Directorate of Audit, Risk and Assurance (DARA) annual report 2009/10

Report: 7
Date: 14 June 2010
By: Chief Executive

Summary

The attached report contains the 2009/10 annual opinion of the Director of Audit, Risk and Assurance on the effectiveness of internal control within the MPS, which is, the control framework has improved and there is a positive direction of travel but overall the control framework is not yet fully effective.

The report also summarises the work and performance of the Directorate of Audit, Risk and Assurance (DARA) and members are asked to conclude on the effectiveness of the MPA audit service.

A. Recommendation

1. The Corporate Governance Committee approves the attached draft Annual Report of the Director of Audit, Risk and Assurance for circulation to all members of the Authority.
2. The Corporate Governance Committee confirms that the MPA Directorate of Audit, Risk and Assurance provided an effective audit service to the Authority in 2009/10.

B. Supporting information

1. The attached report sets out the opinion of the Director of Audit, Risk and Assurance on the effectiveness 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 Appendix 2 a summary of DARA work during the year.

2. The Director of Audit, Risk and Assurance has concluded that the control environment has improved and there is a positive direction of travel with clearly defined plans in place to address areas identified for further improvement, but overall the control environment is not yet fully effective.

3. Key points to note from the draft annual report include:

Internal Control Environment

• The effectiveness of the framework for assessing and managing risk within the MPA and MPS continues to develop. Key improvements include increased oversight, improved risk registers and the introduction of a risk maturity model in the MPS. The Director of Audit, Risk and Assurance concludes that the MPS has established an effective framework for taking risk management forward but it is not yet embedded and operating consistently across the organisation.
• The overall assurance score for 2009/10 is 2.6, an improvement on last year’s score of 2.8 (and the highest since the assurance score was introduced in 2001/2). In particular, first time system audit reviews have improved from a score of 3.1 to 2.9 and follow up reviews from 2.5 to 2.4. This shows that although the internal control framework has not yet reached an adequate score of 2, improvements to the governance framework are now having a greater impact on the control environment.
• A total of 608 DARA recommendations were implemented during the year and the implementation rate has increased from 64% to 74%.
• Analysis of underlying control issues shows that 70% of DARA recommendations made in the second half of the year were as a result of controls not working effectively and 32% related to issues around supervision and review.
• Directorate of Audit, Risk and Assurance (DARA)
• Independent reviews of DARA conducted by the Audit Commission and the HMIC/Audit Commission police inspection team concluded that the MPA audit service is effective and meeting professional standards.
• DARA achieved 88% completion of planned systems audit work to report stage against a target of 90%. Audit time was spent broadly as planned and productivity has increased to 80%, exceeding the 75% target for direct audit time
• Sixty four systems and follow up reviews were finalised and 114 investigations (57 as a result of the National Fraud Initiative data matching exercise) conducted during the year.
• DARA met the 80% target set for overall customer satisfaction with the conduct of reviews exceeding the target in achieving 90% satisfaction.
• Timeliness of audit reporting exceeded targets at discussion and draft stage but needs to improve when issuing the final report.

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. The DARA work plan 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 DARA activities is met within the MPA’s directly managed budget. There is a risk of loss, fraud, waste and inefficiency if the Directorate of Audit, Risk and Assurance 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, Chief Executive, MPA

For information contact:

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

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