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 AUDIT COMMITTEE

 

Minutes of a meeting held on 26th November, 2013.

 

Present:  Councillor K. Hatton (Chairman); Mr. P.R. Lewis (Vice-Chairman); Councillors Mrs. P. Drake, J. Drysdale, K.J. Geary and M.R. Wilson.

 

Also present: Mr. S. Barry (Wales Audit Office) and Ms. G. Turner (Grant Thornton UK LLP).

 

 

604     APPOINTMENT OF VICE-CHAIRMAN –

 

Following the re-appointment of Mr. P.R. Lewis as the Lay Member on the Audit Committee, it was

 

RESOLVED – T H A T Mr. P.R. Lewis resume the position of Vice-Chairman of the Audit Committee for the remainder of the current municipal year.

 

 

605     APOLOGY FOR ABSENCE –

 

This was received from Councillor A.C. Williams

 

 

606     MINUTES –

 

RESOLVED – T H A T the minutes of the meeting held on 16th September, 2013 be approved as a correct record.

 

 

607     DECLARATIONS OF INTEREST –

 

No declarations were received.

 

 

608     AUDITOR GENERAL FOR WALES: IMPROVEMENT ASSESSEMENT LETTER SEPTEMBER 2013 (REF) –

 

Cabinet, on 7th October, 2013 was advised of the results of the assessment by the Auditor General for Wales in relation to whether the Council had discharged its statutory duties in respect of improvement planning.

 

The Auditor General for Wales had a duty under the Local Government (Wales) Measure (2009) to report his conclusions on whether the council had acted on its duty to achieve continuous improvement.

 

The Auditor General's letter as attached at Appendix 1 to the report found that:

  • The Council had discharged its improvement planning duties under the Measure, setting Improvement Objectives for 2013-14.
  • The content of the Improvement Plan incorporated the majority of elements included in the Welsh Government guidance.
  • The Council was likely to comply with the requirement to make arrangements to secure continuous improvement during this financial year.
  • The arrangements in place to manage the changes in school improvement services were still in the process of development, and the Council could not be confident that the Joint Education Service represents value for money for the Council.
  • The Council continued to enhance and improve its performance reporting arrangements.
  • Some elected members had participated in the scrutiny learning exchange project.

No further proposals for improvement were made. Those contained within the letter were identified in the report on the Joint Education Service.

 

Audit and inspection fees for the Council totalled £277,757 plus VAT for the 2013/14 period.

 

At the Meeting the Leader highlighted that no further proposals for improvement were made by the Auditor General for Wales and this showed that the Council was making positive improvements.

 

He also commented that Cabinet wanted to congratulate those involved in making the Auditor General’s letter a successful one.

 

The Cabinet, following consideration of the matter, subsequently resolved –

 

"(1)      That the contents of the report be noted.

 

(2)       That the report be referred to the Audit Committee for information.

 

(3)       That a further report be brought back to Cabinet on the issues raised in Appendix 1 to the Appendix of the report titled Review of the Governance arrangements of the Joint Education Service proposals for improvement June 2013’’.

 

Following consideration of the reference, discussion ensued about how other local authorities may consult with other organisations and residents and the possible use of social media e.g. Facebook, as a means of obtaining feedback.

 

Discussions also took place about how robust the authority’s self-assessment process was.  The Committee were advised that such work was being undertaken in neighbouring authorities.  Mr. Barry advised that he would provide information on this for a future meeting of the Committee. 

 

RESOLVED –

 

(1)       T H A T the contents of the Auditor General for Wales: Improvement Assessment Letter September 2013 be noted.

 

(2)       T H A T an item be included in the Committee’s Forward Work Programme on the Robustness of the Authority’s Self Assessment.

 

 

609     WELFARE REFORM – PROGRESS REPORT (DR) –

 

The purpose of the report was to update Members on the work undertaken by the Council in implementation of the UK Government’s Welfare Reform Agenda.

 

A Scrutiny Task and Finish Group had been established and had made recommendations to the Scrutiny Committee (Corporate Resources), these recommendations were endorsed by Cabinet on 8th May, 2013.

