Agenda item

The Head of Internal Audit to submit a report to update Members on progress made in delivery of the 2018/19 Annual Audit Plan and key findings arising from audit assignments completed since the last Committee meeting.

The Head of Internal Audit

(a)  submitted a report (copies of which had previously been circulated to Members) which updated the Committee on progress made in delivery of the 2018/19 Annual Audit Plan and key findings arising from audit assignments completed since the last Committee meeting;

(b)  highlighted that 65% of planned assignments were either complete or in progress and a copy of the Audit Plan (Appendix A of the report) showed the progress made on all planned audit assignments.

(c)  confirmed that since the last Committee meeting, three reports had been finalised and the key findings were set out at section 2.5 of the report

                      i.        Absence Management:  Sample testing had confirmed that sickness absence figures were complete.  Actions were being taken to record, monitor and take action in relation to sickness absences, in line with the existing policy (all except one absence was found to be recorded accurately on the system.  This had already been identified by the Human Resources Department and was being addressed).  It had been noted that the Council’s performance reporting on sickness absence should be improved.  Testing on flexi and annual leave did not highlight any areas of concern.  An overall good assurance opinion had been given by Internal Audit. 

                    ii.        Travel expenses:  A sample of travel claims and subsistence had been reviewed, revealing that consistent documentation for recording travel claims was used but there were some areas of inconsistency in applying Council policy (on calculating the claimable mileage).  These had been referred to Senior Management for further consideration.  Review of the Essential Car User Scheme confirmed that a set criteria for the Scheme should be defined and essential car users should be regularly reassessed against the set criteria.  Analysis of a sample of rail travel claims demonstrated that the claim form was consistently used for booking rail journeys, there was evidence of manager review and authorisation and supporting evidence (rail tickets retained and available for review).  It was confirmed that the rates paid in excess of the HMRC’s approved mileage rates was taxable and this tax was paid via payroll.  Based upon these findings, a satisfactory assurance opinion had been given by Internal Audit.

                   iii.        Debt management – Consultancy:  Internal Audit found that policies and procedures required modernising and training should be delivered to emphasise and clarify the debt recovery arrangements and responsibilities.  The sundry debt recovery process was less effective than other debt recovery processes and a strategy to incentivise service areas and ensure escalation for persistent non response should increase recovery efficiency.  In addition, there were a number of areas related to reoccurring debtors, where pre-payment and direct debit optimisation could be used to make debt recovery more effective.  Benchmarking on areas for improvement was undertaken with other Leicestershire districts to compare and contrast the Council’s current debt position.  This highlighted areas for development, which Senior Management would take forward.

(d)  advised that since the last Committee meeting, eight actions from audit reports had been completed.  There were twelve actions overdue for implementation, as detailed at Appendix 3 of the report and only one of these actions was high value, as detailed at Appendix 4 of the report.

A Member queried why the Debt Management assignment was undertaken as consultancy work and the Head of Internal Audit advised that this was intended to assess the Council’s performance rather than compliance and good practice.

The Chair suggested that the progress made on debt recovery be reported to this Committee in March 2019 and Members agreed.

A Member raised Universal Credit (in relation to the benchmarking, asking how the number of claims and the effect on benefits compared with other districts.  The Director for Corporate Services advised that this information could be sought but highlighted that Universal Credit was not related to sundry debts.

Another Member drew attention to the Implementation of Audit Recommendations, asking if the overdue actions highlighted a pattern, which should be focussed on.  The Head of Internal Audit advised that there were a small number of ‘historic’ overdue actions, which should be prioritised and progressed.  She reassured Members that overdue actions were not concentrated to a particular directorate or service.  Senior Management received regular updates on all overdue actions and it was anticipated that many of these would be implemented by January 2019.  The Chief Executive reiterated that Senior Management regularly monitored the implementation of Audit recommendations and additional resources were directed to services if necessary.  The position presented to Members at this meeting demonstrated an improved position.

Members agreed that the number of overdue actions was low and commented that the information provided was invaluable.  It was suggested that the overdue actions be specified within future progress reports, as this would help Members to identify which areas should be focussed on.  The Head of Internal Audit confirmed this information would be included in future reports.

There being no further comments or questions from Members, it was

RESOLVED that

(1)  the report be noted, together with the progress made by the Internal Audit team in delivery of the Audit Plan;

(2)  the progress made on debt recovery be reported to this Committee in March 2019.