Please Contact: Lydia Hall
Please email: lydia.hall@north-norfolk.gov.uk
Please Direct Dial on: 01263 516047
28 November 2014
A meeting of the Audit Committee of North Norfolk District Council will be held in the
Committee Room at the Council Offices, Holt Road, Cromer on Tuesday 09 December
2014 at 2.00 pm
Members of the public who wish to ask a question or speak on an agenda item are
requested to arrive at least 15 minutes before the start of the meeting. It will not always be
possible to accommodate requests after that time. This is to allow time for the Committee
Chair to rearrange the order of items on the agenda for the convenience of members of the
public. Further information on the procedure for public speaking can be obtained from
Democratic Services, Tel: 01263 516047, Email: democraticservices@north-norfolk.gov.uk
Anyone attending this meeting may take photographs, film or audio-record the proceedings
and report on the meeting. Anyone wishing to do so must inform the Chairman. If you are a
member of the public and you wish to speak on an item on the agenda, please be aware that
you may be filmed or photographed.
Sheila Oxtoby
Chief Executive
To: Mr N D Dixon, Mr B Jarvis, Mrs A Moore, Miss B Palmer, Mr R Reynolds and Mr D
Young
All other Members of the Council for information.
Members of the Management Team, appropriate Officers, Press and Public
If you have any special requirements in order to attend this meeting, please let us
know in advance
If you would like any document in large print, audio, Braille, alternative format or in a
different language please contact us
Chief Executive: Sheila Oxtoby
Strategic Directors: Nick Baker and Steve Blatch
Tel 01263 513811 Fax 01263 515042 Minicom 01263 516005
Email districtcouncil@north-norfolk.gov.uk Web site northnorfolk.org
AGENDA
1.
TO RECEIVE APOLOGIES FOR ABSENCE
2.
PUBLIC QUESTIONS
To receive public questions, if any
3.
ITEMS OF URGENT BUSINESS
To determine any items of business which the Chairman decides should be
considered as a matter of urgency pursuant to Section 100B(4)(b) of the Local
Government Act 1972.
4.
DECLARATIONS OF INTEREST
Members are asked at this stage to declare any interests that they may have in any
of the following items on the agenda. The Code of Conduct for Members requires
that declarations include the nature of the interest and whether it is a disclosable
pecuniary interest.
5.
MINUTES
(Page 1)
To approve as a correct record, the minutes of the meeting of the Audit Committee
held on 16 September 2014.
6.
AUDIT UPDATE AND ACTION LIST
(Page 9)
To monitor progress on items requiring action from the meeting of 16 September
2014, including progress on implementation of audit recommendations.
7.
AUDIT COMMITTEE WORK PROGRAMME
(Page 10)
To review the Audit Committee Work Programme.
8.
ANNUAL AUDIT LETTER 2013/14
(Page 11)
To receive the Annual Audit Letter for 2013/14.
9.
PROGRESS REPORT ON INTERNAL AUDIT RECOMMENDATIONS
(Page 19)
To receive the Progress Report on Internal Audit Recommendations.
10.
FOLLOW UP REPORT ON INTERNAL AUDIT RECOMMENDATIONS
(Page 32)
To receive the Follow Up Report in Internal Audit Recommendations.
11.
AUDIT PROCUREMENT
(Page 39)
To consider audit procurement.
12.
BUSINESS CONTINUITY
(Page 42)
Incidents and Emergency Planning brief which is to be considered at Overview &
Scrutiny Committee before Audit Committee.
13.
CORPORATE RISK REGISTER
14.
EXCLUSION OF THE PRESS AND PUBLIC
(Page 44)
To pass the following resolution, if necessary:
“That under Section 100A(4) of the Local Government Act 1972 the press and public
be excluded from the meeting for the following items of business on the grounds that
they involve the likely disclosure of exempt information as defined in
of Part I
of Schedule 12A (as amended) to the Act.”
Agenda item _5 _
AUDIT COMMITTEE
Minutes of a meeting of the Audit Committee held on Tuesday 16 September 2014 in
the Committee Room, Council Offices, Holt Road, Cromer at 2.00 pm.
Members Present:
Mr B Jarvis
Miss B Palmer (Vice-Chairman - Chairing)
Committee:
Mr R Reynolds
Mr D Young
Ms V Gay (substitute for Mr N Dixon)
Officers in
Attendance:
14.
Head of Finance, Chief Accountant, Internal Audit Consortium Manager,
Harriet Aldridge and Aphrodite Antoniades (Price Waterhouse Coopers),
Regulatory Officer
APOLOGIES
Mr N Dixon (Chairman), Mrs A Moore
15.
PUBLIC QUESTIONS
None received.
16.
ITEMS OF URGENT BUSINESS
None received.
17.
DECLARATIONS OF INTEREST
None
18.
MINUTES
The Minutes of the meeting of the Audit Committee held on 17 June 2014 were
approved as a correct record and signed by the Chairman, subject to the following
amendments:
Officers in attendance: amend to read Richard Sadler.
Minute 11: substitute „simplistic‟ for „easily understood‟.
Mr D Young referred to Minute 9, where concerns were raised that there may be a bug
in the tills at Tourist Information Centres. He asked if Wells TIC had been approached.
The Head of Finance stated that the concerns had centred more on Cromer TIC but
she would make enquiries of Customer Services.
Audit Committee
1
15 September 2014
19.
AUDIT UPDATE AND ACTION LIST
Members were updated on progress on actions arising from the minutes of the meeting
of 17 June 2014.
Progress on Internal Audit Activity
The Head of Finance confirmed that the tills were now working properly.
Corporate Risk Register
The Head of Finance stated that this matter would be reported to the Audit Committee
in December.
Mr R Reynolds stated that the Head of Finance and her team had done very well and
that everything the Audit Committee had requested had been done.
20.
AUDIT COMMITTEE WORK PROGRAMME
RESOLVED
That the Work Programme be agreed.
21.
PWC 2013/14 ANNUAL GOVERNANCE REPORT (ISA260)
Harriet Aldridge and Aphrodite Antoniades presented the Annual Governance Report
and drew Members‟ attention to the following matters:
a)
b)
c)
d)
e)
f)
g)
Council Tax Benefit reform was an additional risk which had not been included in
the Audit Plan. The new scheme had been tested and no issues were found.
Significant audit matters were all reasonable.
No issues had been identified with regard to related parties.
PWC was not aware of any relationships which impacted on its independence.
No areas of concern had been identified in the Annual Governance Statement.
An unqualified opinion was anticipated with regard to economy, efficiency and
effectiveness on completion of this audit.
No issues had been identified with regard to internal controls.
At the request of Ms Aldridge, the Committee confirmed that it had no knowledge of
any fraud which PWC should be aware of prior to signing the letter of representation.
Mr D Young asked why it was recommended that all public conveniences were
revalued at the same time when it appeared reasonable to revalue them on a rolling
basis.
Ms Antoniades explained that CIPFA guidelines required that all assets within a class
of assets should be revalued at the same time. However, PWC was satisfied that
there was an adequate system of revaluation in place for this class, even though it did
not currently comply with CIPFA guidance.
The Committee noted the report.
22.
PROTOCOL FOR LIAISON BETWEEN INTERNAL AND EXTERNAL AUDITORS
Audit Committee
2
15 September 2014
Aphrodite Antoniades introduced the draft Protocol for liaison between internal and
external auditors which set out the proposed working relationship between
PricewaterhouseCoopers LLP audit team and the Council‟s internal auditors.
RESOLVED
That the draft Protocol be agreed.
23.
ANNUAL REPORT OF THE MONITORING OFFICER 2013/14
The Monitoring Officer presented his Annual Report which summarised the more
important matters arising from the Monitoring Officer‟s work for the District Council from
1 April 2013 to 31 March 2014 and commented on other issues.
The Monitoring Officer explained that his role was to act as internal whistle-blower on
the authority‟s activities, to work with the Chief Executive on governance issues and
with the Democratic Services Team on decision making and the Council‟s Constitution.
With regard to standards and ethics, he attended meetings of the Standards
Committee, assessed complaints and ways of dealing with them. His role included
standards and ethics of Parish Councils.
The Monitoring Officer reported that the backlog of standards cases had been cleared
since the introduction of a new Standards regime in 2012. There had been very few
cases in 2013-14, but there had been a slight increase in cases involving Parish
Councils. However, there was no evidence of widespread misbehaviour by the
Authority or Parishes. He considered that the regime had found its own level and
people understood that the duty to behave was a personal one.
The Monitoring Officer referred to the aspects of his work which were set out in the
report.
A new approach was being taken with a „roadshow‟ style standards event for Parish
Councils by the Monitoring Officer, Chairman of the Standards Committee and an
independent member of the Standards Committee. To date, approximately 15 such
events had taken place. Parish Councillors had shown an interest in what the team
had to say. The Monitoring Officer considered that the value of these events was in
diffusing and preventing problems and complaints.
With regard to Ombudsman matters, there was nothing significant in the number or
type of cases and no maladministration had been found.
Miss B Palmer stated that the roadshow she had attended had been good and all six
Parish Councils involved had engaged in it.
The Monitoring Officer stated that he had suggested that the Head of Planning attend
these meetings.
The Monitoring Officer answered Members‟ questions:
a)
Planning provoked the most complaints. Locally controversial applications often
lay behind complaints about behaviour and it was necessary to get to the
substance of the complaints. Local Members were often perceived as being for or
against planning proposals.
Audit Committee
3
15 September 2014
b)
Pre-determination was an administrative law concept and not a standards and
conduct issue. It had been raised as an issue recently in order to bring it to
Members‟ attention.
c)
Parish and Town Councils were very aware of their role as consultees on planning
applications, but could lose sight of the fact that their view was only one factor
which was taken into account when determining those applications and were
disappointed when their recommendations were not followed. There was a
mismatch of expectations on occasions.
Mr D Young stated that the Head of Planning had addressed a meeting of a
number of parishes. Feedback had been quite positive and the attendees had
been grateful that the Head of Planning had explained matters to them. He
anticipated that she would attend similar events elsewhere.
d)
The Constitution Working Party considered major changes to the Constitution and
made recommendations to Full Council. There were no major changes in the
pipeline. However, issues which may impact on the Constitution, such as changes
in legislation, were kept under review and delegations were often scrutinised to
ensure they were up to date. The Monitoring Officer confirmed that to the best of
his knowledge the version of the Constitution on the website was updated as
changes were made.
The Committee noted the report.
24.
ANNUAL GOVERNANCE STATEMENT 2013/14
The Head of Finance presented the Annual Governance Statement (AGS) 2013/14.
The statement provided a robust statement of the culture and values by which the
Council was directed and controlled. It was built around the six principles of good
governance set out by the Chartered Institute of Public Finance and Accountancy
(CIPFA) and the Society of Local Authority Chief Executives (SOLACE). Adoption of
the AGS by the Council would allow it to move ahead with its corporate planning
process, confident that it could address any issues of governance and risk.
The Head of Finance highlighted the following:
 Bodies and groups had been updated to include those which were currently in
place.
 There was a reduction in the number of completed recommendations; however
the overall number of recommendations had reduced.
 There was one high risk recommendation which had been completed.
 There were two actions which needed attention.
 Progress had been reviewed by the Performance & Risk Management Board.
Mr Young considered that the frequency of the Management Team meetings should be
included in line with the other meetings and board meeting frequency. The Head of
Finance confirmed that these were held monthly and the amendment could be made.
Mr Young asked what the Council needed to do to achieve an Investors in People
silver award, having already achieved bronze. The Internal Audit Consortium Manager
stated that there were many criteria and it was up to the Council if it wanted to take the
next step. However, it was no disservice to staff to achieve bronze. The Head of
Finance stated that there was a human resource issue if the Council wished to proceed
further.
Audit Committee
4
15 September 2014
RESOLVED
That the Annual Governance Statement for 2013/14 be approved for
consideration by Full Council when the annual Statement of Accounts for
2013/14 are also presented for approval.
25.
2013/14 STATEMENT OF ACCOUNTS
The Chief Accountant presented the Statement of Accounts for 2013/14 for review by
the Audit Committee prior to recommendation to Full Council for approval. The outturn
position for the year had been reported to Members in June and had been used to
inform the production of the statutory annual accounts for 2013/14.
The Statement of Accounts for 2013/14 had been produced in accordance with the
Code of Practice on Local Authority Accounting. The draft accounts were produced by
30th June and since then have been subject to external audit review.
Prior to the meeting the Committee had received training on the Statement of
Accounts. The presentation covered the following main points:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
The annual financial cycle, which explained the timeline for the processes which
fed into the Annual Statement.
An overview of the actions the Committee would be requested to take at this
meeting.
An explanation of the content of the Final Accounts and the Core Financial
Statements.
An explanatory foreword to the Accounts provided an easily understandable guide
to the most significant matters reported in the accounts.
The Core Financial Statements comprised a Movement in Reserves Statement,
Comprehensive Income and Expenditure Statement, Balance Sheet and Cash
Flow Statement.
The Movement in Reserves Statement showed the movement during the year on
reserves held by the Council. There were two types of reserve:
i) Usable, eg. general and earmarked, which were funds built up to meet future
likely or known liabilities.
ii) Unusable, eg. the revaluation reserve.
The Comprehensive Income and Expenditure Statement showed the “accounting”
cost in the year of providing services. This had been prepared in accordance with
Generally Accepted Accounting Practice (GAAP). Authorities raised taxation to
cover expenditure in accordance with the regulations, which may differ from the
accounting cost. The Local Council Tax Support Scheme had been introduced
last year and there was no large movement in net cost as the majority of the
money paid out was returned to the authority.
The Balance Sheet showed the assets and liabilities of the Authority at 31 March.
The net assets were matched by “usable” and “unusable” reserves.
The Cash Flow Statement showed the changes in cash and cash equivalents
(assets that could easily be converted to cash, eg. bonds) of the authority during
the year, and how the Authority generated and used cash and cash equivalents.
Cash flows were classified as operating activities, investing activities or financing
activities.
Pensions:
 IAS19 was the accounting standard for employee benefits. Amendments had
been adopted which would result in reclassification of costs/information and a
Audit Committee
5
15 September 2014






