Agenda item

Report of the Head of Audit and Risk Management to inform the Audit Committee of the work undertaken by the Internal Audit Service for the fourth quarter 2007/08 and reports outstanding from 2006/07.

The Head of Audit and Risk Management, Anne Woods, introduced the report on the work undertaken by the Internal Audit Service for the fourth quarter 2007/08 and reports outstanding from 2006/07. The previous format had been maintained for this report, but proposed amendments to Internal Audit reporting to the Committee would be presented in June 2008, including proposals for more regular reporting. These proposals would be based on the recommendations that emerged from the review of the effectiveness of the Audit Committee carried out in 2007/08. Appended to the report was the Deloitte and Touche Annual Internal Audit Report, the follow-up tables and disciplinary data for the whole Council. In particular, Ms Woods reported that the Financial Management Standard in Schools work with primary schools had been very successful, with 23 of the 26 primary schools visited meeting the Standard.

The Chair thanked Ms Woods for her introduction and asked if there were  comments or questions from the Committee. Cllr Gorrie suggested that it would be useful for Members if the report included the dates when each audit was carried out. In relation to the priority 1 recommendations relating to corporate procurement, Cllr Gorrie expressed serious concern at the fundamental nature of some of the audit findings, and also expressed concern that some large projects were only being audited at a stage when there had been significant issues for some time.

In relation to the findings of the audit of Waste Management and Recycling, Cllr Gorrie asked whether the Council was still paying disputed amounts to the contractors. Ibrahim Khatib, Internal Audit Manager, confirmed that this was still the case. Cllr Gorrie suggested that the immediate cessation of paying disputed amounts should have been made a priority 1 recommendation of the Waste Management and Recycling Audit.

The Chair emphasised that follow-up was essential in order to ensure that the recommendations were implemented, as Members required that recommendations were rigidly enforced. Referring to the Financial Management Standard in Schools work, the Chair asked what follow up action was being taken with those schools that had not met the Standard. Mr Khatib responded that a deadline had been agreed with each school, and that their progress was being monitored. Once the deadline was reached, Internal Audit would ask the schools to provide evidence that the Standard had been reached. The Chair suggested that a final cut-off deadline should be established, by which point every school would have been required to comply with the Standard.

Cllr Gorrie stated that it was a positive thing that Internal Audit was revealing weaknesses that existed, but expressed concern that some of the weaknesses being found were such fundamental issues. He suggested that every project officer should be written to, to ensure that basic requirements were being met, and that written confirmation should be received from every capital project that all audit recommendations were being complied with.

In relation to the analysis of disciplinary cases, Cllr Gorrie expressed concern at the number of staff on paid suspension and the length of the suspension periods involved. From the report, Cllr Gorrie estimated that the cost to the Council of paying staff on suspension was over £1m annually, despite the efforts of officers to mitigate this. Ms Woods reported that for disciplinary cases within the Internal Audit team, staff had worked closely with the HR and Occupational Health departments to ensure that any suspensions were managed as tightly as possible, although a small number of particularly complex cases had increased the average period of suspensions, demonstrating that it was not always possible to progress as quickly as hoped. The Committee asked Ms Woods to proved Members with comparative data for other local authorities.

There being no further comments, it was:

RESOLVED

i.                    That, together with the comments from Members and the officers’ responses, the audit coverage and progress during the fourth quarter 2007/08 and on the reports outstanding from 2006/07 be noted.

ii.                  That, together with the comments from Members and the officer’s responses, the progress and responses received in respect of outstanding audit recommendations be noted.

iii.                That a time limit should be applied for compliance with each audit recommendation, as the Audit Committee could not accept lapses in compliance once recommendations had been made.