| CT/12/43 | |
| Audit Committee | |
| 21 September 2012 | |
| AUDIT PROGRESS REPORT | |
| Report of the County Treasurer | |
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| Please note that the following recommendations are subject to confirmation by the Committee before taking effect. |
Recommendation: that the Committee notes the good progress being made by management to address weaknesses identified through the internal audit process
1. At the June Audit committee members were provided with the Annual Internal Audit report for the Council. Appendix 2 of this report provided with a summary of the audits undertaken during 2011/12, along with the audit assurance opinion.
2. Members discussed the report and requested a detailed report to a future meeting updating the Committee on the improvement required issues (highlighted in yellow) in Appendix 2 to the report.
3. The attached report sets out the progress made by management in implementing agreed actions to address the areas of weakness identified
Mary Davis
Electoral Divisions: All
Local Government Act 1972
List of Background PapersContact for Enquiries:
Martin Gould Tel No: (01392) 382437 Room 155a
Robert Hutchins Tel No: (01392) 382438 Room 180
Background Paper: None
AUDIT FOLLOW UP REPORT ON AREAS REQUIRING IMPROVEMENT
1. INTRODUCTION
1.1 At the June Audit committee members were provided with the Annual Internal Audit report for the Council. Appendix 2 of this report provided a summary of the audits undertaken during 2011/12, along with our assurance opinion. Where a "high" or "good" standard of audit opinion was provided we confirmed that, overall, sound controls were in place to mitigate exposure to risks identified; where an opinion of "improvement required" was provided then issues were identified during the audit process that required attention. We provided a summary of some of the key issues reported that were being addressed by management and pointed out that we were satisfied that management were appropriately addressing these issues.
1.2 Members discussed the report and requested a detailed report to a future meeting updating the Committee on the "improvement required" areas highlighted in yellow in Appendix 2 to the report.
1.3 To provide the assurance that Members required, Devon Audit Partnership have undertaken follow up audit reviews, where possible, and the results from this process are contained in this report at Appendix 1.
2. PROCESS
2.1 For each service area where an audit opinion of "improvements required" was provided at the end of 2011/12 we completed a follow up review. The follow up review was undertaken to provide assurance to management and those charged with governance, that the agreed actions identified at our initial audit visit had been implemented, or suitable progress is being made to address the areas of concern.
2.2 Our approach was to initially write to the appropriate service manager to obtain an update on progress being made against agreed audit recommendations. The level of assurance we requested was dependant upon the priority of the agreed recommendation.
2.3 For recommendations of "low" priority we required written confirmation that the action had been enacted upon, or an update on the progress being made.
2.4 For "medium" priority recommendations we required written confirmation that the action has been enacted upon, or an update on the progress being made, plus some evidence to support this.
2.5 For "high" priority recommendations we required written confirmation that the action had been enacted upon, or an update on the progress being made, plus some evidence to support this (as above) plus, and depending upon the nature of the recommendation, we considered a physical visit to confirm that the recommendation was operating as expected and that the identified risk had been reduced to an acceptable level.
2.6 Following the completion of our review we considered the progress made against all of the agreed recommendations. This then enabled us to reconsider our assurance opinion against each of the risk areas identified, and has enabled us to review our overall assurance opinion enabling an updated opinion to be provided where appropriate.
2.7 It should be noted that this updated opinion is based upon the assumption that systems and controls as previously identified at the original audit remain in operation and are being complied with in practice. The purpose of our follow up exercise has not been to retest the operation of these previously assessed controls, but to consider how management have responded to the agreed action plans following our previous work.
3 FINDINGS
3.1 Overall we can report that good progress is being made against the agreed recommendations following our initial audit and this is shown in the direction of travel.
3.2 It should be noted that in a number of instances recommendations are being actioned but this is ongoing and therefore we have been unable to form a new overall assurance opinion. It is acknowledged that the need to make changes to some processes can take time to achieve, and as a consequence not all recommendations have been completed, but this is as expected.
3.3 In some instances we were unable to obtain a full response from the service area due to employees taking their annual leave entitlement; we will ensure that once staff have returned from the holiday period that we complete the follow up process, and confirm that the service area is on track to implement agreed recommendations. Any areas where issues or concerns are noted will be flagged to senior management for further consideration and resolution.
3.4 During our initial audit work we have made reference to areas where risk exists; however in some cases it is either not economically appropriate to address this risk, or technical solutions are not yet available. In such cases management agree to accept this risk, and use other monitoring arrangements to ensure that the risk is kept to a minimum. In such cases we are unable to provide an improved audit opinion, although we fully recognise that the risk is identified, managed and management will resolve the issue as and when opportunities arise.
