Agenda item

This report summarises the work of Internal Audit for the period 1 April 2012 to 31 March 2013, identifying the main themes arising from the audit reviews and the implications for the County Council. 

Declarations of Interest:

None.

Officers:

Kevin Kilburn, Deputy Chief Finance Officer

Sue Lewry-Jones, Chief Internal Auditor

Key Points Raised During the Discussion:

1.    The Chief Internal Auditor introduced the report and highlighted the four key audit findings which the Governance Panel had agreed to take forward into the Governance Statement: Capital Monitoring; Project Management; Commercial Services; and Direct Payments.

2.    The Cabinet Member for Business Services informed the Committee that performance on spending in line with the capital programme had improved compared with the previous year.  She explained that the year-end investment and economic regeneration property acquisitions had been forecasted for at least six months and that the Cabinet had been aware that this would happen.

3.    Members asked for reassurance that cancelled audits had reasonable explanations and were not delaying tactics by services.  The Chief Internal Auditor highlighted the comprehensive analysis of completion of the 2012/13 Internal Audit programme of work, shown at Annex E to her report.  The Chief Finance Officer had questioned Audit Managers about any audits which had not taken place and was satisfied that cancellations were for the right reasons.  Specifically on the Procurement Standing Orders audit, a number of other audits had included checks on compliance with procurement standing orders so that a separate audit was viewed as not necessary.  Internal Audit was robust at undertaking audits that needed to happen.

4.    Members expressed concern that Commercial Services had been operating with minimal visibility and highlighted the likelihood that more trading services would be provided in future.  They asked for reassurance that trading activities would be managed differently going forward.

5.    Members expressed concern about data protection breaches and queried how information governance could be further strengthened.  The Chief Internal Auditor pointed out that practically speaking, email and dealing with sensitive information was a way of life for council officers.  However, there had been a lot of work undertaken to make data more secure over the past few years, with consequent improvements in practice.  This work included cleaning up group email accounts, and warning users when draft messages to group email accounts involved recipients external to the County Council.

6.    In response to a query, the Chief Internal Auditor explained that a ‘n/a’ audit opinion is probably the result of an audit providing a position statement.

7.    Members queried the audit opinion categories used at Surrey County Council.  The Chief Internal Auditor informed the Committee that the Effectiveness Review of Internal Audit had also suggested that the categories be looked at again. 

8.    Members queried a suggestion that there had been an “unexpected spike in predicted demand for school places” (page 257, paragraph 29).  They raised concerns that forecasting was not as robust as it could be and highlighted the need for an additional meeting of the Planning & Regulatory Committee in August to deal with a high number of late planning applications for school expansions in the 2013/14 academic year.  It was pointed out that demand for school places was consistently growing and therefore was not unexpected.  The Cabinet Member for Business Services highlighted the various pressures which have implications for demand for school places.  The Council was having regular meetings with the Secretary of State for Education to discuss the challenges of forecasting demand.  The Chief Internal Auditor informed the Committee that demand was unexpected when compared with previous expectations.  Members suggested that the service build in the potential for empty places to avoid last-minute requirements to seek planning permissions.  Concern was expressed about the potential for Planning and Regulatory Committee to be faced with retrospective planning applications in August.  However, the Cabinet Member for Business Services pointed out that the Council could not build schools that were not required as budgets were tight.  Also, the Schools & Learning Service was now having regular meetings with Finance and Property Asset Management to address any problems.  The Committee was informed that the Children and Education Select Committee was setting up a sub-group to look at school place planning and that the Chairman of the Select Committee would be meeting the Chairman of Planning and Regulatory Committee to discuss issues.

Actions/Further Information to be Provided:

None

Resolved:

The Committee noted the work undertaken and performance of Internal Audit in 2012/13.

Next Steps:

The Chief Internal Auditor will continue to update Members on the progress of issues within this report that have not been fully concluded.