requirement for more detailed disclosures. It was unlikely that this would have
a material effect on the financial statements.
Note 22 to the accounts related to Defined Benefit Pension Schemes, in which
the Council participated, and gave details of the funding arrangements.
The deficit had decreased by £124,000 from March 2013.
The deficit on the Local Government Scheme would be made good by
increased contributions over the remaining working life of employees as
assessed by the scheme actuary.
Finance would only be required to cover discretionary benefits when pensions
were actually paid.
The total contributions expected to be made to the Local Government Pension
Scheme by the Authority in the year to 31 March 2014 was £1.3m.
Benchmarking figures had been provided by the Norfolk Pension Fund for the
first time and compared the authority against 7 other authorities. The results
showed that NNDC was 5th in terms of active members of the scheme (27%),
7th for deferred membership (26%) and 3rd in terms of pensioners (47%). The
Authority‟s solvency ratio was 66% in 2013 and 67% in 2014, placing it 5th in
the benchmarking group. Cash flow was third highest at 161% as a result of
also having the 3rd highest number of pensioners. All authorities in the group
had more pensioners than contributors and more liabilities than assets. Seven
out of the eight paid more in pensions than they received in direct
contributions.
Mr D Young considered that the authority should be aiming to bring the
solvency ratio on the Pension Scheme up to 100% but was struggling to see
how it could be done. The Chief Accountant stated that more could be put in.
Triennial valuations were carried out which looked at the forecast and
recommended future contribution rates for members. Councils had taken a
pensions holiday when the schemes were in surplus and had not paid much
into the fund at that time. In order to achieve a return investments were being
made in cash, equities, properties and funds.
Ms V Gay considered that falling interest rates would have had an impact.
The Chief Accountant confirmed that this would be the case where cash had
been invested. However, cash investments were now lower with an increase
in property investment.
The Chief Accountant stated that there had been changes to the way elements
of the Pension Fund were allocated and it was being tailored to individual
authorities, with a weighted average based on the number of pensioners, how
long they were likely to draw pension and how many active members would
survive to draw a pension. Pensions reporting was a complicated subject.
The deficit/surplus was an estimation.
k)
l)
Major movements in the accounts were highlighted.
The Annual Governance Report presented by PWC (ISA260) for 2013/14 had
raised no significant issues.
The Committee discussed the Final Accounts.
Mr R Reynolds stated that he had not attended the training but had read through the
report and considered that all issues raised at the previous meeting had been covered.
Audit Committee
6
15 September 2014
In answer to a question by Mr D Young, the Head of Finance stated that highways and
transport services operated at a profit due to the car parking income.
RESOLVED
That the Statement of Accounts for 2013/14 be recommended to Full Council for
approval.
26.
PROGRESS REPORT ON INTERNAL AUDIT ACTIVITY, 1 APRIL TO 5
SEPTEMBER 2014
The Internal Audit Consortium Manager presented the report which examined the
progress made between 1 April 2014 and 5 September 2014 in relation to delivery of
the Annual Audit Plan for 2014/15, and provided a current in-year position.
A total of 5 audit assignments had been processed during the period and 30% of the
audit plan had been achieved.
The Internal Audit Consortium Manager highlighted the following matters:
a)
b)
c)
d)
e)
f)
g)
The Coast Protection service area was performing adequately.
The Development Management service area had received an adequate
assurance. Progress was being made and processes were being reviewed.
Policy and procedures were also being reviewed but would take longer. The Head
of Planning was working towards implementing the recommendation in respect of
Section 106 Obligations.
Performance Management, Corporate Policy and Business Planning had received
a good assurance, with only one low-priority recommendation.
Network Infrastructure had received only a limited assurance, but good progress
was being made since the last audit.
Network Security had received an adequate assurance, with the main
recommendation relating to anti-virus.
Some improvement was needed in relation to Performance Indicator outcomes.
One audit had overran slightly, but others had been on time. Two of the five
reports were issued late. Performance had been better than last year but it was
hoped that it will improve.
Feedback forms had resulted in a good opinion.
The Internal Audit Consortium Manager answered Members‟ questions:
a)
b)
c)
d)
Field work had started on sports halls.
Anti-virus, service packs and security updates were expected to have been
addressed by the next report. The Head of Finance added that a follow up report
would be submitted to the Committee in December.
The Chairman requested that an email be sent round regarding high priority issues
prior to the next meeting.
Development Management audit had overrun. It was a 22 day audit, one of the
largest carried out. The Head of Finance added that there had been regular
contact between the auditor and the manager.
The Head of Finance updated the Committee on progress with internal audit
procurement. A detailed report would be submitted to the next meeting.
The Committee noted the report.
Audit Committee
7
15 September 2014
The meeting closed at 2.57 pm
______________________
Chairman
Audit Committee
8
15 September 2014
Agenda Item
AUDIT COMMITTEE 16 September 2014 – ACTIONS ARISING
FROM THE MINUTES
12. Corporate Risk
Register
Originally for the September meeting and deferred
until December:
To return audit committee concerns regarding the
risk level of the Local Investment Strategy to the
Performance and Risk Management Board to ensure
appropriate level of risk has been fully considered.
To consider a further action under ‘Shared Services’
regarding looking more deeply at potential proposals
for shared services in the authority.
9
Karen Sly
Agenda Item 6
AUDIT COMMITTEE WORK PROGRAMME 2014 – 2015
JUNE 2014
PWC
SEPTEMBER
2014
PWC 2013/14
Annual
Governance
report
(ISA260)
DECEMBER 2014
MARCH 2015
Annual Audit
Letter (PWC)
Audit Plan (PWC)
(with overview)
Annual Grant
Certification
Report
Progress Report
on Internal Audit
Activity
Progress Report
on Internal Audit
Activity
Protocol for
liaison between
internal and
external auditors
Internal Audit
Annual Review
of the
Effectiveness of
Internal Audit
Progress Report
on Internal Audit
Activity
Annual Report
and Opinion
Status of agreed
actions
Undertake selfassessment
NNDC
Corporate Risk
Register/ risk
management
framework
Business
Continuity Plan
Review
Follow Up Report
Strategic and
on Internal Audit
Annual Audit
Recommendations Plans
Statement of
Accounts (+
informal training)
Business
Continuity
Flood Recovery
Review of
Pensions liability
RIPA Policy (PreAgenda only)
Risk Management
Framework
Monitoring
Officer’s Report
Corporate Risk
Register
Local Code of
Corporate
Governance and
Action Plan –
update and
Annual
Governance
Statement
2013/14 – update
10
www.pwc.co.uk
North Norfolk District
Council
Annual Audit Letter
2013/14
Government and
Public Sector
October 2014
11
Contents
Code of Audit Practice and
Statement of Responsibilities
of Auditors and of Audited
Bodies
Introduction
1
Audit Findings
3
Fees
2
In April 2010 the Audit Commission
issued a revised version of the
‘Statement of responsibilities of
auditors and of audited bodies’. It is
available from the Chief Executive
of each audited body. The purpose
of the statement is to assist auditors
and audited bodies by explaining
where the responsibilities of
auditors begin and end and what is
to be expected of the audited body in
certain areas. Our reports and
management letters are prepared in
the context of this Statement.
Reports and letters prepared by
appointed auditors and addressed
to members or officers are prepared
for the sole use of the audited body
and no responsibility is taken by
auditors to any Member or officer
in their individual capacity or to
any third party.
PwC  Contents
North Norfolk District Council
12
An audit is not designed to
identify all matters that may be
relevant to those charged with
governance. Accordingly, the
audit does not ordinarily identify
all such matters.
Introduction
The purpose of this letter
We met our responsibilities as follows:
This letter summarises the results of our 2013/14 audit work
for members of the Authority.
Audit Responsibility
Results
Perform an audit
of the accounts in
accordance with
the Auditing
Practice Board’s
International
Standards on
Auditing (ISAs
(UK&I)).
We reported our findings to the Audit
Committee on 16 September 2014 in
our 2013/14 report to those charged
with governance (ISA (UK&I) 260).
On 23 September 2014 we issued an
unqualified audit opinion.
Report to the
National Audit
Office on the
accuracy of the
consolidation
pack the
Authority
is required to
prepare for the
Whole of
Government
Accounts.
We reported to the National Audit Office
on 23 September 2014 that a detailed
review of the consolidation pack was not
required as the Authority was below the
threshold.
Form a
conclusion on the
arrangements the
Authority has
made for securing
economy,
efficiency and
effectiveness in its
use of resources.
On 23 September 2014 we issued an
unqualified value for money conclusion.
We have already reported the detailed findings from our
audit work to the Audit Committee in the following reports:



Audit opinion for the 2013/14 financial statements,
incorporating conclusion on the proper arrangements to
secure economy, efficiency and effectiveness in its use of
resources;
Report to those charged with Governance (ISA (UK&I)
260); and
Annual Certification Report for 2012/13 (to those
charged with governance).
The matters reported here are the most significant for the
Authority
Scope of Work
The Authority is responsible for preparing and publishing its
Statement of Accounts, accompanied by the Annual
Governance Statement. It is also responsible for putting in
place proper arrangements to secure economy, efficiency and
effectiveness in its use of resources.
Our 2013/14 audit work has been undertaken in accordance
with the Audit Plan that we issued in March 2014 and
subsequently updated in June 2014 and is conducted in
accordance with the Audit Commission’s Code of Audit
Practice, International Standards on Auditing (UK and
Ireland) and other guidance issued by the Audit Commission.
PwC  1
North Norfolk District Council
13
Audit Responsibility
Results
Audit Responsibility
Results
Consider the
completeness of
disclosures in the
Authority’s
annual
governance
statement,
identify any
inconsistencies
with the other
information of
which we are
aware from our
work and
consider whether
it complies with
CIPFA / SOLACE
guidance.
We undertook our work in accordance
with our Audit Plan. There were no
issues to report in this regard.
Issue a certificate
that we have
completed the
audit in
accordance with
the requirements
of the
Audit
Commission Act
1998 and the
Code of
Practice issued by
the Audit
Commission.
We issued our certificate on 23
September 2014 on completion of our
work. There were no issues to report in
this regard.
Consider
whether, in the
public interest,
we
should make a
report on any
matter coming to
our notice in the
course of the
audit.
We undertook our work in accordance
with our Audit Plan. There were no
issues to report in this regard.
Determine
whether any
other action
should be
taken in relation
to our
responsibilities
under the
Audit
Commission Act.
We undertook our work in accordance
with our Audit Plan. There were no
issues to report in this regard.
PwC  2
North Norfolk District Council
14
Audit Findings
Accounts
Changes to IAS 19: Employee Benefits
We audited the Authority’s accounts in line with approved
Auditing Standards and issued an unqualified audit opinion
on 23 September 2014.
We noted significant issues arising from our audit within our
Report to Those Charged with Governance (ISA (UK&I) 260).
This report was presented to the Audit Committee on 16
September 2014. We wish to draw the following points,
included in that report, to your attention in this letter:
Pensions liability
The most significant estimate in the Statement of Accounts is
in the valuation of net pension liabilities for employees in the
Norfolk County Council pension fund. Your net pension
liability at 31 March 2014 was £31.8 million (2013 - £31.8
million).
The 2013 triennial valuation has been finalised and the effect
on the accounts is£1,432m. This has been agreed back to the
actuaries report without exception.
We reviewed the reasonableness of the assumptions
underlying the pension liability, and we are comfortable that
the assumptions are within an acceptable range. The report
from the Pension Fund actuary was reviewed by the PwC
specialist team and the assumptions used were compared to
the industry averages with no exceptions or major variances
noted.
We validated the data supplied to the actuary on which to
base their calculations.
From 2013/14 there have been changes to the accounting for
defined benefit schemes and termination benefits. These
changes have been reflected in the Authority’s financial
statements with the inclusion of additional disclosures. The
impact on the authority has been immaterial and no prior
year restatement has been required. No exceptions have been
noted with the presentation in the Statement of Accounts.
Judgments and accounting estimates
The following significant judgments or accounting estimates
were used in the preparation of the financial statements:





Property, plant and equipment – Depreciation and
Valuation;
Bad Debt Provision;
NNDR Provision for Appeals;
Accruals Provisions; and
Pensions.
No issues have been identified in our audit of these areas.
Use of Resources
We carried out sufficient, relevant work in line with the Audit
Commission’s guidance, so that we could conclude on
whether you had in place, for 2013/14, proper arrangements
to secure economy, efficiency and effectiveness in your use of
the Authority’s resources.
PwC  3
North Norfolk District Council
15
In line with Audit Commission requirements, our conclusion
was based on two criteria:

the organisation has proper arrangements in place
for securing financial resilience; and

the organisation has proper arrangements for
challenging how it secures economy, efficiency and
effectiveness.
To reach our conclusion, we carried out a programme of work
that was based on our risk assessment.
We issued an unqualified conclusion on the ability of the
organisation to secure proper arrangements to secure
economy, efficiency and effectiveness in its use of resources.
Annual Governance Statement
Local authorities are required to produce an Annual
Governance Statement (AGS) that is consistent with
guidance issued by CIPFA/SOLACE. The AGS accompanies
the Statement of Accounts.
We reviewed the AGS to determine whether it complied with
the CIPFA/SOLACE guidance and whether it might be
misleading or inconsistent with other information known to
us from our audit work. We found no areas of concern to
report in this context.
Whole of Government Accounts
Certification of Claims and Returns
We undertook our work on the Whole of Government
Accounts consolidation pack as prescribed by the Audit
Commission. The audited pack was submitted to the
National Audit Office on 23 September 2014. We found no
areas of concern to report in this context.
We presented our most recent Annual Certification Report
for 2012/13 to those charged with governance in February
2014. We certified two claims, the Housing and Council Tax
Benefits Scheme and the National Non Domestic Rates
Return, worth £58 million in total. In both cases a
qualification letter was required to set out the issues arising
from the certification of the claim. These details were also
set out in our Annual Certification Report for 2012/13. We
will issue the Annual Certification Report for 2013/14 in
March 2015.
PwC  4
North Norfolk District Council
16
Fees
Fees for 2013/14
We reported our fee proposals in our audit plan. An update on this is set out below. Please note that we have requested fee
variations from the Audit Commission in relation to additional work we have had to undertake this year, which is in addition
to the scope of work covered by the scale fee.
We have agreed our fee variation requests with management, however, until approval is received from the Audit Commission,
the final fees for 2013/14 remain draft.
Statement of Accounts (including whole of government
accounts and Value for Money Conclusion)
Fee variation (pending Audit Commission approval)
2013/14
forecast
outturn
2013/14
fee proposal
2012/13
fee actual
71,250
71,250
74,350
3,216
-
--
29,568*
33,600
36,000
-*
-
2,700
6,627
104,034
104,850
119,677
Grant Certification fee:
BEN01 Housing and Council Tax Benefit Scheme
LA01 National Non Domestic Return
Fee variation (extended testing following error identification)
TOTAL
* Our fee for certification of claims and returns is yet to be finalised for 2013/14 and will be reported to those charged with
governance in March 2015 within the 2013/14 Annual Certification Report.
PwC  2
North Norfolk District Council
17
In the event that, pursuant to a request which North Norflk District Council has received under the Freedom of Information Act 2000, it is required to disclose any information contained in this
report, it will notify PwC promptly and consult with PwC prior to disclosing such report. North Norflk District Council agrees to pay due regard to any representations which PwC may make in
connection with such disclosure and North Norflk District Council shall apply any relevant exemptions which may exist under the Act to such report. If, following consultation with PwC, North
Norflk District Council discloses this report or any part thereof, it shall ensure that any disclaimer which PwC has included or may subsequently wish to include in the information is reproduced in
full in any copies disclosed.
This document has been prepared only for North Norflk District Council and solely for the purpose and on the terms agreed through our contract with the Audit Commission. We accept no
liability (including for negligence) to anyone else in connection with this document, and it may not be provided to anyone else.
© 2014 PricewaterhouseCoopers LLP. All rights reserved. In this document, "PwC" refers to the UK member firm, and may sometimes refer to the PwC network. Each member firm is a separate
legal entity. Please see www.pwc.com/structure for further details.
130610-142627-JA-UK
18
Audit Committee
9 December 2014
Report Title
Progress Report on Internal Audit Activity
– 6 September to 18 November 2014
Are there background papers?
Yes
No
Exempt
Yes
No
Yes
No
Reason for Exemption?
Decision for Full Council?
Contact Officer
Emma Hodds, Internal Audit Consortium
Manager
E-mail address
ehodds@s-norfolk.gov.uk
Telephone number
01508 533791
Are there Non Electronic Appendices?
Yes
List of Background Papers (if applicable)
19
No
Audit Committee
9 December 2014
Agenda Item No_____________
Progress Report on Internal Audit Activity – 6 September to 18 November 2014
Summary:
This report examines the progress made between 6 September
2014 and 18 November 2014 in relation to delivery of the Annual
Audit Plan for 2014/15, and provides a current in-year position.
Conclusions:
A total of 2 audit assignments have been processed during the
period covered by this report.
Recommendations:
It is recommended that the Committee notes the outcome of the
audits completed between 6 September and 18 November 2014
where assurance levels have been given and the progress made
to date with the annual audit plan.
Cabinet member(s):
Ward(s) affected:
All
All
Emma Hodds, Internal Audit Consortium Manager
01508 533791, ehodds@s-norfolk.gov.uk
Contact Officer, telephone
number, and e-mail:
1.
Background
1.1.
This report reflects progress made with regard to assignments featuring in the
approved Annual Internal Audit Plan for 2014/15, which was endorsed by the
Audit Committee on 19 March 2014.
2.
Overall Position
2.1.
The overall position in relation to the progress made against the Internal Audit
Plan is within the attached report.
3.
Conclusion
3.1
Progress in relation to delivery of the Internal Audit Plan is line with expectations;
positive assurances have been awarded in both audit reviews finalised in this
period.
4.
Recommendation
4.1
It is recommended that members note the outcomes of the completed audits and
the progress made to date.
20
Audit Committee
9 December 2014
Appendices attached to this report:
Progress Report on Internal Audit Activity
21
NORFOLK INTERNAL AUDIT CONSORTIUM
NORTH NORFOLK DISTRICT COUNCIL
PROGRESS REPORT ON INTERNAL AUDIT ACTIVITY 2014/15
PERIOD COVERED: - 06/09/2014 TO 18/11/2014
RESPONSIBLE OFFICER
EMMA HODDS – INTERNAL AUDIT CONSORTIUM MANAGER (IACM)
CONTENTS
1. INTRODUCTION ............................................................................................................. 2
2. SIGNIFICANT CHANGES TO THE APPROVED AUDIT PLAN ...................................... 2
3. PROGRESS MADE IN DELIVERING THE AGREED AUDIT WORK ............................. 2
4. THE OUTCOMES ARISING FROM OUR WORK ........................................................... 2
5. PERFORMANCE INDICATOR OUTCOMES .................................................................. 3
APPENDIX 1 – PROGRESS IN COMPLETING THE AGREED AUDIT WORK .................. 5
APPENDIX 2 – AUDIT REPORT EXECUTIVE SUMMARIES ............................................. 7
Page 1 of 10
22
1.
INTRODUCTION
1.1
This report is issued to assist the Authority in discharging its responsibilities in relation to the
internal audit activity.
1.2
The Public Sector Internal Audit Standards also require the Chief Audit Executive (known in
this context as the Internal Audit Consortium Manager) to report to the Audit Committee on
the performance of internal audit relative to its plan, including any significant risk exposures
and control issues. The frequency of reporting and the specific content are for the Authority
to determine.
1.3
To comply with the above this report includes:



Any significant changes to the approved Audit Plan;
Progress made in delivering the agreed audits for the year;
Any significant outcomes arising from those audits; and
Performance Indicator outcomes to date.
2.
SIGNIFICANT CHANGES TO THE APPROVED AUDIT PLAN
2.1
At the meeting on 19 March 2014, the Annual Audit Plan for the year was approved,
identifying the specific audits to be delivered. Since then, there have been no significant
changes to that plan.
3.
PROGRESS MADE IN DELIVERING THE AGREED AUDIT WORK
3.1
The current position in completing audits to date within the financial year is shown in
Appendix 1 and progress to date is in line with expectations. Details of any specific audit
report can be provided on request.
3.2
In summary, 103 days of programmed work has been completed, equating to 47% of the
Audit Plan for 2014/15.
4.
THE OUTCOMES ARISING FROM OUR WORK
4.1
On completion of each individual audit an assurance level is awarded using the definitions
shown in the table below.
Good
There is a sound system of internal control designed to achieve the
client’s objectives.
The control processes tested are being consistently applied.
Adequate
While there is a basically sound system of internal control, there are
weaknesses, which put some of the client’s objectives at risk.
There is evidence that the level of non-compliance with some of the
control processes may put some of the client’s objectives at risk.
Limited
Weaknesses in the system of internal controls are such as to put the
client’s objectives at risk.
The level of non-compliance puts the client’s objectives at risk
Unsatisfactory
Control processes are generally weak leaving the processes/systems
open to significant error or abuse.
Significant non-compliance with basic control processes leaves the
processes/systems open to error or abuse
Page 2 of 10
23
4.2
4.3
Recommendations made on completion of audit work are prioritised using the definitions
shown in the table below.
High
A fundamental weakness in the system that puts the Council at risk. To be
addressed as a matter of urgency, within a 3 month time frame wherever possible,
or, to put in place compensating controls to mitigate the risk identified until such time
as full implementation of the recommendation can be achieved.
Medium
A weakness within the system that leaves the system open to risk. To be resolved
within a 4 – 6 month timescale.
Low
Desirable improvement to the system. To be introduced within a 7 – 9 month period.
During the period covered by the report Internal Audit Services have issued 2 final reports (in
addition to the 5 previously presented to the Committee) and the Executive Summary of
these reports are attached at Appendix 2. In summary the final reports issued conclude the
following:

Procurement (NN/15/02)
The audit scope covered policy, procedure, laws & regulation, resources, roles &
responsibilities, tender & quotation rules, purchase ledger analysis and the contracts
register. On conclusion of the review an Adequate assurance opinion was awarded,
indicating a stable control environment.
2 medium priority recommendations were raised; the first to update the Procurement
Strategy and the Toolkit to reflect regulatory changes and practices, thus ensuring
that the Council complies with its regulatory responsibilities. The second
recommendation is for Senior Management to regularly review the Contracts
Register, thus ensuring that contracts are managed and supervised at a senior level.

Sports Halls (NN/15/06)
The audit scope included review of lease agreements; procedures; income;
expenditure; equipment & premises; customer feedback, marketing & promotion; and
sports clubs & hubs. An Adequate assurance opinion was awarded on conclusion of
the audit, indicating a stable control environment.
3 medium and 2 low priority recommendations were raised, the 3 medium
recommendations relate to; the need to keep DBS checks up to date and reviewed
every 3 years thus ensuring that staff employed in key risk areas are appropriately
employed; reinstating segregation of duty and transparency in the banking process
thus ensuring that the risk of misappropriation is minimised; and health and safety
training undertaken on commencement of employment thus ensuring that the risk of
health and safety breaches is minimised.
4.4
On conclusion of the above work, no high priority recommendations were made during the
period covered by this report.
5.
PERFORMANCE INDICATOR OUTCOMES
Page 3 of 10
24
5.1
The Internal Audit Service is benchmarked against a number of Performance Indicators as
part of the Internal Audit Contract with Mazars. Actual performance to date against these
targets is outlined below.
5.2
To date seven final reports have been issued and management have accepted all
recommendations that have been made by the Contractor.
5.3
Audit briefs should be issued to key clients at least 10 days before the fieldwork is due to
start to ensure that they are well informed of the requirements of the audit. 13 audit briefs
have been issued to date and performance in this area there has been four instances where
audit briefs were issued within a short notice period, however all remaining briefs (9) have
been issued well in advance of the audit commencing, thus ensuring that key clients are
notified of the requirements of the audit well in advance of the start date.
5.4
Once audits are underway it can be seen that performance in this area is good with six being
completed on time, and one only slightly overrunning, the reasons for which were notified to
the Audit Management Team.
5.5
Draft reports should be issued to key officers within 10 working days of completion of the
audit fieldwork. Seven draft reports have been issued to date, three on time and four were
delayed due to the clearance of internal review points. Performance within this area has
dipped since the last report to Committee and action is being taken to address this.
5.6
Final reports should then be issued to key officers within 15 working days of issue of the final
report. Seven final reports have been issued to date, as reported above. Six of these were
issued on time and one was slightly delayed due to a delay in management response.
5.7
On conclusion of all audits a feedback survey is issued to the key client. The survey asks for
responses in relation to; audit staff, audit planning, delivery of the audit and audit reporting.
On completion an overall score of poor (1) through to excellent (6) is reported. To date six
surveys have been completed and an average score of good (5) achieved.
5.7
In conclusion performance is stable, however as mentioned above action is being taken in
regard to ensuring that draft reports are issued by the Contractor in a timely manner.
Page 4 of 10
25
APPENDIX 1 – PROGRESS IN COMPLETING THE AGREED AUDIT WORK
Audit No.
Frequency of
Audit
Coverage
Original Days
Planned
Revised
Days
Planned
PLANNED SYSTEMS AUDIT WORK
NN/1501
Coastal Protection
3-yearly
10
10
10
June
NN/1502
Procurement
3-yearly
10
10
10
July
NN/1503
Development Management,
including applications,
enforcement, s106, Community
Infrastructure Levy & Land
Charges
3-yearly
22
22
22
July
NN/1504
2-yearly
10
10
10
July
2-yearly
10
10
9
3-yearly
12
12
12
2-yearly
20
20
2-yearly
19
19
2-yearly
Annual
20
8
20
8
2
2-yearly
13
13
1
NN/1512
Performance Management,
Corporate Policy and Business
Planning, including annual action
plans
Localism & Communities,
including focus on Big Society
Fund Grant Scheme
Sports halls/leisure centres &
Sports Development
Local C Tax Support, Housing
benefits
Payroll & HR, officers'/members'
expenses
Council Tax and NNDR
Corporate Governance and Risk
Management
Creditors - Ordering, payments,
insurance
Elections & Electoral Registration
3-yearly
12
12
January
NN/1513
Work to Support the AGS
Annual
10
10
February
Annual
8
184
8
184
NN/1505
NN/1506
NN/1507
NN/1508
NN/1509
NN/1510
NN/1511
Description of Audit
Systems Audit Follow Up
TOTAL PLANNED SYSTEMS AUDIT WORK
Days
Scheduling
Delivered
6
Status
Assurance
Level
applicable
Summary Report
Details presented
to Members
Final Report issued 20 August
2014
Adequate
Final Report issued 2 October
2014
Final Report issued 4
September 2014
Adequate
Audit Committee,
16 September
2014
Audit Committee,
9 December 2014
Audit Committee,
16 September
2014
Final Report issued 4
September 2014
October Final Report issued 30 October
2014
November Fieldwork underway
December Fieldwork underway
January
January
Fieldwork to start 5 January
2015
2 x 6-monthly validation
Page 5 of 10
26
Good
Audit Committee,
16 September
2014
Adequate
Audit Committee,
9 December 2014
October Draft report imminent
November Draft brief prepared
82
Adequate
45%
PLANNED COMPUTER AUDIT WORK
NN/15/14 Network Infrastructure
2-yearly
7
7
7
April
Final Report issued 28 May
2014
NN/15/15
Network security
2-yearly
8
8
8
June
Final Report issued 13 August
2014
NN/15/16
NN/15/17
Virus protection/Software
Firewalls
3-yearly
4-yearly
8
7
8
7
5
1
Annual
4
34
4
34
21
62%
218
218
103
47%
0
0
0
218
218
103
Computer Audit Follow Up
TOTAL PLANNED COMPUTER AUDIT WORK
TOTAL PLANNED WORK
November Fieldwork underway
December Fieldwork to start 15 December
2014
2 x 6-monthly validation
EXTRA WORK REQUESTED
TOTAL OF EXTRA WORK UNDERTAKEN
GRAND WORK TOTAL
Page 6 of 10
27
47%
Limited
Adequate
Audit Committee,
16 September
2014
Audit Committee,
16 September
2014
APPENDIX 2 – AUDIT REPORT EXECUTIVE SUMMARIES
Appendix 2(1)
Report No. NN/15/02 – Final Report issued 2 October 2014
Audit Report on Procurement
Audit Scope
The scope of the audit covered the effectiveness and efficiency of controls operating around:





Policies, Procedures, Laws and Regulations;
Resources, Roles and Responsibilities;
Tender and Quotations Rules;
Purchase ledger analysis; and
Contracts Register.
Assurance Opinion
Unsatisfactory
Assurance
Limited Assurance
Adequate Assurance
Good Assurance
Rationale supporting the award of the opinion
The systems and processes of internal control are, overall, deemed adequate in managing the risks
associated with procurement of goods and services. This opinion is based on having raised two medium
priority recommendations. Although there are fewer recommendations, the level of assurance has remained
the same since the previous audit undertaken for this area; hence the direction of travel remains unchanged.
The medium priority recommendations relate to the need to review and update the Council’s Procurement
Strategy and Procurement Toolkit and to regularly present the Contracts Register to the Management Team.
Compliance on the use of waivers/exemptions was tested in our review of Coastal Protection (NN/15/01 –
final report issued 20th August 2014) with no weaknesses identified.
Positive Findings
We found that the Council has demonstrated the following areas where sound controls are in place and
operating consistently:





Procurement requirements, including roles and responsibilities of staff in the procurement process,
are set down within the Constitution;
The Chief Accountant and Procurement Officer is responsible for supporting the procurement process
within the Council;
Procurement training is included within the staff induction process. Staff also attend seminars when
necessary and one-to-one sessions in respect of the Purchasing/Procurement systems with the Chief
Accountant and Procurement Officer;
A Contracts Register is in place which lists all contracts, values, their duration and the key officers;
and
Receipt of tenders and decisions made are clearly documented and comply with Contract Standing
Orders and Financial Rules.
Page 7 of 10
28
Control weaknesses to be addressed
During our work we have identified the following areas where processes in Procurement would benefit from
being strengthened, and as a result, two medium priority recommendations have been made:

The Procurement Strategy and Toolkit should be reviewed and updated to reflect current regulatory
changes and practices, with copies placed on the intranet. Where procurement strategies, policies
and procedures do not reflect current practices, there is a risk that inconsistent or incorrect practices
might develop, which could lead to breaches in local and EU requirements.

The Contracts Register should be monitored and reviewed by senior management. Where the
Contracts Register is not regularly presented to senior management, there is a risk that contracts will
expire without the knowledge of management, resulting in increased costs to arrange alternative
provision.
Summary of the adequacy and effectiveness of controls
Area of Scope
Adequacy and
Effectiveness
Assessments
Policies,
Procedures,
Laws
and
Regulations
Resources,
Roles
and
Responsibilities
Contracts
Register
Tender and
Quotations
Rules
Adequacy
of
Controls
Effectiveness
of Controls
Recommendations
Raised
High
Medium
Low
Green
Amber
-
1
-
Green
Green
-
-
-
Green
Amber
-
1
-
Green
Green
-
-
-
0
2
0
Total
High Priority Recommendations
No high priority recommendations have been raised as a result of this audit
Management Responses
Management have accepted the recommendation raised.
Page 8 of 10
29
Appendix 2(2)
Report No. NN/15/06 – Final Report issued 30 October 2014
Audit Report on Sports halls
Audit Scope
The scope of the audit covered the effectiveness and efficiency of controls operating around:
 Lease Agreements;
 Procedures (including staff Disclosure and Barring Service checks);
 Income;
 Expenditure, purchasing and stock control;
 Equipment and Premises (Including Mobile Gym);
 Customer Feedback, Marketing and Promotion (Including Sports Clubs and Hubs); and,
 Sports Clubs and Hubs.
Assurance Opinion
Unsatisfactory
Assurance
Limited Assurance
Adequate Assurance
Good Assurance
Rationale supporting the award of the opinion
The systems and processes of internal control are, overall, deemed adequate in managing the risks
associated with Sports Halls. This opinion is based having raised three medium and two low priority
recommendations. The level of assurance has remained the same since the previous audit undertaken for this
area; hence the direction of travel remains unchanged.
The medium priority recommendations relate to the need to confirm that all staff have been subject to the
requisite Disclosure and Barring Service checks, to provide health and safety training sessions to all key
members of staff, and to sign off the ‘banking check sheet’ by two senior officers.
The assurance opinion also takes in to account one medium priority recommendation from the previous audit,
which has still to be fully implemented. This relates to the requirement to review the lease agreements for the
dual use facilities at the three high schools, with two (Cromer and Stalham) of the three new lease
agreements still to be signed off by the respective School’s Trustees
Positive Findings
We found that the Council has demonstrated the following areas where sound controls are in place and
operating consistently:








Responsibilities of staff are defined within job descriptions and procedural guidance exists covering
the core duties/ responsibilities undertaken at each centre;
Current written procedures are in place covering operational processes at all three sports halls;
Segregation of duties exists in the receipt, handling and banking of remittances and in the raising and
recovery of sundry debts;
Income collected is securely held and regularly banked;
The Council has up-to-date insurance cover in place to cover all cash/cheque holdings;
Equipment is subject to a monitoring and maintenance programme through weekly inspections;
The Council is actively promoting and advertising initiatives to increase participation at the Sports
Halls; and
Funding for a new project ‘Sports Clubs and Hubs’ commenced in September 2014 and is secured up
to September 2017 through Sport England.
Page 9 of 10
30
Control weaknesses to be addressed
During our work we have identified the following areas where processes in the Sports Halls would benefit from
being strengthened, and as a result, three medium priority recommendations have been made:

Staff working at the Council’s sports halls/facilities should be subject to an up to date DBS check.
Records of such checks should be kept up to date and monitored to allow for checks to be requested
upon the three year expiry date. Where key staff are not subject to current DBS checks, there is a risk
that staff are employed who have not declared criminal convictions and who may be a risk to the
public, resulting in reputational damage to the Council.

Banking check sheets should be signed by the Sports and Leisure Services Manager or another
designated officer to provide segregation of duties, accuracy and transparency in the banking
process. Where banking check sheets are not signed off by two officers there is a risk of
misappropriation of income at the point of receipt; and

Health and safety training should be undertaken upon commencement of employment of new staff
and at least annually thereafter. Where health and safety training is not provided to members of staff
there is a risk of health and safety breaches arising, thus exposing the Council to legal action and
reputational damage through injury to staff or members of public using the facilities.
During our work we identified two areas where we believe that further enhancements could be made. In
particular, with regard to producing operational procedures for the Sports Clubs and Hubs following receipt of
external funding in September 2014 and in relation to the procurement process followed for the sports halls
suppliers, in order to demonstrate how ‘value for money’ can be determined for the procurement of goods and
services.
Summary of the adequacy and effectiveness of controls
Area of Scope
Adequacy and
Effectiveness
Assessments
Lease Agreements
Procedures
Income
Expenditure,
Purchasing and
Stock Control
Equipment and
Premises
Customer
Feedback,
Marketing and
Promotion
Mobile Gyms
(Sports Clubs and
Hubs)
Total
Adequacy
of Controls
Effectiveness of
Controls
Green
Green
Green
Green
Amber
Amber
High
-
Medium
1
1
Low
1
-
Green
Amber
-
-
1
Green
Green
-
-
-
Green
Amber
-
1
-
Green
Green
-
-
-
0
3
2
Recommendations
Raised
High Priority Recommendations
No high priority recommendations have been raised as a result of this audit
Management Responses
Management have accepted the recommendation raised.
Page 10 of 10
31
Audit Committee
9 December 2014
Report Title
Follow Up on Internal Audit
Recommendations – 1 April to 31 October
2014
Are there background papers?
Yes
No
Exempt
Yes
No
Yes
No
Reason for Exemption?
Decision for Full Council?
Contact Officer
Emma Hodds, Internal Audit Consortium
Manager
E-mail address
ehodds@s-norfolk.gov.uk
Telephone number
01508 533791
Are there Non Electronic Appendices?
Yes
List of Background Papers (if applicable)
32
No
Audit Committee
9 December 2014
Agenda Item No_____________
Follow Up on Internal Audit Recommendations 1 April to 31 October 2014
Summary:
This report provides an overview of progress made in
implementing agreed audit recommendations due for completion
in the first seven months of the financial year.
Conclusions:
Good progress has been achieved in relation to the completion
of agreed Internal Audit recommendations.
Recommendations:
It is recommended that the Committee notes management
action taken to date regarding the delivery of audit
recommendations.
Cabinet member(s):
Ward(s) affected:
All
All
Emma Hodds, Internal Audit Consortium Manager
01508 533791, ehodds@s-norfolk.gov.uk
Contact Officer, telephone
number, and e-mail:
1.
Background
1.1.
In accordance with agreed internal audit review and reporting cycles, we revisit
the status of audit recommendations on a 6-monthly basis and last presented our
findings in this area to the Audit Committee on 17 June 2014 as part of the year
end reporting for 2013/14.
1.2.
This report now seeks to provide an update on the status of audit
recommendations following recent verification work performed during November,
which examined the level of activity concerning the delivery of audit
recommendations falling due between 1 April and 31 October 2014.
2.
Overall Position
2.1.
The overall position in relation to the implementation of Internal Audit
Recommendations is within the attached report.
3.
Conclusion
3.1
Good progress is being made in relation to the completion of agreed Internal
Audit recommendations.
33
Audit Committee
9 December 2014
4.
Recommendation
4.1
It is recommended that the Committee notes management action taken to date
regarding the implementation of audit recommendations.
Appendices attached to this report:
Follow Up Report on Internal Audit Recommendations
34
NORFOLK INTERNAL AUDIT CONSORTIUM
NORTH NORFOLK DISTRICT COUNCIL
FOLLOW UP REPORT ON INTERNAL AUDIT RECOMMENDATIONS
PERIOD COVERED: - 01/04/2014 TO 31/10/2014
RESPONSIBLE OFFICER
EMMA HODDS – INTERNAL AUDIT CONSORTIUM MANAGER (IACM)
CONTENTS
1. INTRODUCTION
2
2. STATUS OF AGREED ACTIONS
2
APPENDIX 1 – STATUS OF AGREED ACTIONS
4
Page 1 of 4
35
1.
INTRODUCTION
1.1
This report is being issued to assist the Authority in discharging its responsibilities in relation
to the internal audit activity.
1.2
The Public Sector Internal Audit Standards also require the Chief Audit Executive (known in
this context as the Internal Audit Consortium Manager) to establish a process to monitor and
follow up management actions to ensure that they have been effectively implemented or that
senior management have accepted the risk of not taking action. The frequency of reporting
and the specific content are for the Authority to determine.
1.3
To comply with the above this report includes:
The status of agreed actions.
2.
STATUS OF AGREED ACTIONS
2.1
As a result of audit recommendations, management agree action to ensure implementation
within a specific timeframe and by a responsible officer. The management action
subsequently taken is monitored by the Internal Audit Contractor on a regular basis and
reported through to this Committee. Verification work is also undertaken for those
recommendations that are reported as closed. Appendix 1 to this report shows the details
of the progress made to date in relation to the implementation of the agreed
recommendations.
2.2
The summary position according to recommendation priority is shown in the table below:
Status of Recommendations as at 31 March 2014 (year-end)
High
Medium
Low
Total
Complete
2
15
6
23
Outstanding
0
12
7
19
Unable to confirm
status
Total
2
27
13
42
%
55
45
100
Status of Recommendations as at 31 October 2014
High
Medium
Low
Total
3
18
7
28
0
8
2
10
%
Complete
74
Outstanding
26
Unable to confirm
status
Total
3
26
9
38
100
Key:
H – High priority: A fundamental weakness in the system that puts the Council at risk. To be
addressed as a matter of urgency, within a 3-month time frame wherever possible, or, to put in place
compensating controls to mitigate the risk identified until such a time as full implementation of the
recommendation can be achieved.
M – Medium priority: A weakness within the system that leaves the system open to risk. To be
resolved within a 4 - 6 month timescale.
L – Low priority: Desirable improvement to the system. To be introduced within a 7 - 9 month period.
The tables provide two snapshots – one of the year end position (31 March 2014) and one
covering the position as at the end of October 2014. The figures are not cumulative but
enable an overview to be maintained as to the nature of progress being made in relation to
completing agreed actions at periodic intervals during the financial year.
Page 2 of 4
36
2.4
Details of high priority recommendations which remain outstanding would usually be
attached to this report; however all of these have been successfully implemented
2.5
The Committee can see that significant progress has been made in respect of the
implementation of internal audit recommendations, with 28 (74%) being implemented in the
first 7 months of the year, and only 10 currently reported as outstanding.
2.6
In relation to the 10 outstanding recommendations, management have provided full
response as to the progress that has been made to date, what further action is required and
in most cases a revised deadline date has been provided. Based on the responses there are
no issues that need to be brought to the Committee’s attention.
2.7
It is also worth noting that of the recommendations made to date in year, a further 19
recommendations are not yet due for implementation, see Appendix 1 for the audit areas to
which these relate. As mentioned although the dates for completion have not yet been
reached, until they are actioned, they represent weaknesses in the control environment
which leave the authority open to risk.
Page 3 of 4
37
APPENDIX 1 – STATUS OF AGREED ACTIONS
Reference
NN1112
NN1203
NN1209
NN1401
NN1402
NN1404
NN1407
NN1409
NN1410
NN1411
NN1501
NN1502
NN1503
NN1504
NN1506
NN1215
NN1414
NN1415
NN1514
NN1515
Description
Development Management, Building
Control and Land Charges
Waste Management Contract
Sports Halls/Centres
Environmental Health
Private Sector Housing
Waste Management
Accountancy Services
Sundry Debtors
Work to Support AGS
Remittances
Coastal Protection
Procurement
Development Management
Performance Management, Corporate
Policy and Business Planning
Sports Halls/Centres
SYSTEMS AUDIT TOTALS
Data Consistency
Business Continuity Planning
IT Security Procurement and End User
Controls
Network Infrastructure
Anti-Virus Management
COMPUTER AUDIT TOTALS
Assurance Level
Adequate
Limited
Adequate
Adequate
Adequate
Adequate
Good/Adequate
Adequate
N/A
Adequate/Limited
Adequate
Adequate
Adequate
Implemented
(April '14 - October
'14)
H
M
L
Outstanding
H
M
L
1
1
1
1
1
1
1
1
2
1
1
2
3
1
Unable to confirm
status
H
M
L
1
Adequate
Adequate
Adequate
2
2
9
1
1
1
1
1
1
3
4
1
9
4
0
1
0
0
9
0
1
1
0
0
0
1
7
2
0
0
0
3
3
0
Page 4 of 4
38
0
Not yet due to be
implemented
H
M
L
1
1
1
1
1
2
0
1
1
0
0
0
0
Good
Adequate
Adequate
Adequate
Total
Outstanding
0
0
0
0
2
2
2
3
7
1
2
5
1
0
1
4
2
6
Total Audit
Recommendations
to be actioned
1
1
1
1
1
2
0
1
1
0
0
2
4
1
5
21
0
1
0
5
2
8
NORFOLK INTERNAL AUDIT CONSORTIUM
NORTH NORFOLK DISTRICT COUNCIL
AUDIT PROCUREMENT
RESPONSIBLE OFFICER
EMMA HODDS – INTERNAL AUDIT CONSORTIUM MANAGER (IACM)
CONTENTS
1. INTRODUCTION ....................................................................................................... 2
2. BACKGROUND TO PROCUREMENT PROCESS ................................................... 2
3. THE NEW CONTRACT FROM 1 APRIL 2015 .......................................................... 2
Page 1 of 3
39
1.
INTRODUCTION
1.1
The Norfolk Internal Audit Consortium consists of South Norfolk, Breckland, Broadland and
North Norfolk District Councils, Gt Yarmouth Borough Council and the Broads Authority. The
role of the Head of Internal Audit and the contract management is currently provided by
South Norfolk Council via a group agreement.
1.2
The current contract with Mazars Public Sector Internal Audit Services expires on 31 March
2015, and the Consortium has recently been through a OJEU procurement exercise to
procure a new contract.
2.
BACKGROUND TO PROCUREMENT PROCESS
2.1
South Norfolk Council, as the contracting authority, has managed the Procurement process
on behalf of the Consortium. The services being contracted relate to internal audit services
to fulfil each member Authority’s statutory responsibilities under the relevant legislation,
including the Accounts and Audit Regulations 2011.
2.2
The Procurement was also developed to offer all members of the Consortium two options on
service delivery. The first option was a fully outsourced service, with the Head of Internal
Audit role undertaken by the Contractor as well as the delivery of the annual Internal Audit
work plan, and the contract management element undertaken by the individual Authority.
The second option, as currently provided, was for the Head of Internal Audit role and
contract management (Interface Services) to be provided by South Norfolk Council, and the
delivery of the annual Internal Audit work plan by the successful bidder. Bidders were
requested to submit tenders for both options.
2.3
An OJEU tender, utilising the competitive dialogue route, was undertaken due to the value of
the work to be contracted. A PIN (Prior Information Notice) was issued and soft market
testing took place prior to tender documents being issued and formal tenders being
submitted.
2.4
Tenders were evaluated for quality (60%) and price (40%) via the consideration of method
statements and bill of quantities respectively.
2.5
Three suppliers submitted final bids and the contract has now been awarded to TIAA Ltd
based on the above assessment and their submission of the most economically
advantageous tender overall.
2.6
The new contract will commence on 1 April 2015 and is for five years, with an option to
extend by two years or one plus one.
2.7
In addition, all current members of the Consortium have decided to stay with the current
“Interface Service” approach, with the Head of Internal Audit role and contract management
provided by South Norfolk Council. In conjunction with the Legal Team a Partnership
Agreement will now be drawn up binding the delivery of this service from South Norfolk
Council to the aforementioned authorities.
3.
THE NEW CONTRACT FROM 1 APRIL 2015
3.1
Although the new contract is due to start on 1 April 2015, the procurement exercise ensured
that a mobilisation period was built into the contract to ensure that key stages and
timescales for implementing the Contractual arrangements were confirmed. This includes
how resources are to be put in place to commence services from 1 April 2015, and in
particular how the time in between the contract award and the operational Commencement
Page 2 of 3
40
Date of the Contract will be utilised to prepare for high quality service delivery from day one.
The provision of this has been at no cost to the Consortium.
3.2
TIAA Ltd has been operating for over eighteen years and started as the internal audit
services for a consortium of housing associations. Over the years the company has grown
into being one of the largest specialist internal audit providers in the UK. TIAA is an
employee-centred organisation with staff being the majority shareholders. The Board of the
company includes a non-executive Chair and non-executive company secretary and they
have adopted the public sector principles of governance and accountability. The company
has a strong presence in East Anglia with an existing regional office in Ipswich.
3.3
TIAA Ltd has confirmed a timescale for mobilisation between November 2014 and March
2015 to ensure that they are ready to commence delivery on the first day of the contract. The
detailed requirements are part of the agreed contract and delivery against these key tasks
will be monitored. A key part of this will be a launch presentation at each site for officers to
attend and gain an early insight into how Internal Audit will be delivered going forwards. Key
improvements in service delivery will include:
 Risk Based Internal Audit Planning at a strategic level and at individual audit level
 Audit opinions based on 4 distinct stages (the first 2 being the traditional approach
and the last 2 bringing added value)
o Strategic Direction – consideration of the extent to which process is directed
by proper procedure
o Operational Compliance – consideration of the extent to which staff comply
