Internal audit progress report

Report: 5
Date: 7 December 2007
By: the Director of Internal Audit

Summary

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

A. Recommendation

That

1. members note the progress made in achieving the 2007/08 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 2007/08 Internal Audit Plan

1. Work is underway on 88% of the systems audit programme and we are aiming to achieve the 90% target for completion of the systems audits to report stage. We have, however, been carrying an auditor vacancy and this may impact on our ability to deliver the plan. I will report further on progress at the next meeting.

2. We have finalised six audits of local Borough/Operational Command Unit (B/OCUs) financial and business systems. Reports are at draft stage for SCD5 Child Protection, SCD26 Operational Information Services, the Palace Of Westminster, Croydon and Kensington and Chelsea. Further audits of Lewisham and Camden BOCUs are planned for the final quarter of the year. We are also on target to complete our extensive follow up programme for B/OCUs.

3. We are advising on those systems published in our systems development programme at the start of the year. In particular, we are providing significant input and control advice into systems developing in HR, Finance and DoI.

4. Thirteen final follow-up reports have been issued with a further fifteen having reached draft report stage and eleven currently in progress. Nineteen follow-ups are planned for the last quarter of the year. We have also carried forward 34% of our original planned follow-ups into next year this is mainly due to delays in issuing final reports.

Opinion on the Adequacy and Effectiveness of MPS Systems

5. In my Annual Report for 2006/07 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 2007/08 the equivalent score is 2.7 overall (3.2 systems audits and 2 follow-ups).

6. It is encouraging to note that the follow up audits are indicating an improvement in internal control. We are continuing to work with MPS senior management and the Director of Strategic Finance in particular, to do all that we can to help ensure that this trend continues.

Current Investigations

7. As at 30 September 2007 we have taken on forty-one new cases since the 1 April 2007. This is an increase of one in the same period last year. We have also received two calls on the Right Line, the MPS telephone hotline for reporting wrongdoing. The level of calls received on the Right Line is disappointing and reflects a need refresh the facility – a task that is in hand with MPS Directorate of Professional Standards and MPS Directorate of Finance.

8. I have previously drawn attention to an investigation into the estate procurement issues surrounding Safer Neighbourhoods. Our work on Safer Neighbourhoods has concluded, with agreed arrangements now in place to continue the rollout of bases.

9. Our largest single piece of work in the period involved supporting the defence of a claim against the Authority by a vehicle removal contractor who went into liquidation in 2001. The Authority settled the matter for considerably less than the claim against it.

10. We are facing a significant task in the coming months with the work on Amex cards in support of MPS Professional Standards and Finance. The current diversion of two of my three investigative teams to this investigation will delay work in other areas.

11. We have continued to work on the National Fraud Initiative (NFI data) received from the Audit Commission. A number of the staff data match reports have been cleared, without significant results. The bulk of the creditor data matches (24,000 matches) have also been cleared, with the considerable assistance of MPS Finance, where there is a straightforward explanation for the match, simple error or data inaccuracy. We are now moving on to the remaining matches (approximately 2,000) – this is the area that should produce any evidence of fraud, if the matches provided by the Audit Commission prove to be valid.

Current Advice and Review Activity

12. We advised on the revision of the Authority’s Contract and Financial Regulations and are now working with the MPS in developing the systems to support the implementation of the Regulations. We continue to advise on the Transforming HR Programme, Finance and Resource Modernisation, MetaFor project, covert policing control environment and the work being undertaken in the MPS to support the 2012 Olympics. We have also worked with Finance Services advising on the development of the control framework around the use of corporate credit cards.

13. We continue to support members in their scrutiny role with audit senior management representatives attending the HR, IT, Estates and Procurement Oversight Working Groups.

14. We have issued the following final systems audit and follow up reports since September 2007.

Systems Audit Reports

•  SO2 Protective Security OCU
• Waltham Forest BOCU
• Use and Deployment of Volunteers
• Provision and Disposal of Fixtures and Fittings (C)
• TPHQ Business and Finance Systems
• Energy Policy and Procedures
• Systems for Intelligence and Detection

Follow Up Audit Reports

• Project Sapphire
• Business Continuity and Disaster Recovery
• Freedom of Information – Control and Enforcement
• IS Strategy and Planning
• Police Staff Recruitment
• Informants Management System
• Traffic Fines
• Benevolent, Relief and Welfare Funds

Staffing

16. I currently have thirty-five staff in post with one auditor and one administrative support officer vacancy. We have recruited an auditor to fill the vacancy and anticipate that they will be joining us in January 2008. However, a recent resignation makes it likely that there will continue to be an auditor vacancy in the current financial year.

Internal and External Liaison

Review Activity

17. We are continuing to work in liaison with the MPS Risk Manager 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.

18. My Deputy represents Internal Audit on the MPS External Inspection and Review Group. We also meet with the Audit Commission and HMIC on a regular basis to ensure that a co-ordinated work programme of inspection and review activity is carried out in 2007/08.

National Police Auditor Group

19. In May of this year I hosted the first national conference of Police Authority Auditors. This event included presentations on key developments in auditing in the police environment, discussions around strategy and approach and developing measures for benchmarking performance. I also undertook to attend a meeting of the Police Authority Treasurers to raise issues on behalf of the national group of auditors. This meeting recently took place and there is now a recognition that the auditing and treasurers groups need to work in liaison to ensure that developments in Internal Audit are properly addressed and appropriately resourced.

GLA and Benchmarking

20. Heads of audit in the GLA family meet regularly to discuss issues around commonality of reporting and comparing internal audit performance. A recent benchmarking exercise showed that MPA Internal Audit is cost effective and productive in comparison with its peers in the GLA family.

Home Office

21. I have also met with the Head of Internal Audit at the Home Office. We are currently developing a protocol for auditing the shared services that are of interest to both parties.

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 to be within the Internal Audit budget allocation 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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