Agenda item

The purpose of this report is to inform Members of the Internal Audit reports that have been completed since the last meeting of this Committee in March 2014.

Declarations of Interest:

None.

Witnesses:

Rachel Crossley, Democratic Services Lead Manager

Sue Lewry-Jones, Chief Internal Auditor

Sheila Little, Director of Finance

Nicola O’Connor, Finance Manager – Assets & Accounting

Grisilda Ponniah, Corporate Information Governance Manager

Key Points Raised During the Discussion:

1.    The Chief Internal Auditor introduced the report and highlighted that Council Overview and Scrutiny Committee had considered the Appraisals Internal Audit report.  The Cabinet Member for Business Services informed the committee that on 27 May 2014 Cabinet had tabled a response to the recommendations by Council Overview and Scrutiny Committee.  While she shared the concerns of the Committee with regard to appraisal completion, she assured Members that completion levels were variable and that some departments were doing well.  Some departments require a culture change to ensure that appraisal completion levels increase.  The Director of Finance pointed out that the process of recording appraisals had been simplified and suggested that this would lead to increased recording.  The Chief Internal Auditor stated that there would be a follow-up audit on appraisals. 

2.    The Vice-Chairman queried which senior officers had been identified as having outside interests.  The Chief Internal Auditor stated that a large number of officers have outside interests but that this was acceptable if they are properly disclosed and there are appropriate procedures in place to ensure that there is no conflict of interests.  The audit found that procedures were effective.  She also stressed that outside interests as identified from Companies House data may relate to companies set up to manage their own living accommodation (eg in a block of flats) etc.  The Vice-Chairman went on to express concern about how and when officers are required to make declarations of interests.  He agreed to go through the audit papers to assure himself on procedures and report back to the committee (Recommendations tracker ref: A9/14).

3.    The Chairman commended Internal Audit on its report on Data Mining for Fraud.

4.    The Democratic Services Lead Manager and the Corporate Information Governance Manager were in attendance to discuss the audit of Information Governance.  The Chairman queried what contact the Information Governance team has with the Information Commissioner’s Office (ICO).  The Corporate Information Governance Manager explained that there had been no decision notice against the Council for breach of information rights for many years.  The Council has a positive relationship with the ICO and if a complaint is received by the ICO, they will not process it until the council has had an opportunity to do an internal review.  A few perceived breaches have been reported to the ICO but the Office has decided not to take further action on them.

5.    In response to a query, the Democratic Services Lead Manager assured the committee that the misuse of group email accounts which include outside bodies had been addressed.  Indications were that this had led to a reduction in the number of data breaches occurring.

6.    There was some concern amongst Members about the level of security on electronic devices and the potential to be locked out of programs.  The Democratic Services Lead Manager stressed that the Modern Worker project was looking at how people work now and that it was seeking to balance flexibility with information security.  The Good app was being replaced with a more secure system.  She offered to feedback to IMT the need to consider the Modern Councillor in this work.  In response to queries about printing from iPads, the Democratic Services Lead Manager informed the committee that options had been looked at and that she would chase IMT to find out what progress has been made (Recommendations tracker ref: A10/14).

7.    The Chairman suggested that the Audit & Governance Committee should consider the audit of the General Ledger in detail as it was important the Committee had assurance about the effectiveness of this process before receiving the Council’s Statement of Accounts in July 2014.  The Finance Manager – Assets & Accounting, informed the committee that the audit had been more through than previous years but that she had welcomed this.  The findings were not a surprise but would support the Finance Team in addressing issues that they had already been working on.  The Finance Manager – Assets & Accounting agreed that every suspense code had an identified owner. In the past 12 months, the Finance Team had done a lot of work to make sure that the names are up-to-date. 

8.    The Finance Manager – Assets & Accounting explained that external audit had originally identified an ‘aged’ GR/IR balance.  This relates to a balance which is a commitment on budget codes until the goods are received and the balance paid to the creditor.  An investigation showed that there has been an over-accrual against budget codes as services are actually paying less than has been committed against their budget code.  This may happen for reasons such as the supplier giving a discount.  Numerous small amounts can build up into a substantial balance.  An e-learning package would provide advice on handling the final invoice processed in a block procurement order.  Finance would also start to produce a list comparing goods receipting with final invoices and send it to budget holders to query.  On 31 March 2014, there was a £21.1m GR/IR balance.  The end of March is the peak time for the balance as there is a push to record receipt of all goods by the end of the financial year.  It was stressed that there would always be a timing difference between receiving goods and services and then paying for them.  This means that there would always be a GR/IR balance.  Balances which have been written off in the past have been put into the budget equalisation reserve.  Of the £21.1m GR/IR balance on 31 March 2014, £2.5m relates to an ‘aged’ balance of over 12 months old.  This is still under investigation.  The Director of Finance confirmed that she supported the process undertaken.  The Finance Manager – Assets & Accounting agreed to do a briefing on the GR/IR balance for the Committee’s next information bulletin (Recommendations tracker ref: A11/14). 

Actions/Further information to be provided:

      i.        The Vice-Chairman to review the background papers to the audit of Officer Interests and report back to the committee.

     ii.        The Democratic Services Lead Manager to discuss with IMT the need to consider the Modern Councillor as part of the Modern Worker project and to chase to establish what progress has been made with being able to print from iPads. 

    iii.        The Finance Manager – Assets & Accounting to prepare a briefing on the GR/IR balance for the Committee’s next information bulletin.

RESOLVED:

That the committee notes the report.

Committee Next Steps:

None.