QUARTERLY INTERNAL AUDIT UPDATE REPORT By: INTERNAL AUDIT ...

QUARTERLY INTERNAL AUDIT UPDATE REPORT To: Governance and Audit Committee: 16th March 2010 By: Director of Financial and Corporate Services (s.151 Officer): Sue

McGonigal Subject: INTERNAL AUDIT PROGRESS REPORT OF THE HEAD OF THE

AUDIT PARTNERSHIP. Classification: Unrestricted

Summary: This report gives Members a summary of the internal audit work

undertaken by the East Kent Audit Partnership in the period November 2009 to February 2010.

For Information 1.0 Introduction 1.1 This report includes the summary of the work of the East Kent Audit Partnership for

the third quarter of 2009-10. 2.0 Audit Reporting 2.1 For each Audit review, management has agreed a report, and where appropriate, an

Action Plan detailing proposed actions and implementation dates relating to each recommendation. Reports continue to be issued in full to each member of Corporate Management Team, as well as an appropriate manager for the service reviewed. Attached as Appendix 1 to the EKAP report is a summary of the Action Plans agreed in respect of the reviews covered during the period.

2.2 Follow-up reviews are performed at an appropriate time, according to the status of

the recommendation, timescales for implementation of any agreed actions and the risk to the Council.

2.3 An Assurance Statement is given to each area reviewed. The assurance statements

are linked to the potential level of risk, as currently portrayed in the Council’s risk assessment process. The assurance rating given may be Substantial, Reasonable, Limited or No assurance.

2.4 Those services with either Limited or No Assurance are monitored, and brought back

to Committee until a subsequent review shows sufficient improvement has been made to raise the level of Assurance to either Reasonable or Substantial. A list of those services currently with such levels of assurance is attached as Appendix 2 to the EKAP report.

2.5 The purpose of the Council’s Audit Committee is to provide independent assurance

of the adequacy of the risk management framework and the associated control environment, independent review of the Authority’s financial and non-financial

performance to the extent that it affects the Authority’s exposure to risk and weakens the control environment, and to oversee the financial reporting process.

2.6 To assist the Committee meet its terms of reference with regard to the internal

control environment an update report is regularly produced on the work of internal audit. The purpose of this report is to detail the summary findings of completed audit reports and follow-up reviews since the report submitted to the last meeting of this Committee.

3.0 Summary of Work 3.1 There have been eight Internal Audit reports completed during the period. Of these

audits, one concluded Substantial assurance, four concluded Reasonable Assurance, and one report results in a Limited Assurance level. Additionally, two reports related to Housing Benefit quarterly claim testing (quarters 2 and 3) to which an assurance level is not applicable. The audit review which concluded Limited Assurance was in respect of Environmental Health Food Safety and the main area of concern was in respect of the strict rotation of food safety inspections between members of the food safety team. Summaries of the report findings and the recommendations made are detailed within Annex 1 to this report.

3.2 In addition, three follow-up reviews have been completed during the period. There

are no continuing concerns regarding these reviews to bring to Members’ attention at this time.

3.3 The Thanet District Council audit plan for 2009-10 was 75% complete as at 31-12-09

and the performance figures for the East Kent Audit Partnership for the second quarter of 2009-10 show reasonable performance against target.

4.0 Options 4.1 That members consider and note the quarterly internal audit update report.

4.2 That the changes to the agreed 2009-10 internal audit, resulting from changes in perceived risk, detailed at point 5.0 of the attached report be approved.

4.3 That the changes to the agreed 2009-10 internal audit, resulting from changes in

perceived risk, detailed at point 5.0 of the attached report are not approved. 4.4 That Members consider (where appropriate) requesting an update from the relevant

Director/s to the next meeting of the Committee in respect of any areas identified as still having either limited or no assurance following follow-up.

4.5 That Members consider registering their concerns with Cabinet in respect of any

areas of the Council’s corporate governance, control framework or risk management arrangements in respect of which they have on-going concerns after the completion of internal audit follow-up reviews and update presentations from the relevant Director.

5.0 Corporate Implications 5.1 Financial Implications 5.1.1 There are no financial implications arising directly from this report. The costs of the

audit work have been met from the Financial Services 2009-10 budget.

5.2 Legal Implications 5.2.1 The Council is required by statute (under the Accounts and Audit Regulations and

section 151 of the Local Government Act 1972) to have an adequate and effective internal audit function.

5.3 Corporate Implications 5.3.1 Under the Local Code of Corporate Governance accepted by Cabinet on 8th

December 2009, the Council is committed to comply with requirements for the independent review of the financial and operational reporting processes, through the external audit and inspection processes, and satisfactory arrangements for internal audit.

6.0 Recommendations 6.1 That the report be received by Members. 6.2 That the changes to the agreed 2009-10 internal audit plan, resulting from changes in

perceived risk, detailed at point 5.0 of the attached report be approved.

