Agenda item
1st Internal Audit Progress Report 2012/13
This report summarises the work of Internal Audit and the Investigations Team from 1st April 2012 to 31 August 2012. The attached report provides further details of this together with assurance ratings of reports issued.
Minutes:
atAina Uduehi introduced the 1st Internal Audit Progress report for 2012/13 to the committee and noted that it reflected the work of both Internal Audit and the Investigations team from 1 April 2012 to 31 August 2012. The Internal Audit Plan for 2012/12 comprised 1,200 days, of which 905 were allocated to Deloitte Touche Public Sector Internal Audit Limited. The remaining 295 days were allocated to the in-house team. As of 31 August 2012, 368 days had been delivered against the overall Plan, which equated to 31 per cent of the Plan and was in line with the levels of delivery for 2011/12. The committee was advised that it had not been possible to conduct audits in a number of areas due to requests for deferral relating to work or restrictions regarding the move to the new Civic or the Olympic Games and due to changes in procedures or structural changes which required time to embed prior to being reviewed. It was intended that by December 2012, 60 to 70 per cent of the Plan would be delivered and much of the work for this had already been scheduled. Aina Uduehi concluded by drawing members’ attention to the list of audits completed during this period.
In the subsequent discussion members raised a number of issues. With the permission of the Chair, Councillor Gladbaum queried whether, in view of the negative reputation of Brent’s Schools in relation to financial management, a more robust financial auditing process was required. The Chair queried whether either the audit team or officers in the Children and Families team communicated collectively with schools, through for example meetings with head teachers or school governors. The Chair further queried whether the audit reports were sent direct to the governors of the schools. Councillor Ashraf suggested that the role of the Chair of governors should be developed to encourage greater independence from Head Teachers. Councillor Ashraf also queried how the audit team overcame difficulties associated with schools perceiving their actions as negative or critical, to achieve a positive auditing process. Councillor Van Kalwala queried whether the council could draw on examples of good practice from other local authorities in how to better encourage a good relationship between the council and local schools. Councillor Van Kalwala further queried whether a template of the audit framework was sent to all schools for their information
In responding the committee’s initial queries, Aina Uduehi advised that the audit process for schools was very robust; however there had been a period of two to three years where the council had not conducted full audits of Brent’s school as it had instead been required to conduct Financial Management Standards in Schools (FMSiS) assessments. All of Brent’s schools would visited by the end of next year, by the audit team. The council had a very detailed audit programme for schools, which had been viewed by the external auditors. Various training was available for all head teachers and school governors in Brent. The council worked closely with Brent’s schools and whilst some schools did approach the audit process with a negative outlook, the council did attempt to create a collaborative approach. Meetings were held with schools prior to the audit reports being formally written and schools were given the opportunity to respond following the reports being issued. A copy of the audit report was sent to the Chair of governors with the expectation that the report would be shared with and discussed at a meeting of the school governors. Any issues of relevance to all schools would be shared by circulars to the schools and via the schools extranet. Phil Lawson (Auditor) advised that in two cases schools had become more engaged with the audit process and had requested for example, that rather than conducting a full audit, the council work directly with the school to identify areas of weakness and help to develop an action plan to address these. Andrea White advised that it would be important to develop the relationship between the council and Brent’s head teachers and that this relationship was subject to a range of influences.
Councillor Al-Ebadi queried whether it was possible to view the audit reports for those schools within his ward. Aina Uduehi explained that she would have to seek advice regarding this matter as the reports contained information that would usually be required to be redacted prior to public release.
Councillor Al-Ebadi noted that there were no figures for 2012/13 in the table provided at paragraph 3.13 regarding internal fraud, and sought details of whether the council referred those members of staff who had committed criminal offenses, for example, by working illegally, to the police. Aina Uduehi explained that any reports to the police would have to be dependent on the offence and that the four officers referred to in the 2012/13 statistics had left as a result of identity/illegal working and misuse of blue badge.. The committee was further advised that the numbers recorded against those employees who had resigned or been dismissed as a result of issues of internal investigations did not always relate to criminal offences. Those cases that related to benefit fraud would be reported through the appropriate channels and action would be taken on the basis of the nature of the offence but would not necessarily be reported to the police. The Chair noted that the level of evidence required to pursue a successful criminal prosecution was far greater than that required to dismiss an employee and therefore, unless there was a high degree of financial fraud involved it was likely that the police would not be able to act. Councillor Al-Ebadi also requested that the financial impact of internal fraud should be provided to members of the Audit Committee.
The Chair sought further details regarding the audit that had been conducted on the Procurement Team. Councillor Ashraf queried whether the procurement team had sufficient capacity to support the desired improvements to the procurement process. Phil Lawson advised that the comments of the audit commission regarding procurement provided a valuable perspective on the activities of the council in this respect. The findings of the internal audit of the team had identified a number of weaknesses but it was recognised that there were developments in progress that would address these, which would be reviewed in due course. Martin Searle confirmed that it was considered that the capacity of the team had been built up well through the introduction of several new roles; the challenge was to ensure that the expertise contained in these new roles was appropriately accessed.
The committee advised that schools audit reports should be sent direct to each of the school’s governors and suggested that where appropriate the consultancy service be extended as an option to other Brent schools. The committee further suggested that officers continue to explore ways to improve the relationship between the council and head teachers and that the Children and Young People Overview and Scrutiny Committee may wish to consider this at a strategic level, and may wish to examine examples of best practice from other local authorities. It was agreed that further information would be reported back to the Committee.
RESOLVED: -
That the progress made in achieving the 2012/13 Internal Audit Plan and the review of fraud work be noted.
Supporting documents:
- 5 - 1st -internal-audit-progress, item 9. PDF 129 KB
- 5 - 1st-internal-audit-progress app v2, item 9. PDF 257 KB