BOROUGH OF POOLE

AUDIT COMMITTEE

18 DECEMBER 2008

INTERNAL AUDIT PERFORMANCE & ACTIVITY REPORT

FOR JULY–SEPTEMBER 2008

PART OF PUBLISHED FORWARD PLAN: YES

STATUS – GENERAL

1.PURPOSE AND POLICY CONTEXT

1.1 This report gives a summary of the performance of the Internal Audit Section and any significant issues arising from the audit work undertaken during the second quarter of 2008/2009, and details the current progress on implementation of recommendations (as at November 2008).

2. DECISION REQUIRED

2.1Members are asked to note:

a)the report on the performance of the Internal Audit Section for the second quarter of 2008/09;

b)that there were no significant issues identified during the quarter; and

c)current progress on the implementation of recommendations.

3.INTERNAL AUDIT PERFORMANCE & ACTIVITY REPORT FOR JULY–SEPTEMBER 2008

3.Audit Performance Indicators

Period / % Audit Plan Completed / % Time Spent vs Planned on Audit
(-under +over) (cumulative) / % Recommendations Accepted / % Previous Agreed Recommendations Implemented / Auditee Satisfaction Score (cumulative) *
Actual
July – Sept 08 / 22.4 / +0.4 / 100 / 78 / 3.7
TARGET for Quarter 2 / 22.5 / 0 / 100 / 100 / 3
Year to Date (April – Sept 08) / 48.4 / +0.4 / 100 / 78 / 3.7
TARGET
Year to Date / 45 / 0 / 100 / 100 / 3
TARGET for 2008/09 / 90 / 0 / 100 / 100 / 3

3.1Performance Indicators Table

* Satisfaction Score Key: 4=Very Satisfied, 3= Satisfied, 2= Dissatisfied, 1=Very Dissatisfied

3.2The percentage of the audit plan completed (22.4%) is on target for Quarter 2, and for the year to date (48.4%).

3.3The percentage of recommendations implemented is below target and is reviewed as part of the recommendations followed up/not implemented in section 6 of this report.

3.4Internal Audit ask auditees to score their satisfaction at the end of each audit (4 = very satisfied, 1 = very dissatisfied). These scores are averaged to give an overall auditee satisfaction score. The auditee satisfaction score of 3.7 is exceeding the target of 3 for 2008/09.

4.TIME ANALYSIS

4.1 Time analysis of actual time spent versus the total time planned in Internal Audit Plan showed that total time planned was on course.

4.2 Within some individual ‘Activity’ areas of the Plan, some variances were identified, with the most significant shown below. However, it should be noted that these variances represent a small percentage of overall planned time, and as shown in Table 3.1, the Percentage of Audit Plan completed is on target.

  • Annual Governance Statement (AGS) – Internal Audit have spent more time on the AGS due to drafting the Local Code of Governance
  • Value for Money and Efficiencies – More time has been spent on the projects below. It had not been anticipated that Internal Audit would complete all of these when the original plan was produced:
  • Compilation of national indicator 179;
  • Preparation of the Council’s Efficiency Plan;
  • Completion of the Use of Resources value for money assessments.

5.INTERNAL AUDIT WORK COMPLETED

5.1There are no significant matters to report to the Audit Committee on work completed during the quarter. No ‘qualified’ audit reports (i.e. where the system/area inadequately safeguards the Council against identified risks) were issued, and no high impact recommendations (i.e. to address actual / potential critical implications for achievement of the Council's objectives) were made.

6.AGREED RECOMMENDATIONS FOLLOWED UP / NOT IMPLEMENTED

6.1 Follow up reviews were carried out to ascertain whether agreed audit recommendations had been implemented and therefore the risks identified had been appropriately addressed. The tables below summarise the findings of the follow up audits.

6.2Percentage of Agreed Recommendations Followed Up Not Implemented

during July – September 2008

Number of Recommendations Followed Up
Jul 2008 – Sep 2008 / Number of Recommendations Not Implemented During
Jul 2008 – Sep 2008 / % Recommendations Not Implemented
89 / 20
(3 Medium & 17 Low Impact) / 22%

6.3 As previously reported, the Head of Financial Services and Chief Auditor are to review the ‘Internal Audit Recommendations Escalation/Reporting Procedure’. This work is to be scheduled for early in the new year. Any proposals will be brought back to this Committee.

6.4As shown in Tables 3.1 and 6.2, the percentage of recommendations implemented is below the target of 100%. It is the responsibility of the Service Unit Heads to ensure that recommendations are implemented and service unit risks adequately managed.

