Report of Meeting Date

Assistant Chief Executive (Business Transformation &

Improvement)

Audit Committee 19/03/08

FRAUD & CORRUPTION RISK REGISTER PURPOSE OF THE REPORT 1 To inform members of the outcome of an important review recently conducted by Internal

Audit, to compile a corporate Fraud & Corruption Risk Register, which identifies and addresses specific fraud risks throughout the Council.

RECOMMENDATIONS 2 That the report is noted. EXECUTIVE SUMMARY OF REPORT 3 This committee report summarises the attached Internal Audit report, which explains the

reasons for and the process involved in compiling the Register. CORPORATE PRIORITIES 4 The report relates to the following strategic objectives:

Put Chorley at the heart of regional economic development in the central Lancashire sub region

Develop local solutions to climate change

Improving equality of opportunity and life chance

Develop the character and feel of Chorley as a good place to live

Involving People in their Communities

Ensure Chorley is a performing Organisation

�

BACKGROUND

5 Although the Council has experienced relatively few incidents of fraud in recent years, the

Audit Commission is keen to ensure that all councils commit sufficient resources to this area. In their 2006 Use of Resources report the Commission recommended that the Council should "further develop proactive counter fraud and corruption work, determined by a formal risk assessment which is adequately resourced".

6 Our main response to this recommendation has been to work with Directors to compile a

corporate Fraud & Corruption Risk Register, which identifies and addresses specific fraud risks in individual service areas.

7 Although the main purpose of the exercise was to address the Audit Commission's

recommendations, it also enhances the Council's compliance with the CIPFA / SOLACE guidelines on governance in relation to probity and ethics and provides a more robust Anti-Fraud & Corruption Strategy.

8 The attached report explains the process involved in compiling of the Register and the

resulting Action Plan, which is also attached. SUMMARY OF RESULTS 9 The exercise established that a well developed anti fraud culture is already embedded

within the Council. Of 117 potential fraud risks that were identified in the Council's operations, 92 were discounted because they present very low levels of risk, the existing controls are adequate or they are already being addressed by projects or other actions in progress.

10 However a limited controls assurance rating was awarded in acknowledgement of the fact

that action is needed to further mitigate the remaining risks. These are a mix of corporate and directorate specific issues and are summarised in the attached report, together with a detailed Action Plan to address them.

IMPLICATIONS OF REPORT 11 The attached Internal Audit Report is currently being discussed with all the Directors

concerned and detailed actions agreed with them to further mitigate the risks identified.

GARY HALL ASSISTANT CHIEF EXECUTIVE BUSINESS TRANSFORMATION & IMPROVEMENT

Background Papers

Document Date File Place of Inspection

Use of Resources Assessment 2006

Delivering Good Governance

In Local Government CIPFA SOLACE

2006

2007

FINANCE

UNION ST OFFICES

Report Author Ext Date Doc ID

Garry Barclay Andy Armstrong

5468 5465

10/03/08 F&CRR.doc

Internal Audit Report 14_07

Fraud & Corruption

Risk Register

CONTENTS

BACKGROUND AUDIT APPROACH IMPACT ON GOVERNANCE MAIN CONCLUSIONS

• OVERALL AUDIT OPINION

• OVERVIEW

• FRAUD & CORRUPTION RISK REGISTER

• RISKS REQUIRING FURTHER ACTION ACTION PLAN

BACKGROUND

1 The Council takes the threat of fraud and corruption very seriously and has a constitutional commitment "not to tolerate fraud and corruption in the administration of its responsibilities whether from inside or outside the authority”. This is underpinned by a formal Anti-Fraud & Corruption Strategy, which seeks to ensure that serious concerns are properly raised and addressed. It also sets out the Council’s specific policies towards the prevention, detection, notification and investigation of fraud and corruption and summarises the responsibilities of members, managers and officers in this respect.

2 Although the Council has experienced relatively few incidents of fraud in recent years, the Audit

Commission is keen to ensure that all councils commit sufficient resources to this area. In their 2006 Use of Resources report the Commission recommended that the Council should "further develop proactive counter fraud and corruption work, determined by a formal risk assessment which is adequately resourced".

3 In response to this an section of the Internal Audit Plan is now devoted to anti-fraud & corruption

work. This includes:

• Acting as the Council's local co-ordinator / contact for the National Fraud Initiative (NFI) data matching exercise;

• Developing a suite of computerised interrogations of our own systems to identify any incidence of fraud or error;

• Publishing regular fraud bulletins on the Loop to bring any current issues or scams to the attention of officers in order to raise their awareness of fraud.