 

The recommendations of the Task and Finish Group were as follows - 

 

(a)       The Officer Working Group considers how services can be best co-ordinated to provide appropriate advice services and signposting for claimants, including hard to reach groups, in liaison with libraries, leisure, town and community councils.

 

(b)       Communications on the implications of Welfare Reform to continue to be managed by the Officer Working Group via the communications plan, including the use of social media, C1V, local radio and the Council's website.

 

(c)        Further road shows are used to communicate Welfare Reforms with affected claimants and tenants

 

(d)       Members and officers are given updates on Welfare Reform as further developments require.

 

(e)       The benefits service continues to monitor data on over accommodation (size restriction) and liaise with social landlords (including the Council’s Housing Service) and tenants. 

 

(f)        The Officer Working Group continues to plan and respond to Welfare Reform changes as they develop.

 

(g)       Action plans continue to be used to manage the risk and implementation of Welfare Reform and are monitored by the Officer Working Group and the Corporate Risk Management Group under the corporate risk management policy until the major reforms are implemented.

 

(h)       The Stakeholder Group continues to ensure the there is a co-ordinated approach to Welfare Reform with all LSB partners in the Vale of Glamorgan.

 

(i)         A revised Discretionary Housing Payment (DHP) policy is developed for approval by Cabinet.

 

(j)         The issue of the Localised Support Services for claimants is taken forward via the Stakeholder Group with involvement of Officer Working Group and any framework agreement entered into for Localised Support Services is approved by Cabinet.

 

(k)        The Council identifies and adopts best practice in the administration of Welfare Reform.

 

(l)         Cabinet considers designating the Social Services Department as lead department in dealing with the implications of the Discretionary Assistance Fund and the change from Disability Living Allowance to the Personal Independence Payment.

 

(m)      Cabinet considers designating the housing service as the lead department in dealing with implications of Welfare Reform on the management of the Council's own housing provision and the implications for overarching housing services.

 

(n)       The local housing strategy and the housing asset management plans are reviewed and considered by Cabinet in the light of the impact of Welfare Reform on the enabling function and stock profile.

 

(o)       Where policy decisions are required in relation to Welfare Reform, this is reported to Cabinet.

 

(p)       The Head of Financial Services updates the Change Forum of staffing issues associated with Welfare Reform as the situation becomes clearer.

 

(q)       Staff within Resources and Benefits are kept informed of issues by the Head of Financial Services in team briefings, with the staff newsletter and the core brief.

 

(r)        Future staffing implications are identified by the Head of Financial Services, included in the Council’s Workforce Plan and dealt with in accordance with Council HR policies as Welfare Reform develops.

 

(s)        As the financial year progresses expenditure on Council tax support in included in financial monitoring reports to Scrutiny Committee (Corporate Resources).

 

(t)         The impact of the revised DHP policy and increased funding is monitored and reported to Scrutiny Committee (Housing and Public Protection) initially on a six monthly basis.

 

(u)       That the Scrutiny Committee (Corporate Resources) receives a report on the impact of Welfare Reform within the Vale of Glamorgan initially on a six monthly basis.

 

Given the fluid nature of Welfare Reform, the Task and Finish report reflected the position at the cut-off date of 31st March, 2013.  This report provided an update on the position at 30th October, 2013. 

 

The Officer Working Group currently meets on a monthly basis to co-ordinate work within the Council.  The Stakeholder Group continued to work with outside organisations and the local DWP officers to implement Welfare Reforms.  The action plans were continually updated and the risk assessment revised in line with the requirements of the Corporate Risk Management Group.  Regular liaison meetings take place with landlords to discuss the Welfare Reform implications.  Four road shows were organised by the Welfare Reform Group, the last of which took place in May 2013.  The Benefit Section and Housing Service continued to attend road shows that were organised by other agencies.  Further work was being undertaken with the Overarching Housing Forum to consider the impact across the social housing sector.

 

Progress on implementation had been made as follows:

 

April 2013 Changes

  • Council Tax Reduction Scheme
  • Local Housing Allowance (LHA)
  • Rules on Under Occupancy (size restriction)
  • Social Fund
  • Discretionary Housing Payments (DHP)

July 2013 Changes

  • Introduction of the Personal Independence Payment
  • Introduction of the Benefit Cap
  • Introduction of the Universal Credit
  • Changes to Pension Credit.

Having considered the contents of the report it was

 

RESOLVED – T H A T the contents of the report be noted.

 

Reason for decision

 

To ensure that Members are updated.

 

 

610     UPDATE ON THE REGULATORY PROGRAMME FOR PERFORMANCE AUDIT 2013-14 (MD) –

 

The Committee received an update on the Regulatory Programme which was produced by the Wales Audit Office.

 

The Local Government (Wales) Measure 2009 and the Local Government Act 1999 required the Auditor General to carry out an annual Improvement Assessment to determine whether the Vale of Glamorgan would be likely to comply with the requirements of Part 1 of the Measure.  This involved

  • A review of the Council’s arrangements to secure continuous improvement
  • Improvement studies of areas which may hinder improvement or transformation or give rise to inefficiencies
  • Bespoke pieces of work related to the Council’s improvement objectives and arrangements and
  • An audit of the Council’s published improvement plans and its self-assessment of performance.

The Regulatory Programme outlined work to be undertaken in the Council between April 2013 and March 2014 by and on behalf of the Auditor General under the Local Government (Wales) Measure 2009 and Parts 2 and 3A of the Public Audit (Wales) Act 2004.

 

A copy of the Regulatory Programme update was attached at Appendix 1.

 

Following consideration of the report it was subsequently

 

RESOLVED –

 

(1)       T H A T the update on the Regulatory Programme for Performance Audit 2013/14 be noted.

 

(2)       T H A T Mr. Barry would provide a project brief on the scheme listed in Appendix 1.

 

Reason for decisions

 

(1&2)  In order to review and progress the Regulatory Programme.

 

 

611     ANNUAL AUDIT LETTER 2012/13 (MD)

 

Committee received the Annual Audit Letter for the 2012/13 financial year. 

 

The review of the Annual Audit Letter was included within the remit of the Audit Committee and its terms of reference as follows:

 

'To consider the external auditor’s annual report and other relevant reports and to make recommendations on their implementation to Cabinet and/or Council as appropriate.'

 

The Appointed Auditor was required under the Public Audit (Wales) Act 2004 to:

 

     Provide an audit opinion of the accounting statements;

     Review the Council’s arrangements to secure economy, efficiency and effectiveness in its use of resources and;

     Issue a certificate confirming that the Appointed Auditor had completed the audit of the accounts.

 

The letter was designed to communicate their key messages and conclusions to the Council and external stakeholders, including members of the public.

 

The Annual Audit Letter 2012/13 was attached at Appendix A, summarising key issues that arose from the work the external auditors had carried out during 2012/13.

 

In relation to the Statement of Accounts, the Appointed Auditor issued an unqualified audit opinion on the accounting statements confirming that they presented a true and fair view of the Council’s financial position and transactions.

 

Overall the Appointed Auditor was satisfied that the Council had appropriate arrangements in place to secure economy, efficiency and effectiveness.

 

The Appointed Auditor issued a certificate confirming that the audit of the accounts had been completed on 26th September, 2013.

 

RECOMMENED – T H A T the External Annual Audit Letter be endorsed and referred to Cabinet for approval.

 

Reason for recommendation

 

To facilitate monitoring of the audit function.

 

 

612     INFORMATION AND ACTION REQUESTS BY COMMITTEE (HARM) –

 

The Committee received a report which summarised the actions and information requests made by the Audit Committee to be followed up by the relevant officer, which included a briefing to the Members from the Head of Housing and Building Services on the Building Services – Business Plan / Case.

 

In order to assist the Audit Committee in ensuring that due consideration had been given by the Committee in all aspects of their core functions, a list of Information and Action requests together with a position statement for each was attached at Appendix A and covered the period 17th September, 2012 to date.

