Audit Committee
18 September 2012
Agenda Item No_____10________
Progress Report on Internal Audit Activity, April to September 2012
Summary:
This report examines progress made between April and early
September 2012 in relation to delivery of the Annual Audit Plan
for 2012/13, and includes abbreviated management summaries
in respect of the audit reviews which have been finalised in the
course of this period.
Conclusions:
Adequate assurance levels have been awarded in respect of the
three audits completed in the first five months of the financial
year.
It is further noted that the Annual Audit Plan has been subject to
some rescheduling of assignments (the timing of 5 of the original
16 assignments featuring in the Plan have been revised), whilst
job budgets for 3 reviews have been adapted to accommodate
changes to audit scopes – all revisions were at the request of
management. The Plan has also now been expanded to
incorporate an additional audit of the new Revenues and
Benefits Shared Services Partnership focusing on Data
Transfer, Governance and Risk. Following discussions with
management, this work is to be delivered in two phases. Phase
1 has already been undertaken and an audit letter was produced
in July 2012 commenting on the data transfer arrangements.
To date, we have been able to absorb the above changes to the
Plan without any adverse impact on our ability to deliver all
assignments within the financial year and hereby confirm that we
are on schedule as we approach the half yearly stage.
Recommendations:
It is recommended that the Committee notes the outcomes of
the three audits completed between April and August, together
with recent amendments made to the Annual Audit Plan for
2012/13.
Cabinet member(s):
All
All
Wards:
Contact Officer,
telephone
number, and
e-mail:
Sandra King, Head of Internal Audit
01508 533863
scking@s-norfolk.gov.uk
Audit Committee
18 September 2012
1.
Background
1.1
The Annual Internal Audit Plan was approved by the Audit Committee on 6
March 2012. This report represents the first progress update on the Annual
Audit Plan for 2012/13.
2.
Amendments to the Annual Audit Plan
2.1
Following our previous report to the Committee in March, some changes to the
Plan have occurred, all of which were initiated by management. The key
changes to planned provisions have involved:
2.2
•
Expansion of the Property Services audit to include extra focus on the
Measured Term Contract for the provision of coastal repairs and other minor
coastal works, which led to the job budget being increased from 14 to 19 days
to afford coverage of this additional element.
•
In the course of formulating the 2012/13 Audit Plan in February 2012, the
Corporate Leadership Team requested that an audit be developed to examine
data verification and governance arrangements applying to the newly formed
Revenues and Benefits Shared Services Partnership between North Norfolk
District Council and the Borough Council of Kings Lynn and West Norfolk.
Although the Audit Strategy for 2012/13 alluded to this fact, the Annual Plan
approved by the Audit Committee in March 2012 did not contain specific
provisions as such to undertake such an audit. As a result of meetings with
management in April 2012, there has since been agreement to carry out this
work by way of two phases. A budget of 14 days has been provided and so
far, Phase 1 completed in July 2012 has utilised 2.5 days of those made
available for this purpose. We envisage the second phase will be performed
in September / October 2012.
•
The Corporate Leadership Team had further sought to reduce the job budgets
in relation to 2 computer audits, namely reviews of the Cash Receipting
Application and the Council’s IT Project Management arrangements. Having
revisited the scopes of these two pieces of work, we have been able to
commute the job budgets and still ensure that assurances can be produced,
tailored to management’s specific requirements.
•
It has also proved necessary to re-schedule some of our assignments in order
to secure maximum benefit from audit input and minimise disruption to
service areas. The re-timetabling of planned work is noted in Appendix B to
this report.
The resultant revisions to the Plan have led to a 14 day increase overall in the
total audit days to be delivered in 2012/13. The Audit Committee had approved
212 days in March 2012, whereas this figure has since risen to 226 days.
Audit Committee
18 September 2012
3.
Delivery of Programmed Audit Work in accordance with the Revised
Annual Audit Plan
3.1
As demonstrated in Appendix B, 80 days of programmed work had been
completed at the time of writing this report. This figure equates to 35% of the
revised audit planned days earmarked for completion in 2012/13. The status of
individual audits can be summarised thus:
•
Three assignments have been completed and final reports issued (Audit
Nos. NN/13/01, NN/13/02 and NN/13/03);
•
A draft report has been provided in relation to Audit No. NN/13/15 and
management responses are currently awaited;
•
The audit fieldwork has been completed for 3 additional audits (Audit Nos.
NN/13/04, NN/13/13 and NN/13/14) with corresponding draft reports
imminent.
•
We have circulated the audit brief for Audit No. NN/1306 and should be
commencing audit fieldwork shortly.
•
An ad-hoc review (Audit No. NN/13/17) has also been requested by the
Corporate Management Team, which is being carried out in two stages. To
date, Phase 1 has been finalised with an audit letter produced and
circulated.
4.
Outcomes of Work Undertaken
4.1
With reference to work completed between April and early September 2012, as
mentioned above, we have been able to finalise three audits during this period
and their respective management summaries are attached at Appendix C to
the report.
4.2
In the case of the Property Services & Coastal Protection audit (Audit No.
NN/13/01) and the Strategic Housing & Homelessness review (Audit No.
NN/13/02), we were able to confirm that the adequate assurance levels
awarded this year were consistent with the audit opinions provided the last time
these areas were examined. In relation to the audit of Corporate Policy,
Planning and Performance Management (Audit No. NN/13/03), this was the first
time that we had analysed operational arrangements and it is pleasing to note
that we were able to give an adequate assurance level to the provisions in
place.
4.3
With reference to the additional audit commissioned by the Corporate
Leadership Team applying to the Revenues and Benefits area, when carrying
out Phase 1, we examined data transfer developments, in particular conducting
verification checks on the accuracy and adequacy of the data transfer from the
existing North Norfolk District Council Civica Revenues and Benefits System to
a new OpenRevenues (Civica) platform, which in the future will be used jointly
as part of the overall partnership arrangements. Although our audit comprised
high level verification of systems totals and did not include looking at individual
accounts / account balances, we have been able to conclude that:
•
Data integrity checks have been applied to all systems parameters
appearing on Civica with any discrepancies fully investigated.
Audit Committee
18 September 2012
•
Data integrity checks have been applied to all systems parameters following
transfer of North Norfolk District Council data to the OpenRevenues system,
before going live, with any discrepancies fully investigated.
•
Aged debt balances should be agreed between North Norfolk District
Council and the Borough Council of Kings Lynn and West Norfolk before
transfer of data as part of the former merger.
•
Documentary evidence should be retained in support of all integrity checks,
including evidence of independent check and agreement of outcomes from
both North Norfolk District Council and the Borough Council of Kings Lynn
and West Norfolk.
•
The Steering Group should sign off all agreed balances.
We are intending as part of our work in relation to Phase 2 to evaluate the
status of the Partnership, including governance arrangements and an overview
of IT provisions. The Phase 1 letter was issued to management in July 2012.
5.
Conclusion
5.1
Good progress has been made with the delivery of the Audit Plan to date, and
all current work scheduled is underway as expected.
6.
Recommendation
6.1
That members note the outcomes of the three completed audits and the recent
amendments made to the Annual Audit Plan for 2012/13.
Appendices attached to this report:
Appendix B – Review Work delivered in accordance with the Annual Audit Plan for
2012/13 plus Ad-Hoc Work requested by Management
Appendix C – Abbreviated Management Summaries of Completed Audit Assignments
Appendix C (1) NN/13/01 Property Services and Coastal Protection
Appendix C (2) NN/13/02 Strategic Housing and Homelessness
Appendix C (3) NN/13/03 Corporate Policy, Planning and Performance Management