To consider the attached report.
Contact Officer: Kate Mulhearn (01296) 585724
The Committee received a progress report on assurance work activity undertaken against the 2016/17 Assurance Plan that had been approved by the Audit Committee in March 2016. The following matters were highlighted:-
Final Reports issued since the previous Committee Meeting
The Accounts Receivable review had been completed and been classified as high risk. The full report was attached as Appendix 4 to the agenda and had found that there was a lack of corporate and local oversight of the debt held in each service area and irregular monitoring of the age profile of debt. There were no corporate performance indicators to identify areas which were performing less well in their debt management to allow more effective corrective action to be taken. There was also a lack of clarity over the roles and responsibilities of the central Income Team and service areas regarding which team is responsible for debt management. The Council recognised these challenges and in November 2016 had set up a Corporate Debt Project to address the issues and improve debt management processes.
Through the work of the Debt Project, issues have been identified between the system interfaces and manual processes that ensured information on housing benefit overpayment debt was consistent and reconciled between the finance system (Tech One) and the Benefits system (Northgate). During June-July 2017 the project team had been working to reconcile the two systems and clear any discrepancies. At the time of concluding the report all electronic matching and sorting had been completed on the data from both systems. The task in process was to work through manually each unmatched item and investigate both systems to correct the difference. At this stage it was not believed that this would result in a material adjustment to the reported debt figures.
Work was also progressing with the software providers to address the underlying issue around the interface between Tech One and Northgate. In the mean time, dedicated resource had been identified to ensure manual processes operated effectively to maintain ongoing updates and accuracy.
Further findings had also been made regarding:
• Invoices for trade waste collection had not been issued promptly.
• Invoices not being subject to the correct approval in line with delegated limits when re-directed from the original approver.
• Back up documentation to evidence credit notes was not held on Tech One.
The following work was being progressed:-
· Debt Recovery – the Corporate Debt project work was ongoing, with the progress being monitored by internal audit.
· Service Charges – management approval was being awaited on the draft report.
Overdue Recommendations and Follow Up Work
The Committee was informed that the implementation of actions and recommendations raised by internal audit reviews were monitored to ensure that the control weaknesses identified had been satisfactorily addressed.
The overall progress and detail of those actions/recommendations that were considered overdue was set out in Appendix 3. To the end of June 2017, there were 14 “high” and “medium” agreed audit actions due of which 7 were still outstanding and had been given a revised date for implementation.
Actions arising from low risk audit findings were followed up by management and reviewed, but not validated by internal audit.
Internal Audit Resource
Members were informed that the situation regarding the resources available to undertake internal audit work had not changed since the report made to the June 2017 meeting.
Internal Audit Plan and progress tracker
Progress and changes against the approved 2016/17 Annual Internal Audit Plan was detailed at Appendix 2 to the Committee report. The Committee was informed that the Annual Internal Audit Strategy and Plan for 2017/18 was the subject of a separate agenda and report to the meeting.
Members sought further information and were informed:-
(i) on the work that was being done to reconcile housing benefit overpayment debt between Tech One and Northgate, which had been a significant piece of work. Two people were now responsible for ensuring this happened although it was expected that the process would be automated in time. Tech One and Northgate were also looking at how their systems could work better together.
(ii) that some of the issues raised in the Accounts Receivable review were as a direct result of the new finance system (Tech One) that had been introduced last year. Processes had not been documented and this had led to some of the issues raised occurring when there had been a number of staff/team changes due to the Commercial AVDC Programme. It was explained that it was internal audit’s job to highlight these issues and then ensure that proper controls were put in place.
(iii) that the control design for approving invoices when an approver was not available through Annual Leave or due to sickness had been identified as a weakness in last year’s audit. Significant work had been done since then to update the Scheme of Delegations and match these through to Cost Centres so that Officers would only receive requests to approve invoices for which they had the necessary authorisation.
Members commented that in these circumstances it would be preferable to delegate approval authority upwards to a person’s Line Manager.
That the progress reported be noted.