 

It was noted that a report was to be submitted to Scrutiny Committee (Social Care and Health) on 2nd December, 2013 with a request that it be referred to the next Audit Committee.

 

A Member of the Committee requested as a report on the provision of the CCTV service be provided to the February 2014 meeting of the Audit Committee.

 

Following consideration of the report it was

 

RESOLVED –

 

(1)       T H A T the content of the report be noted and that all actions and requests were recorded and followed up to a satisfactory conclusion.

 

(2)       T H A T a report on the provision of the CCTV Service be provided to the next Audit Committee in February, 2014.

  

Reason for decisions

 

(1&2)  To keep the Audit Committee informed.

 

 

613     NATIONAL FRAUD INITIATIVE (NFI) 2012/13 (HARM) –

 

The Committee received a report on the Council’s response to the 2012/13 Audit Commission’s National Fraud Initiative (NFI). 

 

Initiated in 1996, the NFI is a biennial data matching exercise established by the Audit Commission, designed to help participating bodies detect erroneous and fraudulent payments from the public purse.  Participants included Local Authorities, Fire Services, Pension Authorities, the NHS, Housing Associations, the Student Loan Company and various Central Government departments.

 

The initiative worked by comparing different sets of data such as payroll and housing benefit records, and flagging unusual combinations such as any person claiming housing benefits whilst failing to disclose his / her employment.  The organisations who took part received a report on these potentially unusual matches, which they could then investigate to determine the existence of any fraud or error.

 

A match did not automatically mean fraud, often, there was a simple explanation for the data match and allowed bodies to update their records.  Even where data matching showed little or no fraud or error, this exercise still provided assurance to bodies about their control arrangements.  It also strengthened the evidence for the Council’s Annual Government Statement.

 

Although the Audit Commission was soon to be disbanded, it was understood that the NFI exercise would continue, but be managed by another body.  The NFI 2012/13 exercise was underway and a summary of the matches received was outlined in the body of the report. 

 

The Council received 5,537 data matches for 2012/13 which are detailed in Table 1 below:

 

     Table 1

Type of Match

No

Received

Blue Badges

227

Concessionary Travel

1,087

Creditors History

2,309

Housing Benefit Claimants

1,620

Payroll

131

Private Residential Care Home

42

Insurance Claimants

115

Residential Parking Permits

6

Total

5,537

 

In order to ensure that resources were targeted in the most efficient and effective way, the data returned identified those matches where it was recommended that an investigation takes place.  Table 2 below provided a breakdown of matches, the number that the NFI recommended be investigated as a minimum and the number that had actually been investigated and subsequently closed as at 31st October, 2013.

 

Table 2

Match

Total Matches

Rec to Investigate

Total Investigated as at 31/10/13

Balance

Closed No Issues

Blue Badges

227

197

225

2

225

Concessionary Travel

1,087

1,087

1,087

0

1,087

Creditors History

2,309

177

200

2,109

200

Housing Benefit Claimant

1,620

244

1,270

350

1,270

Payroll

131

40

85

46

85

Private Residential Care Homes

42

4

42

0

42

Insurance Claimants

115

22

46

69

46

Residential Parking Permits

6

3

0

6

0

Total

5,537

1,774

2,955

2,582

2,955

 

The above table showed the number that had been closed and their category code.  As can be seen, over 50% had been closed with no issues.  With the exception of Residential Parking Permits matches, all recommended matches had been investigated.

 

It was noted that the investigating officer had the opportunity to input a potential saving that had been made as a result of the match being identified and action taken.  For all the matches closed to date, none had reported any savings.

 

With regard to Council Tax (CT), this extract would be undertaken in March 2014 as requested by the NFI.  For the Council Tax matching exercise undertaken in 2010/11 (data extracted February 2012) the following information was known:

 

172 matches were received (135 CT to Electoral Register and 37 CT rising 18’s).  All matches had been investigated and closed and £54,077 worth of 'savings’ identified as a result of the matches. 

 

Internal Audit co-ordinated the Council’s NFI activities but it was noted that some of the detailed work described in the report was carried out by other sections.

