Agenda item

This report summarises internal audit activity in respect of audit reports issued during the period 1 October to 31 December 2014 as well as reporting on the performance of the Internal Audit service.

Geoff Drake (Senior Audit Manager) introduced the report and referred to paragraph 5.1 of the report. It was noted from paragraph 5.1.3.2, that the Home Meal and Frozen Food Delivery Service contract management made 1 high recommendation, not 2, as cited in the report. Appendix C of the report presented a summary of each of the limited assurance reports. Geoff Drake and service managers then took questions from the Committee on the audit reports.

Cemeteries and Bereavement Service

The Committee referred to the background report and recalled an unfortunate case in RBK&C. The Committee then sought assurances that the Cemeteries and Bereavement Services delivered in H&F followed stringent procedures to avoid bad practice and service. By combining any ad-hoc lessons learnt from the Bi-Borough arrangement and was integrating them with the specifications of the contracted service. In response, Karia Ullash (Head of Leisure) assured the Committee that all procedures were regularly reviewed to meet the severity and sensitivity of their customers.

The Committee asked if the audit looked at the service departments procedures to prevent such a case occurring for H&F. In response, Geoff Drake referred members to the detailed recommendations in the audit report and advised that the audit could not guarantee that such an event could not occur.

The Committee further questioned the current finance management systems in place to prevent fraud and error, as the report identified that one officer was receiving, recording and banking income. In response, Geoff Drake assured the Committee that this was seen as a weakness which was why the recommendation was raised. The recommendation required introducing segregation of duties and further to introduce reconciliations.

The Committee also raised concerns about the recommendation relating to Health and Safety action plans not being timely acted upon. In particular, electrical checks could have significant implications. Karia Ullash confirmed that the electrical check undertaken on 6^th February 2014 was in a separate office from the crematorium. The Committee acknowledged from the background report that the KPIs targets were met.

Melcombe Primary School

The Committee requested confirmation of the audit assurance provided for the last audit previously undertaken on the School.

ACTION: (Senior Audit Manager)

The Committee noted that a copy of the H&F Final Internal Audit Report for the school would be sent to the School, the Governors and Children Services. The respective management teams would challenge the outcomes accordingly. Geoff explained that the Audit process involved reviewing the systems in place, hold discussions with the accountable managers and a series of recommendations would be identified. For limited assurance reports such as this a follow-up audit  would be undertaken.

Home Meals and Frozen Food Delivery Service

The Committee referred to the background report and raised serious concerns about the results of the KPIs. In response, Mike Potter (Interim Director for Adult Social Care Procurement & Business Intelligence) and Sherifah Scott (Head of Procurement and Contracting) assured the Committee that remedial action had been undertaken to rectify the failings in contract management. For instance, checking that drivers had a clean licence to being DBS certified.

The Committee asked that in future audits of contracts/contract management, where action was required to address failures or poor performance of contractors, Internal Audit should, in all cases consider including a recommendation that allows compensation to be sought from the contractor(s). Geoff Drake agreed that this would be considered in going forward.

The Committee noted that the risk impacts identified against the report recommendations, invariably reflected on the reputation of the authority. Therefore the Committee asked for all future audit recommendations to include the risk management impact on service users where they exist.  Geoff Drake agreed that this would also be included in going forward.

ACTION: (Senior Audit Manager)

The Committee recommended that all future contracts should include clauses that allow compensation to be claimed as a standard requirement. As it was essential to deliver effective contract management to support the process in achieving a high level of service delivery.   Geoff Drake advised that this could be included in the scope of the planned audit of procurement that the committee had already asked to have input into.

The Committee identified two areas of immediate attention in going forward, firstly, address the contract management standards and secondly, apply strict penalties where service delivery is underperforming. The Committee then recommended that Legal Contract Officers should be involved in establishing contract terms and conditions and in applying penalties to best protect the authority and the service user. It was noted that the Committee understood that there was an audit planned for procurement, which presented them with an opportunity to consider these specific areas of improvement. The committee noted that the amendments to the procedures would be made to integrate a legal role to the current check-list for Service Managers. Jane West (Executive Director of Finance and Corporate Governance) agreed that this would be rolled out from April 2015.

ACTION: (Jane West, Executive Director of Finance)

ICPs Parking System Application

The Committee requested to receive a paper detailing the responsibilities of the contractors delivering the information system.

 ACTION: (Bi-Borough Director for Transport & Highways)

The Committee noted from page 81, Appendix B, of the report that the audit of Corporate Procurement Including E-Procurement was deferred. This was due to a delay around the decision-making process in establishing a Tri-Borough service. It was noted that the Committee would like the opportunity to have an input into the audit scope before the audit commences.

In response to the outstanding recommendations listed on page 88 of the report (references 1 – 3), the Committee requested to receive a confirmation email from the department within seven working days confirming why the recommendations were still outstanding. What action was being taken to implement the recommendations and when they would be implemented. It was noted that if the Committee did not receive this, the accountable officers’ should be invited to the next meeting to discuss the matter further.

ACTION: (Senior Audit Manager)

RESOLVED –

THAT the report be noted subjected to the actions listed in the discussion be met.