To update Members on the progress of internal audit work and consider any key internal control issues arising from work recently completed.

The Head of Audit services presented a report which provided an update for the Committee  on the progress of internal audits together with any key internal control issues arising from work which had recently been completed. The Committee noted the following work which had been undertaken by Audit Services:

·               thirteen reviews had been finalised and three reviews drafted.  No significant issues had been revealed by the audits;

·               a further seventeen audits were being completed and included General Ledger, IT, Creditors and a review of the balances bought forward on the Council’s Agresso financial management system; and

·               an internal payment fraud had been reported to Internal Audit which was under investigation.  It was an extremely rare event but controls had immediately been put in place to prevent a reoccurrence.  The Anti-Fraud and Corruption – Review of Council’s arrangements and Awareness Training would probably be held in abeyance for the time being, pending the results of the Police investigation.

Audit Services was continuing to provide support, guidance and information in a number of areas to Officers in respect of specific reviews and information about these had been included in the report.  The additional information requested by the Committee at the last meeting had also been included in the report.  A legend would also be included in the Status column in Appendix 1 at the request of Members.

The Head of Audit Services said that in cases where audits had been delayed, such as the Halo review, or departmental restructuring, other items in the programme had been brought forward. 

The Head of Audit Services was in the process of developing the Internal Audit Plan for 2012/13.  This involved meeting with members of the Council’s HPSLT and other Director’s and managers within the Council to understand the key issues affecting the organisation and how these would impact on the Plan.  The Plan would be submitted to a future meeting of the Committee.

Members were pleased with the way in which matters were progressing. It was noted that the Council was investing considerable resources in the partner organisations but Members did not always feel that it was clear about the funding and financial arrangements that were in place. It was important that clarity was provided in the audits.  A timetable of those pending for Amey, Hereford Futures and Halo was required by the Committee. Areas of importance were seen to be the partnership arrangements and activity, openness and transparency, including the level of support by the Council and the service which was being provided for its investment. 

The Chief Officer Finance and Commercial explained that as the Council moved towards becoming more of a commissioning authority, there would be more frequent reports to the Committee about the auditing arrangements for partner organisations. He explained the arrangements that were in place or under development regarding those organisations. Members asked if the Committee could see the management  accounts for organisations such as Hoople and Amey and the Chief Officer Finance and Commercial said that he would look into what information could be provided. Members felt that it would be useful if a summary timetable sheet could be prepared and updated as necessary about the flow of information from partners and the Chief Officer Finance and Commercial would address this.  Members felt that it was important for the Committee and the Overview and Scrutiny Committee to be assured that the arrangements with partner organisations was providing the Council with value for money.

Referring to the audits which had been undertaken, Members asked about the follow-up arrangements to ensure that the findings were complied with. The Head of Audit services said that recommendations were made to the appropriate officer and improvements then implemented.  Audit Services would then subsequently check upon the new arrangements. Members referred to the Agresso financial management system and asked if information about it could be incorporated in a future report.

Members discussed the reviews that were being undertaken and the Head of Audit services said that they looked at the controls involved which minimised risk. The Committee felt that it would be useful if the reviews in the report were set out in portfolio area and the Head of Audit Services said that he would have a look at distinguishing between corporate themes and directorate issues in the report.  A question was asked about a number of audits which appeared in the Progress Report for September 2011 which were not shown within the current report. The Head of Audit services said that it was likely that these had been redefined or incorporated into other reviews but that he would check on the matter.

RESOLVEDTHAT

Subject to the foregoing, the report be received and noted.