 

Following consideration of the content of the report it was

 

RESOLVED – T H A T it be noted that the content of the report has been considered to ensure that all aspects of the Audit Committee’s core functions were being adequately reported.

 

Reason for decision

 

To ensure appropriate monitoring arrangements were in place.

 

 

614     HOUSING BENEFIT AND COUNCIL TAX FRAUD INVESTIGATIONS – HALF YEAR POSITION 2013/14 COMPARED AGAINST 2012/13 OUTTURN (HARM) –

 

The Committee received a report to inform them of the activities that had been undertaken in the first six months of this financial year with regard to Housing and Council Tax Benefit Fraud Investigations, and compared this against the 2012/13 activities.

 

The Housing and Council Tax Benefit Investigations Team was responsible for the investigation of allegations of Housing and Council Tax Benefit fraud.  Fraud Investigators were required to conduct a whole investigation from the initial allegation being received, to closure of the case and preparation of a sanction, if appropriate.  There were three posts on the current staffing structure that undertook this work but currently one investigator post was vacant and the Team Leader was on secondment with the Department for Work and Pensions (DWP) working on the Single Fraud Investigation Service (SFIS) project.  However, due to the fall in referrals the remaining investigator had been able to adequately manage the workload alone.

 

Until the SFIS was agreed and implemented the Vale of Glamorgan Council would continue to undertake Housing Benefit and Council Tax fraud investigations.  Referrals could be received from a number of sources such as members of the public, the Housing Benefit Section or from the DWP.  The Council also continued to receive information via the Housing Benefit Matching Service (HBMS) and the National Fraud Initiative (NFI).  However, these national initiatives had been in place for a number of years and therefore the quantity and quality of these referrals was decreasing. 

 

Due to the success of the national initiatives over the last 8 years, the number of high quality fraud referrals had reduced.  Many referrals the Council now received resulted in joint investigations with the DWP as claimants were in receipt of DWP benefits as well as Council benefits.  Over the past six months there had been 31 new investigations opened and undertaken compared to 46 new investigations at the same time last year.  During 2012/13 a total number of 100 new investigations were opened.  Table 1 illustrated the source of the information received. 

 

Table 1 – Source of Referrals for new case

Source of Referral

                                        Number

 

2012/13

April to Sept 2012

April to Sept 2013

Anonymous

31

15

13

DWP

24

11

16

Housing Benefit Section

30

17

2

NFI / HBMS

12

0

0

Other Local Authority / Police

3

3

0

Total

100

46

31

 

The investigations were undertaken on the basis of information received or from an allegation made against the claimant or landlord in respect of their Housing Benefit or Council Tax Benefit claim.  The most common allegation received was that of co-habitation which accounted for 42% of the cases opened in 2012/13 and 45% of the cases opened during the first six months of this financial year.  Working and claiming and undeclared capital or interest accounted for the majority of the other referrals.  As well as new investigations opened during the year, there were also ongoing cases opened in previous years, 30 of which were carried forward into 2013/14.  Therefore, of the 61 cases worked on in the first six months of 2013/14, 32 had been closed by the end of September 2013.  The reasons for closing these cases were set out below.

 

Table 2 – Reason for Closure

Reasons for Closure

                                     Number

 

2012/13

April to Sept 2012           

April to Sept 2013

All in order

60

27

23

Claimant Error

15

7

0

Proven

22

16

9

Nothing to Investigate

3

2

0

Total

100

52

32

 

It could be seen that 28%, (9 cases) had been closed during 2013/14 with fraud being proven.  This was comparable to 2012/13 where the percentage of cases closed as proven was 31% (22 cases).  The majority of the closures were as a result of the information being found to be all in order and therefore no fraud or error had been established. 

 

Once a case had been closed and fraud had been proven, the amount of overpayment was calculated by the Benefits Section.  A decision was then made using the Council’s prosecution policy, as to the most appropriate action.  Table 3 below illustrated the sanctions that were administered in 2012/13 and for the first six months of 2013/14 together with the associated Housing Benefit or Council Tax Benefit that had been overpaid and was recoverable.   