Christine Parker, Head of the Audit Partnership, ext. 7190 Simon Webb, Audit Manager, ext 7190

Contact Officers: Sue McGonigal, Director of Financial and Corporate Services (s.151 Officer) Ext. 7790

Annex List:

Annex 1 East Kent Audit Partnership Quarterly Report – 16-03-10

Background Papers:

Title Details of where to access copy

Internal Audit Annual Plan 2009-10

Previously presented to and approved at the 17th March Governance and Audit Committee meeting

Internal Audit working papers

Held by the East Kent Audit Partnership

ANNEX 1

UPDATE REPORT FROM THE HEAD OF THE EAST KENT AUDIT PARTNERSHIP,

COVERING THE PERIOD NOVEMBER 2009 TO FEBRUARY 2010. 1.0 INTRODUCTION AND BACKGROUND 1.1 This report provides Members with an update of the work undertaken by the East

Kent Audit Partnership during the period from November 2009 to February 2010. 2.0 SUMMARY OF REPORTS

Service / Topic Assurance level

Number of

Recs Made

Number of

Recs Accepted

2.1 Treasury Management Substantial H M L

0 0 0

H M L

0 0 0

2.2 Food Safety Limited H M L

4 5 1

H M L

4 5 1

2.3 Emergency Planning Reasonable H M L

3 2 0

H M L

3 2 0

2.4 Let Properties and Concessions

Reasonable H M L

5 2 1

H M L

5 2 1

2.5 Housing Benefits – Quarter 2 Testing

Not Applicable

2.6 Capital Reasonable H M L

2 1 0

H M L

2 1 0

2.7 East Kent Shared Services Reasonable H M L

0 7 2

H M L

0 7 2

2.8 Housing Benefits – Quarter 3 Testing

Not Applicable

2.1 Treasury Management:

2.1.1 Business Objective

To ensure that various Treasury Management matters within the remit of the accountancy office are performed effectively & efficiently, in furtherance of the Council’s Policies.

2.1.2 Audit Objective

ANNEX 1

To provide assurance on the adequacy and effectiveness of the procedures and controls established governing Treasury Management.

2.1.3 Summary of Findings

The council has appointed two Finance Officers to oversee the council’s management of investments, cash flows, banking, money market and capital market activities. They have a sound knowledge of the systems in place and are charged with the effective control of the risks associated with these transactions and obtaining the optimum results having taken into account the risks associated with Treasury Management.

The council has working cash balances and investment funds which it deposits for varying periods in financial institutions. The emphasis is on protecting the money invested, so deposits are widely spread across a number of banking institutions in instant access accounts.

In light of the current financial market the Council is being cautious and taking steps to limit the risk of financial investment by concentrating on the security of investments as opposed to obtaining the highest return on those investments. The policy for lending has recently been reviewed to reflect this and ensure there are robust controls in place and all investments are made prudently.

2.1.4 Management Response

Management are pleased with the outcome of this audit review. It demonstrates that officers are effectively managing the risks associated with placing investments whilst still trying to obtain the best rate of return for the Council. Treasury management is seen as an important part of the Finance function and it is pleasing that the report reflects that all the key controls are in place and working effectively.

2.1.5 Audit Assurance

Management can place Substantial Assurance on the system of internal controls in operation.

2.2 Food Safety:


To reduce the incidence of food poisoning within the district through effective registration and inspection of all food businesses, investigation of food complaints, enforcement of the Food Hygiene Regulations 2006 and associated legislation, provision of food hygiene training, and offering advice and guidance.


To provide assurance on the adequacy and effectiveness of the procedures and controls established to ensure that both the business objectives and the Council’s legal responsibilities are met.


ANNEX 1

Whilst many of the control procedures within the Council’s food safety service are effective, there are however areas of concern where the control environment needs to be strengthened in order to reduce risk and improve value for money.

The allocation of inspections of food premises needs to ensure that they are

adequately rotated within the team. Testing undertaken as part of the audit highlighted concerns in this area that inspections are not being adequately rotated between staff in all instances. In one example the same inspector had undertaken each of the last five inspections of a food premises over a period of six years. This is considered to be a very high risk which needs to be addressed without delay.

Compliance testing of the income collected from a sample of Basic Food Hygiene

courses highlighted that an incorrect fee had been levied which was not in accordance with the approved Schedule of fees and charges.

Members of the Food Safety team are paid a fee of £360 for preparing and

presenting a Basic Food Hygiene course. The authorisation for this expenditure was approved by Committee in 1992 (at which time it was benchmarked against what lecturers at Thanet College received) but has not been reviewed since. Audit enquiries as part of this review have revealed that no other East Kent cluster Council makes any payment to its staff for presenting food hygiene courses.

Members of the Food Safety team also receive overtime payments for undertaking

evening inspections of food premises. Whilst these evening inspections form a valuable part of the inspection regime, the justification for overtime payments needs to be reviewed in the current economic climate.

The departmental risk register for food safety was found to contain limited information

and requires updating. The Council’s Food Safety team should undertake regular benchmarking of the

service across the East Kent Cluster, Kent and other relevant family groups. The Food Safety pages on the Council’s internet also need to be reviewed and

updated in order to make them more informative. Policies and procedures covering this service area are comprehensively documented. 2.2.4 Management Response Actions have been identified to address the weaknesses identified in the audit report.