with the procedures
o Operational Effectiveness – consideration of the extent to which process
provides efficient and effective delivery
o Reputation Awareness – consideration of the extent to which customer /
regulator requirements are met
 Outcomes reported as a result of audit reviews will include recommendations as
required, however an Operational Efficiency Action Plan is also included which sets
out matters identified during the audit where there may be opportunity for service
enhancements to be made to increase both the operational efficiency and enhance
the delivery of value for money services.
 Audit software that provides an integrated solution for delivering the Internal Audit
vision
3.4
A new approach to Internal Audit delivery will be evident from financial year 2015/16. This is
starting now with the planning approach being taken by the Internal Audit Consortium
Manager being much more risk focused and ensuring an element of the plan concentrates
on the key risks and the corporate priorities of the Authority, with the other elements
concentrating on service areas and those key systems which feed into the Statement of
Accounts.
Page 3 of 3
41
Brief for Audit Committee December 2014
Incidents and Emergency Planning
There have been five recent incidents that have had an impact on the Authority.
Storm St Jude, coastal Flooding at Walcott in October, District wide coastal flooding
in December, USAS helicopter crash in January and the Fakenham town centre fire.
All of these events involved implementation of Emergency and Business Continuity
Plans.
The most significant being the tidal surge, last December and a full de-brief report
has been complied and this report will go to Overview and Scrutiny Committee.
Contained within the report is an action plan for the lessons learnt for the authority
during and after the event. Most points required our emergency response plan to be
updated and improved with the knowledge gained from this and the other events we
experienced. Overall the Emergency Response Plan was proved to be fit for purpose
and the new additions will help to deliver an event slicker response to any future
incident the authority may face. The new updated version four of the NNDC
Emergency Response Plan has now been completed and is awaiting publication.
Team BC Plans
All team BC plans are in place except Revenue and Benefits. However, this team
have got a draft plans in place and the line managers are working on the new
version.
The new version of a simplified Business Impact Analysis and Business Continuity
Team Plans has been rolled out. This will be easier for managers to understand and
implement as it removes the duplication from the old versions.
The new Business Continuity Working Group has not met but it is anticipated that the
first meeting of the new group will take place either before Christmas or early in the
New Year.
Despite the fact that authority experienced several significant emergency incidents
the over the last year, with had little impact of service delivery proves that the current
Business Continuity plans in place are robust and fit for purpose.
Training
It is hoped to get some basic external business continuity training delivered early in
the new year this will be delivered to the BCWG and any other interested parties.
42
The CCT team are still helping teams to develop and improve their own BC plans
with one to one training sessions.
25 Members of NNDC have agreed to act as Emergency Staff if required during a
significant event; they will carry out roles such as Rest Centre Managers, Rest
Centre Staff, Emergency Support staff and Loggist. 17 have undergone a basic
training course on 26th September.
Flood warden training has been delivered for Wells, Stiffkey and Bacton.
Disaster Recovery and Work Action Recovery site
This project is still on-going but has been delayed due to office moves, reception
project, new help desk configuration and the incidents that have occurred. All data
is being replicated from the Cromer office to the Fakenham site on a daily basis and
if we suffer a total loss of this building it would take a small amount of reconfiguration
work to get access to the stored data. Final testing of the DR site is hoped to take
place by the end of 2014.
The Work Action Recover Site is in place with an initial 10 networked PC’s and
associated equipment. During the recent Fakenham fire the building was used to
great effect as an evacuation and information centre for the members of the public
that were made homeless. The staff that used the site during the incident reported
that the ability to use NNDC IT networks made the whole process far easier. The
fact that they had the ability to use the small rooms for confidential interviews and
the kitchens for refreshments only further enhanced service delivery.
43
Corporate Risk Register November 2014
PRMB - 4 December 2014
Audit Committee 9 December 2014
Summary Register
Ref.
Current
Score
Target
Score
Medium Term Financial Plan
015(CR)
20
12
Karen Sly - Head of Finance
Coastal Erosion - (the effects of)
002(CR)
20
12
Rob Goodliffe - Coastal Management Team
Leader
Transformation Agenda/Business Transformation Work
003(CR)
16
8
Sheila Oxtoby - Chief Executive
Property assets (the condition of)/ Asset Management
001(CR)
12
9
Duncan Ellis - Head of Assets & Leisure
Council Banking Services Provider
016(CR)
10
15
Karen Sly - Head of Finance
Procurement - (lack of value for money)
009(CR)
9
3
Karen Sly - Head of Finance
Information - (loss of)
008(CR)
8
4
Sean Kelly - Head of Business
Transformation and IT
Housing Delivery
010(CR)
6
6
Operational disruption - (significant event)
013(CR)
6
6
Homeworking - security, staff health and safety
019(CR)
6
6
Risk
44
Officer
Nicola Turner - Strategic Housing Team
Leader
Richard Cook - Civil Contingencies
Manager, Steve Hems - Head of
Environmental Health
Sean Kelly - Head of Business
Transformation and IT
1
Corporate Risk Register November 2014
PRMB - 4 December 2014
Audit Committee 9 December 2014
Risk
1. Cause of risk
2. Description of Risk or potential
event
3. Consequence of risk
happening
Existing Controls
Controls that have been
implemented since the
last review are shown in
green
Score (with
controls)
Impact x
Likelihood =
Total
Medium Term Financial Plan 015(CR)
Policy work
5x4=20
1. Uncertainty around the
Governments spending reduction
programme and the impact on the
Council’s funding. The business
rates retention system has shifted
the risk of business rates
fluctuations to the local level,
meaning that Local Authority
funding will be impacted directly
from decline in business and also
planned reductions to the revenue
support grant and reliance on New
Homes Bonus funding influenced by
delivery of new homes and
reductions in long term empty
properties.
2. Failure to produce a balanced
budget position and funded future
projections in the medium term and
to deliver a freezing of Council Tax
increases.
3. The Corporate Plan may not be
delivered to the identified
timescales. The level of service
Action (to achieve target
score) and progress to date
Lobbying Central
Government
Growth forecasting models to be
developed for housing and
business rates to inform future
financial forecasts and budget.
– On Track
Medium Term Financial
Strategy
Delivery of identified and
planned savings.
Corporate Planning /
Service Planning
Identification of future savings
and efficiencies.
Target
Score
Impact x
Likelihood
= Total
4x3=12
Corporate
Objective /
Service
Priority
Officer
Delivering
the Vision
Karen Sly
- Head of
Finance
Budget Process / Budget
Monitoring
Regular monitoring system
of the impact of the
business rates retention
and the localised council
tax support system
Utilisation of the New
Homes Bonus grant within
the base budget from
2014/15
Review of the Councils
reserves following the
impact of the storm repair
45
2
Corporate Risk Register November 2014
Risk
1. Cause of risk
2. Description of Risk or potential
event
3. Consequence of risk
happening
currently provided could be at risk,
unplanned use of reserves which is
unsustainable in the longer term.
Higher level of savings requirement
in future years.
Existing Controls
Controls that have been
implemented since the
last review are shown in
green
PRMB - 4 December 2014
Audit Committee 9 December 2014
Score (with
controls)
Impact x
Likelihood =
Total
Action (to achieve target
score) and progress to date
Target
Score
Impact x
Likelihood
= Total
Corporate
Objective /
Service
Priority
Officer
4x3=12
Coast,
Countryside
and Built
Heritage
Rob
Goodliffe
- Coastal
Managem
ent Team
Leader
costs and associated
funding - Implemented
Reporting - New legislation
and consultation Implemented
Timely agreement of the
annual Localised Council
Tax Support Scheme Implemented
Project Management Plans
– Implemented
Early update of the
Financial Strategy to
inform the 2015/16 budget
process – Implemented
Coastal Erosion - (the effects of) 002(CR)
1. Lack of Government funding to
maintain coast defences and / or to
support local compensation claims
2. Coastal erosion and blight of
coastal settlements through loss of
public and private infrastructure and
assets. The Council has devoted
The Pathfinder Project
5x4=20
Shoreline Management
Plan (SMP)
Repairs & Maintenance
Programme
Procurement practices
46
Cromer Sea Defence Works –
On Track - £8m scheme being
implemented. Has been delayed
by the storm of December 2013
which will ultimately impact on
the programmes completion
being delayed from the original
completion date of March 2015
to sometime in the autumn of
2015. First works on the ground
started on site
3
Corporate Risk Register November 2014
Risk
1. Cause of risk
2. Description of Risk or potential
event
3. Consequence of risk
happening
significant resources to pursuing
sustainable answers to coastal
management issues. There is a
considerable Health and Safety
context here which serves to
increase the reputational risk for the
Council at the same time.
Existing Controls
Controls that have been
implemented since the
last review are shown in
green
3. Increased coastal erosion through
loss of defences presents a
reputational risk to the authority in
the eyes of local communities and
direct loss of Council owned assets /
infrastructure which are fundamental
to the district's tourism offer and
therefore the economic well-being of
the district. Loss of confidence in
respect of business investment and
residential property market; blight of
properties in erosion zone; direct
loss of tourism assets and
infrastructure promenades, beach
chalets, cafés, public toilets, car
parks etc.; loss of tourism income /
employment.
Control of coastal
management schemes
through procurement and
regular checking –
Implemented
Transformation Agenda/Project 003(CR)
1. It is clear that there is a new
urgency about change in local
PRMB - 4 December 2014
Audit Committee 9 December 2014
Score (with
controls)
Impact x
Likelihood =
Total
Health & Safety checking
and monitoring
Target
Score
Impact x
Likelihood
= Total
Corporate
Objective /
Service
Priority
Officer
Delivering
the Vision
Sheila
Oxtoby Chief
Executive
November/December 2013.
Works are 33% complete on the
concrete foundation works to
the sea walls. Work has started
on refurbishment of the groynes.
The programme was delayed by
implementing storm damage
repairs which were not part of
the original contract. This is a 23 year scheme anticipated to
complete in 2015.
DEFRA funding of capital
schemes
Coast monitoring
Training, learning & policy
initiatives
Action (to achieve target
score) and progress to date
Repairs in response to the
December 2013 Tidal Surge –
On Track - in progress.
4x4=16
Strategies
Reporting - New legislation
47
IT transformation work that is
currently being undertaken –
Some Problems - Workload vs.
capacity needs to be assessed
and planned and then
appropriately monitored. The
2x4=8
4
Corporate Risk Register November 2014
Risk
1. Cause of risk
2. Description of Risk or potential
event
3. Consequence of risk
happening
government driven by the current
financial pressures and the ambition
to ignite community engagement.
Previous incremental change is
being replaced by a more wholesale
restructuring of local government
and its place in local service
delivery.
2. The risk is that in moving to a
new agenda so quickly there is no
basic framework within which the
new arrangements can be
undertaken.
3. Vision and action may not be fully
supported by a sound assessment
and a solid understanding of policy
implications at national and local
level.
Existing Controls
Controls that have been
implemented since the
last review are shown in
green
PRMB - 4 December 2014
Audit Committee 9 December 2014
Score (with
controls)
Impact x
Likelihood =
Total
and consultation
Maintain technical
competence
Medium Term Financial
Strategy
Delivering
the Vision
Duncan
Ellis –
Head of
Assets
and
Leisure
Individual project teams will
include service representation
and project timelines will be
planned and agreed with due
consideration to other
scheduled activities within the
service and the wider council.
Business Transformation
Board monitoring projects
progress
The introduction of a
property risk assessment
and inspection regime
Officer
Managing delivery of
workstreams as included in the
Transformation programme –On
Track –
Appointment of a Head of
Business Transformation
to deliver the programme
1. A lack of investment and sound
decision-making.
Corporate
Objective /
Service
Priority
Further discussions/
consideration of options around
shared services – On Track
Approval of the Business
Transformation
Programme
Work on R & M schedules
Target
Score
Impact x
Likelihood
= Total
resource to deliver any
additional activities needs to be
clearly identified and its impact
on the existing plan assessed
prior to a decision to implement
that business change.
Network development
Property assets - (the condition
of) - 001(CR)
Action (to achieve target
score) and progress to date
4x3=12
2. Deteriorating property assets may
48
Work is on-going in relation to
the R&M schedules in relation to
including all of this detail within
the Concerto system. The
schedules were used to support
the update of the Asset
Management Plan and the
3x3=9
5
Corporate Risk Register November 2014
Risk
1. Cause of risk
2. Description of Risk or potential
event
3. Consequence of risk
happening
lead to a loss of revenue and
possible legal liability.
3. The Council does not achieve
value for money from its investment
and/or possible legal liabilities either
directly or through its leasing