4 Our main response to the Commission's recommendation however has been to work with Directors

to compile a corporate Fraud & Corruption Risk Register, which identifies and addresses specific fraud risks in individual service areas.

5 This report explains the process involved in compiling of the Register and the resulting Action Plan,

which is attached.

AUDIT APPROACH

6 The best practice guidance set out in the CIPFA publication “Managing the Risk of Fraud” and the

approach outlined in the HM Treasury Guidance for Managers “Managing Fraud Risk” were the main sources of reference to establish and categorise potential fraud risks.

7 Directors and other senior officers were interviewed to establish the extent to which the potential

fraud risk could actually materialise within their spheres of operation.

IMPACT ON GOVERNANCE

8 Although the main purpose of this exercise was to address the Audit Commission's Use of

Resources recommendations, it will also enhance the Council's compliance with the CIPFA / SOLACE guidelines on governance in relation to probity and ethics.

9 Taking an internal perspective, this exercise also contributes to a more robust Anti-Fraud &

Corruption Strategy. MAIN CONCLUSIONS

OVERALL AUDIT OPINION (*) 10 The Council is now required to include a statement in the annual accounts regarding the

effectiveness of its overall system of governance. To facilitate this, Internal Audit reports contain an opinion as to the adequacy of the internal controls in each separate system / area reviewed. In our opinion, the number and nature of risks identified during this exercise and the totality of action required to mitigate them provide Limited Assurance

AUDIT OPINION RATINGS Inadequate - the Authority cannot place sufficient reliance on the controls. Substantive control weaknesses exist. Limited - the Authority can place only limited reliance on the controls. Significant control issues need to be resolved. Sound - the Authority can place sufficient reliance on the controls. Only minor control weaknesses exist.

OVERVIEW 11 The exercise has established that a well developed anti fraud culture is already embedded within the

Council and this is reflected in the systems and procedures implemented by management. The limited controls assurance rating awarded is in acknowledgement of the fact that additional action is needed to mitigate some significant risks that remain. Implementation of the recommendations from this exercise together with other planned follow up work will build on the foundations already in place and will develop and enhance corporate resilience against fraud further.

12 We also found that many of the potential risk factors considered during discussions with Directors did

not present a real threat within the Directorates concerned or there was an array of mitigations and controls in place or in progress.

FRAUD AND CORRUPTION RISK REGISTER 14 The complete results of the exercise are recorded in the Fraud & Corruption Risk Register at the

Appendix to the report. The key contents of the Register are explained as follows: Fraud Category - the generic types of fraud risk set out in the prevailing guidance

Area of Risk - the detailed, potential fraud risks within each category Mitigation / Controls - the measures already in place within the Council to reduce the likelihood and / or impact of the potential fraud risks Risk Rating - taking the existing mitigation / controls into account, whether the level of risk remains high, medium or low (using the corporate risk matrix) The remaining columns were only completed in respect of high / medium risks as no further action was considered necessary in respect of low risks Exposures Identified - the potential impact on the Council's operations should the risks materialise Recommendations - the action that should be taken to address the high / medium risks identified Existing Action Planning Vehicles - where the high / medium risks identified are already being addressed by current projects, audit action plans or other actions in progress Recommendation Number - where risks remain of high or medium exposure and no form of action is currently in progress to address them. These have been transposed to the attached Action Plan

RISKS REQUIRING FURTHER ACTION

15 117 potential fraud risks were identified in the Council's operations, 92 of which were discounted because they present very low levels of risk, the existing controls are adequate or they are already being addressed by projects or other actions in progress.

16 However 25 risks remain of medium or high exposure where further action is required to address

them. These are a mix of corporate and directorate specific issues and are captured in the Action Plan below, together with recommendations, which will be discussed with the managers concerned. The remaining risks are summarised and prioritised as follows:

Corporate ICT related risks - including the safety of data during transit and mobile working, the use

of internet and e-mail, the unauthorised use of data, official publications and intellectual property rights.

Funds and grants - the control and administration of a “basket” of separate internal bank accounts

and grants provided to external organisations where the value involved may be low but reputational risk is high.

Employment and staffing matters - ranging from corporate arrangements for the vetting or

termination of staff to the administration of individual incentive schemes such as car loans and recruitment expenses.

