Agenda item

Internal Audit Progress Report

Decision:

A report was presented to members of the Audit & Governance Committee was sought to provide the committee with a progress update on the work of the Internal Audit team and the key findings from audits completed to date. 

 

It was noted that during the 2023/24 financial year to date, 53% of the planned audits had been delivered to at least draft report stages and a further 46% was in fieldwork stages.  This reflected that delivery was on track for this stage in the year. Since the last meeting of the Audit & Governance Committee, finalised reports had been issued in respect of six audit assignments. 

 

One update in relation to procurement compliance was provided to members. Compliance against contract procedure rules was undertaken and a number of sample tests were completed. In terms of compliance, testing of purchases made in the financial year to date noted that for 16 out of 25 purchases (64%) there was evidence of compliance with the requirements of the CPRs. In relation to new contracts and contract extensions, for a sample of 15 commencing in the financial year 2023/24 there was evidence available to demonstrate the procurement processed followed in 14 (93%) of cases. In all non-compliant cases noted, the value of the purchase / contract was less than £100k and therefore had not been subject to checks by the Procurement Team, who currently only review purchases over £100k. Actions had been agreed in relation to training, inclusion of procurement training in officer inductions and checks on new contracts added to the register. Based upon the fieldwork completed, a moderate assurance opinion had been given for

Control Environment and compliance with a medium organisational impact.

        

The second audit update was provided in relation Revenue and Benefits system implementation. A good level of assurance was provided for control environment and compliance with a low organisational impact.  

 

In relation to complaints and compliments management the review found that an effective framework existed to support compliments and complaints.  This was based around clearly defined expectations in the Customer Compliments, Comments and Complaints Policy; mechanisms in place to receive compliments and complaints; and the role of the Complaints team in co-ordinating and overseeing the correspondence. However, key areas had been identified, where further action is required to manage associated risks and actions had been agreed in relation to policy review; improvements to reporting to track trends on complaints and learning outcomes; strengthening escalation processes for overdue complaints; improving record keeping on remedies; and clarifying processes for compensation payments.

Based upon the fieldwork completed, a moderate assurance opinion had been given for Control Environment and compliance with a medium organisational impact. A number of the recommendations had already been implemented

 

An audit report was then provided in relation to Home to School transport It was noted that the disaggregation process had created challenges, where further action is required to manage associated risks:

 

The review had found that the Council had a clearly defined Home to School Education Transport Policy, that is reflective of statutory guidance. To support the policy, appropriate systems were found to be in place to support the administration of applications, procurement activity and payments. Additionally, arrangements were in place to assess whether providers are meeting the Council’s expectations around child safety and welfare through the work of Inspectors.

The review identified a lack of documented procedures covering most of the activity undertaken currently by the Council in support of home to school transport. Additionally, in terms of current working practices, there was limited evidence of the role of management in monitoring, reviewing and approving activity. A review of working practices covering inspections highlighted that the master record provided limited details about the outcome of such activity, and there were concerns over the accuracy / relevance of information included in this record. Based upon the fieldwork completed, a moderate assurance opinion had been given for Control Environment and compliance with a medium organisational impact.

 

Members then received an audit report in relation to Early years providers. Internal Audit visited a sample of 15 early years settings to conduct spot checks against claims that had been submitted for the last period.  All of the settings visited had a means of recording attendance (i.e. registers and records of times attended) which were readily available at the time of audit.  Testing found that, overall, the majority of claims processed were evidenced as accurate, based on parental contracts and attendance records – but this was not consistent for all children in each setting.  In testing, 9 of the 15 settings (60%) were able to evidence that all of the children selected for testing had attended the number of hours claimed for the period - and any exceptions related only to safeguarding or Special Educational Needs and Disabilities (SEND) cases, for which provision is made in the provider agreement.  In the other 40% of settings visited, cases were identified where the full claimed hours were not being regularly attended by the named child.