It is hoped that a majority of these actions will be completed before the Public Protection Manager leaves in April.

2.2.5 Audit Assurance Management can place Limited Assurance on the systems of internal controls in

operation. 2.3 Emergency Planning:

Business Objective

ANNEX 1

2.3.1 To ensure that the Council fulfils its obligations under the Civil Contingencies Act 2004 in planning for and responding to emergencies.


To provide assurance on the adequacy and effectiveness of the procedures and controls established to ensure that the business objective is met.

2.3.3 Summary of Findings The Council has reasonable systems and procedures in place to ensure that it fulfils

its obligations under the Civil Contingencies Act 2004 in planning for and responding to emergencies. The principal role of the Council in Emergency Planning is the recovery phase, after the blue light services have effectively completed been stood down, however this does necessitate the Council being involved from the outset such that it is sufficiently informed to take control.

There are however several issues that need to be addressed to ensure that Thanet

District Council is able to continue to fulfil its legal obligations. A revised emergency plan is being developed based upon the template that has

been adopted across the whole of the County. This emergency plan will have functional plans that will provide the guidance and direction for the services (Homelessness, Media etc) in the event of an emergency that requires the assistance of the Local Authority. The Council hopes to have these plans in place by early 2010 at which time a timetable for testing them should be drawn up and put in place to provide assurance that the functional plans can deliver their expected objectives.

The Emergency Planning Officer has expressed concerns over the Authority’s

capacity to deliver its obligations in prolonged emergency situations e.g. to provide emergency after-care for longer than 8 to 10 hours after an emergency arising. This is a difficult element to test as part of the plan or any exercise and to do so would incur a significant cost. However, Dover District Council is putting on an exercise (GUSTO2) at some point next financial year to look at the recovery function. No date has yet been set for this exercise but it should be during 2010. The Council should consider approaching Dover District Council to observe their recovery exercise that is planned for 2010 or to ask them if Thanet District Council could use their template to plan and carry out its own recovery exercise instead of “re-inventing the wheel”.

Positive action has been taken in Thanet to ensure that an Activation Officer is

always on call to be the initial contact on behalf of the Authority. A call out rota has been put in place with a “grab bag” to ensure that the officer has all the relevant documentation and information when advising the District Emergency Co-ordinator. Additional District Emergency Co-ordinators have been identified and these officers are to receive training on this role through the SLA that is in place with Kent County Council for emergency planning assistance.

2.3.4 Management Response The Council’s Management Team (CMT) recently agreed organisational changes,

with no budget change, to improve Emergency Planning resilience. A Deputy Emergency Planning Officer is now responsible for compiling and updating procedures, and the Activation List is being strengthened with reserves.

ANNEX 1


Management can place Reasonable Assurance on the system of internal controls in operation.

2.4 Let Properties and Concessions:


To ensure that the Council derives the maximum value from its let properties and concessions and that where applicable these lettings further support the Council’s regeneration aims and aspirations.


To provide assurance on the adequacy and effectiveness of the procedures and controls established over the Council’s commercially let properties and concessions.

2.4.3 Summary of Findings The Let Properties process is generally working well and most of the expected

controls are effective; however there are a number of areas in which improvements are required to strengthen the control regime.

The main issue that needs to be addressed is the outstanding rent reviews that have

been contracted out to an agent and setting a completion date for these. They were appointed in late 2007 to carry out 71 rent reviews, currently they have only completed 50% of the work some 2 years later. All of the rent reviews still outstanding have already passed the expiry lease date in terms of rent reviews.

There is currently no policy in place for voids, leases, rent reviews and lettings. These

could be combined into one generic policy together with the Asset Management plan that could support the Asset Management Strategy 2007-20011 that has been developed with considerable Member input.

Following amendments to the Asset Management Strategy the Constitution needs to

be reviewed to ensure that the section dealing with the disposal of land is in line with the new strategy. Additionally, the Constitution does not state any financial limits that the Director of Regeneration Services is able to work to before Member approval is sought for the agreement of new and surrender of existing leases. It is envisaged that Member agreement is only necessary for the exceptional case of under valuations. The Constitution will state disposals will obtain best (highest value) unless agreed by Members otherwise.

Clarification is also required on what powers have been delegated to officers and any

financial limits to act on behalf of the Director of Regeneration Services in terms of approving rent reviews and other decisions.

By comparison with neighbouring Councils, Thanet has a small number of staff

considering the size of its asset register, and the significance of the Asset Management Strategy. Its costs will therefore be lower than those of neighbouring Councils.

2.4.4 Management Response

ANNEX 1

Management accept the findings of the audit review and are in the process of implementing the agreed action plan.

2.4.5 Audit Assurance Management can place Reasonable Assurance on the system of internal controls in

operation. 2.5 Housing Benefits 2009-10 Quarter 2 Testing: 2.5.1 Introduction Over the course of the 2009-10 financial year the East Kent Audit Partnership has

been completing a sample check of council tax, rent allowance and rent rebate benefit claims to support the Audit Commission’s verification work.

2.5.2 Findings: For the second quarter of 2009-10 financial year (July to September) five claims

(including new, cancellation and change of circumstances) of each benefit type were randomly selected for verification.

In total 20 benefit claims were checked and of these one has failed the criteria set by

the Audit Commission’s verification guidelines. This means that under the Audit Commission requirements 40 additional claims have to be checked by the Housing Benefits section for each error type found on the failures.

2.6 Capital:


To provide an effective and efficient evaluation and approval procedure for capital projects and robust financial procedures to enable sufficient budgetary provision to be made available for their funding.


To provide assurance on the adequacy and effectiveness of the procedures and controls established in the systems to ensure achievement of the business objectives stated above.

2.6.3 Summary of Findings Management can place Reasonable Assurance on the system of internal controls in

operation in respect of Capital Growth Bids. The Finance Manager (HRA, Capital and External Funding) has been responsible for

the Capital Programme since November 2009.

The Capital growth bids are presented to the Finance Manager (HRA, Capital and External Funding) for evaluation and are then presented to Corporate Management Team. They are then passed through a process of approval with Cabinet. Budget Managers and the Finance Manager (HRA, Capital and External Funding) monitor the Capital Spend and report this to Members.

ANNEX 1

Monitoring is carried out as part of the budget monitoring process. Monthly reports are submitted to budget managers. A formal monthly report goes to CMT and Cabinet receives a quarterly report.

There is a lack of documented hard copy evidence that each existing capital growth

bid has proceeded through the correct project management process. Testing has showed that the four new bids did however, commence this route correctly and records are kept to evidence this. The Finance Manager (HRA, Capital and External Funding) is in the process of putting together a folder for each growth bid to record each process as it happens.

2.6.4 Management Response Significant improvements have been made with capital budget monitoring over the

last few months but management recognise that further improvements are still required with regard to capital appraisals and post implementation reviews. Management will ensure that the recommendations made within the report are met by the agreed dates


Management can place Reasonable Assurance on the system of internal controls in operation in respect of Capital Growth Bids.

2.7 East Kent Shared Services: 2.7.1 Business Objective

To ensure that the four East Kent Cluster Council’s are able to capitalise on opportunities for joint working, through collaboration and shared services and that these projects are based upon sound project proposals to provide efficiencies in the services put forward.

2.7.2 Audit objective

To provide assurance on the adequacy and effectiveness of the governance, project management and communication processes and controls established to ensure achievement of the stated East Kent Joint Arrangements Committee objectives.


Four Authorities, Canterbury, Shepway, Dover and Thanet came together to consider the possibility of joint working in areas where financial savings and service improvements could be achieved. There is a traceable history of the Chief Executives’ meetings going back to March 2007 and of discussions covering shared services from that time. The need for formal arrangements to be in place to address the management of projects was recognised early by this forum. Officers were charged with the responsibility of identifying suitable ways to ensure a legal and accountable approach was adopted. As a result of a considerable amount of work around the legal aspects of such collaboration a formal framework was arrived at consisting of four bodies. The East Kent Leaders’ and Chief Executives’ group, the East Kent Chief Executives’ Forum, The East Kent Joint Arrangements Committee and the East Kent Joint Scrutiny Committee.

ANNEX 1

The audit noted that before the formal establishment and adoption of the committee structure outlined above, work continued apace on identifying areas where joint working might prove beneficial. This was a pragmatic approach in the light of the political and financial imperatives to establish whether in practice sharing would improve services and/or strengthen their resilience and reduce costs.

The operating arrangements allow the strategic aims of each participating authority to

be achieved in either a multi or single shared service without compromising any other party. The EKJAC has delegated authority “to exercise the executive and non-executive functions of the parties in order to commission, co-ordinate, provide, procure and/or manage any shared services as are agreed from time to time by two or more of the parties”. These powers have been used for the Human Resources project to a much greater extent than for any other service, to great effect.

As part of the core procedures an excellent Project Initiation process map was

prepared setting out the steps to be followed for each shared project and a standard form of documentation was agreed for each manager to use when submitting proposals.

Facility is built into the procedures for financial predictions to face rigorous scrutiny

throughout the gestation period. Each authority needs to establish what value can be achieved by joining a shared services and good practice would suggest that a realistic and supportable baseline position should be established at the outset and adhered to unless other factors come into force.

Officers interviewed during the course of the audit mentioned the considerable

amount of time spent away from their “day jobs” to undertake the shared services work, in one instance 80% plus. The expanding nature of the shared services agenda indicates that more staff time will need to be committed to projects.

The clear vision required for each project needs to be established at the outset by

strong guidance from the East Kent Joint Arrangements Committee wherein the ultimate power resides for the strategic guidance of officers. This group consists of 10 named councillors from the participating authorities. Member engagement is vital in achieving the shared vision for joint services.

Further consideration for assets and how they will be managed and formalised should

be included in the implementation planning. In this context, assets should also be taken to include contracts, which should be identified early in the project so that suitable arrangements for novation can be put in place.