Control and use of corporate assets – weaknesses relating to the recording of assets within

Directorates together with an issue relating to the authority for the disposal of land. Control over vehicles and fuel – specific issues relating mainly to the control of fuel and petrol

issues and the disposal of vehicles and plant at the Bengal Street Depot. Collection of miscellaneous income – relating to the collection of several discreet streams of

income but most notably the corporate arrangements for the recovery of charges for the private use of telephones and printing.

Procurement – an isolated but corporate weakness to adequately consult with the Director of

Corporate Governance on low value contracts.

AC

TIO

N P

LA

N

Re

c

No

R

isk

R

eg

N

o

Are

a o

f R

isk

P

rio

rity

R

ec

om

me

nd

ati

on

s

Re

sp

on

sib

le

Off

ice

r D

ate

Co

rpo

rate

IC

T r

ela

ted

ris

ks

1

44

Theft o

f IC

T e

quip

ment and s

upplie

s

2 2

ICT

sto

ckro

om

- A

sto

ck c

ontr

ol re

gis

ter

will

be

imple

mente

d t

og

eth

er

with p

rocedure

s for

bookin

g

mate

rials

in a

nd o

ut and r

eg

ula

r sto

ck t

akes.

Genera

l -

An invento

ry o

f all

IT e

quip

ment lo

cate

d

within

each r

oom

will

be intr

oduced a

nd s

igned o

ff b

y

each r

espective D

irecto

r.

Corp

ora

te

Directo

r of

ICT

2

53

Unauth

orised a

ccess/u

se o

f in

form

ation a

nd

record

s d

ue to -

uncontr

olle

d m

ovem

ent

of

unencry

pte

d d

ata

1

2

A H

om

e w

ork

ing P

olic

y incorp

ora

ting s

uitable

sta

ndard

s

and g

uid

ance w

ill b

e d

evelo

ped a

nd im

ple

mente

d a

s

part

of

the d

evelo

pm

ent of

the H

om

e W

ork

ing

pro

ject.

Mem

bers

netw

ork

access w

ill b

e t

ransfe

rred t

o "

Thin

C

lient"

with a

ll data

held

centr

ally

.

Corp

ora

te

Directo

r of

ICT

3

83

Theft o

r m

isuse o

f off

icia

l docum

ents

, public

ations o

r in

telle

ctu

al pro

pert

y r

ights

due

to w

eak d

ocum

ent contr

ol

arr

ang

em

ents

/sta

ndard

2 2

The S

ecurity

Polic

y w

ill b

e a

mended t

o inclu

de a

section c

onta

inin

g a

dvic

e a

nd g

uid

ance f

or

sta

ff a

bout

docum

ent security

and "

cla

ssific

ation"

Advic

e a

nd g

uid

ance o

n this

issue w

ill b

e inclu

ded in

the IC

T e

lem

ent

of

induction s

essio

ns f

or

sta

ff

Corp

ora

te

Directo

r of

ICT

4

98/9

9

lack o

f m

onitoring

info

rmation a

nd u

nre

str

icte

d

access leadin

g to u

ndis

clo

sed/inappro

priate

private

inte

rnet

or

excessiv

e/inappro

priate

private

e-m

ail

use during o

ffic

e h

ours

1 1

The I

nte

rnet

and e

-mail

accepta

ble

use p

olic

y w

ill b

e

revis

ed a

nd r

eis

sued.

ICT

Serv

ices w

ill intr

oduce a

pro

cedure

to c

arr

y o

ut

reg

ula

r m

onitoring (

both

Inte

rnet and e

-mail)

to e

nsure

th

at its p

rovis

ions a

re im

ple

mente

d b

y a

ll users

.

Corp

ora

te

Directo

r of

ICT

5

100

Auth

orised s

taff

may u

ndert

ake t

he

unauth

orised e

xport

of

off

icia

l data

/info

rmation

2

The p

roposed e

-mail

monitoring p

rocedure

will

in

clu

de

a c

heck t

o identify

and r

evie

w o

utg

oin

g e

-mails

that

have a

larg

e f

ile s

ize o

r volu

me o

f data

Corp

ora

te

Directo

r of

ICT

F

un

ds

an

d g

ran

ts

6

58

Theft/m

isappro

priation fro

m the M

ayors

Charity

B

ank A

ccounts

due t

o p

oor

contr

ol

arr

ang

em

ents

2 2

Imple

ment an a

nnual in

dependent re

concili

ation o

f in

com

e a

nd e

xpenditure

D

evelo

p a

nd issue p

rocedura

l g

uid

ance n

ote

s to the

Ma

yors

Secre

tary

reg

ard

ing

the c

ontr

ol of

incom

e.

