Directorate of Audit, Risk and Assurance (DARA) progress report

Report: 5
Date: 22 March 2010
By: Director of Audit, Risk and Assurance

Summary

The report summarises the work completed by the Directorate of Audit, Risk and Assurance since the Committee last met. It also provides an update on the adequacy and effectiveness of control in the MPS based on final reports issued in 2009/10 to date.

A. Recommendation

That members note:

1. work undertaken by the Directorate of Audit, Risk and Assurance and progress made in achieving the 2009/10 Audit Plan; and
2. the current evaluation of the adequacy and effectiveness of internal control in the MPS.

B. Supporting information

Audit Work Completed in the 4th Quarter 2009/10

1. Fourteen final reports have been issued since the December meeting of this committee. Appendix 1 highlights the overall opinion, effective areas of control, the control issues identified and the progress made in implementing our recommendations, for each review completed. It also summarises the outcomes of our follow up audits. A further 30 reports are at draft report stage and 31 audits are in progress.

2. We have provided advice to a number of key developing systems including; the interim HR payroll project, finance modernisation, language programme board, property services outsourcing framework and the management of covert assets. As part of our role in facilitating the improvement of risk management, I now meet with the MPS strategic lead on a regular basis and have been invited to sit on the MPS business management risk review group. We are also advising the MPA on the further development of its risk management process.

3. We continue to work with colleagues in MPS Procurement Services to address contract non-compliance and are currently reviewing the additional contract management controls that have recently been introduced. The MPS Director of Resources will present an update and action plan on contract compliance to the April meeting of the resources and productivity sub committee, as agreed following the Section 5 report to full Authority in January 2010.

4. Our input to the AMEX investigations is now limited to supporting adhoc requests for assistance from DPS. Six individuals (three police officers and three members of the public related to the police officers) have been charged with conspiracy to defraud and face trial at the Central Criminal Court in October 2010.

5. The directorate’s counter fraud team have contributed to the investigation of 101 cases of potential irregularities and/or fraud since the 1 April 2009 and have received six calls on the Right Line, the MPS telephone hotline for reporting wrongdoing. The total number of cases is significantly higher than last year due to the increase in National Fraud Initiative work, which is conducted on a two-yearly cycle. We are also continuing to develop our approach to analysing the underlying risk and control issues that are evident from our investigative work. This will be used to inform our risk review and fraud prevention programmes.

Internal control environment

6. The overall assurance score to date for 2009/10 based on our final reports remains at 2.5 [1] with first time reviews scoring 2.7 and follow ups 2.3. This is a notable improvement on the overall score of 2.8 (3.1 first time reviews and 2.4 follow ups) for 2008/9.

7. The progress made in implementing our recommendations is shown at Appendix 2. A total of 203 remain outstanding from 2008. The analysis of recommendations for 2009 also shows that 209 (82%) of the 256 that remain outstanding are past the agreed date for implementation. We are conducting further analysis with Finance Services to determine the underlying reasons for this position. This will include reviewing the reasonableness of the deadlines agreed.

8. Greater emphasis is being placed on monitoring high risk recommendations as evidenced in the separate report to this committee, although a number remain outstanding past the original agreed implementation date.

9. Our analysis of recommendations made show that the main control areas are around management supervision and review (33%), reconciliation (17%), authorisation and approval (13%), guidance and training (13%) and record keeping (13%). MPS Performance Board are now receiving this level of analysis and are overseeing the measures being put in place to address the underlying control issues.

Work in progress

10. We have completed our fieldwork on the contract management of property outsourced contracts and are about to conclude our reviews on partnerships and witness protection. Our follow up reviews of risk management and treasury management will conclude before the year end and we have commenced our follow up of security vetting. The output of these reviews will be reflected in my annual report.

11. We are working with the Director of Group Finance on drafting the terms of reference for a joint review of MPS assurance functions. Phase one will focus on determining the level of review activity currently taking place. We are also advising the Deputy Treasurer and MPS Finance Services on the corporate governance framework self assessment.

12. The Audit Commission have completed and issued their report on the output of the fraud awareness workshops held in 2008/9. We are working with MPS Finance Services colleagues to review and respond to the recommendations. Planning is under way with the MPS and Audit Commission for a further series of fraud awareness and prevention workshops to be held in the first quarter of 2010/11.

Directorate of Audit, Risk and Assurance performance

13. We are aiming to achieve the 90% target for completing our work programme to report stage by the year end. Five of the 6 planned B/OCU reviews are in progress and we are on target to complete those follow ups that are now due in 2009/10.

14. Our current rate of productivity 80% is exceeding the 75% target and we are spending our time broadly as planned. We are continuing to focus on improving the timeliness of reporting.

C. Race and equality impact

1. The MPA’s commitments in relation to equality and diversity are considered in all activities carried out by the Directorate of Audit, Risk and Assurance. We also monitor the behaviour of our staff through questionnaires to auditees on a range of matters related to audit and investigative work.

D. Financial implications

There is a risk of loss, fraud, waste and inefficiency if our recommendations are not effectively implemented. Savings and recoveries made as a result of audit work enable funds to be directed towards core policing activities.

E. Background papers

None

F. Contact details

Report author: Julie Norgrove, Director Audit, Risk and Assurance, MPA

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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