The testing also highlighted that in 13% of settings claims had been submitted for children for whom there was no signed, valid parental contract on file for the period; and 47% of settings had gaps in evidence of identification checks for children in the sample.  Furthermore, only 38% of settings had evidence on file of checks on eligibility for two-year-old funding.
Actions had been agreed in relation to resolving discrepancies highlighted in audit testing; promoting lessons learnt with providers; and supporting on ensuring transparency of voluntary contributions across the range of providers.

Based upon the fieldwork completed, a moderate assurance opinion had been given for Control Environment and compliance with a medium organisational impact.

 

An audit report update was then provided to members in relation to the Public Health grant. In overall terms, the audit confirmed that there was an appropriate governance framework in place to regulate and monitor expenditure against the PHG, however work remained ongoing to establish a financial coding structure that clearly identifies PHG spend against the categories outlined in the Revenue Outturn document.

Sample testing of expenditure totalling approximately £4.23m back to source documentation, which included costs such as payroll, agency staff, contractors, professional fees/hired services and equipment, confirmed eligibility of spend against PHG terms and conditions.

Actions have been agreed in relation to the coding structure; retention of supporting documentation; and clarifying disaggregated spend. A good level of assurance was provided for control environment and compliance with a low organisational impact.

 

Since the last Audit and Governance committee meeting, 49 open actions had been confirmed as implemented There were 89 recommendations overdue for implementation as at 30th January 2024. 

 

The Council had recently introduced new spend review processes and this is an area where Internal Audit assurances had been requested.  The cancellation of the Planning Service Transformation audit would provide a timely opportunity to reallocate audit days to this priority area.  It was, therefore, recommended to member that the Planning Service Transformation audit be cancelled from the 2023/24 plan and that the 12 days be reallocated to support on the spend review processes and assurances over compliance with these new controls in the last quarter of the financial year.

 

Following debate it was

 

RESOLVED            That the Audit and Governance Committee noted the progress report and approved the proposed amendment to the Internal Audit Plan, to remove the planned audit on Planning Service Transformation and replace this with assurance work on the Spend Management Review process.

Minutes:

A report was presented to members of the Audit & Governance Committee was sought to provide the committee with a progress update on the work of the Internal Audit team and the key findings from audits completed to date. 

 

It was noted that during the 2023/24 financial year to date, 53% of the planned audits had been delivered to at least draft report stages and a further 46% was in fieldwork stages.  This reflected that delivery was on track for this stage in the year. Since the last meeting of the Audit & Governance Committee, finalised reports had been issued in respect of six audit assignments. 

 

One update in relation to procurement compliance was provided to members. Compliance against contract procedure rules was undertaken and a number of sample tests were completed. In terms of compliance, testing of purchases made in the financial year to date noted that for 16 out of 25 purchases (64%) there was evidence of compliance with the requirements of the CPRs. In relation to new contracts and contract extensions, for a sample of 15 commencing in the financial year 2023/24 there was evidence available to demonstrate the procurement processed followed in 14 (93%) of cases. In all non-compliant cases noted, the value of the purchase / contract was less than £100k and therefore had not been subject to checks by the Procurement Team, who currently only review purchases over £100k. Actions had been agreed in relation to training, inclusion of procurement training in officer inductions and checks on new contracts added to the register. Based upon the fieldwork completed, a moderate assurance opinion had been given for

Control Environment and compliance with a medium organisational impact.

        

The second audit update was provided in relation Revenue and Benefits system implementation. A good level of assurance was provided for control environment and compliance with a low organisational impact.  

 

In relation to complaints and compliments management the review found that an effective framework existed to support compliments and complaints.  This was based around clearly defined expectations in the Customer Compliments, Comments and Complaints Policy; mechanisms in place to receive compliments and complaints; and the role of the Complaints team in co-ordinating and overseeing the correspondence. However, key areas had been identified, where further action is required to manage associated risks and actions had been agreed in relation to policy review; improvements to reporting to track trends on complaints and learning outcomes; strengthening escalation processes for overdue complaints; improving record keeping on remedies; and clarifying processes for compensation payments.

