High-risk audit recommendations

Report: 6
Date: 2 December 2010
By: Director of Resources on behalf of the Commissioner

linked to exempt item 19

Summary

This report updates Members in relation to the outstanding high-risk MPA Directorate of Audit, Risk and Assurance (DARA) recommendations, as at 28 October 2010.

A. Recommendation

Note the status of all outstanding high-risk recommendations made in relation to MPS control systems by the Directorate of Audit, Risk and Assurance.

B. Supporting information

1. This report summarises the present status of accepted high-risk recommendations made by the Directorate of Audit, Risk and Assurance and details the ongoing process by which the MPS responds to audit recommendations.

Progress report on high-risk audit recommendations

2. Since the last report to Corporate Governance Committee (CGC) on 13 September 2010, three further high risk audit recommendations have been made by DARA and accepted by MPS, two of which have been implemented. In addition, a further high risk recommendation from 2008 has also been implemented, with another now being classed as medium risk. Details of all of the high risk audit recommendations can be found in Appendix 1, with details of exempt audit recommendations at Exempt Appendix 2. Progress to ensure the outstanding recommendations are addressed as a high priority continues to be co-ordinated by the Compliance and Assurance Team (CAAT) in Finance Services.

Current Position

3. Including the new recommendations, there are 13 DARA high-risk recommendations outstanding to the MPS, with a further two outstanding to the MPA Treasurer.

4. The table below provides detail of the outstanding recommendations, comparing the current position with that reported to the previous two CGC meetings in June 2010 and September 2010.

Table 1: High-Risk DARA recommendations

*See table at Appendix 2.

Process by which the MPS responds to audit recommendations

5. The Audit and Inspection Protocol agreed in 2008 between the MPS and the audit and inspection services is currently being reviewed to ensure that all parties continue to work together to enhance delivery and response to audit and inspection programmes and ensure that maximum benefit is achieved.

6. Outstanding high-risk recommendations are reported on a quarterly basis to the MPS Performance Board. Additionally, MPA DARA is updated at meetings with Finance Services in relation to the development of audit recommendation tracking and reporting.

C. Other organisational and community implications

Equality and Diversity Impact

1. There are no direct implications for equality and diversity arising from this report.

Consideration of MET Forward

2. Any implications for the delivery of Met Forward will form part of the respective inspection and audit reports by the external inspection and audit services. In addition, any of the key outcomes will be addressed through implementation of the recommendations and any identified areas for improvement.

Financial Implications

3. The direct costs associated with the audit activity outlined within this report are covered within existing budgets. Any additional financial implications will form part of the individual audit reports and will be approved through normal MPS/MPA approval processes. In addition, any financial matters highlighted will be addressed by implementation of the recommendations and any identified areas for improvement.

Legal Implications

4. Regulation 4 of the Accounts and Audit Regulations 2003 (‘the Regulations’), as amended by the 2006 Regulations, states that the MPA are required to have a sound system of internal control which facilitates the effective exercise of that body’s functions, including arrangements for the management of risk, and the conduct of an annual review. There is also a legal requirement under the Regulations for a Committee to review the effectiveness of the system of control.

5. This report assists the MPA’s/MPS’ compliance with the requirements referred to above.

6. The Corporate Governance Committee is in receipt of delegated powers in respect of the internal system of control procedures including risk management and is in receipt of the appropriate authority to approve the contents of this report.

Environmental Implications

7. There are no direct implications on environmental issues arising from this report.

Risk Implications

8. Consideration of risk is an integral part of the respective inspection and audit reports by the external inspection and audit services. All recommendations by the MPA DARA will be graded ‘high’, ‘medium’ or ‘low’ risk as appropriate.

D. Background papers

None

E. Contact details

Report author: Nick Rogers, Director of Finance, Finance Services

For information contact:

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

Part 2: Exempt section of the report

Appendix 2 is not for publication as it contains exempt information by virtue of Part 1 of Schedule 12a to the Local Government Act 1972 (as amended)

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