Agenda item

6.1

Mr Austin presented the report.

6.2

Mr Harris updated the Panel on each of the remaining 2011/12 reports.  The position was:

·        Fraud report – Now finalised

·        Information Governance – Still in raft, soon to be finalised

·        Payroll and HR system – Work in progress, draft to be issued in the next week or two

·        HR Thematic – to be ready by end July

·        Regeneration of Lewisham – to be finalised in July

·        Implementation of NNDR – work in progress; more work required on data migration expected to take place soon.

·        Supporting People Framework – Now finalised.

6.3

Mr Austin updated the Panel on the work done to align the audit plan to the Council’s key risks, including examples of the risks covered by internal audit and those not.  Mr King asked what other assurances are in place for the approximate 40% of corporate risks not being looked at by internal audit.  In these cases Mr Austin described how there are other assurances in place, such as services accredited to standards (e.g. legal) and others reviewed by external independent inspectors (e.g. OFSTED and CQC).  The 2012/13 audit plan includes a project to refresh the mapping of these assurances.  It was agreed that going forward the alignment of the Audit Plan and Key Risks should be made.

6.4

Mr Dale referred to the contractor Performance Indicators. Mr King asked in particular about number 4 which gave a score of 4.6 out of 5 for the average level of client satisfaction achieved. He asked whether this figure was too high; were internal auditors taking the soft option. He asked members of the panel whether they agreed with this figure.  Mr Austin said that of the 90 audits in 2011/12 only 15 returned their questionnaires. Officers have shortened the questionnaire (four questions each to be scored on a scale of 1-4) and put it online and are encouraging audit sponsors to return more questionnaires. He said that it could be that those who have suggestions to improve the service were not returning questionnaires.

6.5

6.6

6.7

Mr Harris said that, as the contractor, they invested time upfront in the audit process.  Working with audit sponsors to agree the audit objectives and discussing the draft audit findings and recommendations prior to issuing the draft report to ensure the factual aspects of the work are agreed.  He thought it difficult to state what a good performance score would be.

The Executive Director for Resources and Regeneration asked whether the Panel was suggesting that the audit contractor’s relationship with the client might be too ‘cosy’.  Mr Dale agreed with her description. 

Mr King asked how members could know whether Lewisham were compliant with CIPFA code?  Mr Austin said that three years ago Lewisham’s compliance was reviewed by the external auditors, two years ago by the London Borough of Croydon. This year internal audit undertook a self-assessment, and next year (2012/13) Lewisham will be reviewed by Lambeth.  In each year the recommendations for continuous improvement have been reported to the Audit Panel in the Head of Internal Audit’s annual assurance report.

6.8

Mr Dale said that 2011/12 had been a poor year for audit completions and yet the satisfaction figures were high so there was a discrepancy somewhere. He was concerned about the number of recommendations that were still outstanding. Mr Austin agreed that things were less assured than they were. However, much of the planned 2011/12 work had been caught up and the audit reports had been more critical on matters of internal control this year.   This is distinct from the separate monitoring of the implementation of Internal Audit recommendations by officers.

Ms Senior said that management do consider recommendations that are not being implemented as reported by internal audit and they are discussed at the Internal Control Board.  She said that it is often the case that recommendations have been followed-up but the internal audit tracking system had not been updated.  She did not believe the relationship was unduly ‘cosy’ but she said that some recommendations were not being dealt with quickly enough and this should be addressed.  It is recognised by management that this is an issue and needs to be addressed.  Mr Dale said that the Audit Plan needed to be delivered on time by internal audit and agreed recommendations implemented by management.

6.9

The Chair asked about the process leading up to managers being called before the Audit Panel for late implementation of internal audit recommendations.  Mr Austin said that officers could be called to this panel to explain why they had not responded to recommendations. He said that he would do this if there was no response after three reminders. Members agreed that there should only be two reminders before officers were called to this panel for an explanation.  The deadline for management should be the same as the date of preparing the report. This was agreed.

ED R&R

6.10

6.11

Mr Dale said that consideration needs to be given to what happens to recommendations when they are superseded and whether it has an impact on the overall opinion. Mr Austin agreed to give members information on recommendations superseded in 2011/12 follow-up reports.

The Chair concluded that the priorities for 2012/13 are for the internal audit contractor to deliver the plan on time through the year, management to implement agreed recommendations in a timely manner, and the Head of Audit to refresh the assurance mapping to align future audit plans to objectives and risk.

ED R&R

RESOLVED

that the report and appendix 1 be noted and appendices 2 and 3 approved.