Agenda item

The Committee considered the report of the Internal Audit Manager regarding a summary of the activities of Internal Audit for the fourth quarter of the financial year 2013/14.

Audit work carried out to date against the audit plan for 2013/14 was set out in appendix A. The Internal Audit Manager made reference to the main points from the appendix which included annual audits for BDO, work on benefits, grant claims, a review of void management, land charges and searches, no consultancy work and five planned reviews that were postponed.Further main points from appendix A were detailed in the report.

A list of all final audit reports issued from 1 April 2013 to 31 March 2014 and the level of assurance attained were detailed in the report. The Committee was advised that during this quarter, one review had been issued with an assurance level of inadequate which was Tenancy management. The Internal Audit Manager reassured the Committee that work had already begun on putting the required controls in place and as a result the assurance level should improve by the time of the next meeting.

Further information on reports issued in final during the year with an assurance level below excellent was set out in Appendix B, with any issues highlighted in the reviews which informed the assurance level given.

A brief explanation for a number of outstanding high and medium priority recommendations from audits, reasons why they had not been implemented along with the month when the next follow up date was due were set out in appendix C. The comments made by the Corporate Management Team following consideration of outstanding high risks were set out in appendix D. The only outstanding high risk remained Catering which had arisen as a result of the Council taking back the Catering function in-house and inheriting poor controls as a result. While the structure had not yet been fully realised, the Internal Audit Manager reassured the Committee that the recommendations listed in Appendix D were being actioned.

The Committee was advised that one fraud over £10K had been reported in the last quarter which meant that only two frauds had been reported this financial year.

The Fraud Investigations Manager reported that there had been a total of six cases over £10K but four of these had been classed as customer error. This was an indication that the team were working well to spot frauds earlier and claims suspended promptly when discrepancies were found, to help minimise overpayments.

In total the Benefits team had identified £465,332.56 in overpayments and £443,360.00 in weekly incorrect benefit. They had also administered £12,864.20 in sixteen administrative penalties, eight Formal Cautions to customers and 13 prosecutions.

The Internal Audit Manager advised that the work referred to in the report had been used as the basis for the opinion of the overall effectiveness and adequacy of the internal control environment, in addition to other ad hoc work undertaken by the auditors. It was the opinion of the Internal Audit Manager that internal controls across the authority were generally found to be sound.

The Corporate Management Team had discussed potential governance issues to be reported in the Annual Governance Statement. The results of these discussions were reported in the Annual Governance Statement report.

The Committee was advised that the Public Sector Internal Audit Standards came into effect from 1^st April 2013 therefore the work of the Internal Audit section was assessed for compliance against these standards. It was found that the Internal Audit function was “generally conforming” to the standards with a 94.85% rating. Areas of partial or no conformance were listed in the table attached to the report, in addition to an explanation and actions to be taken where appropriate. The Committee was advised that progress would continue to be made to address the issues to ensure better compliance and this would be reported to the Committee.

The Committee supported the idea of a comparison in terms of compliance with the standards with neighbouring authorities. The Internal Audit Manager advised that they would discuss benchmarking with Wealden District Council.

The Committee were informed that the Public Sector Internal Audit Standards had requested that the Internal Audit Manager obtain a professional qualification such as CMIIA or CCAB. The Internal Audit Manager advised that she had attended an interview in London that would hopefully obtain the qualification.

Councillor Cooke enquired why Theatre Reconciliations had appeared in Appendix B with an assurance level of inadequate when the Committee had been advised all issues had been resolved. The Internal Audit Manager clarified that Appendix B listed all reports that had been issued in final throughout the year with an assurance level below excellent. The Committee was reassured that all issues with Theatre Reconciliations had been resolved.

The Committee discussed the till discrepancies high risk listed in Appendix D for Catering following a query by Councillor Taylor. The Chief Finance Officer suggested that should deficiencies remain by the time of the next follow up, the Committee would invite the relevant Head of Service to attend the meeting. This was supported by the Committee.

RESOLVED: That the report be noted.