3.5 Appendix 1 of this report set out the audits at the end of 2011/12 which were identified as "improvements required". The appendix shows the current (updated) assurance opinion following our follow up work, and a "direction of travel". We have also provided some more detailed commentary on progress being made.
4 CONCLUSION
4.1 Overall we conclude that good progress has been made against the agreed audit recommendations. Improved assurance opinions have been provided in a number of areas, and the direction of travel is showing as improving in the majority of areas (see appendix 1); this should provide assurance to those charged with governance.
4.2 We would like to acknowledge and offer our thanks to all those who have assisted with this process. We understand that the work was undertaken at a traditionally difficult time for management (due to the summer holiday season) and their help in providing the information for this review is appreciated.
Martin Gould
Head of Devon Audit Partnership
September 2012
Appendix 2
Table to show updated Audit Assurance Opinion after completion of follow up work to end August 2012.
Corporate Services
| Audit Area | Audit Assurance Opinion as at 31 May 2012 | Updated Audit Assurance Opinion as at 31 August 2012 | Direction of Travel | Commentary |
| County Treasurer | ||||
| Barclaycard/Procurement | Improvements Required. | Good standard. |
| At the time of reporting the annual outturn this report was still in draft and subsequent meetings have been able to confirm that the updated assurance opinion is "Good Standard". |
| Main Accounting System | Improvements Required | Good standard |
| Management have responded positively to the audit process and have taken appropriate action to address the issues identified. We can confirm that an upgraded assurance opinion of "good standard" has now been provided in this service area. |
| Advice - Self Registration of Payments | Improvements Required. | High standard |
| Management have responded positively to the report. and guidance has been issued to external clients with access to finest to ensure that they don't authorise payments to themselves. A review has been undertaken of these payments since April and no issues identified, hence the assurance opinion has been upgraded to "High Standard". |
| Audit Area | Audit Assurance Opinion as at 31 May 2012 | Updated Audit Assurance Opinion as at 31 August 2012 | Direction of Travel | Commentary |
| County Treasurer - Pensions | ||||
| Pensions Automation | Improvements Required | Improvements Required |
| This is an ongoing process to increase the automation of processes within Pensions. All recommendations were positively received and prompt action has been taken to address all issues within the proposed automation process. Given the ongoing nature of this project the audit opinion remains as "Improvement Required" until the processes are complete, operational and been subject to an audit review. The direction of travel reflects the proactive action taken to date against the audit recommendations. |
| Pensions General Ledger | Improvements Required | Good Standard
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| All recommendations have been positively received by Management and implemented. Thus the audit opinion has risen to "Good Standard". |
| Human Resources | ||||
| Payroll | Improvements Required | Improvements Required |
| Management have responded positively to the audit report and good progress has been made against some of the recommendations. However, there are some issues identified outside of the original audit process which will be fully examined as part of the 12/13 audit plan and thus the opinion remains unchanged. The direction of travel reflects the action taken on the original report. |
| Audit Area | Audit Assurance Opinion as at 31 May 2012 | Updated Audit Assurance Opinion as at 31 August 2012 | Direction of Travel | Commentary |
| Absence Recording | Improvements Required | Improvements Required |
| This report related to a security incident report regarding tracked changes in word documents. This issue was investigated and advice was sent out to all staff via the insider publication no 396. As reliance must be placed on users of word it is not possible to upgrade the assurance opinion. The direction of travel reflects the action taken. |
| Appendix E | Improvements Required | Improvements Required |
| HR has been reorganised and all recommendations have been agreed and an action plan produced for implementation. We are confident that the recommendations will be implemented which is reflected in the direction of travel. . |
| Redundancy Calculations | Improvements Required | Good Standard |
| Processes have been improved and standardised across all redundancy payments which improves the control arrangements. This has resulted in the upgrade of the assurance opinion. |
| Pay Slip Production | Improvements Required | Improvements Required |
| Management have taken positive action to reduce the current risk and accept any residual risk at this time. The direction of travel reflects the prompt action taken but our overall assurance opinion remains the same due to the residual risk. A project to implement on line pay advices later in 2012/13 may further mitigate the residual risk. |
| Audit Area | Audit Assurance Opinion as at 31 May 2012 | Updated Audit Assurance Opinion as at 31 August 2012 | Direction of Travel | Commentary |
| Business Strategy and Support | ||||
| Contracts and Tendering Children's Centres | Improvements Required | Improvements Required |
| Response outstanding and thus unable to report on status of the agreed actions or update the assurance opinion. |
| Contracts and Tendering - LDP | Improvements Required | Good Standard |
| All recommendations were accepted and have been implemented satisfactorily. Thus we are able to upgrade the assurance opinion. |
| Estates & Asset Management Dangerous Trees (Corporate) | Improvements Required | Improvements Required |
| It has been confirmed that some improvements have been carried out which has led to a change in the direction of travel .However there remain some issues which will be fully examined as part of the 12/13 audit plan and thus the opinion remains unchanged. |
| ICT Project Management | Improvements required | Good Standard |
| At the time of reporting the annual outturn this report was still in draft and subsequent meetings have been able to confirm that the updated assurance opinion is "Good Standard".