Assis

tant C

hie

f E

xecutive

(BT

&I)

C

orp

Directo

r (G

overn

ance)

7

71/7

4

Act

as

the

"accounta

ble

body"

on

National

Lott

ery

funded p

roje

cts

there

fore

lia

ble

in t

he

event

of

third p

art

y f

raud o

r m

isappro

priation

2

When w

ork

ing w

ith p

art

ners

docum

enta

ry e

vid

ence o

f expenditure

will

be o

bta

ined o

r in

spection c

arr

ied o

ut to

obta

in a

ssura

nce o

f com

plia

nce

with p

roje

ct

req

uirem

ents

.

Assis

tant C

hie

f E

xecutive

(P&

P)

Corp

ora

te

Directo

r (P

eople

)

8

59

Theft/m

isappro

priation fro

m the E

lections B

ank

Accounts

(4)

- E

uro

pean -

Parlia

menta

ry -

C

ounty

- M

unic

ipal

2 2

An a

dditio

nal auth

orised s

ignatu

re w

ill b

e e

sta

blis

hed

and a

rrang

em

ents

will

be a

mended t

o r

eq

uire tw

o

independent

sig

natu

res o

n e

ach c

heque issued.

The c

ontr

ol and r

econcili

ation a

rrang

em

ents

should

be

carr

ied o

ut

by tw

o p

eople

.

Corp

ora

te

Directo

r (G

overn

ance)

9

75

Mis

appro

priation/u

nauth

orised u

se o

f fu

nds b

y

applic

ants

obta

ined a

s g

rants

due t

o a

lack o

f confirm

ation o

f expenditure

in a

ccord

ance w

ith

the g

rant applic

ation

2

Appro

ved g

rant applic

ations w

ill b

e m

onitore

d to o

bta

in

assura

nce o

f com

plia

nce w

ith t

he a

pplic

ation

req

uirem

ents

by o

bta

inin

g d

ocum

enta

ry e

vid

ence o

f expenditure

or

by inspection.

Corp

ora

te

Directo

r (P

eople

)

10

76

Unauth

orised u

se o

f fu

nds o

bta

ined a

s s

mall

2

A s

tandard

form

of

agre

em

ent w

ill b

e d

evelo

ped a

nd

Corp

ora

te

valu

e c

onserv

ation g

rants

due to a

lack o

f confirm

ation o

f expenditure

in a

ccord

ance w

ith

the g

rant applic

ation

imple

mente

d f

or

each g

rant

appro

ved.

Directo

r (B

usin

ess)

E

mp

loym

en

t a

nd

sta

ffin

g m

att

ers

11

43

Deception -

bre

ach o

f conditio

ns o

f th

e c

ar

loan s

chem

e d

ue to a

lack o

f th

e inspection o

f drivers

docum

enta

tion

2

Imple

ment an a

nnual check o

n d

ocum

enta

tion

V5/I

nsura

nce/D

rivin

g L

icence t

o c

onfirm

com

plia

nce

with t

he s

chem

e c

onditio

ns.

Assis

tant C

hie

f E

xecutive

(BT

&I)

12

86

Subm

issio

n o

f fr

audule

nt cla

ims u

nder

the

"Schem

e f

or

Fin

ancia

l In

centives T

o

Recru

itm

ent"

2

The r

esponsib

ility

for

ow

ners

hip

of

the s

chem

e w

ill b

e

cla

rified -

the s

chem

e a

nd d

ocum

enta

tion w

ill b

e

revis

ed a

nd u

pdate

d a

nd t

he p

aym

ent m

ediu

m c

larified

Corp

ora

te

Directo

r of

Hum

an

Resourc

es

13

113

Inadeq

uate

vett

ing

of te

mpora

ry o

r ag

ency

sta

ff a

nd c

ontr

acto

rs

2

Em

plo

ym

ent

Polic

ies a

nd a

rrang

em

ents

should

be

revie

wed t

o p

rovid

e a

dvic

e a

nd g

uid

ance t

o m

anag

ers

about th

e r

isks r

ela

ting

to t

he e

mplo

ym

ent of

ag

ency/c

ontr

acto

r and a

ssocia

ted s

tandard

of

backgro

und v

alid

ation r

eq

uired.

