A Housing Association Internal Audit Annual Report 2014/15

Transcription

1 A Housing Association Internal Audit Annual Report 2014/15 Date of Issue: 1 June 2015 Presented at the meeting of the Audit Committee: 21 July 2015

2 TABLE OF CONTENTS EXECUTIVE SUMMARY... 2 Background... 2 Scope... 2 Internal Audit Assurance Statement... 2 Conflicts of Interest... 2 SUMMARY OF WORK UNDERTAKEN... 3 Assurance Provided Compared to Previous Year... 3 Additional Work Undertaken by the Shared Service... 3 Internal Audit Performance... 4 Client Satisfaction... 4 APPENDIX A INTERNAL AUDIT ASSURANCE MAP... 6 This report is prepared solely for the use of the Board and senior management of A Housing Association. Details may be made available to specified external agencies, including external auditors, but otherwise the report should not be recited or referred to in whole or in part to other third parties without prior written consent. No responsibility to any third party is accepted as the report has not been prepared, and is not intended for any other purpose. 1 P a g e

3 EXECUTIVE SUMMARY Background The purpose of this report is to present the results of our internal audit work for A Housing Association s system of governance, risk management and control. This report forms part of the framework designed to inform the Statement on Internal Control and is therefore a key part of A Housing Association s assurance cycle. The outcomes of this report should be used to inform and update the organisation s risk profile; however there are a number of other important sources to which the Audit Committee should look for assurance. This report does not supplant the Audit Committee s responsibility for forming its own view on governance, risk management and control. Scope Our findings are based on the Internal Audit work performed as set out in the Internal Audit Strategy / Annual Plan presented to the Audit Committee in March 2014; subject to the following amendments: A series of risk management workshops was provided, rather than an assurance review of risk management processes. In addition, the following have also been taken into account in arriving at our opinion: The results of follow up action undertaken in respect of audits from previous years; The acceptance of recommendations by management; The effects of any material changes in the organisation s objectives or activities; Matters arising from previous reports or other assurance providers to the Audit Committee and/or Board; Whether or not any limitations have been placed on the scope of internal audit; and Whether there have been any resource constraints imposed upon us which may have affected our ability to meet the full internal audit needs of the organisation. In giving our opinion it should be noted that assurance can never be absolute; the most that the internal audit service can provide to the Board is a reasonable assurance that there are no major weaknesses in risk management, governance and control processes. The matters raised in this report are only those which came to our attention during our internal audit work and are not necessarily a comprehensive statement of all the weaknesses that exist, or of all the improvements that may be required. Internal Audit Assurance Statement The annual Head of Internal Audit opinion is provided to A Housing Association by Barcud Shared Services. We are satisfied that sufficient internal audit work has been undertaken during 2014/15 to enable us to draw a reasonable conclusion on the adequacy and effectiveness of A Housing Association s governance, risk management and internal control arrangements. For the 12 months ended 31 March 2015, based on the work we have undertaken, our opinion is that the organisation has adequate and effective governance, risk management and control arrangements. Conflicts of Interest We have not undertaken any work or activity during 2014/15 that would lead us to declare any conflict of interests. 2 P a g e

4 SUMMARY OF WORK UNDERTAKEN We have undertaken 15 engagements at A Housing Association during 2014/15. Of these, 13 were assurance reviews and of these: Six provided Substantial assurance; Seven provided Reasonable assurance; None provided Some assurance; and None provided Limited assurance. Our Follow Up review indicated that Reasonable progress had been made in implementing recommendations. Finally, two advisory reviews were undertaken in the areas of Project Assurance and Risk Management workshops. All of the recommendations made during the year were accepted by management. Details of the key findings from all the reviews conducted in 2014/15 have been summarised in Appendix A of this report Assurance Provided Compared to Previous Year 2013/14 Assurance: 2014/15 Assurance: Additional Work Undertaken by Barcud Shared Services We undertook three Risk Management workshops for staff from across the organisation. Our void management workshop provided a forum for all members of the Barcud consortium to share good practice and opportunities for improvement. We provided a presentation on controls and assurances to the Audit Committee in November P a g e

