Internal Audit progress report

Report: 10
Date: 08 April 2005
By: Director of Internal Audit

Summary

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

The report also summarises the results of significant Internal Audit work to date and the adequacy and effectiveness of control in MPS systems where Internal Audit has issued formal reports since April 2004.

A. Recommendation

That

1. members note the progress made in achieving the 2004/2005 Internal Audit Plan; and
2. the current Internal Audit evaluation of the adequacy and effectiveness of internal control in the MPS.

B. Supporting information

Progress against the 2004/2005 Internal Audit Plan

1. We are on course to meet the performance target set by the Treasurer for completion of our Systems Audit Plan for this year (audits finished and a report issued for 90% of the plan).

2. We have also carried out eight audits of local Borough/Operational Command Unit financial and business systems. Our work in this area has proved to be particularly productive and of value to local senior managers. Two further B/OCU audits are due to commence before the end of the financial year.

3. We are currently advising on twenty of the twenty-seven areas of work published in our systems development programme at the start of the year. Work will commence in the remaining seven areas in line with the MPS programme for development.

4. We have completed fifteen follow-up audits to report stage, twenty are in progress and a further twelve are due to commence. However, as a result of delays in starting some audits, 38% of the follow-ups in our published programme are now not due until next year (the timing of the review is dependent on the date the final report is issued).

Opinion on the adequacy and effectiveness of MPS systems

5. In my Annual Report for 2003/2004 I noted that, on the scale where 1=excellent control and 5=unacceptable control, the MPS had an overall score of 2.9 but for follow-up audits the score improved to 2.1. This was a third year in succession where the MPS scores had shown improvement. At this stage in the last quarter of 2004/2005 the equivalent scores are 3.4 overall and 2.7 for follow-up audits. This is a little disappointing as it is unlikely that by the time of my Annual Report the MPS will have been able to sustain the continuous improvement of the previous three years. While this may not be significant, we will need to keep it under close review.

Current investigations

6. In my last report I drew attention to an estate related issue. This work involved MPA premises occupied by an outsourced service provider. The work has now concluded and we have reported to the Director of Property Services. This relates to the level of rental charged for MPA property and the utility charges. No member of staff still working for the MPS was involved and the Director of Property Services and his staff are taking steps to put matters right. The MPS has issued the contractor with an invoice for £91,000 for unpaid rental and utilities. A review of rent of the properties concerned is currently underway and this will identify a current rental value.

7. We are also involved in two major investigations that are requiring considerable resource but that we are unable to report at this time. One further interpreter enquiry has commenced, as the case is sufficiently serious to warrant returning to this subject. A High Court freezing order has been obtained to coincide with the arrest of the interpreter by officers from the MPS Directorate of Professional Standards.

8. We have received the first set of data from the Audit Commission for the National Fraud Initiative 2004 review. Early indications are that we will detect fewer offences this year as a result of a number of successful years in dealing with fraudulent staff.

9. The number of cases dealt with this year is going to be less than last year (55 so far against 88), however the funds recovered has increased from less than £40k last year to over £500k in 2004/5. The fall in case numbers is due in part to having less small cases from NFI work and in part to our concentration on some major on-going cases in the year.

Current advice and review activity

10. Our advisory work in high-risk areas includes the Outsourcing Work Programme, which has reached a critical stage for a number of key support functions. We are represented on each of the Action Groups set up for the Outsourcing Programme. We continue to advise on the next stage of the upgrade of the MPS corporate accounting, property and transport systems. Our advisory work on MetHR and MetTime also continues. We have conducted further risk and control awareness training and our advisory work with BOCUs continues.

11. We have an agreed action plan with MPS senior management for addressing the recommendations made following our recent audit of Police Overtime which informed the member led review.

Auditing covert and sensitive accounts

12. Following concerns expressed at the last Corporate Governance Committee meeting, we have agreed a protocol for reporting sensitive matters to the Chair of the Corporate Governance Committee. The Chair and the Chief Executive of the MPA will meet quarterly with me to discuss progress with audit work in these areas. We agreed that if there were any significant concerns about MPS systems or the implementation of audit recommendations in any of these areas I would produce a Green Paper report for the next Corporate Governance Committee.

13. Recently we held our first quarterly meeting under the new arrangements. It was agreed that there were no matters that warranted a Green Paper report at this stage. There was however two areas where the MPS had accepted that significant improvement in controls were needed. These could potentially be reported at a future Committee if insufficient progress was made.

14. I met with the Director of Resources and the Management Board members responsible for Specialist Operations and the Serious Crime Directorate to agree the way forward on a number of our recommendations made in high-risk sensitive areas. The Director of Resources is hosting a follow-up meeting shortly to ensure that progress continues to be made in implementing our high-risk recommendations.

Final audit and follow-up reports in 2004/5

15. We have issued the following final systems audit and follow up reports since the publication of my 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 Welfare Services
• Review of MPA Business and Finance Systems
• Accident and Riot Claims and Payments
• Linguistics
• Police officer and Staff Support Outside the U.K.
• Accounts Control TSU
• Transport and Travel Arrangements
• Freedom of Information Act Enforcement and Control
• Career Management – Police Staff
• MPA Business and Finance Systems
• Havering BOCU Review of Business and Finance Systems
• Lambeth BOCU Review of Business and Finance Systems
• Transport OCU Review of Business and Finance Systems
• Rent and Housing Allowance Follow up
• Boat Support and Maintenance Follow up
• Messenger and Mail Services Follow up
• Police Officer and Staff Support Inside the U.K. Follow up
• Temporary Imprest Control Follow up

Responses to audit reports in high risk areas

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

High risk recommendations

17. At the December meeting, I reported that twelve high-risk recommendations from previous years and nineteen from the first half of the last calendar year were not fully implemented but work was in progress towards implementation. One further recommendation has now been implemented and work continues on the remaining. A further six high-risk recommendations from twelve made in the second half of the last calendar year have also been implemented.

Staffing

18. I currently have thirty-six staff in post with my Executive Assistant due to join us in April. This will leave me with one vacancy in the Directorate at analyst level.

Liaison with other bodies, partnerships and joined-up working

19. We are continuing to work in liaison with the MPS Director of Risk Management and internal and external inspection and review bodies. I continue to attend the MPS Strategic Corporate Governance Committee and my Deputy is our representative on the Statement of Internal Control Working Group. We have worked in liaison with the Audit Commission, HMIC and the MPS Inspectorate to ensure that a co-ordinated work programme of inspection and review activity is produced for next year.

C. Race and equality impact

Internal Audit continues to reflect the diverse community within which the MPS and MPA operate. The percentage of visible ethnic minority staff is 32% and the percentage of female employees has increased to 25%. We also employ staff with disabilities and from a wide age range.

D. Financial implications

I anticipate that the Internal Audit Budget will be marginally underspent by approximately £25,000 at the end of the financial year. Recoveries made by Internal Audit include £240,000 retained by the MPA. A further £280,000 of recoveries made has been retained by the MPS.

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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