Corp

ora

te

Directo

r of

Hum

an

Resourc

es

14

114

Ma

licio

us/u

nath

orised/ille

gal activity d

ue t

o the

lack o

f a c

lear

exit s

trate

gy t

o a

ddre

ss

dis

gru

ntled m

em

bers

of sta

ff/leavers

2

Em

plo

ym

ent

Polic

ies a

nd a

rrang

em

ents

should

be

revie

wed t

o inclu

de a

form

al exit s

trate

gy to b

e a

dopte

d

when t

he c

ircum

sta

nces a

rise.

Corp

ora

te

Directo

r of

Hum

an

Resourc

es

15

38

Collu

sio

n o

r m

isappro

priation fro

m w

eak

contr

ol over

the a

d h

oc s

ele

ction,

eng

ag

em

ent

and p

aym

ent of

Coaches,

ente

rtain

ers

and

art

iste

s

2 2

When a

uth

orisin

g o

rders

/invoic

es m

anag

em

ent

will

undert

ake o

ccasio

nal spot

checks o

n p

aym

ents

that

drill

dow

n in t

o t

he s

ele

ction a

nd justification f

or

paym

ents

. A

valid

ate

d "

sele

ct

list"

will

be e

sta

blis

hed a

nd o

pera

ted

for

each type o

f activity.

Corp

ora

te

Directo

r (P

eople

)

Co

ntr

ol

an

d u

se

of

co

rpo

rate

ass

ets

16

79

Sale

of

land tra

nsactions c

om

ple

ted u

nder

seal

by t

he D

irecto

r of

Corp

ora

te G

overn

ance

where

clie

nt

instr

uctions d

o n

ot conta

in

refe

rence to the a

uth

ority

for

dis

posal

2

A c

ontr

ol w

ill b

e p

ut in

pla

ce t

o r

eq

uire a

clie

nt

offic

er

to

pro

vid

e c

lear

evid

ence o

f th

e a

uth

ority

for

dis

posal as

part

of

the "

clie

nt in

str

uctions"

to L

eg

al S

erv

ices.

Corp

ora

te

Directo

r (G

overn

ance)

17

31

Theft o

r m

isappro

priation fro

m "

the A

stley H

all

colle

ction"

by inte

rnal or

exte

rnal sourc

e

1 1

Imple

ment a c

om

pre

hensiv

e "

art

efa

cts

data

base"

in

com

plia

nce w

ith M

useu

ms S

ocie

ty s

tandard

s a

nd

recom

mended s

oft

ware

. U

ndert

ake a

"ro

lling p

rogra

m"

of

sto

ck r

econcili

ation

ag

ain

st th

e a

rtefa

cts

data

base w

hic

h inclu

des

independent

verification b

y L

eis

ure

Serv

ices

Manag

em

ent.

Corp

ora

te

Directo

r (P

eople

)

18

41

Mis

appro

priation/loss o

f eq

uip

ment

due to

obsole

te A

sset

Reg

iste

rs

2

Each D

irecto

rate

will

revis

e a

nd u

pdate

the a

sset

reg

iste

r to

ensure

it is

com

pre

hensiv

e a

nd u

p t

o d

ate

.

All

Directo

rs

Co

ntr

ol

ove

r ve

hic

les a

nd

fu

el

19

66/6

7

Theft o

f die

sel fu

el is

sued fro

m B

eng

al S

treet

Depot

or

petr

ol is

sued fro

m B

ung

alo

w S

erv

ice

Sta

tion a

/c d

ue t

o p

oor

contr

ol and

reconcili

ation.

1 1

Fully

im

ple

ment th

e c

om

pute

rised fuel is

sues

applic

ation/d

ata

base.

Revie

w c

urr

ent

opera

tional arr

ang

em

ents

and p

ut in

pla

ce a

form

al ag

reem

ent/

pro

cedure

incorp

ora

ting

eff

ective c

ontr

ol arr

angem

ents

.

Corp

ora

te

Directo

r (N

'hoods)

20

68

Obta

inin

g a

pecunia

ry a

dvanta

ge fro

m the

2

Develo

p a

nd im

ple

ment a c

learly d

ocum

ente

d "

Vehic

le

Corp

ora

te

dis

posal of

obsole

te v

ehic

les,

pla

nt and

eq

uip

ment

and P

lant

Dis

posal P

olic

y/P

rocedure

D

irecto

r (N

'hoods)

21

60

Theft o

f fu

el obta

ined for

Ma

yora

l cars

2 2

Month

ly r

econcili

ation o

f fu

el is

sues a

nd v

erification o

f m

pg

for

the c

ar

to b

e c

arr

ied o

ut as p

art

of

paym

ent

auth

orisation r

outine.

