Bolsover, Chesterfield and North East Derbyshire Councils. Internal Audit Consortium. Annual Report to Chesterfield Borough Council 2011/12

Transcription

1 Bolsover, Chesterfield and North East Derbyshire Councils Internal Audit Consortium Annual Report to Chesterfield Borough Council 2011/12 INTRODUCTION 1. The purpose of this report is to: Present a summary of the internal work undertaken from which the opinion on the internal control environment is derived Provide an opinion on the overall adequacy and effectiveness of the Council s control environment including any qualifications to that opinion Draw attention to any issues that need to be considered for inclusion in the Annual Governance Statement Compare work actually undertaken with that which was planned and summarise performance Comment on compliance with the CIPFA Code of Practice for Internal Audit and the results of the quality assurance programme Review of the performance of the Internal Audit Consortium against the current Internal Audit Policy (Strategy) SUMMARY OF WORK UNDERTAKEN 2. Appendix 1 details the audit reports issued in respect of audits included in the 2011/12 internal audit plan. The appendix shows for each report the overall opinion on the reliability of the internal controls and the opinion given at the last audit. The report opinions can be summarised as follows: Control Level Number of Reports Percentage 2011/12 Good Satisfactory Marginal Unsatisfactory Unsound Percentage 2010/11 1

2 A definition of the above control levels is shown in Appendix There were no issues relating to fraud arising from the reports detailed in Appendix The following table summarises the performance indicators for the Internal Audit Consortium as detailed in the Internal Audit Service Plan: Description 2011/12 /13 Plan Actual Plan Cost per Audit Day Percentage Plan 96% 98% 96% Sickness Absence (Average Days per Employee) Customer Satisfaction Score (see para 11 below) 8.5 (Corporate Target) (Corporate Target) 80% 93% 80% OPINION ON THE ADEQUACY AND EFFECTIVENESS OF THE CONTROL ENVIRONMENT 5. The audit opinion results for the audits completed in the year (summarised in paragraph 2) showed that internal controls were in the main operating satisfactorily, giving an overall confidence in the internal control system operating in the Authority. There was only one report issued with an unsatisfactory opinion (report 29 - Information Technology Inventory). In respect of this report, appropriate action has been initiated by management to implement the recommendations made in order to address the control weaknesses identified. ISSUES FOR INCLUSION IN THE ANNUAL GOVERNANCE STATEMENT 6. The internal control issues arising from audits completed in the year have been considered during the preparation of the Annual Governance Statement. In respect of the unsatisfactory 2

3 internal audit opinion issued, the following was identified for consideration in the Annual Governance Statement Action Plan: Complete implementation of recommendations included in report 29 (IT Inventory) COMPARISON OF PLANNED WORK TO ACTUAL WORK UNDERTAKEN 7. The Internal Audit Plan for 2011/12 was approved by the Standards and Audit Committee on the 25 th March A comparison of planned audits with audits completed is shown as Appendix 2. Overall 98% of planned audits were completed during the year. COMPLIANCE WITH CIPFA CODE OF PRACTICE FOR INTERNAL AUDIT IN LOCAL GOVERNMENT AND OTHER QUALITY ASSURANCE RESULTS 8. During 2011/12 a self assessment has been undertaken to review compliance with the CIPFA Code of Practice for Internal Audit. 9. This review confirmed that there were no significant areas of non compliance, with an assessed score of 94.2% being recorded against the Code requirements. 10. Quality control procedures have been established within the internal audit consortium as follows: Individual Audit Reviews Working papers and reports are all subject to independent review to ensure that the audit tests undertaken are appropriate, evidenced and the correct conclusions drawn. All reports are reviewed to ensure that they are consistent with working papers and in layout. Whilst these reviews invariably identify issues for clarification, the overall conclusion of the quality assurance checks is that work is being completed and documented thoroughly. Customer Satisfaction A Customer Satisfaction Survey form is issued with each report. This form seeks the views of the recipient on how the audit was conducted, the report and recommendations made. 3

4 Client Officer Views A survey form has been issued to the two client officers seeking their views on the overall performance of the Internal Audit Consortium for the year in achieving the objectives set out in the Internal Audit Terms of Reference and Strategy. 11. Based on the customer satisfaction survey forms returned, the average score was 93% for customer satisfaction during 2011/12 (2010/11 result 92%). 12. The results of the Client Officer survey for Chesterfield was a score of 100% (35 out of a maximum of 35 - for the seven areas reviewed this represented 7 very good scores). The 2010/11 score was 94%. REVIEW OF PERFORMANCE OF THE INTERNAL AUDIT CONSORTIUM AGAINST THE CURRENT INTERNAL AUDIT STRATEGY 13. An updated version of the Internal Audit Policy (Strategy) was reported to and approved by the Standards and Audit Committee on 23 rd September 2011 (Minute 0019). The overall policy was stated as: To deliver a risk-based audit plan in a professional, independent manner, to provide each partner organisation with an opinion on the level of assurance it can place upon the internal control environment, and to make recommendations to improve it. Based on the information provided in this report on the completion of the 2011/12 internal audit plan, it is considered that this policy has been substantially met during the year. 4