5 Internal Audit Performance 2014/15 The following statistics 1 provide information on the performance of Barcud Shared Services across all our clients. This information is reported on a quarterly basis throughout the year to the Consortium Committee. In addition, we have included specific statistics for A Housing Association for comparison. 60 of 61 (98%) Terms of Engagement were issued at least two weeks in advance of the fieldwork commencing. For A Housing Association, we achieved 100%. 95% of all draft reports were issued within two weeks of the audit debrief or final piece of information being provided by the client. For A Housing Association, we achieved 100%. 62 of 63 (98%) draft reports were issued at least three weeks prior to the Audit Committee to which they were due to be presented. For A Housing Association, we achieved 93%. 100% of final reports were finalised within one week of receiving management s response to the draft report. Good Practice Sharing and Value for Money All our reports are designed to offer value for money through the provision of: Assurance that internal processes are operating effectively and efficiently to mitigate identified risks; Recommendations and Suggestions based on good practice from within and external to the sector; and Benchmarking / comparative information from other organisations where practicable and time allows. In addition, the following were provided in 2014/15: 22 suggestions for improvements that could be made in line with good practice or processes operating in other organisations were made across the 14 reports issued during 2014/15. We issued the following briefing papers during the year: Rent Arrears Management In-House Labour Service Website Design The content of the Asset Management Policy was reviewed and we identified a number of areas that were either not yet included or that the organisation may wish to consider including further information on. These were based on good practice guidance and content that we have seen elsewhere. In the Information Security and Data Protection audit we provided a matrix of key policy / procedural areas and which document they were covered by, as well as any gaps. We provided example documentation in relation to risk assessments and site surveys as seen operating effectively at other members of the Consortium. We undertook benchmarking in a number of requested areas and shared this with each of the organisations. We provided guidance in the Key Financial Controls audit regarding information to include in the updated Income Recovery Policy based on good practice. Our void management workshop provided a forum for all members of the Barcud consortium to share good practice and opportunities for improvement. We provided a sanitised version of a Board expenses policy to help the organisation in reviewing its own policy. 1 Where delays were requested or caused by the client this has not affected the results. 4 P a g e

6 Client Satisfaction 56 satisfaction surveys were issued across the service in 2014/15 and 36 responses were received (a response rate of 64%). For A Housing Association, 13 surveys were issued and 13 responses were received. The average scores are provided below. Survey responses can range from 1 (very dissatisfied) to 4 (very satisfied). Exact question wording can be provided upon request. 5 P a g e

7 Bron Afon Community Housing Internal Audit Annual Report 2014/15 APPENDIX A INTERNAL AUDIT ASSURANCE MAP The table below summarises the internal audit work undertaken during 2014/15 including the level of assurance, number of recommendations and headline findings: Audit Headline Findings Assurance Recommendations High Medium Low Total Agreed Assurance and Advisory Work to Address Specific Risks: A Audit 1 The key finding from the review was that there was a lack of robust performance information underpinning the key performance indicators (KPI) reported to the Board and a lack of embedded validation processes to provide assurance that the KPI is accurate A Audit 2 The key finding from the review was that the root cause of eight of the 15 complaints sampled had not been identified and we did not identify evidence monitoring was occurring to ensure that investigating officers were identifying the root cause of complaints and ensuring that actions were taken to address lessons learnt Core Assurance and Other Work: Key Financial Controls The two Medium priority recommendations were raised due to the following key findings: Through the use of data analytics we identified an anomaly in the purchase to pay system for one member of staff s authorisation limit that had led to 23 invoices being inappropriately approved. The Financial Regulations had not been updated and did not reflect the current structures of the organisation or the approval structures in place P a g e

8 Bron Afon Community Housing Internal Audit Annual Report 2014/15 Audit Headline Findings Assurance Recommendations High Medium Low Total Agreed Follow Up The audit sought to provide assurance that the recommendations raised in previous audits had been implemented as reported to the Audit Committee. 34 recommendations were followed up as part of this review; four of which were High priority and 30 were Medium priority. We concluded that Reasonable progress had been made. 19 (56%) recommendations had been implemented in full; five (15%) had been partially implemented; seven (20%) had not been implemented; and the remaining three (9%) had been superseded. The 12 outstanding recommendations were restated in the report and an additional recommendation, regarding the reporting of the status of recommendations to the Audit Committee, was also raised. Example Report Only Remaining 11 Audits Removed TOTAL: P a g e