Agenda item

To consider a report summarising Internal Audit activity during the period April to December 2016.

The Committee considered the Internal Audit Assurance Report of the work carried out between April-December 2016 by the internal audit contractors and the in-house team.

The Committee noted that 48 Memos/Reports had been issued in draft and a further 10 Memos/Reports issued were on the client side to be reviewed.

Limited Assurance Opinions had been issued on 15 audits which included Budget Savings, Schools, Construction and Maintenance, Disaster Recovery and Home to School Transport. 

A programme of counter fraud training commenced during 2016/17 delivered by a specialist fraud investigator to teams in Adult Social Care, Health and Housing during quarter 2.  The next round of training would be delivered to senior managers in Environment, Culture and communities on 9 February 2017.

The Committee noted the work undertaken by the Council’s Benefits Team.  During the period, 28 cases of overpayments in welfare in excess of £2k had been passed to the DWP for investigation.  During the last financial year 76 cases were referred and the Council had so far been notified of 3 prosecutions and 2 administrative penalties.

With regard to Council Tax Single Person Discount (SPD), the Committee noted that a data matching exercise was carried out on all households which matched credit records to those households claiming SPD.  As a result of the exercise, SPD was removed from 438 households who were not entitled to the discount which resulted in a reduction of £153k in SPD awards.

With regard to Construction and Maintenance, a limited assurance opinion was given again in 2016/17 due to errors in billing by the reactive maintenance contractor with regard to not billing in a timely manner and delays in quality control checks, as a result of which the provider had now been changed. The limited assurance opinion was also in respect of a lack of supporting documentation and wrong rates being billed by other contractors. A further audit of this area would now be carried out in the last quarter of 2016/17.

The Committee noted the follow up of previously issued limited assurance audit reports, some of which were due to be, or currently were being, re-audited.  Five reports had already been re-audited and had resulted in a satisfactory opinion given comprising Council Wide Procurement and 4 schools including Kennel Lane and The Pines.

Key weaknesses identified during audits with a limited assurance opinion to date included an unexplained weakness in the IT system which had allowed one officer to authorise her own expenses. The Committee was advised that the officer had now left the organisation and her action had not been considered to be due to a fraudulent claim or inappropriate expenditure.  Audit had been advised that this would be tested on implementation of Agresso version MS5 in June 2017. In the meantime Calvin Orr advised that this appeared to be an isolated case as it had not been possible to replicate self-authorisation of expenses..

A limited assurance opinion had been given on budget savings in relation to the target not being met in the review of ASC care and support packages. 

The Committee expressed their concern on the limited assurance opinions given on five school audits during the period.  Senior officers from the Education Authority were providing support to the Schools to enable them to address weaknesses in their control environments and the new Director of CYP&L was aware of any ongoing issues and the progress being made. 

With regard to Disaster Recovery, the Report stated that the disaster recovery documentation was out of date and no longer relevant.  The Committee expressed concern that this was an ongoing issue and reassurance sought previously that improvements would be made had not been received.  The Committed was reassured that disaster recovery testing found that the systems worked but the current documentation did not reflect the correct processes.  Councillor Heydon said he would raise the issue at the next Corporate Services DMT and arrange for an officer from ICT to attend the next Committee meeting to update on the progress of the renewal of the documentation. 

In regard to Home to School Transport, weaknesses had been identified in controls over Disclosure and Barring Service (DBS) checks on drivers and escorts.  The audit had found that one driver’s DBS renewal and checks on offences subsequently reported had not been completed on a timely basis by Licensing and Home to School Transport had not been made aware of this.  Action was being taken to improve communication.  In addition, Home to School Transport had not been advised by the taxi frim that one escort had returned from maternity leave and her DBS had lapsed whilst she was on maternity leave.  The Committee was reassured that the taxi firm had since tightened up their procedures.

The Fraud and Error Reduction Incentive Scheme (FERIS) was launched in November 2014 allowing local authorities to opt into the scheme and bid for funding. FERIS was an incentive scheme that offered a financial reward to local authorities that found reductions to Housing Benefit entitlement as a result of claimant error or fraud. From April 2016 to November 2016 the Council had carried out targeted campaigns to 400 households in which approximately 81.3% had resulted in either a reduction or increase to Housing Benefit and approximately 79.3% had resulted in either a reduction or increase to Council Tax Reduction.  A percentage break down differentiating between reductions and increases was not currently available but would be produced at the next meeting.

RESOLVED that the Internal Audit Assurance Report be noted..