Agenda item

Geoff Drake presented the report that summarised internal audit activity in respect of audit reports issued during the period 1 April to 30 June 2016 as well as reporting on the performance of the Internal Audit service. At the time of the meeting there were 64 audit recommendations outstanding.

Geoff Drake noted that Ed Garcez, Chief Information Officer, was unable to attend the meeting due to a long-standing commitment. The Chair said he would meet with him to discuss the outstanding recommendations and request a note for the rest of the committee.

Fulham Primary School

Councillor Mark Loveday noted that the internal audit report on Fulham Primary School was in the exempt agenda but information on the school’s outstanding audit recommendations were contained in the audit summary in the quarterly report which was in the open agenda. He asked that officers considered whether audit reports really needed to be kept exempt in future or whether they could be made public.

Councillor PJ Murphy, with reference to the high number of outstanding recommendations relating to schools, asked if there was a legal requirement to audit schools. Dave McNamara responded that the Council was obliged through a statutory framework to test whether proper controls were in place. In this instance the reminder sent to schools asking them to respond was sent a short time before the summer break and the report for committee was written before they came back so there was only a short time for them to provide updates. Schools do take the process seriously and are concerned if they receive nil or limited assurance. He also noted that some schools disagreed with the auditor’s opinions but find it difficult to articulate why. Councillor Murphy said would be helpful to have that information in reports going forward so at least the Committee is aware that some action is being taken. Dave McNamara suggested audit should meet with the bursars as they were keen to understand the process in more detail.

Councillor Mark Loveday, with reference to pages 253 and 254, noted that the overall picture on audit seemed to be presenting a deterioration. There were more nil-assurance returns which were defined as where ‘controls are generally weak open to significant abuse’. In addition, outstanding recommendations were remaining outstanding for longer. He asked what the cause of that was. Geoff Drake responded that a small number of schools were responsible for a significant proportion of outstanding recommendations and both of the nil returns. Dave McNamara noted that Fulham Primary School did not feel the recommendations reflected the judgement and a nil assurance opinion was not an accurate reflection of the severity of the situation. Geoff Drake countered that internal audit took a consistent line on opinions and nil assurance reports were always reviewed by the Head of Audit – he offered to meet with Children’s Services officers to resolve this issue.

The Committee agreed that the Chair should write to the Chair of Governors at the school inviting them and the Headteacher to attend the next meeting of the committee to discuss the issues highlighted in the report. The Chair noted that going forward the Committee would require Chairs of Governors and Headteachers to attend in cases of limited and nil assurance audits.

Corporate Procurement

Michael Hainge, Commercial Director, presented the recommendations for Corporate Procurement (recommendations 40 and 41). He apologised to the Committee for not meeting the agreed deadlines. He noted that a procurement strategy had been drafted and would be finalised by the end of October. The biggest changes related to contract standing orders – all contracts above £100,000 in value would have a strategy from the outset, giving Cabinet opportunity to have their input and ensure that the contract reflected the administrations priorities from the outset. He also informed the Committee that 30 staff had undertaken an online procurement training course from IACC. In addition to this over 80 staff had been trained on the new contract standing orders. Councillor PJ Murphy noted that the best learning was through experience. Training needed to be followed up regularly to be effective.

Councillor Guy Vincent asked what the next steps were. Michael Hainge responded that internal audit would follow up with the service and confirm the implementation of the recommendations.