Based upon the fieldwork completed, a moderate assurance opinion had been given for Control Environment and compliance with a medium organisational impact. A number of the recommendations had already been implemented

 

An audit report was then provided in relation to Home to School transport It was noted that the disaggregation process had created challenges, where further action is required to manage associated risks:

 

The review had found that the Council had a clearly defined Home to School Education Transport Policy, that is reflective of statutory guidance. To support the policy, appropriate systems were found to be in place to support the administration of applications, procurement activity and payments. Additionally, arrangements were in place to assess whether providers are meeting the Council’s expectations around child safety and welfare through the work of Inspectors.

The review identified a lack of documented procedures covering most of the activity undertaken currently by the Council in support of home to school transport. Additionally, in terms of current working practices, there was limited evidence of the role of management in monitoring, reviewing and approving activity. A review of working practices covering inspections highlighted that the master record provided limited details about the outcome of such activity, and there were concerns over the accuracy / relevance of information included in this record. Based upon the fieldwork completed, a moderate assurance opinion had been given for Control Environment and compliance with a medium organisational impact.

 

Members then received an audit report in relation to Early years providers. Internal Audit visited a sample of 15 early years settings to conduct spot checks against claims that had been submitted for the last period.  All of the settings visited had a means of recording attendance (i.e. registers and records of times attended) which were readily available at the time of audit.  Testing found that, overall, the majority of claims processed were evidenced as accurate, based on parental contracts and attendance records – but this was not consistent for all children in each setting.  In testing, 9 of the 15 settings (60%) were able to evidence that all of the children selected for testing had attended the number of hours claimed for the period - and any exceptions related only to safeguarding or Special Educational Needs and Disabilities (SEND) cases, for which provision is made in the provider agreement.  In the other 40% of settings visited, cases were identified where the full claimed hours were not being regularly attended by the named child.

The testing also highlighted that in 13% of settings claims had been submitted for children for whom there was no signed, valid parental contract on file for the period; and 47% of settings had gaps in evidence of identification checks for children in the sample.  Furthermore, only 38% of settings had evidence on file of checks on eligibility for two-year-old funding.
Actions had been agreed in relation to resolving discrepancies highlighted in audit testing; promoting lessons learnt with providers; and supporting on ensuring transparency of voluntary contributions across the range of providers.

Based upon the fieldwork completed, a moderate assurance opinion had been given for Control Environment and compliance with a medium organisational impact.

 

An audit report update was then provided to members in relation to the Public Health grant. In overall terms, the audit confirmed that there was an appropriate governance framework in place to regulate and monitor expenditure against the PHG, however work remained ongoing to establish a financial coding structure that clearly identifies PHG spend against the categories outlined in the Revenue Outturn document.

Sample testing of expenditure totalling approximately £4.23m back to source documentation, which included costs such as payroll, agency staff, contractors, professional fees/hired services and equipment, confirmed eligibility of spend against PHG terms and conditions.

Actions have been agreed in relation to the coding structure; retention of supporting documentation; and clarifying disaggregated spend. A good level of assurance was provided for control environment and compliance with a low organisational impact.

 

Since the last Audit and Governance committee meeting, 49 open actions had been confirmed as implemented There were 89 recommendations overdue for implementation as at 30th January 2024. 

 

The Council had recently introduced new spend review processes and this is an area where Internal Audit assurances had been requested.  The cancellation of the Planning Service Transformation audit would provide a timely opportunity to reallocate audit days to this priority area.  It was, therefore, recommended to member that the Planning Service Transformation audit be cancelled from the 2023/24 plan and that the 12 days be reallocated to support on the spend review processes and assurances over compliance with these new controls in the last quarter of the financial year.

 

Following debate it was

 

RESOLVED            That the Audit and Governance Committee noted the progress report and approved the proposed amendment to the Internal Audit Plan, to remove the planned audit on Planning Service Transformation and replace this with assurance work on the Spend Management Review process.

Supporting documents: