SUMMARY/PURPOSE

1. This report is to provide the Committee with a summary of Internal Audit activity completed since the last report to the Committee in September 2005.

2. The Committee is invited to note the contents of the report and to seek clarification of any issues arising from audits undertaken.

BACKGROUND

3. In keeping with good corporate governance practice, a Committee of elected members should have oversight of the activities of the Internal Audit Service for the following purposes:

v The Committee should monitor Internal Audit’s performance, both in terms of the quality and quantity of its work;

v The Committee should satisfy itself that Internal Audit has devoted its attention to the appropriate issues;

v The Committee should consider the results of Internal Audit reviews to ensure that any significant findings are addressed, including control weaknesses and to ascertain whether, in the opinion of the Chief Internal Auditor, adequate and satisfactory responses have been given by the Authority’s management;

v The Committee should recommend, if necessary, that further attention should be given to some of the issues raised;

4. To facilitate this process, attached as appendix A are synopses of significant audit work completed since the September 2005 report to the Audit Committee.

FINANCIAL, LEGAL, CRIME AND DISORDER IMPLICATIONS

5. There are no significant financial or legal implications of this report, given that it is a progress report on the Internal Audit function. The Committee is reminded that the Council is required by statute (the Accounts and Audit Regulations) to have an adequate and effective Internal Audit function.

RELEVANT PLANS, POLICIES, STATEGIES AND PERFORMANCE INDICATORS

None.

CONSULTATION PROCESSES

None.

BACKGROUND PAPERS USED IN THE PREPARATION OF THIS REPORT

Audit project files held by G Richardson – ext 3683

APPENDIX A

1. Review of The Customer Accounts (Sundry Debtors) System

The audit was carried out as part of the 2005-06 audit plan. The plan was developed using a risk based approach with Customer Accounts being scored as a C on a scale of A-D with A being considered the highest risk. The objective was to provide assurance to management that the Customer Accounts system is operating in accordance with management’s expectations and that the control system is adequate to ensure the integrity of the Authority’s Debtor system. The audit was carried out by interviewing relevant officers and carrying out testing on selected areas to determine the level of compliance with the Council’s policies and procedures.

There were two significant findings shown below

1. A significant risk identified during the audit was a health and safety risk arising when the recovery officer visits customers in their own homes alone. Given the nature of the task, (recovering monies from reluctant payers), it is felt that there is the potential for a very small minority of customers to behave aggressively when proposals for recovering debt are discussed. Corporately, this issue is being considered for all staff who have to visit people at home and are involved in some form of enforcement role. It is envisaged that a database of customers with a history of violent/aggressive behaviour will be maintained so that visiting officers can check in advance if such a history exists and plan their visit accordingly. It is recommended that Customer Accounts make use of this facility when it becomes available.

2. The audit also identified a system improvement which could potentially provide some efficiency savings in Customer Accounts and reduce the amount of paperwork flowing around the organisation. Invoices are already created in the debtors system directly by service departments. The proposal is to extend this facility to credit notes which will considerably reduce the paperwork flowing into Customer Accounts and reduce routine processing time.

There were other recommendations including other minor administration, and procedural issues.

In general assurance can be given to management that systems now in place are operating satisfactorily.

We have made 10 recommendations for improvement all of which have been accepted by management.

2. Risk Based Audit of The Children’s Disability Team in Children’s Services

The audit was carried out as part of the 2005-06 Audit Plan agreed by the Audit Committee on 29^th July 2005. The overall objectives were to provide assurance to management that the objectives of the service are being met and that appropriate risk mitigation strategies are in place and operating satisfactorily. The audit

commenced with a risk assessment workshop facilitated by internal audit and attended by staff and management of the Children’s Disability Team.

The risks identified in the workshop are clearly understood by the service. Actions should be taken to improve the management of these risks in the following areas:

· Sickness Management: It has been recommended that the requirements of the Corporate Policy for management of absence are implemented.

· Supervision: Whilst the levels of supervision observed during the audit are in accordance with staff supervision guidelines it is imperative that supervisors and managers record this in individual case files as per the requirements of the Laming inquiry.

· The service should record the level of inappropriate referrals made to the service to identify the amount of time spent on actions that are outside of the scope of the service.

It was clear during this audit that the team are often stretched for resources; are committed to the service they provide and work effectively as a team. It is hoped that the recommendations made above will assist in improving the service and ensuring all available resources are targeted where they are most needed.

3. Risk Based Audit of The Schools Inspectorate – Children’s Services

The audit was carried out as part of the 2004-05 Audit Plan agreed by the Audit Committee on 29th July 2004. The objective of this audit was to establish the extent to which the Schools Inspectorate are aware of their risks and are developing and implementing effective control measures to manage risks.

As part of the audit process Risk Assessment Templates were completed with the Head of Learning Effectiveness and the Schools Inspectorate Team. These document the current controls implemented by the section to manage the key risks identified during the Audit, and planned actions to improve the management of these risks.

The 11 key risks looked at in depth fell into the following categories:

Ø Resources: The failure to recruit and retain appropriately qualified staff in the School Inspectorate and in Schools. The capacity of the team to deliver the service in respect of an increasing number of Government Initiatives. Focused training.

Ø Responsibilities: The failure of stakeholders – the LEA, Schools, Governors and Parents to acknowledge their responsibilities and to provide a challenge to the quality of education when appropriate. Schools and the LEA to listen and respond to parents concerns. Parents to be made aware of what they should expect from the schools.

Ø Focus: The failure to focus on pupils and standards, and to put pupils first.

A range of control measures are in place to mitigate these risks including:

· Enhancing the role of cluster groups

· Training within cluster groups

· Professional development of staff/work-force remodeling.

Additional mitigation strategies identified during the audit which are planned to be implemented are:

· The LEA to publish indicative targets for individual schools

· School profiles to be published

· A formal process of collecting views of parents to be established.

Assurance can be given to management that the Schools Inspectorate is aware of their risks and are in the process of developing and implementing effective control measures.