Report of the internal auditor (to follow)

Purpose: to inform the Committee of progress on those recommendations raised by Internal Audit which are due for implementation.

Recommendation: the Committee are asked to consider and note the report.

The Chair took this item next.

The Committee considered the report of the Council’s internal auditors, BDO, setting out progress on implementing the recommendations arising from previous internal audits.

The Committee noted the report and asked that the report show the original anticipated completion date and the actual or expected completion date.

Report of the Internal Auditor (to follow)

Purpose: to inform the Committee of progress made against the 2015/16 internal audit plan which was approved by Audit and Governance Committee on 23 April 2015.

The following reports were issued with a Moderate opinion for both design and effectiveness of controls and the Executive Summary is provided in this report:

•           Budgetary Control and Performance Management

•           Enforcement

•           Homelessness Prevention

An audit for the DCLG Flood Support Scheme Grant Certification was completed. This is a certification for grant funding received: BDO issued a letter to DCLG confirming no instances of non-compliance were identified

Recommendation: The Committee is asked to note the report.

Councillor Paule left before the start of this item.

The Committee considered the report of the Council’s internal auditors, BDO, setting out progress against the approved internal audit plan and detailing the recommendations from three audit reports highlighting moderate risks.

The Committee noted the report and the recommendations arising.

The Head of Financial Services will present the Half Year Summary report of the Council’s internal auditors BDO.

Purpose:

This report is intended to inform the Audit and Governance Committee of progress made against the 2015/16 internal audit plan which was approved by Audit and Governance Committee on 23 April 2015.

Recommendation:

The Committee is asked to note the report.

The Committee considered the report of the Council’s internal auditors, BDO setting out the work carried out in accordance with the approved 2015/16 internal audit plan in Quarter 3.

The Committee asked about the benefits of implementing the Sigma system.

The Committee asked about the capitalisation threshold (part of the Statement of Accounts) and officers confirmed this was due for review.

The Committee agreed to note the report and that the recommendations were now included in the Audit Tracker.

Report of the Internal Auditor.

Purpose: The report sets out progress in Quarters 1 and 2 against the approved 2015/16 Audit Plan. Progress against the reviews scheduled for completion in Quarters 1 and 2 is shown in Appendix One. The remainder of the audit plan will be addressed by the Council’s new internal auditors.

Summaries of reports issued since the last meeting are included.

Full reports on:

·         Health and safety: Housing stock and corporate assets

·         Managing capital projects

·         Planning applications

are attached to this agenda.

Recommendation: the Committee is asked to discuss and note the progress report and the internal audit reports attached.

The Committee considered the report of the internal auditor, PwC, providing a progress update on the agreed 2015/16 internal audit plan in Quarter 1 and Quarter 2.

Kate Mulhearn introduced the report and answered questions. PwC had completed several reports, summarised in the progress report. Full reports were presented to the committee on health and safety and planning applications for completeness as the recommendations and actions were discussed at the June meeting.

Officers advised that implementing the recommendations for housing allocations was in progress. There were no instances of adverse consequences for applicants identified as people were contacted to discuss their registration but there was previously no verification of this. The challenge was to align the available information to the required level of monitoring without manual intervention.

Jackie Yates undertook to confirm the status of the housing allocations system upgrade in the IT work programme.

Anna Winship introduced Greg Rubins and Gurpreet Dulay, the new internal audit team from BDO who would take over from the PwC team on 1 October.

The Committee welcomed the new audit team and noted this would be the last meeting Kate and PwC would attend.

The Committee noted the report.

The Committee is asked to discuss and note the report.

The Committee considered the report of the internal auditor, PwC, providing details of the audit of the Council’s management of capital projects.

Kate Mulhearn introduced the report. She highlighted areas of good practice and the recommendations considered and agreed by senior officers. She recommended that the controls and processed for managing high risk and/or high value projects were monitored to ensure these worked satisfactorily and quickly identify any problems.

Nigel Kennedy and Martin Shaw answered questions from councillors. They confirmed that training for officers was ongoing, focussing on realistic timescales and proposals, and delivery on time and budget. Training was offered to members. The overall programme was managed through monthly progress meetings and projects had measurable outputs, but these were subject to change as funding and government policy evolved. This improved monitoring and early identification of the reasons and nature of any slippage. Every project had a sponsor and a manager and reported to the monthly meetings on a risk-based basis. Additional projects and changes to the capital programme could be authorised by Council during the year if essential.

Councillors commented:

·         Publically sensitive projects should be subject to the same processes as high value projects because of the reputational risk to the council.

