Monitoring of Declarations of Interests by Council Staff
Zena Cooke, Corporate Director for Resources on behalf of Heather Daley, Divisional Director for HR and Transformation informed Committee Members the control weaknesses identified by Internal Audit had been addressed. She said all staff had been made aware of completing the Declarations form via the HR self-service system and Managers had received training on identifying potential conflicts of interest. Inaccuracies and relationships between officers had to be declared, so to safeguard the organisation.
Members made the following comments:
· Did the 23 declarations tested, page 191 uncovered any conflict of interest or family relationships?
Zena Cooke responded saying the irrespective of where staff were working, declarations of interest had be completed, ensuring the procedural record was correct and each individual had been risk assessed against the criteria. Declarations were part of the HR process and staff including interim staff, are required to update the record.
· Do members of staff understand why they are asked to complete the declaration of interest form?
Street Lighting
Roy Ormsby, Service Head of Public Realm stated the service had undergone a restructure and vacancies within the service had been advertised. The new PSI system had been procured and was bedding in. Two Performance Boards had been set up with the respective Portfolio Leads, which would look at performance management issues. Policy and procedures were looked at as part of the restructure and as such he was confident that with the resources identified the team would be compliant against the assurances identified.
Roy Ormsby offered to come back to the Committee in six months to report on the progress made.
Members made the following comments:
· Members of the Committee AGREED to review the service in six months.
Highways, Repairs and Maintenance
Roy Ormsby, Service Head of Public Realm informed Members not much progress had been made against the recommendations identified in the Internal Audit Report. He said the restructure of the service had only just been completed and it would take time for new policies and procedures to bed in. The PSI system which would allow officers to access files and records remotely from hand held devices required time to align within the service.
He requested if he could come back in six months to report on the progress made.
Members made the following comments:
· Members enquired why six months was required and wanted to see plans for the service and action taken to mitigate the risks before then.
o ACTION: Officers agreed to provide performance information to the Committee by the next meeting with the proviso the Service showed improvement against the recommendations identified in the Internal Audit Report.
· Members AGREED the Service should report back to the Audit Committee in six months on the progress made.
Tower Hamlets Local History Library and Archives (THLHLA)
Shazia Hussain, Divisional Director for Customer Service reported the Service had made progress against all the internal audit recommendations within their purview. Gaps in control such as record keeping had been addressed and discussion about expanding the strongroom, were ongoing with feasibility studies being conducting to secure a better facility/location.
The backlog of cataloguing items was still an issue however a growth bid had been made to secure more resource. With respect to recommendation 5 it was difficult for the Council to insure all items, although the most expensive item in the collection was insured. Shazia Hussain said this was an issue that had been escalated corporately however the preservation of the collection is an expensive business.
Members made the following comments:
· Members appreciated it would be difficult to insure every item in the collection.
· With regard to recommendation 6, had the development of the Civic Centre been considered as an option to resolve the issue of a strongroom?
Shazia Hussain responded that the Civic Centre as an option had been considered however which ever option was favoured, after the feasibility studies had been completed, it would no doubt be costly.
· Could Section 106 monies be used to address the issue of resource?
· Great to see the service has National Accreditation. Can Heritage Lottery Funding be accessed to catalogue the collection?
Client Monitoring of ICT Contract
Adrian Gorst, Divisional Director for IT stated progress was being made against the risks identified by Internal Audit. He said he has monthly meetings with Agilisys regarding KPI’s and it’s been made clear information needs to be provided on time.
He said the challenges faced by the service were great however through delivering the transformation plan and the service improvement plan progress was being made. The contract handbook has been updated so it was clear to the Council and Agilisys of what was required.
Adrian Gorst said he would have a better view of how the service was performing by December 2017.
Members made the following comments
· It would appear as a Local Authority, contracts are not managed robustly.
· Do Agilisys incur financial penalties, if they do not fulfil the requirements of the contract?
o ACTION: Can a report come to Audit on large contracts – i.e. top 10 contracts, showing how much money is involved, how contractors are performing, the penalties they incur and action taken to mitigate risk to the Council.
· There is an acceptance this contract was poorly written. Do you think a cultural change is required to address the management of contracts?
· Members AGREED the service should report back to the Audit Committee in January 2018.
Acting up and Honoraria Payments
Zena Cooke, Corporate Director for Resources addressed Committee on behalf of Heather Daley, Divisional Director for HR and Transformation. Zena Cooke said gaps had been found in how documentation for Acting up and Honoraria payments are kept and this was being addressed. HR was reviewing its policies and procedures and the criteria for determining the basis of payment of an acting up allowance or honorarium payment, including the limit on Managers authorising payments had been tightened, with escalation to Corporate Directors if an acting arrangement exceeded 12 months.
Members made the following comments:
· Is the service confident it can hold to account Managers authorising such payments?
· How were payments made without authorisation?
· In reference to page 202, can you explain why there is a big jump in the amount of Honoraria payments?
o ACTION: Members of the Committee NOTED the explanation given with regard to Acting up and Honoraria payments however requested an update be provided on Overtime payments.
Registrar’s Office Follow up
Asmat Hussain, Corporate Director for Governance stated that of the five recommendations made by Internal Audit, two had been partially implemented and three were outstanding. Since her appointment, she has instigated a review of the service, as part of a wider restructure and has devised an action plan to address the recommendations.
Asmat Hussain stated she believed the ‘limited’ assurance was generous as in her view the service should have received a ‘nil’ return. She offered to return to the Committee in six months to report on the progress made.
Members made the following comments:
· Members of the Committee AGREED to review the service in six months.
Supporting documents: