Internal Audit progress report

Report: 6
Date: 8 December 2008
By: Director of Internal Audit

Summary

The report summarises the work of Internal Audit for the period April to December 2008.

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 2008.

A. Recommendation

That

1. members note the progress made in achieving the 2008/09 Internal Audit Plan; and agree the proposed postponement of two audits in the programme, 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 2008/09 Internal Audit plan

1. Work is underway on 77%of the systems audit programme and we are aiming to achieve the 90% target for completion of the systems audits to report stage by the year-end. We had planned to conduct an Estates Strategy review carried forward from last year but now intend to postpone this audit and provide appropriate input to the current Authority review of Estates in its place. The Director of Property Services has also asked that we postpone our review of the management of outsourced property services until the early part of the next financial year.

2. 40% of our B/OCU Programme for 2008/09 is underway with the remainder due to be completed in the third and fourth quarters of the year. We continue to receive excellent feedback, in particular from borough commanders, on this area of our work.

3. We are currently advising on the key areas of work published in our systems development programme at the start of the year. We are also on target to complete those follow up reviews that are due in 2008/09. 18% of the original follow up programme has been carried forward to next year, as the reviews are now no longer due (the timing of a follow up review is dependent on the date of issue of the original review).

Opinion on the adequacy and effectiveness of MPS systems

4. In my Annual Report for 2007/08 I noted that, on the scale where 1=excellent control and 5=unacceptable control, the MPS had an overall score of 2.8 (3.1 for systems audits and 2.4 follow-ups). At this stage of the year for 2008/09 the equivalent score is showing a slight improvement at 2.7 overall (3 for systems audits and 2.4 for follow-ups).

5. It is encouraging to note that our follow-up reviews continue to show an improved assurance score on that of first time reviews. Where internal audit recommendations have been implemented the internal control environment is improving. We are continuing to work with MPS senior management to ensure that appropriate action is taken to address areas of concern during the year.

Current investigations

6. We have taken on forty-five new cases since the 1 April 2008. This is broadly in-line with earlier years. The fraud prevention officer, a post approved under the MPA 2008/09 growth bid, has recently taken up post and is actively taking our fraud prevention and awareness work forward.

7. We have received five calls to date this year on the Right Line, the MPS telephone hotline for reporting wrongdoing; this is a marginal increase on last year despite the lack of publicity for the facility. The planned launch of the MPS confidential e-mail reporting facility and an associated re-launch of the Right Line have been delayed by technical difficulties, but these are expected to be resolved shortly.

8. Our most significant task in the last quarter has continued to be in relation to the MPS Amex corporate charge cards. Further information on this is a separate agenda item. Internal Audit investigative work on this should conclude within the next few months.

9. Investigative resources have also been allocated to issues relating to the award of contracts to Impact Plus. Contact is being maintained with the investigation team led by Sir Ronnie Flanagan and regular update meetings are planned. Support has also been provided to Dorset Police to assist their work in relation to the Amex cards held by two MPS ACPO officers.

10. A quick-time fact-finding review was conducted around the £30m of MPA funds deposited in the Icelandic bank, Landsbanki, at the time of its receivership and nationalisation. The report was presented to the November 2008 Finance and Resources Committee.

Current advice and review activity

11. 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 and have provided recent advice to the Developing Resource Management Project Teams and the revised MetaFor project. We have also been invited to contribute advice to the Improving Policing Information (IPI) Programme.

12. We continue to contribute to the work of the MPS Suppliers and Tenderers Risk Assessment Group (STRAG). STRAG considers the commercial risks associated with suppliers and alerts senior personnel responsible for major or business critical contracts to the potential for financial failure. The group has recently increased the frequency of its meetings from monthly to weekly as a response to the current financial instability.

13. We have issued the following final systems audit and follow up reports since the publication of my Annual Report:

Systems audit reports

• Accounts Control SO15
• Pay Reconciliation
• Systems Supporting Financial Reporting
• Business Performance Management
• Cash Security and Disbursement
• SCD Child Protection OCU
• Lewisham BOCU
• Use and Control of Firearms
• Crime Related Property
• External Data Communications
• Financial and Accounting Advice
• Strategic Planning, Budgetary Planning and Performance Management
• Management of Additional Funding
• Vehicle Removal and Statutory Charges
• VAT – Accounting and Control
• Police/Police Staff Support Outside the UK
• Camden BOCU
• CO15 Traffic OCU

Follow up audit reports

• Management Training and Development
• Catering Sales and Trading
• Catering Special Events
• Imaging Services, Identification Services, DNA and Fingerprints
• Tower Hamlets BOCU
• Haringey BOCU
• Human Resource Planning
• Systems Supporting Visual Identification
• Attendance Management
• Police Operational Training
• Systems for Intelligence and Detection
• Common Police Services (Support Inside the UK)
• Traffic Criminal Justice System
• SCD7 Serious and Organised Crime
• Greenwich BOCU
• Resourcing and Management of Specials
• Provision and Disposal of Fixtures and Fittings for Covert Properties
• Islington BOCU
• Complaints, Monitoring, Statistics and Records
• Public Relations – Funding and Control
• Hackney BOCU
• Bexley BOCU
• Management of Outsourced Transport Services

Staffing

14. I currently have thirty-five staff in post including the newly appointed Fraud Prevention Officer. I continue to have two auditor, one analyst and an administrative support officer vacancy. We will be running a further recruitment exercise in the New Year. To ensure that we are able to deliver this year’s programme we currently have two part-time contractors from the commercial sector in post.

Liaison with risk management and inspection and review activity

15. We are continuing to work with 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. The protocol between the MPS and Internal Audit has also now been launched. We are working to the principles agreed as part of this process aimed at ensuring maximum benefit is gained from audit review activity.

External liaison

16. My Deputy represents Internal Audit on the MPS External Inspection and Review Group and we are working with the Audit Commission, HMIC and MPS Finance Services to ensure that a co-ordinated work programme of inspection and review activity is carried out in 2008/09.

17. I have recently met with the Head of Audit of the Home Office. We are currently drafting a protocol to promote joint working where appropriate and to agree the boundaries of our respective areas of responsibility in auditing those systems that are of interest both to the Authority and the Home Office.

18. I meet regularly with the other heads of audit in the GLA family to discuss issues around commonality of reporting and comparing internal audit performance. As previously reported, in June I also chaired the second national conference of Police Authority Auditors in England and Wales. Following this event I recently attended the Police Authority Treasurer’s Group to give feedback on the audit related issues that were discussed at the Conference.

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

There is a risk of loss, fraud, waste and inefficiency if Internal Audit recommendations are not effectively implemented. Savings and recoveries made as a result of audit work enable funds to be directed towards core policing activities.

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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