The creation of new business units of whatever style is properly achieved when the

business case fully understands and presents a transformational programme which addresses and timetables the stages of integration and the path to be followed to achieve a successful structural merger whilst still delivering the day to day services. Project business cases should therefore include an indication of the potential service transformation that could, credibly, achieve the level of savings being forecast.

2.7.4 Management response

The report was reviewed by the four s151 Officers and presented to the East Kent Chief Executives’ Forum, the minutes to that meeting record the discussion and agreement to the actions in the recommendations and note that “EKAP were thanked for their report”.

ANNEX 1

2.7.5 Assurance Statement Management can place Reasonable Assurance on the controls in place.

2.8 Housing Benefits 2009-10 Quarter 3 Testing: 2.8.1 Introduction Over the course of the 2009-10 financial year the East Kent Audit Partnership has

been completing a sample check of council tax, rent allowance and rent rebate benefit claims to support the Audit Commission’s verification work.

2.8.2 Findings: For the third quarter of 2009-10 financial year (October to December) five claims

(including new, cancellation and change of circumstances) of each benefit type were randomly selected for verification.

In total 20 benefit claims were checked and of these five have failed the criteria set by

the Audit Commission’s verification guidelines. This means that under the Audit Commission requirements 40 additional claims have to be checked by the Housing Benefits section for each error type found on the failures.

3.0. FOLLOW UP OF AUDIT REPORT ACTION PLANS: 3.1 As part of the period’s work, three follow up reviews have been completed of those

areas previously reported upon to ensure that the recommendations made have been implemented, and the internal control weaknesses leading to those recommendations have been mitigated. Those completed during the period under review are shown in the following table.

Service/ Topic Original Assurance

level

Revised Assurance

level

No of Recs Made

No of Recs Implemented

a) Dickens House Admissions

Limited Reasonable H M L

3 0 0

H M L

2 0 0

b) Visitor Information Centres

Limited Limited H M L

8 0 0

H M L

4.5 0 0

c) Pest Control Reasonable Reasonable H M L

1 3 3

H M L

1 2 partial

2

3.2 As highlighted in the above table, those areas previously reported as having a

Limited or No assurance have been reviewed and Members are advised as follows: a) Dickens House Admissions:

Two of the three high level recommendations have been implemented as far as is feasible at present. The third recommendation to raise sundry debtor invoices for visitor fees is no longer relevant and therefore not implemented. Visitors pay at the time prior to the start of the tour.

ANNEX 1

The Principal Visitors Services Officer has created electronic waybills for Broadstairs Museum and VIC which resolves the previous mis-coding issues and ensures automatic calculation of figures and any unders and overs. This system was also extended to all Council VICs in 2008.

Overall, I am pleased to report that as a result of the action taken the system’s controls have improved and the risks reduced. Consequently the original audit opinion is revised to give a higher level of assurance, from Limited Assurance to Reasonable Assurance.

b) Visitor Information Centres:

Of the eight high level recommendations four can be said to have been implemented with the additional partial implementation of another.

There are acknowledged difficulties associated with the operation of the Broadstairs VIC due to its location in a museum run by volunteers who are not obliged to comply with all the Council’s procedure rules. This situation is historic and prevents all recommendations being fully implemented.

The long-awaited implementation of the EPOS (electronic point of sale) system should improve controls at Dickens House especially together with the ongoing work developing standard office procedures should improve controls across all sites.

Overall, as a result of the action risks have been reduced and reasonable progress has been made toward the overall objective of improving the internal control regime. However, until such time as the EPOS system has been implemented and a full internal audit review has confirmed the adequacy of the internal controls it would be premature to raise the assurance level from Limited Assurance at the present time.

4.0 WORK-IN-PROGRESS: 4.1 During the period under review, work has also been undertaken on the following

topics, which will be reported to this Committee at future meetings: Compliance with Contract Procedure Rules, Overtime, Child Protection, Employee Health and Safety, Housing Benefit Fraud Arrangements, Car Parks, Debtors, Creditors, Main Accounting System, Payroll, Choice Based Lettings, Homelessness and Thanet Leisure Force.

5.0 CHANGES TO THE AGREED AUDIT PLAN: 5.1 The Audit plan was agreed by Members at the meeting of this Committee on 17th

March 2009. 5.2 The Head of the Audit Partnership meets on a monthly basis with the Section 151

Officer to discuss any amendments to the plan. Members of the Committee will be advised of any significant changes through these regular update reports. Minor amendments have been made to the plan during the course of the year as some high profile projects or high-risk areas have been requested to be prioritised at the expense of putting back or deferring to a future year some lower risk planned reviews. The detailed position regarding when resources have been applied and or changed are shown as Appendix 3.

6.0 FRAUD AND CORRUPTION:

ANNEX 1

An investigation concerning the Grounds Maintenance Service, commissioned by the s151 Officer, is currently underway and will be reported to the June meeting of Governance and Audit Committee.

7.0 INTERNAL AUDIT PERFORMANCE 7.1 For the six month period to 31st December 2009, 297.80 chargeable days were spent

out of a planned total of 400. Approximately 75% of the plan has therefore been completed. All of the recommendations made within reports to management have been accepted by them.

7.2 The financial performance of the EKAP is on target and there are no concerns to

highlight at this time. 7.3 As part of its commitment to continuous improvement and following discussions with

the s.151 Officer Client Group, the EKAP has established a range of performance indicators which it records and measures. The performance against each of these indicators for the first quarter of 2009-10 is attached as Appendix 5. There are no concerns regarding the resources engaged or outputs achieved at this time, and the East Kent Audit Partnership is performing well at this time against its targets for the 2009-10 financial year.

7.4 The EKAP audit maintains an electronic client satisfaction questionnaire which is

used across the partnership. The satisfaction questionnaires are sent out at the conclusion of each audit to receive feedback on the quality of the service. Current feedback arising from the customer satisfaction surveys is attached as Appendix 4.

Attachments

Appendix 1 Summary of recommendations resulting from the period’s work Appendix 2 Summary of services with Limited / No Assurances Appendix 3 Progress to 31st December 2009 against the agreed 2009-10 Audit Plan. Appendix 4 Feedback from Customer Satisfaction Questionnaires Received During

the period. Appendix 5 EKAP Balanced Scorecard of Performance Indicators to 31st December

2009. Appendix 6 Assurance statements

APPENDIX 1

SUMMARY OF RECOMMENDATIONS RESULTING FROM THE PERIOD’S WORK

REVIEW DATE REPORT

ISSUED RECOMMENDATION/ WEAKNESS ACTION TO BE TAKEN

RESPONSIBILITY AND TARGET DATE

Approach Dover District Council to observe their recovery exercise that is planned for 2010 and ask them if the Council could use their template to plan and carry out its own recovery exercise

Liaise with DDC and wider LA group regarding recovery plan. Develop plan and test.

End 2010

Engineer

Put in place a timetable for the testing of the function plans and the revised emergency plan.

Continue to develop suite of functional plans along side main plan. Carry out a programme of plan testing and validation through tabletop and live exercises as deemed to be required.

Completion of main plan – Feb 2010

Completion of functional

plans – May 2010

Plan testing and validation – end 2010

Engineer

Emergency Planning

16-12-09

Ensure that all Activation officers know how to set up the emergency centre if a major emergency occurs that requires the emergency centre to activated.

Train EAO’s and selected staff with EP responsibilities in set up of Emergency Centre

May 2010 (Following Refurbishment)

Engineer


REVIEW DATE REPORT



The Constitution should clearly state if there are any financial limits that the Director of Development Services is able to work to before Members approval is sought on the agreement of and surrender of leases.

Reports to Asset Management WP, Constitutional Review WP Cabinet and Council – purpose to align the Asset Management Strategy with the Constitution against the embedded principles of the Council obtaining best value for its land and property at all times, unless decisions by Members, within the content of the Corporate Plan, dictate otherwise

September 2010

Director of Economic Development and Regeneration

Building Control and Property Manager Estates Surveyor

Clarification is required on what powers have been delegated to officers and financial limits to act on behalf of the Director in terms of approving rent reviews and other decision making decisions.

Reports to Asset Management WP, Constitutional Review WP Cabinet and Council – purpose to align the Asset Management Strategy with the Constitution against the embedded principles of the Council obtaining best value for its land and property at all times, unless decisions by Members, within the content of the Corporate Plan, dictate otherwise

September 2010

Director of Economic Development and Regeneration

Building Control and Property Manager Estates Surveyor

Put in place discussions with Caxtons to identify and agree an end date by which they will have completed all of the rent reviews that have passed to them.

Outstanding reviews to be scheduled first quarter 2010/11 and carried out.

1 June 2010

Estates Surveyor

Let Properties and

Concessions 11-01-10

Prioritise bringing the rent reviews up to date so that TDC`s income streams are improved and the tenants are paying a fair market rent based on the current market environment.

Action 1 in this schedule will avoid the future possibility of any rent review being missed

1 April 2010

Technical Officer


REVIEW DATE REPORT



Let Properties and

Concessions 11-01-10

As part of the ongoing development of office procedures to consider putting in place policies / guidance for dealing with Voids, Rent Reviews, Surrender of Leases and the format of leases.

Decisions are taken professionally within RICS procedures. This principle will be incorporated into the Asset Management Strategy and the Constitution of the Council, including its Scheme of Delegations

May 2010

Estates Surveyor & Asset Manager

The Director of Community Services should undertake a review of the on-going justification for payments to staff for preparing and presenting Food Safety courses.

Director of CS to undertake further enquiries of other local authorities to review how courses are run and resources.

Director of Community Services by 31 May 2010

The Director of Community Services should undertake a review of the on-going justification for overtime payments to staff

Overtime payments ceased before the publication of the audit report.

Completed

Food Safety 11-02-10

Ensure refunds made to the individuals overcharged in 2009-10 and ensure better communication of the fees and charges in future years.

Refunds were made as soon as error was identified. The website entry gives the correct fee and will be updated for 2010/11 after reference to fee and charges schedule agreed by Members.

Public Protection Manager by 31 March

2010


REVIEW DATE REPORT



Food Safety 11-02-10

The allocation of inspections should ensure that inspections of food premises are adequately rotated within the team i.e. Planned inspections should always be undertaken by a different member of staff to the previous inspection; and Investigations of complaints concerning food premises should always be investigated by a different member of staff to that which undertook the last planned inspection.

A random allocation procedure is already in place and this will be amended to include criteria to ensure premises not allocated to same officer for consecutive inspections. The procedure will exceptionally allow for consecutive inspections where specialist knowledge is required, or where a programme of improvements is in progress

Public Protection Manager by 31 March

2010

Capital 03-03-10

Each capital growth project bid should follow the correct agreed project management process. A header sheet should be introduced to record that each process has been recorded from project brief through to post implementation review.

Prior to the 2010/11 budget process this was not undertaken. All new bids are now recorded in this way and will have a post implementation on completion.

July 2010

Finance Manager (HRA,

Capital & External Funding)


REVIEW DATE REPORT



Capital 03-03-10

There should be some documented procedures detailing the processes to be followed in respect of capital growth bids to enable another Finance Officer within Accountancy to step in during any unforeseen absences. Ensure that procedure notes provide sufficient detail to assist officers within Accountancy should they have to complete Capital Bid forms if the Senior Finance Officer is absent.

All staff within the team will have the writing of procedure notes as a target within their staff appraisal.

August 2010

Finance Manager (HRA,

Capital & external Funding)

APPENDIX 2

SERVICES GIVEN LIMITED / NO ASSURANCE LEVELS STILL TO BE REVIEWED

Service Reported to Committee

Level of Assurance

Management Action Follow-up Action Due

FOI and Data Protection March 2008 Limited Assurance still Limited after follow-up. Further work to be undertaken in the third quarter of 2009.

Audit scheduled for March 2010

Compliance with CPRs December 2008 Limited Assurance level Limited at the time of the last two audits. On-going management action required.

Follow-up in progress as part of 2009-10 audit

Maritime Services December 2008 Limited On-going management action in progress to remedy the weaknesses identified.

Follow-up in Progress

Business Continuity September 2009

Limited On-going management action in progress to remedy the weaknesses identified.

Spring 2010

Food Safety March 2010 Limited On-going management action in progress to remedy the weaknesses identified.

Spring 2010

APPENDIX 3

PROGRESS TO DATE AGAINST THE AGREED 2009-10 AUDIT PLAN.

Area Original Planned Days

Revised Budgeted Days as

at 31-12-09

Actual days to 31-12-09

Status and Reason for difference planned v actual and/or revised

budget

FINANCIAL SYSTEMS:

Capital 8 8 0.17 Finalised

Treasury Management 8 8 0.17 Finalised

Housing Benefits - Payments 7 6.95 6.95 Finalised

Housing Benefits - Overpayments 7 6.64 6.64 Finalised

Housing Benefits – Fraud Investigation Arrangements

6 6 0.17 Work in Progress

Housing Benefits – Quarterly Testing 20 20 16.27

Work in progress throughout 2009-10.

Quarters 1, 2 and 3 testing Finalised.

Key Controls – Payroll 3 3 2.40 Work in Progress

Key Controls – Car Parks 3 4 3.79 Work in Progress

Key Controls - Creditors 3 3 3.02 Work in Progress

Key Controls - Debtors 3 3 2.53 Work in Progress

Key Controls – Main Accounting System 3 3 2.09 Work in Progress

GOVERNANCE RELATED:

Compliance with Contract Procedure Rules


Data Protection/FOI 10 10 0.17 Planned for late Quarter 4

Local Code of Corporate Governance 5 5 0.17 Work in Progress

Performance Validation/Data Quality 15 11.15 11.15 Finalised

Governance and Audit Committee/Corporate

25 24.07 21.41 Work in progress throughout

2009-10

Risk Management 10 8.10 8.10 Finalised

East Kent Shared Service Projects 5 6.64 6.64 Finalised

SERVICE LEVEL:

Employee Allowances and Benefits 8 8.36 8.36 Finalised

Mortgages 5 3.59 3.59 Finalised

Human Resources Related 5 0 0 Audit removed from plan to accommodate unplanned



at 31-12-09



budget

work of more significant risk.

Employee Health & Safety 10 10 8.99 Work in Progress

Food Safety 8 8.50 8.3 Finalised

Pest Control 8 7.49 7.49 Finalised

Coast Protection 10 0 0 Audit removed from plan to accommodate unplanned work of more significant risk.

Contract Monitoring 12 0 0 Audit removed from plan to accommodate unplanned work of more significant risk.

Homelessness 10 10 0.17 Work in Progress

Housing Allocations/Choice Based Lettings


Visitor Information Centres 10 0 0 Audit removed from plan to accommodate unplanned work of more significant risk.

Cliftonville Renewal Area/Margate Central

10 0 0 Audit removed from plan to accommodate unplanned work of more significant risk.

Child Protection 8 8 0.24 Work in Progress

Let Properties and Concessions 10 12.59 12.59 Finalised

Equality and Diversity 8 0.17 0.17 Audit removed from plan to accommodate unplanned work of more significant risk.

