Directorate of Audit, Risk and Assurance progress report

Report: 5
Date: 10 October 2011
By: Director of Audit, Risk and Assurance

Summary

This report summarises the work carried out by the Directorate of Audit, Risk and Assurance (DARA) in the second quarter of 2011/12 and the key areas of activity planned for the third quarter. It also provides the latest position on the adequacy and effectiveness of the MPS internal control environment based on the final reports issued to date.

A. Recommendation

That members note:

1. the work undertaken by the Directorate of Audit, Risk and Assurance in the second quarter of the year and the key areas of activity planned for the third quarter
2. an evaluation of the current position on the adequacy of the MPS internal control environment.

B. Supporting information

Work carried out in the 2nd Quarter 2011/12

1. In the second quarter of this year we have finalised 15 audit reports. Appendix 1 highlights the overall opinion, effective areas of control, the risk and control issues identified, and progress made in implementing agreed actions for each review completed. A further 26 audits are at draft report stage and 23 underway.

2. Our advisory work on a number of key developing systems within the MPS continues, these include; the finance modernisation programme, MetTime, business interests control framework, asset management tracking, and the language programme.

3. We finalised our B/OCU reports on Central Communications Command, SO1 Protection Command, Met Intelligence Bureau, TP BOCU Support Functions and issued our follow up of the Economic and Specialist Crime OCU.

4. Appendix 1 also summarises our counter fraud activity to date. We currently have 47 cases of potential irregularities and/or fraud, 39 of which have been started this year. We received 12,951 data matches from the Audit Commission in January 2011. Our work with MPS colleagues to resolve the matches is progressing well and we plan to complete the review by December 2011 in advance of the Audit Commission deadline of March 2012.

5. Work continues on our proactive investigative programme to analyse financial systems and transactional data on a regular basis. Currently, we are reviewing and analysing the MPS use of the Government Procurement Card. We are also planning a further series of fraud awareness workshops that will take place in the final quarter of the year.

Internal Control Environment

6. The overall assurance score to date for 2011/12 based on our final reports is 2.6 [1] with first time reviews scoring 2.8 and follow ups 2.3. Last year’s overall score was 2.5 (2.8 first time reviews and 2.3 follow ups). Follow up activity continues to show improvements to the control framework.

7. The progress made in implementing our recommendations for the previous two calendar years is shown at Appendix 2. The analysis shows that 94% of recommendations from 2009 and 81% from 2010 have been implemented. We are currently working with Finance Services to evaluate the recommendations outstanding from 2008 to determine if they remain relevant and to facilitate their implementation where appropriate.

8. Our analysis of recommendations made to date this year shows that the main issues continue to be around management supervision and review (25%), guidance and training (18%) and record keeping (16%).

Key Reviews Planned for the 3rd Quarter

9. In the third quarter of the year we plan to issue final reports for; CRIS resilience, Command and Control resilience, secure intelligence systems; dangerous dogs funding and management, Olympics procurement activity, police/police staff support inside the UK, gifts and hospitality and SO20 counter terrorism protective security command. Our follow up reports on vetting and security clearance, police officer and staff pensions, and data protection and FoI control and enforcement, and business continuity will also be finalised.

10. Our risk and assurance audit reviews of transport and travel arrangements, fuel cards management and control and the framework for the deployment and payment of linguistics are due to reach report stage in the next quarter. Key audits due to commence include; the change management control framework, creditors payments systems, benefits realisation, ACPO TAM governance framework, covert and discreet properties rentals, and material systems.

11. We will continue to focus our advisory work on two key aspects of the MPS major Change Programme, TP Development and Finance Modernisation.

12. The Audit Commission report on their findings following the completion of the fraud awareness workshops conducted in 2011 will be published and used to inform future fraud prevention activity.

Shared Internal Audit Services

13. We are now providing the internal audit service to the GLA and are developing our approach to a shared audit service for the London Fire Brigade to take effect from April 2012. This has the potential to create financial savings and provides an opportunity to optimise the use of all the available professional and specialist audit skills.

Staffing

14. We are currently carrying one vacancy at Risk and Assurance Auditor level. The Head of Counter Fraud recently retired and this position will be covered on a temporary basis whilst an evaluation of the senior management structure needed to support the shared audit service is carried out.

Directorate of Audit, Risk and Assurance Performance

15. The directorate is currently on target to complete 90% of the risk review work programme by the year end. 71% of risk based audits are underway, we are providing advice on areas included in our published programme, and are on course to complete those follow ups that are now due in 2011/12.

16. We are achieving our productivity target of 75% and are spending our time broadly as planned.

C. Other organisational and community implications

Equality and Diversity Impact

The MPA’s commitments to equality and diversity are considered in all activities carried out by the Directorate of Audit, Risk and Assurance. The conduct of our staff is also monitored through questionnaires to auditees on a range of matters related to audit and investigative work. 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.

Consideration of MetForward

Completion of the Directorate of Audit, Risk and Assurance annual work programme, which is designed to support all strands of MET Forward, and in particular MET Standards, is making a key contribution to fighting crime, securing value for money and increasing confidence in policing

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.

Legal implications

There are no direct legal implications arising from the report.

Environmental Implications

There are no direct environmental implications arising from the report.

Risk Implications

The report highlights areas of effective management of risk and areas for further improvement identified as a result of DARA review activity.

D. Background papers

None

E. Contact details

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

For information contact:

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

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