Agenda item

The Corporate Committee is responsible for monitoring the completion of the annual internal audit plan and the implementation of agree recommendations as part of its Terms of Reference. In order to facilitate this, progress reports are provided on a quarterly basis for review and consideration by the Corporate Committee on the work undertaken by the Internal Audit Service in completing the 2012/13 annual audit plan, together with the responsive pro-active fraud investigation work, and housing benefit fraud investigation work. Where further action is required or recommended, this is highlighted in the report and appendices and included in the recommendations for the Corporate Committee.

In addition, the report provides details of the work the Council’s Human Resources business unit has undertaken in supporting disciplinary action taken across all departments by respective Council managers.

The Head of Audit and Risk Management drew the Committee’s attention to appendix A of the report and the probity audits issued for schools during quarter 3, in particular the audit for Seven Sisters Primary School, which had received an assurance level of Nil. Internal Audit had been contacted by the Chair of the Board of Governors at the school with concerns regarding financial controls and probity at the school, with the resultant audit bearing out the concerns raised. An action plan of 32 high-priority recommendations had been issued and agreed with the school, and a follow-up audit had been arranged for the following month.

The rest of the Committee report indicated that Internal Audit was on track to deliver the Audit plan. It was noted that 3 Priority 1 recommendations were outstanding; Directors would be advised that, if these were still outstanding by the time of the next meeting, they would need to attend to explain the position to the Committee.

In response to a question regarding progress with the cases submitted to the DWP for joint prosecutions, it was reported that all such cases were highly complex, but that the Council met with the DWP on a monthly basis to chase progress regarding these issues. It was confirmed that of the disciplinary cases set out on pages 175 and 176 of the papers, the case to the value of £747 was being recovered from the employee’s salary and that repayment arrangements were in place for the case valued at £41,758.

In response to questions regarding the Nil assurance in respect of Seven Sisters Primary School and the general issues this raised around financial controls at schools, Ms Woods advised that a previous nil assurance and some limited assurance findings at schools had occurred when schools were in transition to becoming an academy. In general, it was smaller primary schools that found covering all elements of financial probity a challenge, and several had now begun working together in order to develop best practice. No evidence of fraud or theft had been identified at Seven Sisters, but exceptionally poor record-keeping and financial management had been demonstrated. It was reported that for those schools who used the Council’s corporate finance facility, concerns would be flagged up through the service, but that not all schools used this service. School audits were programmed in on the basis of risk levels and feedback, and head teachers often requested an audit as soon as possible on starting at a new school. With regard to the children’s centre associated with Seven Sisters Primary School, it was reported that they would also have a follow up audit at the same time as the school, as they shared some financial arrangements. It was agreed that Ms Woods would seek the permission of the school to share the full audit report with Members of the Committee.

In response to a query raised by Cllr Jenks, it was agreed that Ms Woods would supply information on the amounts covered by the Bailiff Monitoring spreadsheet (as referred to on page 168 of the papers) outside the meeting.

RESOLVED

i)             That the audit coverage and counter-fraud work completed during the third quarter 2012/13 be noted.

ii)            That having reviewed the management responses received for those audit recommendations not fully implement, the Committee confirm that the managers’ actions taken during the quarter to address the outstanding recommendations are appropriate.