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| Audit Area | Audit Assurance Opinion as at 31 May 2012 | Updated Audit Assurance Opinion as at 31 August 2012 | Direction of Travel | Commentary |
| ICT Network Management | Improvements Required | Improvements Required |
| Since the issue of the original report, technologies and solutions have changed and are in the process of being introduced. However, it is likely that the recommendations in the report still apply and will be reviewed along with the technological changes as part of the 2013/14 audit plan. Thus we are unable to update the assurance opinion at this time. |
Place
| Audit Area | Audit Assurance Opinion as at 31 May 2012 | Updated Audit Assurance Opinion as at 31 August 2012 | Direction of Travel | Commentary |
| Highways and Traffic Management | ||||
| Dangerous Trees (Highways) | Improvements Required | Improvements Required |
| It has been confirmed that some improvements have been carried out which has led to a change in the direction of travel .However there remain some issues which will be fully examined as part of the 12/13 audit plan and thus the opinion remains unchanged.. |
| Civil Parking Enforcement | Improvements Required | Good Standard |
| Good progress has been made against the majority of recommendations. The Highway Management Team has commissioned a full external review of the operation which may provide a catalyst for further change and improvement. |
People
| Audit Area | Audit Assurance Opinion as at 31 May 2012 | Updated Audit Assurance Opinion as at 31 August 2012 | Direction of Travel | Commentary |
| Child and Adult Protection | ||||
| Youth Offending | Improvements Required | Good Standard |
| Management have responded positively to the audit process and have taken appropriate action to address the issues identified. We can confirm that an upgraded assurance opinion of "good standard" has now been provided in this service area.
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| Safeguarding - provider Care Management Report | Improvements Required | N/A | N/A | This report was issued to an external provider and provided advice for consideration on safeguarding clients' money. Therefore this has not been followed up as part of this committee reporting process. |
| Mental Capacity Act | Improvements Required | Improvements Required |
| Management have responded positively to the report and been proactive in creating a risk register to incorporate actions required based on the recommendations. This positive response is reflected in the direction of travel. However, a number of recommendations remain outstanding and thus the assurance opinion remains unchanged at this time. |
| Audit Area | Audit Assurance Opinion as at 31 May 2012 | Updated Audit Assurance Opinion as at 31 August 2012 | Direction of Travel | Commentary |
| CRB Process - Compliance & Professional Registration | Improvements Required | Improvements Required |
| Legislation has changed since the completion of this review which is still being considered in relation to implementation and changes to internal policies and practices and thus the audit opinion has not been changed. However, administrative processes have been significantly improved and standardised which is reflected in the direction of travel. |
| Project TEAM - Follow Up | Improvements Required | Improvements Required |
| At the time of reporting the annual outturn this report was in draft and has only recently been finalised, hence a follow up is not appropriate at this time. Thus the overall assurance opinion remains unchanged. |
| Haven Banks
| Improvements Required | Improvements Required |
| Management have responded positively to the report and confirmed that the recommendations have been actioned where possible. However this has not been evidenced and as such the overall assurance opinion cannot be changed at this time. The direction of travel reflects the status of actions as described by management. |
| Audit Area | Audit Assurance Opinion as at 31 May 2012 | Updated Audit Assurance Opinion as at 31 August 2012 | Direction of Travel | Commentary |
| Education & Learning | ||||
| DASH, DAPH, DAG, SHAD Budgets | Improvements Required | Improvements Required |
| At the time of reporting the annual outturn this report was in draft and liaison with management continues to finalise this report, hence a follow up is not appropriate at this time. Thus the overall assurance opinion remains unchanged. |
| Social Care Provision | ||||
| Daw Vale | Fundamental Weaknesses | Good Standard |
| Management have responded positively to the audit process and have taken appropriate action to address the issues identified. We can confirm that an upgraded assurance opinion of "good standard" has now been provided in this service area.
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| Adoption Services | Fundamental Weaknesses | Improvements Required |
| Confirmation has been received that actions and improvements are ongoing. In addition a joint project involving Adoption and Fostering has been established to address the remaining agreed actions and further improve the service area. However this has not been evidenced and as such the overall assurance opinion cannot be further improved at this time. The direction of travel reflects the status of actions as described by management. |
| Audit Area | Audit Assurance Opinion as at 31 May 2012 | Updated Audit Assurance Opinion as at 31 August 2012 | Direction of Travel | Commentary |
| Residential Homes Staffing | Improvements Required | Improvements Required |
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