Appendix I
Summary of Internal Audit Coverage for 2011/12
The following table sets out the proposed coverage of each audit identified in the Annual Audit Plan for 2011/12. The more detailed scoping of reviews will
be determined at the planning stage for each audit, with terms of reference being confirmed in audit briefs, drawn up in consultation with client officers.
Individual audits will also consider the quality of management information generated within the relevant service area(s) to assist decision-making and
performance monitoring, and there will additionally be some focus given to the monitoring of corporate/service risks and ongoing maintenance of procedures
and business continuity/disaster recovery plans, where appropriate.
Title
Systems Audits
Corporate Governance and Risk
Management
Work to support the Annual
Governance Statement 2011/12
Description
This audit will assess the Council’s arrangements to ensure adequate systems of corporate governance and risk
management are in place, in order for the Head of Internal Audit to provide annual opinions in these areas to inform
Annual Governance Statement. In some Councils, we have adapted these audits to focus on the governance of
change in the current environment, and such an approach may be considered if desired.
This audit assesses the key controls in place over the Council’s fundamental financial systems that are not otherwise
subject to audit during the year, in order to provide assurances to the Head of Internal Audit and Section 151 Officer
that these controls are operating effectively ahead of preparation of the Annual Governance Statement.
In addition, in order to satisfy the requirements of External Audit, we undertake additional testing where audit work has
been scheduled earlier in the financial year, to ensure our work is reflective of the whole year period.
The job budget has increased for 2011/12 compared with previous years to accommodate key control testing of
Housing and Council Tax Benefits which has not been necessary previously, as in-depth systems reviews in this area
have been conducted annually. However, going forward, a more detailed audit of working practices is to be performed
on a 2-yearly cycle, with selective key control testing performed in alternate years.
Appendix I
Summary of Internal Audit Coverage for 2011/12
Accountancy Services
Receipt, Handling and Banking of
Remittances, tourist information
centres
Sundry Debtors
Foreshores and Coastal
Management / Coastal Protection
(Pathfinder Scheme)
This audit was last undertaken in 2009/10, receiving an adequate assurance; 7 medium priority recommendations were
raised. At a time of greater financial pressure for the Council, this audit plays a key role in assessing that the Council’s
finances are being appropriately managed. This is a fundamental financial system, and the outcomes from this review
will be utilised by External Audit. Key areas of focus are:
• Control accounts – the majority of control accounts are evaluated during individual systems reviews; this audit
reviews any additional control accounts, including the suspense accounts
• Banking and Bank Reconciliation procedures, including banking contracts and processes
• Asset Register Management, including reconciliation to property service records
• Budgetary Control, and preparation of the annual budget
• General Ledger maintenance and journal entry controls.
• Treasury Management, including the treasury management strategy and investment decision processes.
This audit was last undertaken in 2009/10, where it received an adequate assurance, raising 3 medium, and 2 low
priority recommendations. Subsequently, the Council has closed its cash office, and although Internal Audit were
consulted and provided advice on the new arrangements, this is the first opportunity to scrutinise the changes in depth.
The changes included the way that petty cash balances operate in the Council, and these will be singled out for scrutiny
within the review, as well as the review over controls at the Tourist Information Centres.
The Council’s sundry debtors functions were also last reviewed in 2009/10, receiving adequate assurance, having
raised 1 medium and 7 low priority recommendations.
The Council have been considering amalgamating the sundry debtors team with the exchequer team during 2011/12.
This practice is not uncommon, however presents risks regarding segregation of duties, and, as a result, the audit
budget has been slightly increased to allow some cross referencing between the functions users are able to perform on
both the debtors and exchequer systems, and ensure this is appropriate. As with the audits of accountancy services
and remittances, this is a fundamental financial system review, and our work will support that of External Audit.
In 2009, North Norfolk Council received £3m funding to support the Coastal Pathfinder Scheme. The Council have
been notified that the funding awarded should be scrutinised by Internal Audit in keeping with requirements specified by
Department of Environment, Food and Rural Affairs, namely the arrangements for the carrying forward of capital spend.
The review will also take account of the extent to which the Coastal Pathfinder Scheme has been delivered to date and
the feasibility of Internal Audit evaluating the controls applying to the operation of the scheme and whether it is being
delivered in line with the bid requirements.
Appendix I
Summary of Internal Audit Coverage for 2011/12
Affordable Housing initiatives
Waste Management Contract
Sports Halls / Centres, Sports
Development
Parks and Open Spaces, Woodland
Management
Affordable housing is a key area of priority for the residents of North Norfolk, as well as being of high risk to the Council.
The Council’s arrangements to encourage affordable housing development were last reviewed in 2008/09, at which
stage it received adequate assurance, raising 1 medium and 1 low priority recommendation. This audit will assess how
the system has developed since this time to deliver affordable houses in the district.
The Council have recently completed a lengthy process to enter into a new waste management contract, which will
commence on 1 April 2011. As part of the 2010/11 audit plan, we have undertaken a review of the ending of the
current arrangements, elements of the procurement of the new contract, and the transfer of services to the new
contractor; this work is ongoing at the time of developing the audit plans. The 2011/12 audit will focus on the
arrangements under the new contract, and ensure there are adequate control systems in place to monitor the contract
delivery. Depending on the outcomes of the recently commissioned business case into the transfer to the contractor of
related administration services, there may also be some potential for audit scrutiny of this transfer, should agreement
have been obtained to such a move.
We have brought forward the audit of sports halls to 2011/12 based on the fact that in 2009/10, when we last undertook
a review of this service, we awarded a limited assurance, raising 3 high, and 5 medium priority recommendations; the
most significant aspects of these recommendations related to the cash and income collection procedures and thus, we
consider that it is important to now evaluate the adequacy of the new systems operating at this early stage.
This audit was one of the first reviews undertaken under the new audit arrangements in 2008/09, whereupon it received
a limited assurance opinion, raising 2 high, and 7 medium priority recommendations. This audit will follow a similar
approach to that undertaken previously, scrutinising arrangements to monitor delivery of the outsourced contract to
maintain the Council’s parks, and the operation of the Council’s woodland team.
Appendix I
Summary of Internal Audit Coverage for 2011/12
Communications
Corporate Policy, Planning,
Performance Management
Car Parking and Markets
The audit of communications was deferred from the 2010/11 audit plan, and as such this will be the first examination of
this area under the present audit arrangements, recognising that the Council unveiled its new Communications Strategy
for 2011/15 in September 2010. Similar audits undertaken at other Councils have looked at areas such as
achievement of value for money in the production of publicity material; methods of engagement with hard to reach
groups, and compliance with the Code of Recommended Practice on Local Authority Publicity, which has recently been
subject to consultation. It is appreciated that the proposed computer audit of Contract Management (covered
subsequently in this paper) will be considering website provisions and we will ensure that there is no overlap therefore
between this audit and our overall review of Communications.
The Council’s corporate plan runs to 2011, and in the light of current central government developments, it is timely to
independently review how the Council determines its priorities, and subsequently manages performance in light of
these. With the scrapping of the majority of national performance indicators (hence the removal of the annual
performance indicator audit), there is now more emphasis on local authorities to manage their own performance in light
of local needs; this audit will evaluate how the Council is beginning to deliver against these requirements.
The Council’s car parking and market systems were last audited as part of the 2009/10 audit plan, where an adequate
assurance was awarded, having raised 7 medium priority recommendations. Subsequently, the Council has taken the
decision during 2010/11 to enter into a shared service arrangement with Kings Lynn and West Norfolk Borough Council
to operate over the next 5 years. As part of this decision, it was agreed that internal audit scrutiny should be provided
to ensure that the systems to monitor delivery of the new service are adequate; this audit will fulfil that remit and take
account of monthly management review meetings and the work of the Shared Services Board in this matter.
Appendix I
Summary of Internal Audit Coverage for 2011/12
Computer Audits
Business Continuity
The audit will look at the Council’s Business Continuity arrangements. Business Continuity is the foundation which will
help the Council continue operations in the event of a disaster or significant incident affecting Council staff, premises or
systems. Business Continuity concentrates on the user end of the recovery process and is also a key requirement of
the 2004 Civil Contingencies Act. In previous years this audit has been undertaken in conjunction with Disaster
Recovery; however, as Business Continuity is not an IT responsibility (but should inform the Disaster Recovery
requirements) they are now undertaken as separate audits so responsibility is no longer blurred between the two.
Data Consistency
Consistency of data is a key aspect of providing an effective service to the Council’s customers. Failure to leverage
information available to improve the customer service can result in duplication and inconsistencies in customer records.
The key applications which are enablers for this include the Geographic Information System (GIS) and Local Land and
Property Gazetteer (LLPG) which ideally should hold source data. However, consistency also relies upon the
management of date client date entering the Councils systems and movement of information (such as address
changes) between Council departments. The audit will look at how the Council manages data consistency in terms of
policies, procedures, identification of contact points and internal distribution of information.
Northgate – payroll and personnel
application
This application manages the Council Payroll, Personnel and Recruitment requirements and was highlighted as a key
application during the de-brief following the initial analysis. The control areas are as follows:
•
•
•
•
•
•
•
Content Management
Access Controls;
Data Input;
Data Processing;
Data Output;
Interfaces;
Management Trails; and
Support Arrangements and Change Controls.
The Council advertises its services and keeps customers informed via its website. Therefore, it is critical that the
content of the website is relevant and accurate in order to be effective and provide value. The audit will look at how the
Council manages the content of its website and how it ensures that all content is accurate and fit for purpose.