Thanet Leisure Force 15 15 0.65 Work in Progress

Improvement Grants 10 0 0 Audit removed from plan to accommodate unplanned work of more significant risk.

Housing Revenue Account 8 0 0 Audit removed from plan to accommodate unplanned work of more significant risk.

Procurement 10 0 0 Audit removed from plan to accommodate unplanned work of more significant risk.

ICT – Network Security 8 8.23 8.23 Finalised

ICT – Change Controls 8 0 0 Audit removed from plan to accommodate unplanned work of more significant risk.

Emergency Planning 8 9.22 9.22 Finalised

Waste Management & Recycling 10 5 0.17 Planned for March 2010

OTHER



at 31-12-09



budget

Liaison with Audit Commission 5 3.5 3.50 Work in progress throughout

2009-10

Follow-up Work 25 11 10.43 Work in progress throughout

2009-10

FINALISATION OF 2008-09 AUDITS

Regeneration 0.03 Audit removed from plan to accommodate unplanned

work of more significant risk.

Community Safety 2.76 Finalised

Thanet Gateway Plus 8.70 Finalised

Business Continuity 6.04 Finalised

Business Rates 1.11 Finalised

Partnerships 0.89 Finalised

Insurance 2.38 Finalised

Local Code of Corporate Governance

5 22.09

0.18 Finalised

UNPLANNED WORK

Grounds Maintenance Investigation 94 92.51 Work in Progress

Creative Margate – Consultancy Arrangements

6.71 6.71 Work in Progress

Total 400 400 297.80 75% Complete as at 31-

12-10

UNPLANNED ADDITIONAL WORK

Interreg Grant – Customer Services - - 0.07 WIP – First Level Controller sign off charged to project

Interreg Grant – Tudor House - - 2.31 WIP – First Level Controller sign off charged to project

Overtime Review - 8 6.13 Additional audit requested by

Director of Finance

Feedback from ‘Customer Satisfaction Questionnaires’ received during the period

APPENDIX 4

Position

Service audited

Were you given adequate notice of the audit?

Was the audit work undertaken at a convenient time?

Were you informed of the audit objectives and scope?

Were you given the opportunity to influence the scope

Were the interviews conducted in a professional manner?

Were the findings adequately supported by the evidence?

How would you rate the standard of the report

After the audit what perception does your service area have of audit

Do you feel the audit was worthwhile?

No Customer Satisfaction Questionnaires have been completed during the period

APPENDIX 5 BALANCED SCORECARD

INTERNAL PROCESSES PERSPECTIVE: Chargeable as % of available days Chargeable days as % of planned days Percentage of recommendations at Quarter 2; Closed Not Yet Due Now Due for Follow Up No. Escalated after Follow Up Percentage compliance with the CIPFA IA Code

2009-10 Actual

Quarter 3

82%

77%

20% 29% 51% 0

97%

Target

75%

75%

50% 25% 25% 0

97%

FINANCIAL PERSPECTIVE: Cost per Audit Day (Reported Annually)

2009-10 Actual

£

Target

£300

APPENDIX 5 BALANCED SCORECARD

CUSTOMER PERSPECTIVE: Number of satisfaction questionnaires Issued; Number of completed questionnaires received back; Percentage of Customers who felt that the service was ‘Very Good’ or better- individual audits survey

2009-10 Actual

Quarter 3

22

10

90%

Target

90%

INNOVATION & LEARNING PERSPECTIVE: Quarter 3 Percentage of staff qualified to relevant technician level Percentage of staff holding a relevant higher level qualification Percentage of staff studying for a relevant professional qualification Number of days technical training per FTE Percentage of staff meeting formal CPD requirements

Number of business efficiency/ service Improvement recommendations introduced

2009-10 Actual

72%

36%

27%

4.5

36% 10

Target

80%

33%

26%

3.5

33% -

Appendix 6

27

AUDIT ASSURANCE

Definition of Audit Assurance Statements

Substantial Assurance From the testing completed during this review a sound system of control is currently being managed and achieved. All of the necessary, key controls of the system are in place. Any errors found were minor and not indicative of system faults. These may however result in a negligible level of risk to the achievement of the system objectives. Reasonable Assurance From the testing completed during this review most of the necessary controls of the system in place are managed and achieved. There is evidence of non-compliance with some of the key controls resulting in a marginal level of risk to the achievement of the system objectives. Scope for improvement has been identified, strengthening existing controls or recommending new controls. Limited Assurance From the testing completed during this review some of the necessary controls of the system are in place, managed and achieved. There is evidence of significant errors or non-compliance with many key controls not operating as intended resulting in a risk to the achievement of the system objectives. Scope for improvement has been identified, improving existing controls or recommending new controls. No Assurance From the testing completed during this review a substantial number of the necessary key controls of the system have been identified as absent or weak. There is evidence of substantial errors or non-compliance with many key controls leaving the system open to fundamental error or abuse. The requirement for urgent improvement has been identified, to improve existing controls or new controls should be introduced to reduce the critical risk.

QUARTERLY INTERNAL AUDIT UPDATE REPORT By: INTERNAL AUDIT ...

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