6.5 A comparison with the previous three quarters is shown below.

Quarterly Trend Analysis of Percentage of Recommendations Not Implemented

As shown in the graph above, there has been a slight decrease in the number of recommendations not implemented during this quarter compared to the previous quarter.

6.6The table below shows only those recommendations which are outstanding beyond the latest agreed recommendation date reported to Members. This includes:

  • Any outstanding recommendations not previously reported to this Committee; and
  • Outstanding recommendations previously reported to this Committee where the revised target date has again been exceeded.

It is considered that these recommendations need to be brought to the attention of Members. The details of these recommendations are reported in table 6.7 below.

Impact
Time lapse beyond LATEST
Agreed Implementation Date / High / Medium / Total
> 1 year / 0 / 5 / 5
6 – 12 months / 0 / 1 / 1
3 – 6 months / 0 / 0 / 0
< 3 months / 0 / 0 / 0
Total / 0 / 6 / 6

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6.7Current Progress (as at 3rd November) on Non-Implemented Agreed Recommendations and Reasons for Non-Implementation

This provides further details of the recommendations summarised in 6.6 above.

KEY

Bold = Previously reported to Audit Committee as non-implemented recommendations.

SHADED = High and Medium recommendations outstanding for >1 year

(‘3rd Report’ = This is the third report to committee)

Audit
(Service Unit) / No. Original Recs / Recs
Not Implemented (by Latest Date Reported to Members) / No./Impact of Recs Not Implemented / Time Outstanding Since Original Date / Recommendations Not Implemented / Service Unit Reasons for Non-Implementation / Further Action Taken
Education Capital Programme
(C&YPS-SQI) / 20 / 1 / 1 x medium / 1 x > 1 year /
  • System of post project completion reviews is implemented(3rd Report)
/
  • Few project completions. Several due to be completed by the end of this financial year.
/
  • Revised date 31/3/09

Winchelsea School
(C&CYPS-SQI) / 28 / 1 / 1 x medium / 1 x > 1 year /
  • Inventory is printed and signed by the Head Teacher (2nd Report)
/
  • New inventory being produced.
/
  • Revised date 30/12/08

Waste Disposal
(E&CPS) / 13 / 1 / 1 x medium / 1 x > 1 year /
  • Review the Debtors Service level Agreement (3rd Report)
/
  • Further delays as changes in billing process will effect SLA.
/
  • Revised date 30/06/08

Fleet Management
(E&CPS) / 13 / 2 / 2 x medium / 1 x > 1 year
1 x 6 months /
  • Produce guidance for schools for maintaining mini buses (2nd Report)
  • Action plan detailing how contracts will be brought in to line with CSOs
/
  • Awaiting response from Schools Health & Safety Officer.
  • Delay due to change in vehicle parts supplier.
/
  • Revised date 01/04/09
  • Revised date 01/06/09

ICT & Business Support / 23 / 1 / 1 x medium / 1 x > 1 year /
  • Produce procedures for monitoring network activity and security events (2nd Report)
/
  • To be reviewed as part of the Gov Connect implementation project.
/
  • Revised date 30/04/09

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7. ADVICE, CONSULTATION & OTHER WORK

7.1 Advice – Following requests from Service Units, Internal Audit have continued to provide advice on a wide range of risk, control and compliance issues including how to ensure compliance with Financial Regulations & Contract Standing Orders, new system controls and on the revision of Council Policies.

7.2 National Fraud Initiative – Internal Audit have co-ordinated the provision of data to the Audit Commission for the National Fraud Initiative. This is a data matching exercise designed to assist in the prevention and detection of fraud. Once data matches have been identified, these will be investigated by the Council to ascertain whether there is a fraud, error or other explanation.

8.PROJECTS AND INVESTIGATIONS

In addition to work carried out on investigations and projects previously reported, the following new areas were also reviewed:

Projects/ Investigations

/ Days

Projects

Formula grant / 4
Employees First / 2 (on-going)
Building Schools for the Future / 3 (on-going)
Personalisation Agenda / 2 (on-going)

Investigations

OFT Contractors List / 4

9.Conclusion

9.1The key Internal Audit annual performance indicator (i.e. the annual completion of 90% of the Audit Plan) is well on target to be met this year with 48.4% completed in the first two quarters.

9.2The Internal Audit Plan has been regularly updated to take account of the changing risk profile of the Authority.

9.2 Risks and controls have been assessed in several Service Units this quarter to help ensure that management meet their unit/corporate objectives.

Liz Wilkinson

Head of Financial Services

Background Papers Nil

Name and Telephone Number of Officer to Contact:Keith McCormick 633123

Committee reports/audit committee/performance & activity/Dec 2008

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