Internal audit progress report

Report: 7
Date: 22 March 2007
By: Director of Internal Audit

Summary

The report summarises the work of Internal Audit for the period December 2006 to end of February 2007. It 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 final reports since April 2006.

A. Recommendation

That

1. members note the progress made in achieving the 2006/07 Internal Audit Plan; and
2. note the current Internal Audit evaluation of the adequacy and effectiveness of internal control in the MPS.

B. Supporting information

Progress against the 2006/07 Internal Audit Plan

1. We are on target to complete 90% of the systems audit revised programme to report stage by the end of the year. We have also finalised fifteen audits of local Borough/Operational Command Unit financial and business systems and are due to report on Royal Parks, SO17 Palace of Westminster, SO2 Business Support, CO4 National Identification Service, TPHQ and Islington and Bexley BOCUs.

2. Thirty-one final follow-up reports have been issued with a further four having reached draft report stage and eighteen currently in progress. However, as a result of some delays in issuing final reports, 45% of the follow-ups in our original 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

3. In my Annual Report for 2005/06 I noted that, on the scale where 1=excellent control and 5=unacceptable control, the MPS had an overall score of 2.9 (3.3 for systems audits and 2.5 follow-ups). At this stage of the year for 2006/07 the equivalent score remains at 2.9 overall (3.4 systems audits and 2.5 follow-up).

4. We continue to work with senior managers in the MPS to improve the level of internal control across business groups. We have recently met with Business Group Managers and established a key point of contact to help facilitate the role of Internal Audit and increase awareness around internal control issues. We are also working with representatives from TPHQ and Finance Services to implement a strategy for strengthening controls at a local level.

Current investigations

5. We have taken on fifty-nine new cases since the 1 April 2006. This is slightly below the pattern of earlier years, but the cases have been generally larger and more complex. Whilst the investigations are spread across business areas of the MPS a recurring feature of many of the cases remains the procurement process. We have also received five calls on the Right Line, the MPS telephone hotline for reporting wrongdoing and one irregularity reported by e-mail.

6. I have previously reported to this committee on progress with our investigation into the estate procurement issues surrounding Safer Neighbourhoods. Our final report has been submitted to the Deputy Commissioner, other senior MPS personnel and the Audit Commission.

7. We have continued to be involved in a number of issues, including recovery contracts, financial forecasts and value for money, concerning the Vehicle Recovery and Examination Service (VRES). A report was presented to CoP on 1 March concerning VRES tendering for work for Transport for London.

8. Our examination of a number of IS/IT projects continues. A recurring feature is the lack of robustness in the procurement process. We have also commenced a review of the disposal of commercial and residential properties.

9. We have received back from the Audit Commission the data matches relevant to the 2006 National Fraud Initiative (NFI) exercise and have commenced to analyse them prior to commencing investigations. It is too early to draw any conclusions as to the likely level of fraud identified by the exercise. We were surprised however by a sudden increase (to 160) in the number of data matches relating to pensions that continued to be paid after death of the pensioner. At least in part this appears to be a technical problem caused by the way the outgoing pension contractor dealt with payments returned by the banks over a number of years rather than an increase in the level of fraud. We also have a large volume (26,000) of creditor data matches to resolve before we can identify any trends.

Current advice and review activity

10. We continue to be represented on the Transforming HR Programme Board and will be advising the various work strands during the implementation stage of the programme. In liaison with the MPA Deputy Treasurer, MPS Director Strategy, Modernisation and Performance we are advising on the development of the MPA Corporate Governance Framework in light of the changes proposed by the revised CIPFA/SOLACE Guide that is due to be published in the new year. My deputy and I also continue to work with senior managers in the covert policing command to develop the control framework around covert policing activities. We continue to advise on the review of the MPA Contract Regulations and Procurement Strategy, Outsourcing Work Programme, MetHR and the upgrade of the corporate accounting system.

11. I plan to hold a seminar in March 2007 with senior members of the MPS to discuss the current issues around procurement that are causing concern and to agree the way forward. MPS senior management has welcomed this approach.

12. We have issued the following final systems audit and follow up reports since the publication of my last update in December 2006:

Systems Audit reports

• Partnership Funding and Control
• Human Resource Planning
• Strategic Planning for Training
• Rent and Housing Allowance
• Hammersmith BOCU
• Major Incident Response
• Royal Parks Police
• Common Police Services (Support Inside the UK)

Follow up audit reports

• Caution Administration System
• Vehicle Fleet Management
• Vehicle Hire
• Sponsorship and Income Generation
• Vehicle Maintenance and Repair
• Provision and Disposal of Vehicles (C)
• Witness and Jury Protection (C)
• Accounts Control TSU (C)
• Acquisition and Disposal of Covert Property (C)

Staffing

13. I currently have thirty-six staff in post. The one auditor vacancy was due to be filled in January 2007. However, delays in the vetting process have contributed to the candidate’s decision to not take up our offer of employment and the vacancy remains.

Liaison with MPS risk management, inspection and review activity

14. We are continuing to work in liaison with the MPS Director of Risk Management and the internal inspection review bodies. We are actively involved in the Internal Inspection and Review Group aiming to ensure internal review activity is properly co-ordinated and duplication is avoided.

External liaison

15. My deputy and I meet with the Audit Commission and HMIC on a regular basis to ensure that there is a co-ordinated approach to our work and to discuss any common emerging themes. We are due shortly to present our respective plans for 2007/8 to the Commissioner’s SMT.

16. I continue to meet with the other heads of audit in the GLA family to discuss issues around commonality of reporting and comparing internal audit performance. We are also due to host a conference for Police Authority Internal Auditors.

C. Race and equality impact

1. Our diverse workforce sets a good example to the MPS. The MPA’s commitments in relation to equality and diversity are considered in all audits and investigations carried out by Internal Audit.

2. We monitor the behaviour of our staff through questionnaires to auditees on a range of matters related to audit and investigative fieldwork. This helps to ensure that any diversity issues are quickly identified and addressed.

D. Financial implications

We are currently forecasting that we will come in on budget at the year end.

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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