 

Table 3 – The Number of Sanctions 2012/13 and 2013/14 to Date

Sanction

2012/13

Number

Value of HB/CTB O/P

 

April to Sept 2013

Value of HB/CTB O/P

Caution

4

£4,116

0

0

Prosecution - guilty

22

£114,834

6

£35,812

 

It was noted that 19 of the 22 prosecution cases during 2012/13 were investigated jointly with the DWP, whilst all six cases successfully prosecuted during the first six months of 2013/14 were also joint cases with the DWP.  The value of the recoverable DWP benefit overpayments for these cases was £169,804 in 2012/13 and £40,128 in 2013/14.  Of the 2013/14 successful prosecutions, two claimants received conditional discharges, two received suspended jail sentences, one had a community supervision order, whilst the other was jailed for 10 weeks.

 

The information provided throughout the report illustrated that although the number of referrals had fallen, the Council continued to work successfully with the Council’s Housing Benefits Section and the DWP.  This work continued to result in the recovery of overpaid benefits as well as successful prosecutions where applicable. 

 

Having considered the content of the report it was

 

RESOLVED – T H A T the content of the report be noted.

 

Reason for decision

 

To ensure that Housing Benefit and Council Tax Fraud investigations performance was monitored.

 

 

615     SINGLE FRAUD INVESTIGATION SERVICE (SFIS) (HARM) –

 

The Committee received a report regarding the progress with the Single Fraud Investigation Service (SFIS). 

 

The coalition government’s strategy for tackling welfare fraud and error, published in October 2010, set out a commitment to create the Single Fraud Investigation Service to investigate benefit and tax credit fraud and when commenced, Universal Credit.  SFIS would be part of the Department for Work and Pensions (DWP).  The Universal Credit was introduced from April 2013, but claimants with existing relevant benefits continue to receive those benefits until the full migration to the Universal Credit was completed. 

 

This commitment would be achieved by bringing together investigation staff from local authorities, DWP and Her Majesty’s Revenue and Customs (HMRC).  The aim was to reduce fraud and error overpayments in the welfare system by one quarter, £1.4 billion by March 2015.

 

In April 2013, Council Tax Benefit was replaced by the Council Tax Reduction Scheme.  This new scheme was administered directly by the Council and would not be included under the SFIS remit.  Investigation of fraud involving this scheme would be the responsibility of the Council and legislation was in place to allow this.

 

The formation of SFIS would bring together expertise from DWP, HMRC and local authorities with the aim of all working together under a single policy and set of operational procedures.

 

Consultation was conducted in September 2011 among the participants and a decision was made that, in the short term, investigators would stay with their original employing organisation, retaining their terms and conditions, while working under one banner of SFIS with a planned start date of April 2013.

 

The amalgamation of investigation staff from DWP, HMRC and local authorities had been postponed pending the outcome of studies within a number of pilot sites including Corby Borough Council, Glasgow City Council, London Borough of Hillingdon and Wrexham Council.  It was understood that the pilot projects were realising benefits, across government, and had provided many lessons for a future service.

 

In addition, the SFIS project would draw expertise from DWP, HMRC and local authorities and as a result a Group Auditor based within the Internal Audit Sections HB / CTB Fraud Investigation Team had been seconded to the project team since March 2013.  The initial secondment was for a period of six months, however, this had been extended until February 2014. 

 

The SFIS project team were in the process of finalising the business case and considering the options for delivery, these included:

 

     Introducing SFIS as a partnership

     Introducing SFIS as a single organisation within DWP

     Introducing SFIS as a single organisation, but owned by another organisation

     Delay the introduction of SFIS until after the full roll out of the Universal Credit

     Take no action and leave the services as they are.

 

Evidence to date pointed to a recommendation to introduce SFIS as a single organisation within DWP.  In August 2013 the DWP Programme Board recommended that SFIS be introduced within the DWP during 2014/15 and this had since been ratified by the Permanent Secretary and Minister.  At this stage, the proposed approach was still a recommendation and more work would need to take place, including finalising the full business case and seeking agreement of funding with H.M. Treasury. 

