Agenda item
Payroll Audit Report and Pensions Administration Audit Report
The report includes findings, risks and recommendations and the actions agreed by management following a recent audit of the Council’s Payroll arrangements.
Minutes:
Althea Loderick (the Council’s Strategic Director of Resources) introduced the Audit Report on the Payroll service and said that one of the key findings of the limited assurance paper was that checks and balances were not where they should have been. Ms Loderick informed Members that the recommendations of the report had been accepted and there had been changes in the overall management of the service as it had moved to the finance area of the Department of Resources.
In relation to the limited assurance audit of the Council’s Pensions Administration, Ms Loderick informed Members that there had been issues with Capita (the previous provider of the service) that had been related to performance. Those had been addressed and Brent would be moving away from the contract as the Council would be working with the Local Pensions Partnership (LPP). It was noted that the Pensions Administration Audit Report would be submitted to the Pensions Board.
The Committee expressed concern why some of the issues that had been highlighted in the reports had not been addressed sooner – in particular, there was not a procedure for recovering money that had been overpaid, and this could have been tackled earlier. Michael Bradley (the Council’s Head of Audit & Investigations) said that he agreed with the points raised by Ms Loderick and the Members of the Committee and spoke about the need to follow up on the implementation of the recommendations, in view of the outstanding recommendations from the previous audit.
In relation to the estimated length of decline of the policies and procedures, Ms Loderick added that it was difficult to determine the length. She commented that some of the factors that might have led to the current situation where service reductions, change of staff and lack of proper documentation of the work being done. This led to question about the aspects audit should be looking at in order to provide long-term assurance. Conrad Hall (the Council’s Chief Finance Officer) pointed out that in respect of some back office and transactional services, cheaper service did not always mean worse service. He referred to Payroll where not all the work had been documented properly and said that the solution would be related to implementing controls, standards and procedures in the right management culture. As far as the Pensions Administration was concerned, Mr Hall said that some of the problems were due to historical anomalies of data. He emphasised that although sometimes one-off additional resources could help, it was important to have the work done properly and in the right way.
Members commented that the organisation could be going through further changes and enquired about the principles that had to be followed to ensure that a similar situation would not occur again. Mr Hall responded that some of the issues identified were related to the way the services interacted with the rest of the organisation. Having clear frameworks for various procedures would help, however, the development of these could take time so the answer to that question was related to risk analysis which could identify areas of concern and ensure that the organisation could respond accordingly.
The Independent Member asked if any statistical sampling had been carried on from which a probable error rate (overpaid and underpaid) could be determined. He also emphasised that the financial loss to Brent was the total of overpayments and underpayments because Brent had a duty to correct underpayments wherever possible but wouldn’t always have the ability to recover overpayments arising from errors by Brent staff. It was acknowledged that some errors may have been caused by third parties. In such case Brent should seek compensation from third parties if it was thought reasonable and practical to so for the sums involved and the probability of success. Mr Bradley said that the overpayments report had tried to detail their level, but the key point identified was related to the lack of appropriate controls. The Independent Member acknowledged that controls should be re-established and be seen to be working. It would be appropriate to bring an update to a future meeting advising whether past errors have been eradicated and restitution made where possible.
RESOLVED that:
(i) The contents of the Payroll Audit Report, be noted;
(ii) The contents of the Pensions Administration Audit Report, be noted; and
(iii)An update on the implementation of the recommendations of the reports be provided as soon as appropriate.
Supporting documents:
- 11. Cover Report - Payroll Audit Report, item 11. PDF 80 KB
- 11a. Payroll - Final Report AAC version, item 11. PDF 1 MB