Internal Audit Progress Report

Report: 11
Date: 23 September 2004
By:  Director of Internal Audit

Summary

This report sets out progress made in achieving the 2004/2005 Internal Audit Plan.

A. Recommendation

That the progress made in achieving the 2004/2005 Internal Audit Plan be noted.

B. Supporting information

Progress against the 2004/2005 Internal Audit Plan

1. Good progress is being made in achieving the Internal Audit Plan for 2004/2005. At this stage, it is anticipated that the performance target set by the Treasurer (audits finished and a report issued for 90% of the plan) will be met. Internal Audit has commenced its BOCU review programme with two reviews completed, four in progress and the remaining five planned for later in the year.

2. The programme of follow up audits has also commenced and the systems development audit work programme is being carried out as planned. Forensic Audit work also continues to have a significant impact.

Current review work - including investigations

3. Internal Audit’s interpreter cases continue to make progress through the criminal and civil courts. In a previous report, reference was made to one of the earliest cases being heard at Southwark Crown Court. It can now be reported that case has been satisfactorily concluded and the civil case to recover the alleged funds involved has resumed in the High Court. It was also reported that two further cases had been reported to Directorate of Professional Standards for criminal investigation. One of these cases has resulted in the interpreter being charged with eleven counts of false accounting and the other has been returned to the MPS for administrative sanction.

4. Internal Audit’s investigation into the circumstances surrounding the MPS Keyholder Database project (Project Penates) has closed and a report of the findings presented to the Director of Resources on the systems failures identified and any potential disciplinary matters. The Director of Resources has appointed an independent investigator to follow up any potential disciplinary issues.

5. Internal Audit acted in response to a report from the MPS Finance Directorate involving an MPS finance manager improperly obtaining the sum of £195,000. The matter was referred to SCD6 and Internal Audit assisted with the follow up work. The finance manager was charged with two counts of false accounting and two counts of obtaining money transfers by deception. He has pleaded guilty and is due for sentencing at Southwark Crown Court on 16 September. Internal Audit is actively involved and negotiated the recovery of the £195,000 from the finance manager’s bank.

6. Internal Audit has worked in close liaison with the Finance Directorate to ensure that the system weaknesses identified as a result of this fraud are being addressed. It is also working with the Head of Business Support, Finance Services and the Devolution Team in reviewing the Scheme of Devolved Financial Management. In particular, it is advising on the internal control issues that have arisen following a recent survey of BOCUs conducted by the Devolution Team. Other advice in high-risk areas includes the Outsourcing Work Programme, the upgrade of the MPS corporate accounting system, and MetHR.

7. With its aim to increase awareness of basic financial and business risks and controls, Internal Audit has issued an Internal Audit Advice Note to all BOCU Commanders and their management teams. The note is based on the findings emerging from BOCU review work and highlights some practical steps that can be taken to help achieve a sound control framework at a local level.

8. Internal Audit has issued the following final systems audit and follow up reports since the publication of its Annual Report:

• Equipping and De-equipping MPS Vehicles,
• Vehicle Maintenance and Repair,
• Vehicle Fleet Management,
• Hire of Vehicles,
• Corporate Strategy and Planning,
• Inventories and Asset Registers,
• Uniform Services – Stores and Stock Control,
• Cash Security and Disbursement,
• Investment, Borrowing and Cash Management,
• Storage and Display of Police Artefacts,
• Occupational Health and Psychology Services,
• Havering BOCU Review of Business and Finance Systems,
• Rent and Housing Allowance Follow up,
• Boat Support and Maintenance Follow up,

9. Internal Audit’s follow up reviews continue to demonstrate that the adequacy of the control framework improves following an audit review.

Responses to audit reports in high-risk areas

10. There are no responses currently outstanding for high-risk reviews.

High-risk recommendations

11. Six of the thirty-one high-risk recommendations from previous years, reported as outstanding in the 2003/04 Annual Report, have now been implemented. Eleven of the twenty-six high-risk recommendations made in the first quarter of this calendar year have also been implemented. The Director of Internal Audit is seeking assurance from senior management that action is being taken to address those recommendations that remain outstanding and will report any further progress to the December meeting.

Staffing

12. Internal Audit has currently thirty-five staff in post and three vacancies. However, a recent recruitment campaign has proved successful and it is hoped to fill two auditor vacancies in the near future. The Director of Internal Audit is also currently in the process of recruiting an Executive Assistant to replace his personal secretary following her retirement in August of this year.

Liaison with other bodies, partnerships and joined-up working

13. Internal Audit is continuing to work in liaison with the MPS Director of Risk Management and internal and external inspection and review bodies. The Director of Internal Audit also now attends the MPS Strategic Corporate Governance Committee and his Deputy represents Internal Audit on the MPS Risk Management Project Board. Internal Audit’s relationship with the MPS Professional Standards Directorate is also developing further and this has proven particularly productive in recent months.

C. Equality and diversity implications

Internal Audit continues to reflect the diverse community within which the MPS and MPA operate. The percentage of visible ethnic minority staff remains at 34%. It also continues to employ several staff with disabilities, although only seven females are in post five hold managerial posts, including that of Deputy Director of Internal Audit. Those employed in MPA Internal Audit represent a wide age range, up to and beyond the age of sixty.

D. Financial implications

The Internal Audit budget is currently on target (the underspend on salaries has been off set against the cost of employing contractors to assist with our investigation work).

E. Background papers

None

F. Contact details

Report author: Peter Tickner, Director of Internal Audit, MPA.

For information contact:

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

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