 

The current planning assumptions were that, as SFIS be implemented,

 

     the investigation of HB / CTB fraud would move to the DWP

     the investigation of Local Council Tax Schemes (LCTS) / Tenancy Fraud etc. would remain with local authorities

     the amendment of HB / CTB claims would remain with local authorities

     the calculation and recovery of any HB / CTB overpayments would remain with local authorities

     DWP investigators would request information and evidence from local authorities to support an investigation

     single prosecution bodies would be used (Crown Prosecution Service [CPS] for England and Wales and Procurator – 

           Fiscal [PF] for Scotland).

 

As part of the next phase of project activity, the SFIS project team would be working closely with Human Resources experts to understand the impacts on people working on fraud investigation and prosecutions, including looking at any potential TUPE (Transfer of Undertakings Protection of Employment) or COSOP (Cabinet Office Statement of Practice) implications.

 

The Audit Committee would be regularly updated as more information became available. 

 

Following consideration of the report it was

 

RESOLVED – T H A T the contents of the report be noted and that further reports be presented to the Committee in order to provide updates on the progress of the Single Fraud Investigation Service.

 

Reason for decision

 

To monitor the progress of the Single Fraud Investigation Service and the likely effect on service provision.

 

 

616     OUTTURN REPORT – APRIL TO OCTOBER 2013 (HARM) –

 

Committee was informed of actual Internal Audit performance against the 2013/14 Plan for the period 1st April to 31st October, 2013.

 

The actual position for the seven months compared against the Plan was detailed in the table below.

 

The figures showed that 1,090 actual productive days had been achieved, which equated to 114% of the overall planned productive time available for the period.

 

Directorates

2013-14

Full Year

Plan Days

Proportion of

Plan Days Available for

April to Oct.

2013-14

April to Oct.

Actual Days

 

Corporate and Customer Services

55

32

16

Resources

440

257

211

Development Services

150

88

75

Visible Services and Housing

110

64

63

Learning and Skills

220

128

145

Social Services

155

91

66

Cross Cutting

280

163

62

Contingency - unplanned

125

73

357

Contingency - Fraud and Error

100

58

94

TOTAL PRODUCTIVE DAYS

1,635

954

1,090

 

A summary of audits completed during the period April to October 2013 was detailed in the Head of Accountancy and Resource Management’s progress report attached at Appendix A to the report.  This, together with Appendix B, provided the Committee with details of the reviews completed, together with an overall Audit Opinion and this would support the annual audit opinion at the end of the financial year.

 

Detailed reports were issued to the relevant service managers on the results of individual audits and where significant weaknesses were identified these would be followed up to ensure high priority recommendations were implemented. 

 

RESOLVED – T H A T the actual Internal Audit performance during the seven months of the financial year be noted.

 

Reason for decision

 

To facilitate monitoring of the audit function.

 

 

617     UPDATE ON INTERNAL AUDIT PERFORMANCE APRIL TO SEPTEMBER 2013 (HARM) –

 

Committee received an update on the Internal Audit Shared Service (IASS) performance to 30th September, 2013 and were requested to propose a quality assurance and improvement programme (QAIP) for consideration and endorsement.

 

Committee were informed that the reference to Bridgend County Borough Council in paragraph 8 of the report should read 'The Vale of Glamorgan Council'.

 

One of the core functions of an effective Audit Committee was to 'Oversee the work of Internal Audit (including the risk-based annual plan and charter) and monitor performance’. 

 

The Public Sector Internal Audit Standards (PSIAS) came into effect on 1st April, 2013 and replaced the Code of Practice for Internal Audit 2006.  The PSIAS required the Head of Internal Audit to develop and maintain a quality assurance and improvement programme (QAIP) that covered all aspects of the internal audit activity.  The new Standards were designed to drive improvement and although they would come into force this year, the first full review against these standards would not need to take place until the end of the financial year following. 

 

The QAIP should be designed to enable an evaluation of the internal audit activity conformance with the PSIAS and assess the efficiency and effectiveness of the internal audit activity and identified opportunities for improvement.

