Agenda item

Report of Internal Audit Manager – Report 09.

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 2012/13.

Audit work carried out to date against the audit plan for 2012/13 was set out in appendix A. A list of all audit reports issued in final from the 1^st April to 31^st March 2013 and the level of assurance attained were detailed in the report. The Committee were pleased that 25 out of the 29 reports carried out were performing well or excellently.

A list of all reports issued in final during the year was set out in Appendix B, with any issues highlighted. The Internal Audit Manager reported that specific attention should be paid to the review of Use of Council Vehicles, which acquired an inadequate level of assurance. It was explained that the level was due to the draft policy omitting important issues such as use, recording journeys, security of keys and carrying out checks on driving licences. Without these in the policy and being in draft form, meant that the controls around the system were weak. The Internal Audit Manager advised that it had been agreed by the Corporate Management Team that it would not be included in the Annual Governance Statement due to the overall risk to the Council being low.

The Committee enquired the issue with Creditors and no specific checks being carried out to identify duplicate creditors. The Financial Services Manager advised that regular reports are produced that would identify any duplicate payments and at the time of the report, no duplicate payments had been made.

The Committee also raised concerns of safety issues regarding Food Safety and Hygiene, specifically the out of date policies and delay in carrying out inspections. The Internal Audit Manager responded that the delay in carrying out inspections was due to a lack of resources at the time. The Internal Audit Manager continued that the policies out of date were flagged up even if the contents of them were correct.

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. Where the column “priority” showed “High”, the outstanding recommendations and client comments from that audit had been listed in appendix D. The Committee noted that the recommendations listed were outstanding at the time of the last follow up review. The Internal Audit Manager advised that only Daily Cash Reconciliations had shown as high priority.  The comments made by the Corporate Management Team following consideration of outstanding high risks were also set out in appendix D. The Committee was advised that since writing the report, the recommendations for Daily Cash Reconciliations had been addressed.

The Committee considered the list of frauds over £10k which was reported to the authority’s external auditors on a quarterly basis. The Committee noted that no frauds had been reported in the final quarter of the year.

At the last meeting, the Committee enquired over several issues on the topic of frauds. Those questions and answers had been included at Appendix E.

The internal audit work had been used as the basis for the opinion of the overall effectiveness and adequacy of the internal control environment along with other ad hoc work undertaken by the auditors. A self assessment of the work of the audit function against the CIPFA Code of Practice for Internal Audit was set out at appendix F to the report and had shown a compliance rating of 99.73%.

The Internal Audit Manager also reported that as of April 2013, there are new standards for the Internal Audit Service, the Public Sector Internal Audit Standards. The Committee was advised that the end of year report next June would report on the compliance with the new standards.

RESOLVED: That the report be noted.

(NB: Councillor Belsey withdrew from the meeting following this item due to having to attend a meeting at East Sussex County Council)