Inclu

de v

ehic

le d

eta

ils in the c

om

pute

rised fuel is

sues

applic

ation d

ata

base. (s

ee 1

9 a

bove)

Corp

ora

te

Directo

r (G

overn

ance)

Corp

ora

te

Directo

r (N

'hoods)

C

oll

ec

tio

n o

f m

isc

ella

ne

ou

s i

nc

om

e

22

2

N

on p

aym

ent

of

private

phone c

all

(landlin

e &

m

obile

)/printing c

harg

es d

ue t

o lack o

f eff

ective

colle

ction m

echanis

ms

1 1

Eff

ective t

ele

phone m

onitoring

arr

ang

em

ents

will

be

inclu

ded in t

he im

ple

menta

tion o

f th

e n

ew

tele

phony

contr

act.

A

sta

ndard

corp

ora

te p

rocedure

will

be im

ple

mente

d

and p

rom

ote

d t

o r

ais

e s

taff

aw

are

ness u

sin

g team

brief/

loop/e

-new

s a

nd v

iew

s.

Corp

ora

te

Directo

r of

ICT

C

orp

ora

te

Directo

r of

ICT

&

Off

ice

Support

23

7

Lack o

f cla

rity

about

arr

ang

em

ents

for

the

colle

ction o

f In

com

e fro

m s

ale

s o

f O

rdnance

Surv

ey M

aps.

2

As p

art

of th

e p

rocessin

g o

f th

e m

onth

ly invoic

e f

rom

"S

tansfield

s"

(Map S

upplie

r) the n

um

bers

of

pla

ns

pro

duced b

y the s

yste

m w

ill b

e r

econcile

d t

o t

he

num

bers

dow

nlo

aded a

nd t

he incom

e r

eceiv

ed m

onth

ly

- and d

iscre

pancie

s w

ill b

e investig

ate

d.

Corp

ora

te

Directo

r of

ICT

24

8

Colle

ction o

f charg

es for

serv

ices t

o C

CH

2

Directo

r of

ICT

Serv

ices to c

onfirm

that adeq

uate

deta

ils a

re s

pecifie

d in the c

ontr

act and s

uitable

m

onitoring a

rrangem

ents

are

in p

lace.

Corp

ora

te

Directo

r of

ICT

P

roc

ure

me

nt

25

61

Failu

re t

o c

onsult L

egal S

erv

ices a

nd p

ut

eff

ective a

gre

em

ents

in p

lace t

o p

rote

ct th

e

Council

for

serv

ices u

sually

under

£10000

2 2

The C

orp

ora

te P

rocure

ment G

uid

ance a

nd p

rocedure

s

will

be a

mended to s

pecify a

req

uirem

ent to

consult w

ith

Leg

al S

erv

ices t

o e

nsure

an a

ccepta

ble

agre

em

ent

is

put

in p

lace.

Leg

al S

erv

ices t

o p

roduce a

"g

ood p

ractice g

uid

e"

conta

inin

g b

ulle

t poin

ts s

ett

ing

out th

e m

ain

issues t

o

consid

er

and p

ote

ntial pitfa

lls t

o a

void

when c

om

ple

ting

contr

acts

at th

is level.

Corp

ora

te

Directo

r (G

overn

ance)

P

RIO

RIT

Y 1

A

gre

ed

acti

on

s t

hat

are

co

nsid

ere

d e

ssen

tial

as t

hey i

mp

act

sig

nif

ican

tly o

n t

he C

ou

ncil

's s

yste

m o

f g

overn

an

ce a

nd

in

tern

al

co

ntr

ol

an

d m

ay in

flu

en

ce exte

rnal

insp

ecti

on

o

utc

om

es.

A la

ck o

f ti

mely

im

ple

men

tati

on

w

ill

be re

po

rted

to

th

e A

ud

it

Co

mm

itte

e.

PR

IOR

ITY

2

Ag

reed

acti

on

s t

hat

will

sig

nif

ican

tly i

mp

rove t

he l

evel

of

co

ntr

ol

an

d w

ill

be m

on

ito

red

by I

nte

rnal

Au

dit

. A

lack o

f ti

mely

im

ple

men

tati

on

may b

e r

ep

ort

ed

to

th

e A

ud

it C

om

mit

tee.