Internal Audit Annual Report 2004/5

Report: 10
Date: 11 July 2005
By: Chief Executive and Clerk

Summary

The report at Appendix 1 summarises the work of Internal Audit for the year 2004/05, and gives the opinion of the Director Internal Audit on the adequacy and effectiveness of control within the MPS and the MPA.

A. Recommendation

That members of the Corporate Governance Committee approve the attached draft Annual Report of the Director of Internal Audit for circulation to all members of the MPA.

B. Supporting information

1. The report sets out the Director of Internal Audit’s opinion on the adequacy of control within the MPS and MPA for the reporting period. The report also includes at Annex A summaries of each audit and line management response, follow-up reviews and summaries of key areas of audit advice. Annex B to the Report gives a summary of investigations undertaken during the year.

2 Key points to note from the draft Annual Report include:

• The Director of Internal Audit has given a reduced assurance on the adequacy and effectiveness of internal control within the MPS. Improvements over the previous three years have not been sustained and the overall level of control is below an acceptable standard.
• Internal Audit has achieved completion of 90% of the planned systems audit work for the year.
• In total, in the last three years, Internal Audit have been able to cause savings and stem losses of around £10 million.
• Internal Audit has advised a number of significant developing MPS business projects during the year, including all major outsourcing action groups, as well as advice to the MPA/MPS review of Police Overtime.
• Internal Audit has developed a ‘road show’ to help local police management to improve controls in basic financial and business systems.
• Internal Audit’s investigative arm, Forensic Audit Branch, has achieved savings or losses stemmed during the year of approximately £1.1 million and recoveries of £556,203. In two separate cases £435,000 that had been fraudulently obtained from MPA funds was recovered.
• MPS response times to audit reports have significantly worsened in the last year, with a third of responses taking eighteen weeks or longer from MPS line management.
• Internal Audit has an overall 78% customer satisfaction rate with their performance (compared to 76% in 2003/04). The highest scores were 93% satisfaction with the way audits were conducted and 80% satisfaction with the value of recommendations made.
• Staffing in Internal Audit has been maintained at a satisfactory level. The staff continue to reflect the diverse community that they serve.
• Over the last three years Internal Audit has matched its expenditure to its budget. This year additional income of £240,000 was also generated from a civil recovery following an investigation.
• MPS management have accepted all high-risk recommendations made by Internal Audit. At the time of report writing 66% of these had been implemented by the MPS.

C. Race and equality impact

Internal Audit addresses equalities aspects if and when they arise in relation to its business.

D. Financial implications

1. The cost of Internal Audit activities is met within the MPA’s directly managed budget.

2. There is a risk of loss, fraud, waste and inefficiency if Internal Audit recommendations are not effectively implemented.

3. Savings and recoveries made enable funds to be better directed towards core policing activities.

E. Background papers

None

F. Contact details

Report author: Catherine Crawford, MPA Chief Executive, MPA.

For information contact:

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

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