Internal Audit plan for April 2007 to March 2008

Report: 10
Date: 15 December 2006
By: Director of Internal Audit

Summary

This report and associated appendices sets out the proposed plan for the use of Internal Audit resources from 1 April 2007 to 31 March 2008.

The annual plan is based on an updated Audit Needs Assessment and Risk Analysis for the next five years ahead.

The Acting Director of Resources for the MPS and the MPA Treasurer are content with the proposed annual plan submitted to the Corporate Governance Committee.

A. Recommendation

That

1. members approve the proposed use of Internal Audit resources and note the summary calculation of audit need and comparison to planned work set out in Appendices 1 and 2; and
2. approve the programme of Internal Audit work, set out in Appendices 3 to 6.

B. Supporting information

Purpose and basis of the annual Internal Audit plan

1. The plan is designed to ensure that I have sufficient information to form an opinion on the adequacy of the MPA/MPS control framework. That opinion will feed into the Authority’s Governance reporting and Statement of Internal Control for the published accounts for 2007/8, as well as providing a degree of assurance for the MPA and external reviewers.

2. My opinion on control is based on risk scores given at the end of each systems review (including operational audits of local systems). The scores are on a scale of 1 to 5, where 1 = excellent and 5 = unacceptable. The scoring system also includes the results of any significant audit investigations, major advisory work on developing systems and other relevant professional review activity of the MPS.

3. The Acting Director of Resources and the Treasurer have agreed the draft plan. I have also sought the views of Management Board members, the Chair and other senior members of the Authority and consulted with HMIC and the Audit Commission in drawing up the plan.

4. Our audit plan is risk based and the highest current risk determines those systems that will be audited in year. Our risk model takes into account a number of factors, including financial values, impact on operational activities, likelihood of a major system failure and the length of time since the last audit. We also refer to the MPA and MPS risk registers to ensure that there is parity in our assessment of risk.

5. Appendix 1 and Appendix 2 highlight the calculated need and the resources available to meet the need. In summary:

• 81% of need will be met for systems advice and routine audits (3208 audit days out of 3972)
• 82% of the need for investigative work will be met (1822 days out of 2210)
• 81% of overall need should be met with this plan (our target is 80%)

6. Appendices 3 to 5 outline systems audits, our follow up programme and systems development work. In summary:

• Key systems audits include: Compliance with Health and Safety Legislation, Police Officer Recruitment, PCSO Recruitment, Police and Police Staff Overtime, Criminal Justice Processes, Royalty/VIP/Diplomatic Protection, Management of Property Services Outsourcing, Management of Transport Outsourcing, Creditors System, Debtors System and Investment, Borrowing and Cash Management.
• A significant part of the follow up programme is focused on tracking progress made in implementing our B/OCU recommendations to strengthen controls at a local level.

7. Appendix 6 highlights our BOCU review programme. The number of reviews in the B/OCU programme has been reduced from ten to five for next year to reflect the emphasis on follow-up reviews. We also intend to concentrate on those BOCUs that have not yet been subject to an audit review.

Key themes of our work for 2007 – 2008

• Improving MPA/MPS Corporate Governance Framework
• We will continue to provide advice in key areas that have a significant impact on MPA/MPS objectives including: Met Modernisation Programme, Corporate Governance Framework, Covert Policing Standards, Transforming HR Programme, NSPIS, MPA Contract Regulations and MPS Procurement.

Liaison with other review bodies and police authority auditors

• Increased and visible co-ordination with Audit Commission and HMIC
• Membership of Inspection and Liaison Groups – internal and external reviewers
• GLA Heads of Audit Group
• DIA Chair of the National Group of Police Auditors, DDIA attends Northern Group – contributing to the development of auditing within the national policing environment

Fraud investigation and liaison

• Working jointly with the Audit Commission, we are planning an Anti Fraud and Corruption drive aimed at raising awareness around identifying and dealing with potential fraud and corruption and taking steps to prevent it.

C. Race and equality impact

1. Internal Audit continue to reflect the diverse community within which the MPS and MPA operate. All field auditors and investigators have received appropriate training in equality and diversity issues and their performance within the MPS is monitored.

2. The plan of work is designed to provide as wide a range of coverage of MPS staff and systems as is possible and practicable.

D. Financial implications

The agreed budget for 2007/08 has been determined in line with Internal Audit resources required to deliver the approved Annual Programme.

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

Appendix 1

Calculation of annual Internal Audit need

• Systems audits per audit needs assessment (based on five year cycle – high risk system three audits in five years, Medium risk system twice in five years, Low risk system once in five years): 13110
• Every BOCU/OCU one 45 day audit every five years: 2700
• Five year total system audits and reviews: 3162 days (51% need)
• Systems development work per annum: 580 days (9% need)
• Analysing key financial systems per annum: 230 days (4% need)
• Total systems audit and audit advice: 3972 days (64% need)
• Forensic Audit (investigations, preventative advice and National Fraud Initiative): 2210 days (36% need)
• Total Annual Internal Audit Need: 6182 (100%)

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