Agenda item

Report of the Audit Partnership Manager, Rob Milford

The Head of Audit Cotswolds introduced the report which was a six monthly  item designed to give the Committee an opportunity to comment on the work completed by the partnership and provide ongoing comment and assurances on the control environment throughout the year.  This would also support the work of the external auditor.

Item 3.4 set out other areas of work which Audit Cotswolds had undertaken through the course of the last year and included support for GO Shared Services, the Local Authority Company and Cheltenham Borough Homes as a client.  Appendix 1, the Internal Audit Monitoring Report itself gave details of the specific areas of audit. 

Payroll – this was the third consecutive year that issues were being reported but given the imminent implementation of a new ERP system a pragmatic approach to the review had been taken and focussed on key controls to identify any operational improvements so as not to effect the progress of GO.  Weaknesses in the accuracy and effectiveness of internal controls included reconciliation, non-standard salary payments (e.g. maternity payments) and management review and performance management procedures.  In spite of GO the risk would still be with this authority and whilst he was confident that a higher assurance would be achieved, this would need to be evidenced before the assurance would improve. The assurance was Limited.

Council Tax and NNDR – sickness was a concern.  One member of the team had been off sick since last October and whilst this had not impacted the service any further absences would have consequences.  The assurance was High.

Housing Benefits – the issues here had been resolvable and therefore a limited assurance was not justifiable.  There was uncertainty around the significant changes to the Benefit system and periods of change always posed a risk.  The assurance was Satisfactory.

Green Waste Accounting – this was a follow-up to a review which resulted in a limited assurance and had involved discussions with UBICO and the CBC side to ensure that all issues were being addressed.  He was comfortable that the issues were being taken forward and confirmed that the matter would be subject to further follow-up. 

The Head of Audit Cotswolds provided the following responses to member questions;

• There was no formal opinion for the review of the Green Waste Accounting as this had been a follow-up. 
• Progress in relation to recommendations was reviewed after 6 months and all recommendations had an associated deadline which would trigger a return visit from internal audit.  If sufficient improvements had been achieved the service would not be reviewed again until the next annual review.
• There were a number of issues that had delayed improvements to the payroll system and resulted in 2-3 years of limited assurance, which included failed negotiations with Tewkesbury Borough Council to join GO and capacity issues which despite numerous attempts at recruitment were unresolved.  Given that a new system was being built a pragmatic approach was taken and whilst the legal requirements were met, the limited assurance was allowed to continue for much longer than would ordinarily be acceptable.
• The ERP system was automated but managerial authorisations were still required.  The 2 person rule referred to in the report implied that the process would involve the same two individuals but this was not the case, the point was simply that a second person would need to be involved in the process.
• The concerns highlighted in the original report for the green waste review had been fairly severe in relation to non-compliance with financial rules but he was confident that action had been taken to resolve this.  With the formation of UBICO there had been a significant shift in governance and this would be considered in detail by internal audit at the end of the year.