5 Appendix 1 Chesterfield Borough Council Internal Audit Reports Issued 2011/12 Overall Opinion Ref Report Title 2011/12 Previous Audit 1 Unsocial Hours Payments Marginal n/a 2 IT Security Satisfactory Satisfactory 3 Innovation Centres Income Good Good 4 Decoration Allowances Satisfactory Marginal 5 Property Rents Marginal Satisfactory 6 Performance Indicators 2010/11 Satisfactory Marginal 7 Gas Servicing Marginal Marginal 8 Crematorium Income Satisfactory Satisfactory 9 Winding Wheel Income Satisfactory Satisfactory 10 Non Domestic Rates Satisfactory Satisfactory 11 Housing Rechargeable Repairs Good Unsatisfactory 12 Planning Fees Income Good Good 13 Council Tax (Key Controls) Good Satisfactory 14 Bank Reconciliation Good Good 15 Private Sector Housing Grants Satisfactory Satisfactory 16 Bulky Household Waste Income Good Satisfactory 17 Housing and Council Tax Benefits Good Good 18 Cash and Banking Good Good 19 Markets Income Good Satisfactory 20 Accounts Receivable (Debtors) Good Good 21 Theatre Income Good Satisfactory 22 PVCu Window and Door Factory Satisfactory Satisfactory 23 Payroll Satisfactory Marginal 24 Car Parks Income Satisfactory Marginal 25 Housing Rents Good Good 26 Treasury Management (Loans) Good Good 27 Risk Management Good Satisfactory 28 Accounts Payable (Invoice Processing) Marginal Satisfactory 29 Information Technology Inventory Unsatisfactory Satisfactory 30 Investment Portfolio Good Good 31 Main Accounting System and Good Good Budgetary Control 32 Working Neighbourhoods Fund Marginal Good 33 Pavements Centre & Vicar Lane Good / Satisfactory Income Share Marginal 34 Procurement Policies and Procedures Marginal Marginal Follow up 35 Housing Repairs Marginal Marginal 36 Commercial Waste Income Satisfactory Marginal 37 Public Private Partnership Client Good n/a 5

6 Overall Opinion Ref Report Title 2011/12 Previous Audit 38 Supporting People Marginal Marginal 39 Community Forum Budgets Marginal n/a Internal Audit Report Opinion Definitions Control Level Good Satisfactory Marginal Unsatisfactory Unsound Definition A few minor recommendations (if any). Minimal risk; a few areas identified where changes would be beneficial. A number of areas have been identified for improvement. Unacceptable risks identified, changes should be made. Major risks identified; fundamental improvements are required. 6

7 INTERNAL AUDIT CONSORTIUM Appendix 2 CHESTERFIELD BOROUGH COUNCIL Comparison Planned Audits to Audits 2011/12 Main Financial Systems Planned Audits Main Accounting System ( Incl Budgetary Control) Capital Accounting and Fixed Asset Register Bank Reconciliation Payroll Creditor Payments (Accounts Payable) Debtors Treasury Management (Loans) Investment Portfolio Cash and Banking Council Tax Non Domestic Rates Housing / Council Tax Benefit Housing Rents Housing Repairs Housing Grants Public / Private Partnership Client Monitoring Procedures Other Operational Audits Planned Audits Property Rents Pavements / Vicar Lane Income Share Car Parks Income Innovation Centres Planning Fees Markets Income Housing Rechargeable Repairs Supporting People incl Telecare Gas Servicing PVCu Window Factory Decoration Vouchers Commercial Waste Income Bulky Waste and Miscellaneous Income Joint Crematorium Pomegranate Theatre Winding Wheel Income Unsocial Hours Payments Community Forums 7

8 Other Operational Audits Planned Audits Contract Final Accounts Computer / IT Related Planned Audits Network Security and Installation Review Data Protection and Freedom of Information Inventory / Disposal of Old Equipment Fraud and Corruption Planned Audits Procurement National Fraud Initiative Corporate / Cross Cutting Issues Planned Audits Performance Indicators Annual Governance Statement Risk Management NNDR Grant Claim Brimington Parish Council Financial Advice / Working Groups Working Neighbourhood Grant Location / Regularity Cash Floats Inventories Special Investigations / Contingency Audit Committee / Client Liaison Additional Audits (not in original plan) Control / Sale of Scrap (OSD) Drain Clearing Income On going Input to working group by External Audit On going As required On going 8