To update Members on the progress made in relation to the Audit Plan and to bring to their attention any key internal control issues.  In addition the report updates Members on the actions or the current position on key issues raised for 2004/5 that required attention.

The Principal Audit Manager advised the Committee of the progress that had been made to date on the Audit Plan and highlighted key internal control issues.  In addition he advised of the current position on the key issues raised in 2004/05.

He stated that two key areas identified in the Annual Assurance Report for 2005 were the need for improvements in the Council’s overall disaster recovery arrangements and the overspends within Social Care.  He stated that the current action plan to address the overspends in Social Care had resulted in:

• the secondment of the Assistant County Treasurer (Policy and Audit) to the Adult and Community Services Directorate to assist with the day-to-day financial management of the budget;
• the projected overspends within the Directorate for Children and Young People reduced to approximately £195,000; and
• the development of an action plan to increase family support and the recruitment and retention of skilled foster carers.

It was felt that positive action was being taken to resolve the issues relating to the overspends.  It was noted that the audit review of the disaster recovery arrangements is planned for quarter four and it is proposed that the Committee is updated on this in the Annual Assurance Report.  It was agreed that the work listed below be deferred to 2006/07 to align the Audit Plan with available resources.

• Social Care contract letting;
• Supply cover administration;
• Older people payment to independent providers;
• Physical disabilities – direct payments to service users;
• Private finance initiative;
• CHRIS;
• Government grants;
• Waste Management Contract;
• Info in Hereford, Garrick House;
• Agency payments;
• P and C grants and donations; and
• Early years development – site visits.

It was noted that audits on the fundamental systems of the Council would be carried out, as it would adversely affect the closure of the Council’s financial accounts if they were not.

The Principal Audit Manager reported that there were only two ‘critical one’ recommendations, which related to improved school controls over the use of the school mini bus and the details of legislation and acts listed on the Council’s various types of warrant cards were correct, complete and current.  He stated that he had taken a personal interest in these issues and that good progress had been made.

It was reported to Members that any audit that was rated as unsatisfactory, worse and any fundamental or major system found to be marginal or worse, would be brought to the attention of the Committee.  Two audits met this criteria, which were Social Care financial management and budgetary control and anti-money laundering procedures.  Members were informed that for the Social Care issues an action plan for the Director had been prepared for consideration.  With regard to the anti-money laundering procedures, guidance had been provided by CIPFA and through the Council’s legal department.  It was felt that good information and training had been put in place and the key areas were the Info Shops and Cash Office.  Training was due for completion by the end of March 2006.

The Principal Audit Manager drew Members’ attention to the audit benchmark survey, part of the CIPFA benchmarking club Audit Customer Satisfaction Survey, which gave an overall audit performance of good.  Three areas for improvement were, value for money reviews, the timing of audits and recommendations being constructive, practical and cost effective.  All areas were seen as of high importance by customers and have been addressed with the signing of audit protocols with each directorate. 

RESOLVED    That the Interim Assurance Report be approved.