Directorate of Audit, Risk and Assurance Audit plan 2011/12

Report: 8
Date: 10 March 2011
By: Director of Audit, Risk and Assurance

Summary

This report sets out the proposed 2011/12 annual plan for the Directorate of Audit, Risk and Assurance.

A. Recommendation

That members

1. approve the 2011/12 annual plan for the Directorate of Audit, Risk and Assurance.

B. Supporting information

Approach to planning

1. The 2011/12 annual plan at Appendix reflects the Directorate of Audit, Risk and Assurance Strategy approved by the Committee in December 2010. There is a greater emphasis on risk based activity, providing risk and control advice to major programmes/projects and a focus on high risk/cost areas of the business, such as procurement and information technology.

2. The work programme supports the MPA’s strategic plan, Met Forward and the strategic priorities and objectives of the Policing Plan. It has been drawn up in consultation with the MPS management board, MPS senior managers, MPA senior management team, MPA business management group, Audit Commission and HMIC. The MPA Chief Executive, MPA Treasurer and MPS Director of Resources have agreed the plan.

3. The annual plan has been derived from our four year rolling risk analysis and the MPS assessment of key risks. Our risk model takes into account a number of factors, including financial values, impact on operational activities, reputational risk, likelihood of a major system failure and the length of time since the last audit. The MPS corporate risk register and business group risk registers have informed our overall assessment of risk used to determine the work programme.

4. Business group risk registers are at varying stages of development but have proved particularly useful in discussing key areas of risk with management board members and their senior managers. Key themes included; the need to deliver greater savings specifically under the Service Improvement Programme, the significant level of change taking place across the organisation and risks associated with meeting the operational needs of the Olympic and Paralympic Games.

5. Overall the plan will enable the Director of Audit, Risk and Assurance to provide the required annual opinion on the adequacy of the internal control framework and give assurance on the effectiveness of risk management in the MPA and MPS. The Director of Audit, Risk and Assurance opinion will form part of the MPA annual governance statement for the 2011/12 published accounts.

Key Elements of the 2011/12 Annual Plan

6. The plan at Appendix shown by business group, features three key areas of work; risk and assurance audits, interim assurance audits (follow ups) and risk and control advice to major programmes and projects.

7. Key risk and assurance audits include; the change management control framework, service improvement programme governance and delivery, people services, radio communications procurement and service delivery, contract management framework, gifts and hospitality, police officer performance appraisal framework, and policy development, implementation and review.

8. We intend to audit three specialist OCUs; the newly formed Firearms Command OCU, the Human Exploitation and Organised Crime OCU and the Counter Terrorism Security Command within Specialist Operations. We will also visit five B/OCUs to support our advisory work on TP development and Met Standards.

9. Our material systems work programme will be carried out in liaison with the Audit Commission to provide assurance on the adequacy of key MPS financial systems and associated IT controls. The follow up programme will provide assurance on progress being made in improving the internal control framework and managing risks in those areas we reviewed in 2010/11.

10. The scope of each audit review will also include, where appropriate, evaluating any potential risks associated with the Olympic and Paralympic Games and any value for money issues.

11. We are to provide risk and control advice to a number of key programmes and projects. These include; finance and resource modernisation, TP development, corporate real estate, covert control environment, the re-alignment of the Central Operations and Specialist Crime Directorates, and improving policing information.

12. Counter fraud activity includes a review of our fraud risk assessment and implementation of the fraud prevention strategy approved by the Committee in December 2010. We will continue to conduct investigations into potential fraud and abuse and to identify the risk and compliance issues leading to internal fraud. This informs our risk review and fraud prevention activity. Our analytical work programme will also identify potential areas of concern and help to provide assurance on the management of high cost and sensitive areas of the business.

Allocation of resources

13. Completion of the annual plan will provide an adequate level of coverage with 84% of the audit need being met. The allocation of DARA resources is shown as follows:

Table 1 Allocation of Audit days

Review

14. As previously agreed the Director of Audit, Risk and Assurance will revisit the plan in consultation with MPS management board, MPA senior management team and Members on a quarterly basis to ensure that we are responding appropriately to emerging issues and risk. Any subsequent proposed amendments to the plan will be reported as part of the quarterly updates to Committee.

C. Other organisational and community implications

Equality and Diversity Impact

1. The MPA’s commitments to equality and diversity are considered in all activities carried out by the Directorate of Audit, Risk and Assurance. In particular, next year’s DARA plan includes a review of the framework for managing equalities and diversity risks throughout the MPS. Each risk audit will include, where appropriate, a review of the equalities impact assessment conducted to support MPS policies and procedures. The conduct of DARA staff is also monitored through questionnaires to auditees on a range of matters related to audit and investigative work.

Consideration of MET Forward

2. The DARA annual work programme has been drawn up to support MET Forward as reflected in the Appendix. Completion of the Directorate of Audit, Risk and Assurance annual work programme, will make a key contribution to fighting crime, securing value for money and increasing confidence in policing.

Financial Implications

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

Legal Implications

4. There are no direct legal implications arising from the report.

Environmental Implications

5. There are no direct environmental implications arising from the report.

Risk Implications

6. The DARA annual plan is risk based and focused on reviewing key risks to achieving strategic objectives and priorities. Areas for improvement are identified as a result of DARA review activity and subsequent action taken will improve the management of risk.

D. Background papers

• Appendix – Directorate of Audit, Risk and Assurance Proposed Plan 2011/12

E. Contact details

Report author: Julie Norgrove, Director Audit, Risk and Assurance, MPA

For information contact:

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

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