 

In order to assist the Audit Committee in ensuring that due consideration had been given by the Committee to all aspects of their core functions, a proposed Quality Assurance and Improvement Programme was attached at Appendix A to the report for consideration and endorsement.  In addition, and included within the body of the report was a position statement on the IASS performance as at 30th September, 2013.

 

Client Feedback

 

At the completion of each audit, all recipients of our reports were asked to comment on their satisfaction with the audit process, by way of a survey questionnaire ranging from a score of 1 for very satisfied to a score of 5 very unsatisfied.  The results so far this financial year are summarised in the table below:

 

Table 1

No.

Question

Average

Score of

Responses

30/09/13

Average

Score of

Responses

2012/13

1

Where appropriate, briefing of client and usefulness of initial discussion.

1.400

1.404

2

Appropriateness of scope and objectives

 of the audit.

1.520

1.475

3

Timeliness of audit.

1.480

1.621

4

Response of Officer to any request for

advice and assistance.

1.330

1.414

5

General helpfulness and conduct of auditor(s).

1.290

1.254

6

Discussion of findings / recommendations

during or at the conclusion of the audit.

1.000

1.530

7

Fairness and accuracy of report.

1.480

1.559

8

Practicality and usefulness of

recommendations.

1.430

1.667

9

Standard of report.

1.380

1.466

10

Client agreement with overall audit

opinion.

1.480

1.552

 

For the first half of this year, 21 responses had been received which represented a 70% response rate, this was compared with a response rate of 42% for the financial year 2012/13.  Historically the return rate of questionnaires had been average, however, it was envisaged that a review of this process during this year focusing on the completion of questionnaires on-line would hopefully increase the response rate and improve results. 

 

Benchmarking

 

The IASS participated in the Welsh Chief Auditors Group (WCAG) benchmarking exercise which was undertaken annually.  This compared the Council’s performance and data with all Welsh councils.  Table 2 below showed the comparison of key indicators for Vale of Glamorgan Council against the overall average of the 18 out of 22 responses received.

 

[View Table 2 Content]

 

As can be seen from Table 2 above, IASS’s performance exceeded the average in 6 of the 8 indicators.  Every effort would be made to improve our performance on those indicators which were below the average, specifically 2 and 6.

 

External Audit

 

The Council’s External Auditors, Grant Thornton UK LLP, carry out a review of internal audit on an annual basis.  Their review informed them as to whether they could place reliance on the work of Internal Audit, particularly in relation to the Council’s main financial systems.  If they were happy to do so, then work in these areas could be reduced as the opinion of the Internal Auditor could be relied upon.  Grant Thornton UK LLP had not passed any adverse comments on the 2012/13 audit work and had always placed reliance on Internal Audit as part of their review for the basis for their work.

 

Quality

 

Quality control was achieved through:

 

Preparation of a detailed audit plan according to an agreed risk assessment methodology and widely consulted upon throughout the Council

 

A documented audit methodology supported by standard working papers, and the review of each draft audit report by the Principal Auditors and/or the Operational Manager - Audit prior to issue

 

Working hard to ensure audits meet the requirements of our customers by giving them the opportunity to comment on the Audit Brief and timing of work, and by working with managers to identify solutions in areas where there is scope for improvement

 

Implementation of the Quality Assurance and Improvement Programme

 

Ensuring the Section is compliant with the Public Sector Internal Audit Standards.

 

Following consideration of the report it was

 

RESOLVED – T H A T the Quality Assurance and Improvement Programme be endorsed and the IASS performance as outlined in the report be noted.

 

Reason for decision

 

To approve the Quality Assurance and Improvement Programme to drive improvements and to monitor performance in respect of the shared service.

 

 

618     UPDATED FORWARD WORK PROGRAMME 2013-14 (HARM) –

 

The updated Forward Work Programme 2013/14 was presented for Committee’s consideration and approval. 

 

RESOLVED – T H A T the amended 2013/14 Forward Work Programme be noted and approved.

 

Reason for decision

 

To monitor and update the Committee’s Forward Work Programme.