Internal Audit Annual Report 2007/8

Report: 6
Date: 15 June 2009
By: Chief Executive

Summary

The report at Appendix summarises the work of Internal Audit for the year 2007/8, gives the opinion of the Director of Internal Audit on the adequacy and effectiveness of control within the MPS, which is that this continues to fall below an acceptable standard. The report also comments on the effectiveness of MPA Internal Audit to meet the requirements of the Accounts and Audit Regulations 2003 (as amended 2006).

A. Recommendation

That:

1. the Corporate Governance Committee approves the attached draft Annual Report of the Director of Internal Audit for circulation to all members of the Authority; and
2. confirms that MPA Internal Audit provided an effective audit service to the Authority in 2007/8.

B. Supporting information

1. The report sets out the Director of Internal Audit’s opinion on the adequacy of the control environment, including governance, risk management and internal control within the MPS and MPA for the reporting period. The report also includes, at Annex A, summaries of each audit completed with an update from senior line management commenting on the summary and indicating progress in implementing the recommendations, follow-up reviews and summaries of key areas of audit advice. Annex B to the Report gives a brief summary of investigations undertaken during the year.

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

• The Director of Internal Audit concludes that the adequacy and effectiveness of internal control in the MPS falls below an acceptable standard. Key controls have either not been applied, applied inappropriately or not applied in time to provide an adequate and effective control environment.
• On control weaknesses the Director of Internal Audit highlights a number of high-risk systems where internal control fell well short of the expected standard as well as a concern that overarching risk management arrangements are still not adequate. Systems where the Director of Internal Audit is particularly concerned include: crime-related property, where TP are now developing adequate arrangements but as yet systems are not in place; procurement, where improvements in some areas, e.g. contracts database are offset by continuing weaknesses over non-compliant contracts and poor contract management; management of additional Home Office funding; security vetting and clearances; building security; funding for royalty and diplomatic protection; and police staff overtime
• On control strengths the Director of Internal Audit highlights the covert policing environment and the Developing Resource Management programme
• The control environment has remained consistent with Internal Audit’s findings in 2007/8, although the overall picture during the lifetime of the Authority is of gradual improvements in governance and control.
• The implementation rate of accepted audit recommendations fell from 72% in 2007 to 63% in 2008.
• Internal Audit achieved completion of 91% of the planned systems audit work against a target of 90%.
• The investigative arm of Internal Audit, the Forensic Audit Branch, was diverted for a large proportion of the year to deal with a detailed investigation of the use of corporate credit cards by police officers. As a result the Branch was unable to maintain its usual level of losses stemmed, savings made and recoveries. However, cumulative recoveries and savings or losses for the last five years still totalled an impressive £24m.
• The Internal Audit customer satisfaction rate at 90% is higher than last year (88%) and exceeded our 80% target. The highest scores were 94% satisfaction that there was no discriminatory behaviour and 90% satisfaction with the way audits were conducted.
• Internal Audit has developed a fraud awareness educational programme for police officers and police staff in conjunction with the MPS and the Audit Commission. This was well received.
• Internal Audit issued a significant number of B/OCU reports and is continuing to work collaboratively with B/OCU Commanders, TPHQ and Finance Services to address the issues arising.
• Internal Audit has advised on a number of the major developing systems including: Transforming HR, Finance Modernisation Programme, MetaFor, MetDuties and MetTime projects. It has also received an increased number of requests for assistance and continues to expand its advisory role.
• Staff numbers employed in Internal Audit continue to reflect the diverse community that they serve.
• Internal Audit underspent by 2% on its budget.
• MPS Management accepted all except one high-risk audit recommendation.
• Internal Audit has made further progress in maintaining its effective working relationships with HMIC, Home Office Internal Audit, the Audit Commission and GLA ‘family’ internal auditors.

C. Race and equality impact

All field auditors and investigators have received appropriate training in equality and diversity issues and their performance within the MPS is monitored. Internal Audit planned 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 cost of Internal Audit activities is met within the MPA’s directly managed budget. There is a risk of loss, fraud, waste and inefficiency if Internal Audit recommendations are not effectively implemented. 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

For information contact:

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

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