Sally Hendrick, Head of Audit and Risk Management attended the
Committee and presented a summary of the Internal Audit activity
during the period April 2018 to 13 March 2019.
Sally Hendrick advised the Committee that:
- The report followed the interim report provided to the Committee
on 30 January 2019.
- Section 3.4 set out the major control issues identified as the
number of audits with a limited assurance opinion and/or priority 1
recommendation and increased occurrence of limited
assurance/priority 1 recommendations being issued again at
follow-up audits.
- Common themes arising out of the audits included poor debt
management, weaknesses in some financial control across the Council
and review and monitoring arrangements in some services such as the
annual review of some residential care cases in Adult Social Care
and quarterly Direct Payment checks not taking place or being
behind schedule. CMT was to consider
common themes of weakness to review the provisional internal audit
plan and ensure this addressed these areas adequately.
- Section 3.6 provided details on nine audits with major issues
(eleven audits in this category had previously been reported at the
last meeting on 30 January 2019). These
included two ‘repeat offenders’ – Business Rates
and Council Tax.
- A
priority one recommendation was raised to address weaknesses in
financial monitoring of S106 monies.
- One priority 1 recommendation was raised in respect of
uncertainty about the completeness of sickness
recorded.
- A
priority 1 recommendation was raised due to non-compliance with
controls to review and approve purchase card
expenditure.
- Appendix A provided details on the status and outcome of all
audits carried out to-date in 2018/19 which showed that delivery
against the planned programme was on track with audits finalised,
issued in draft or in progress.
- Appendix C provided an update from managers of 2017/18 audits
where a limited assurance/priority 1 recommendation had been given
more than once.
In
response to questions from Members, Sally Hendrick, Head of Audit
and Risk
Management advised the Committee that:
- The main weakness identified in financial monitoring of S106
monies had arisen because the monitoring had been carried out by
one individual for many years and following their departure, there
had been a delayed handover which had resulted in the monitoring
spreadsheet not being updated. New
processes had been agreed to address the issue and ICT had been
invested in to reduce the reliance on spreadsheets and the
implementation was now in progress. One
error in the allocation of S106 monies had been identified whereby
the sum of £10,000 was allocated somewhere when it had
already been spent.
- It
was noted that if a proportion of S106 monies was allocated
incorrectly to different budgets or not allocated at all then the
budget holder may lose the monies as there was a limited time to
spend the money before it went back to the Developer.
- As
outlined in the Creditors report in the pink section, a transaction
had been identified where an officer had approved a transaction for
£92k when their Agresso system
approval limit was in fact £50,000. The Director: Finance advised that there appeared
to be some issue around how this had been set up on the
system.
- Members questioned whether the audits with major issues
identified within the People Directorate were a safeguarding
concern. Sally Hendrick said this could
possibly be the case with regard to for example the missed annual
reviews.
- The absence management audit had identified poor record keeping
by managers around actions and discussions with staff around their
sickness absence and issues such as lack of sickness certificates
and return to work forms. The key issue
the auditors had found was around trying to give assurance on the
completeness of sickness absence recorded. It had not been possible to verify sick records by,
say, looking at an individual’s flexi record as the style and
submission protocol of these records was not consistent across the
organisation. For example, some
individuals maintained their own records, did not always note down
when they were sick and didn’t always submit their records to
their manager whilst some departments held a central
record. Only a small sample of flexi
records could be tested to trace to sickness records and for the
small sample tested errors of omission were found in sickness
recording. Members expressed their
disappointment that this issue had been identified as
unsatisfactory for the last 2 years and had not yet been
resolved.
- The variation in completion of flexi records across the Council
was felt by Members to be a cultural and historical one though that
view was not supported by department Directors who felt the issue
was due to the reporting being misrepresented. Stuart McKellar, Director of Finance said absence
recording was now facilitated by iWorks, however, the use of the system was not yet
consistent across the Council. In
addition, iWorks did not have the
facility to record flexi time worked, only the ability to record
the actual absence.
- Members discussed that the issue of absence monitoring should go
before CMT with the request that they devise a central strategy of
recording flexi that is pushed down the organisation. Members agreed that it was a management function
to ensure that individuals recorded their working hours so that
their whereabouts was known and that, as Chair of CMT, these
comments should go to the Chief Executive.
- Sally Hendrick said she would support a central method of
recording flexi time but noted that the senior management team were
considering the need to balance time recording requirements with
the agile working agenda where the focus was on outcomes rather
than minute-by-minute monitoring.
- With regard to the priority 1 recommendation raised due to
non-compliance with controls to review and approve purchase card
expenditure, Sally Hendrick said this related to approving officers
not approving the expenditure. Stuart
McKellar said there had been a heavy push to improve the situation
and if expenditure was not entered onto the system, the card would
be withdrawn.
- Sally Hendrick said a sample of 20 transactions had been audited
and 8 (40%) had not been approved with some serial
offenders. Members discussed whether it
was unfair on the card holder to withdraw the card if the approver
was not following procedure with Members agreeing that whilst it
was the responsibility of both to ensure the correct process was
followed, ultimate responsibility lay with the
approver. Members agreed that Assistant
Directors responsible for serial offenders should be asked how they
were addressing the situation.
- Sally Hendrick said the issue was due to be re-audited in
quarter 2 and whilst she would be willing to bring the re-audit
forward to quarter 1, she recommended it remain on schedule to
allow time for the situation to be resolved.
- With regard to the update from managers of 2017/18 audits where
a limited assurance/priority 1 recommendation had been given more
than once, the unaudited updates from managers now all had an amber
or green rating. Members were
encouraged to note that the process for write-offs had been
improved.
Members discussed the format for the update from Managers and
all agreed the colour-coded Finance report was the preferred layout
with the adjustment that the columns were changed to be full-width
with target date, responsibility, priority and rating as boxes
underneath. Sally Hendrick said she
would devise a template to be sent to managers for this purpose in
the future.
RESOLVED: that the report that
summarised the Internal Audit activity during the period April 2018
to 13 March 2019 be noted.