Agenda item
Review of Internal Audit, Counter Fraud & Risk Management
- Meeting of Audit Committee, Thursday, 16th November, 2017 7.00 p.m. (Item 4.1)
- View the background to item 4.1
There will be a presentation on this item.
Minutes:
Robert Patterson, Head of Internal Audit and Counter Fraud at Kent County Council provided feedback on the quality assessment he had undertaken of Tower Hamlets Internal Audit, Counter Fraud and Risk Management function.
Mr Patterson stated the quality assessment had been conducted in August 2017 and the service was assessed against the 57 standards as identified by the Public Sector Internal Audit Standards (PSIAS) requirements. He said an external quality assessment was required once every 5 years and the deadline for the assessment was March 2018.
He said the Counter Fraud function was reviewed against the relevant CIPFA code of practice and the Risk Management operation was also reviewed.
The presentation covered in detail the findings under each heading and Mr Patterson’s recommendations. The main points to note were:
· Tower Hamlets currently spends a net £1.3m on the entire audit, counter fraud and risk management function,
· The largest element – nearly £850K – is on internal audit.
· There is a disparity between what Officers think should be on the risk register and the recommendations arising from this.
· The Audit Committee is a statutory function and Internal Audit requires a higher profile within the organisation.
· The satisfaction surveys sent to services to complete are not always sent back to Internal Audit.
· Consideration should be given to having a combined Internal Audit and Counter Fraud function.
· The internal audit assurance of “Satisfactory” “Limited” or “No Assurance” provides appropriate challenge and scrutiny and it is good senior officers attend the Audit Committee. However the meaning of ‘what is satisfactory’ needs to be clearly defined.
· Mr Patterson recommended a re-launch of the Service. The Service needs a higher profile and needs to engage more strategically with the council’s decision making processes. e.g. mechanisms to raise concerns/risk to the Corporate and Directorate Leadership teams as well as to the Audit Committee, the Mayor, Cabinet and Mayors Advisory Board.
· With respect to Counter Fraud, Mr Patterson praised the work being done but recommended the team develops a counter fraud plan and raises awareness to build an anti-fraud culture within the organisation.
Members of the Committee made the following comments and asked questions in relation to the presentation received:
· Slide 10 refers to the Areas for development and the opinion that many Directors “did not think the opinion was representative of TH or TH Homes”. You quoted 70%. What does this refer to? That 70% agreed or disagreed?
· £1.3M is spent on the Internal Audit function. Do you think this is a sufficient amount given the volume of work output?
· Members welcomed the report and recommendations and the Chair agreed the service needed a more strategic role in identifying key trends.
· Which type of audit reports go to the Corporate Leadership Team and what happens when service areas are non-compliant?
· Interesting to hear the method used at Kent County Council where services are asked to self-assess and take ownership of their risks. Do you think TH could adopt this approach or there is still work to be done beforehand?
· When services report slippages in meeting the recommendations set out by internal audit, should these be escalated to the Executive?
· What are the processes to capture risk other than the workshops referred to?
· What level/grade are the Risk Champions?
· Should consider having a simpler matrix rather than a numerical score, so Officers can understand it. Need to make it more accessible.
· The Risk Register needs to identify key risks. Why are KPI’s not monitored?
The Chair, Councillor Ronald stated the presentation and the recommendations had provided a lot of useful information and MOVED to form a small working group of Members to further scrutinise the recommendations before providing Mr Neville Murton and Mr Minesh Jani with the Committee’s views.
The Committee Members AGREED with the Chair and stated they would agree a date to meet, after the conclusion of the Audit Committee meeting.
It was also suggested the Chief Executive should be invited to the next meeting of the Audit Committee.
The Chair on behalf of the Committee thanked Mr Robert Patterson and Ms Sarah Bubb for their presentation.