Agenda item

Report of the Assistant Director, Corporate Governance, detailing the work undertaken by the Internal Audit and Counter Fraud Teams in the quarter ending 30 September 2016 and focusing on progress on internal audit coverage relative to the approved internal audit plan, including the number of audit reports issued and finalised – work undertaken by the external provider (Mazars).

The Committee considered the Internal Audit Progress Report 2016/17 – Quarter 2, presented by Anne Woods, Head of Audit and Risk Management. The report set out progress on internal audit coverage relative to the approved internal audit plan, including the number of reports issued and finalised by Mazars, the Council’s external audit provider, and provided a summary of the audit reports receiving an assurance rating of less than substantial that had been issued during the quarter, as well as an update on follow up work and progress on outstanding actions.

In relation to the audit reports issued during the quarter, it was noted that three (Civica Enforcement Application Review, Procurement of Contracts below OJEU Threshold and Tuition Service) had received a limited assurance and one (Stamford Hill Primary School) had received nil assurance. In relation to Stamford Hill School, it was reported that the Head of Audit and Risk Management was working with the AD, Schools and Learning and had held discussions with the Chair of Governors and Head teacher at the school, that an action plan was in place and that a follow-up audit was programmed for 12 December 2016. The Head of Audit and Risk Management would report back on the findings of the follow-up at the next meeting of the Committee.

In response to a question from the Committee, it was reported that the only previous nil assurance ratings for internal audits in Haringey had also related to schools, but that this was the first such rating for a couple of years. The Committee expressed concern regarding the findings of the audit relating to procurement of contracts below OJEU threshold, and asked for further information on this. Anna D’Alessandro, Interim Deputy Section 151 Officer, agreed that the findings were unacceptable and had identified that there were concerns around getting the basics of procurement right. It was noted that the procurement service had recently moved from Finance to Commercial and Operations and that the Chief Operating Officer was working closely with the AD Commercial and Operations to address the issues identified. It was further noted that a number of senior staff within Finance, where responsibility for the procurement function had previously resided, had left the organisation. The Chair noted that this was a matter of concern and that she would be monitoring progress on the actions arising from this audit on a regular basis with the Head of Audit and Risk Management. A follow up report on this would be provided to the next meeting of the Committee.

The Committee asked about contracts above the OJEU limit; the Head of Audit and Risk Management advised that there was a rolling programme of contract audits above the OJEU threshold each year. Unlike contracts below the OJEU limit which were governed by more generic processes, those above the threshold tended to have more bespoke arrangements and audits of these were therefore on an individual contract basis, on the basis of risk analysis, rather than across the piece. The Interim Deputy Section 151 Officer advised that the Council as an organisation was overall very compliant in respect of contracts, and that the issues identified only affected a very small amount of the Council’s spend.

RESOLVED

That the Committee note the audit coverage and follow up work completed.