arrangements.
This scenario is detrimental to the
local tourism economy as well as
damaging to local communities
contributing to a lack of community
pride and possible increase in
vandalism. The capital tied up in
assets cannot be released to
support wider Council initiatives and
income streams are not maximised.
Existing Controls
Controls that have been
implemented since the
last review are shown in
green
PRMB - 4 December 2014
Audit Committee 9 December 2014
Score (with
controls)
Impact x
Likelihood =
Total
Effective team resourcing
Action (to achieve target
score) and progress to date
Target
Score
Impact x
Likelihood
= Total
Corporate
Objective /
Service
Priority
Officer
capital works highlighted within
the plan have gone forward as
capital bids to be considered by
Members as part of the budget
setting process for 2015/16.
Asset Management Plan
Implement asset
management software –
Implemented – The team
is now using the system
regularly. Additional
technical assistance is
being provided to ensure
this system is being used
to full effect.
Rolling asset condition surveys
continue to be undertaken to
ensure that the R&M schedules
remain up to date.
Various policies are in place to
help manage property risks and
risk assessment inspections and
review works continue to be
developed and improved.
Regular routine inspections take
place on all of the Council’s car
parks for example to review,
monitor and help manage a
number of risks.
Team resourcing continues to
be monitored although the
recovery works connected with
the storm surge have stretched
the team this year. Additional
resource is being investigated to
support with further data input
onto the Concerto system which
49
6
Corporate Risk Register November 2014
Risk
1. Cause of risk
2. Description of Risk or potential
event
3. Consequence of risk
happening
Existing Controls
Controls that have been
implemented since the
last review are shown in
green
PRMB - 4 December 2014
Audit Committee 9 December 2014
Score (with
controls)
Impact x
Likelihood =
Total
Action (to achieve target
score) and progress to date
Target
Score
Impact x
Likelihood
= Total
Corporate
Objective /
Service
Priority
Officer
Delivering
the Vision
Karen Sly
- Head of
Finance
is extremely time consuming.
The Asset Management Plan
was updated and agreed earlier
this year and contains an
improvement plan which is
currently being implemented
and forms part of the Ten
performance monitoring system.
As mentioned above additional
temporary resource support is
being investigated in relation to
the Concerto system to ensure
this becomes fully populated as
quickly as possible. The more
information the system holds the
more useful it will be.
Council Banking Services
Provider (Change from
“Downgrading of Co-op Bank” 016 (CR)
1. Downgrading of the Co-op bank
credit rating and subsequent
notification of the withdrawal from
providing banking services to Local
Authorities has meant that the
Council must change provider for
Overnight funds kept to a
minimum within the Co-op
Public Sector Reserve
Account (previous limit
was £500,000)
5x2=10
Implementation of the project
and transition to new bank.
Allocation of resources from
relevant services, including IT
and Finance to achieve the
timescales for the banking
services t be moved.
Alternative banking facility
has now been set up.
5x1=5
Regular monitoring of
position with Treasury
50
7
Corporate Risk Register November 2014
Risk
1. Cause of risk
2. Description of Risk or potential
event
3. Consequence of risk
happening
banking services.
Existing Controls
Controls that have been
implemented since the
last review are shown in
green
2. Current contract end date is
March 2015, withdraw of services or
failure to deliver services ahead of
this date would leave the Council
without and banking service
provider.
Commencement of joint
tender process (with other
Norfolk authorities) for
banking contract (which
expires in March 2015)
earlier than would have
normally.
3. The Council could not collect its
income or make any payments and
would be unable to carry on its day
to day business in the short term
until alternative banking
arrangements can be put into place.
Depending on the time the security
of payments/cash ’in transit’ could
be at risk.
PRMB - 4 December 2014
Audit Committee 9 December 2014
Score (with
controls)
Impact x
Likelihood =
Total
1. The current financial climate,
recent resourcing issues causing an
absence of a focus for this work,
together with a reduction in the
Target
Score
Impact x
Likelihood
= Total
Corporate
Objective /
Service
Priority
Officer
Delivering
the Vision
Karen Sly
– Head of
Finance
Advisors.
Joint tender process
underway with tender
document now issued.
Tender process for new
contract to be completed in
accordance with the
project timetable.
Implemented.
Award of contract
scheduled for the summer
2014 – Implemented.
Procurement - (lack of value for
money) - 009(CR)
Action (to achieve target
score) and progress to date
Procurement Strategy
3x3=9
Procurement Framework
Joint procurement protocol
and opportunities for
joint/shared procurement
51
A procurement evaluation Some Problems - An increased
awareness of the location and
use of the Toolkit (including the
Quotation Value Path) has been
undertaken including
presentations to Management
3x1=3
8
Corporate Risk Register November 2014
Risk
1. Cause of risk
2. Description of Risk or potential
event
3. Consequence of risk
happening
available accountancy resources
going forward increase the risk of a
lack of continuous improvement in
this area.
2. Failure to adopt new procurement
practices and delivery of efficient
and timely procurement processes
could mean that the Council will not
achieve value for money procuring
the goods and services it uses.
3. The Council may not achieve
value for money,
financial/procedural inefficiencies
possible challenge to contracting
procedures.
Information - (loss of) - 008(CR)
1. Lax security - Information may be
lost, mislaid or stolen. Increased use
of mobile technology such as I Pads
etc.
2. There exists an inherent potential
for the loss of organisational
information at any security level. ICT
is responsible for ensuring
electronic data is secure (in
conjunction with system owners who
Existing Controls
Controls that have been
implemented since the
last review are shown in
green
PRMB - 4 December 2014
Audit Committee 9 December 2014
Score (with
controls)
Impact x
Likelihood =
Total
with other authorities
where possible
Target
Score
Impact x
Likelihood
= Total
Corporate
Objective /
Service
Priority
Officer
Delivering
the Vision
Sean
Kelly Head of
Business
Transform
ation and
IT
groups and on one-to-one basis.
More work still to be done
regarding analysis of
procurement outcomes and the
value for money achieved.
Advice for external
suppliers
Procurement responsibility
assigned to the Chief
Accountant
Procurement publication
requirements to be reviewed
and actioned in accordance with
the transparency code.
Regular procurement
refresh and review of
procedures – Implemented
Information Management
Strategy
Action (to achieve target
score) and progress to date
4x2=8
Implement data security
protocols on mobile
devices
ICT Security Policy
On-going role specific user
training relating to information
security and data protection –
Requires discussion with HR as
to how and when to implement
this training. Interim generic
information to be shared with
staff through intranet.
4x1=4
IT Monitoring
Data Protection training
52
9
Corporate Risk Register November 2014
Risk
1. Cause of risk
2. Description of Risk or potential
event
3. Consequence of risk
happening
control access to their databases),
3. Information may be
inappropriately used. Fraud or data
corruption may occur. Systems may
suffer damage. The Council's
reputation may be harmed.
Existing Controls
Controls that have been
implemented since the
last review are shown in
green
PRMB - 4 December 2014
Audit Committee 9 December 2014
Score (with
controls)
Impact x
Likelihood =
Total
Action (to achieve target
score) and progress to date
Target
Score
Impact x
Likelihood
= Total
Corporate
Objective /
Service
Priority
Officer
3x2=6
All controls are implemented
and risk is currently under
control, to be reviewed in six
months time.
3x2=6
Housing and
Infrastructur
e
Nicola
Turner Housing
Team
Leader Strategy
Code of Connection
compliance
Regular audits of IT
security arrangements. –
Implemented
Regular 3rd party data
protection and integrity
testing – Implemented
Housing Delivery - 010(CR)
Use of capital
1. A combination of lack of
developer confidence because of
recession / weak financial markets
and pressure on public finances
meaning reduced availability of
grant funding for affordable housing
provision.
Partnership work with
Registered Providers
2. Inability to secure planning
permission for provision of
affordable housing.
Internal planning protocol
3. A challenge over the Council's
ability to deliver sufficient affordable
homes
Housing Strategy
discussion document
Local Investment Plan
Local Development
Framework (LDF) policies
Increased Focus
53
10
Corporate Risk Register November 2014
Risk
1. Cause of risk
2. Description of Risk or potential
event
3. Consequence of risk
happening
Existing Controls
Controls that have been
implemented since the
last review are shown in
green
PRMB - 4 December 2014
Audit Committee 9 December 2014
Score (with
controls)
Impact x
Likelihood =
Total
Action (to achieve target
score) and progress to date
Target
Score
Impact x
Likelihood
= Total
Corporate
Objective /
Service
Priority
Officer
(2010)
Enhance Housing
Association delivery –
Implemented - Following
the approval of the Local
Investment Strategy,
Cabinet has provided
delegated authority for the
issue of the first loans and
work is on-going to
negotiate the terms and
complete the loan.
Continuing to work on
delivering both affordable
housing (and market
housing where they
provide the subsidy
needed for the delivery of
the affordable dwellings) in
a way which reduces
upfront costs to Housing
Associations. First phase
of schemes identified.
Development plan affordable housing
provision – Implemented On-going forward
development plan need
54
11
Corporate Risk Register November 2014
Risk
1. Cause of risk
2. Description of Risk or potential
event
3. Consequence of risk
happening
Existing Controls
Controls that have been
implemented since the
last review are shown in
green
PRMB - 4 December 2014
Audit Committee 9 December 2014
Score (with
controls)
Impact x
Likelihood =
Total
Action (to achieve target
score) and progress to date
Target
Score
Impact x
Likelihood
= Total
Corporate
Objective /
Service
Priority
Officer
continuous attention to
ensure on-going pipeline of
affordable housing
schemes- On Track 153 affordable dwellings
were completed in 2013/14
which is the highest
number delivered in the
district by Registered
Providers.
74 completions are
predicted for 2014/15,
although this number is
subject to change.
Ensuring that there is an
on-going pipeline of
affordable housing
schemes remains a key
priority to ensure that
affordable housing delivery
is sustained in future
years.
On=going monitoring of
financial contributions
received and expenditure
will be committed in a
timely way on affordable
55
12
Corporate Risk Register November 2014
Risk
1. Cause of risk
2. Description of Risk or potential
event
3. Consequence of risk
happening
Existing Controls
Controls that have been
implemented since the
last review are shown in
green
PRMB - 4 December 2014
Audit Committee 9 December 2014
Score (with
controls)
Impact x
Likelihood =
Total
Action (to achieve target
score) and progress to date
Target
Score
Impact x
Likelihood
= Total
Corporate
Objective /
Service
Priority
Officer
Delivering
the Vision
Richard
Cook Civil
Contingen
cies
Manager,
housing.
Identified partner to work
with Council and Housing
Associations to bring
forward affordable (and
market) housing schemes
in a way which reduces
upfront costs to Housing
Associations - On Track
Operational disruption (significant event) - 013(CR)
Response & Recovery
Planning
1. Both the National and Community
Risk Registers have more
information regarding the risk of
specific events (e.g. Pandemic)
occurring.
Continuity Planning
3x2=6
Corporate Business
Continuity key role training
2. Any Internal or external event that
has a significant impact on the
ability of the Council to deliver
services.
Complete critical services'
Business Continuity Plans
(BCP) – On Track - All Critical
services now have carried out
Business Impact analyses
except Revenues and Benefits
which is now at draft stage. All
critical services have plans
except Revenues and Benefits.
The Civil Contingencies
Manager will work with the
Revenues and Benefits team
leaders and managers to
finalise plans.
3x2=6
Steve
Hems Head of
Environm
ental
Health
3. a) Loss of staff for 'usual' service
delivery
b) Loss of premises
c) Loss of key partners/suppliers
d) Loss of infrastructure services
56
13
Corporate Risk Register November 2014
Risk
1. Cause of risk
2. Description of Risk or potential
event
3. Consequence of risk
happening
A reduction in the ability of the
Council to deliver services, possibly
at a time of increased demand from
the community.
Homeworking - security, staff
health and safety - 019(CR)
1. All aspects of remote working not
covered by corporate policies. There
are procedures in place for IT risks.
Existing Controls
Controls that have been
implemented since the
last review are shown in
green
PRMB - 4 December 2014
Audit Committee 9 December 2014
Score (with
controls)
Impact x
Likelihood =
Total
2x3=6
IT Monitoring
Action (to achieve target
score) and progress to date
Produce and implement staff
policies and procedures for
homeworking – Not Started –
This work has been added to
the HR service plan and has yet
to have a deadline set.
Target
Score
Impact x
Likelihood
= Total
2x3=6
Corporate
Objective /
Service
Priority
Officer
Delivering
the Vision
Sean
Kelly Head of
Business
Transform
ation and
IT
2. Security put at risk. Cost of home
working not adequately budgeted
for. All managers have a
responsibility for their staff working
from home.
3. Remote staff unable to access
technology needed to do their jobs
and for business continuity.
Notes:



Risk 007(CR) Partnership/s - (potential failure) removed as risk closed by the Head of Finance.
Risk 011 (CR) Shared Services Plans – PRMB recommended to remove as not actively pursuing shared services at present.
005 (CR) Organisational Restructuring – PRMB recommended to remove as more service specific.
57
14