·         Was it possible to reduce the time between making a bid for funding in the budget and commissioning (nearly a year) to reduce the risks associated with the delay, or could these be factored into the bids?

The Committee agreed to note the report.

The Committee is asked to discuss and note the report.

The Committee considered the report of the internal auditor, PwC, providing details of the audit of planning applications.

David Edwards confirmed that the service now had sufficient staff to manage the development control workload. The number and complexity of applications was increasing: Network Rail would provide funding for a planning officer and an environmental specialist. Oxford University would need to fund a planning officer and a conservation specialist to manage applications relating to their development programme.

The Committee agreed to note the report and the update on development control.

The Committee is asked to discuss and note the report.

The Committee considered the report of the internal auditor, PwC, providing details of the audit of Health and Safety: Housing Stock and Corporate Assets.

Kate Mulhearn introduced the report. Anna Winship confirmed that one action was nearly complete and all others were complete.

The Committee agreed to note the report.

Report of the internal auditor.

Purpose: the report summarises the review of the controls and processes in place relating to Sports Pitch and Facilities Booking.

The Committee is asked to discuss and note the report.

Councillor Thomas left the meeting at the start of this item.

The Committee considered the report of the internal auditor summarising the evaluation of controls and processes in place for sports pitch and facilities bookings.

Christopher Dickens introduced the report and in answer to questions from the Committee he and Ian Brooke said:

·          Four medium risks were identified and the implications of these should be considered even if action to reduce these was not practical or cost-effective.

·         Processes which led to non-compliance with the council’s financial regulations should stop.

·         Online payments were increasing, reducing the reliance on cash or cheques and allowing invoices to be processed through the accounting system (Agresso). Other authorities used online payment and booking systems and officers would like to make more use of these.

·         Agresso gave better control over invoicing, reduced errors and allowed checking. Systems were also in place to handle cash and paper bills correctly and with the proper checks.

The Committee noted the report and the actions taken.

Report of the internal auditor.

Purpose: the report summarises the evaluation of controls and processes in place for housing rents.

The Committee is asked to discuss and note the report.

The Committee considered the report of the internal auditor summarising the evaluation of controls and processes in place for housing rents.

Christopher Dickens and Nigel Kennedy introduced the report and in answer to questions from the Committee said:

·         Under ‘right to buy disposals’ (P72) the dates should show April to June 2014.

·         The improvements outlined in the report were now in place, including procedures for better communications and reconciliation between teams.

·         A new system, due to be introduced primarily for the investigation service, would allow officers to assess a tenant’s total overall level of debt before setting up debt recovery.

·         New processes relating to right to buy valuations could be circulated separately once implemented.

The Committee noted the report and the actions taken.

Report of the Head of Finance

Report of the internal auditor

Purpose: To present to Audit and Governance members a ‘lessons learned’ report undertaken by the Council’s auditors PWC on the capital project for the construction of a new Community Centre at Rosehill.

Recommendation:

That the Audit and Governance Committee note the PWC report together with the management response

The Committee considered the report of the internal auditor setting out the results of their evaluation of the capital project for the construction of a new community centre at Rosehill.

Christopher Dickens introduced the report and explained the conclusions set out there.

Jacqueline Yates, Nigel Kennedy, Jane Lubbock, Ian Brooke answered questions from the Committee:

·         New capital programme procedures (the capital gateway process) defined roles more clearly and required a clear and considered procurement strategy for major projects. Staff were trained in project management, as appointing an external project manager was not always satisfactory.

·         Full financial and credit checks were carried out before letting a contract, and monthly financial checks were carried out on key suppliers and customers.

·         There was no indication at the time the project went to tender that the number of bids would be problematically few or that a different process may produce better results.

·         This was a complex project to deliver a flagship centre for the council and community, and the project was now on track and on budget. Officers considered it more important to deliver a high quality centre, with the right elements included for the community, than to deliver a lower specification scheme. It was uncommon for such schemes to be longer and more expensive projects than anticipated.

·         As the capital programme had grown significantly, officers were more aware of the market and more rigorous with external project managers and gathering market intelligence.

·         The gateway process started in September 2014 and included points where the design and price were frozen.

·         The recommendations from the report would be added to the audit tracker and progress reported to the committee.

Committee members commented:

·         Project managers needed to be mindful of how community involvement affects projects.

·         As the increase in costs was not uncommon in this type of project, did the organisation have the capacity to deliver these or should an experienced project manager be appointed for these infrequent large projects?

·         The report was useful and timely.

·         The post-implementation review at the end of the project should be brought to the committee for its consideration.

The Committee noted the report and the comments from officers and members.