Directorate of Audit, Risk and Assurance (DARA) Progress Report

Report: 6
Date: 12 December 2011
By: Chief Executive

Summary

This report summarises the work carried out by the Directorate of Audit, Risk and Assurance (DARA) in the third quarter of 2011/12 and the key areas of activity planned for the fourth 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:

1. the work undertaken by the Directorate of Audit, Risk and Assurance in the third quarter of the year and the key areas of activity planned for the fourth 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 3rd Quarter 2011/12

1. In the third quarter of this year we have finalised 12 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 23 audits are at draft report stage and 26 underway.

2. Our advisory work on a number of key developing systems within the MPS continues, these include; the finance modernisation programme, business interests, asset management tracking and the language programme. We also recently had a particularly productive meeting with the TP Development Programme lead. We discussed the outcome of our recent BOCU reviews and have been working with the TP Development team in developing our BOCU review programme for this year, which is about to commence.

3. Appendix 1 also summarises our counter fraud activity to date. We currently have 47 cases of potential irregularities and/or fraud, 36 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 this will be completed in advance of the Audit Commission deadline of March 2012.

4. 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 and use of MPS vehicles.

5. We have been working in liaison with the National Fraud Authority who are about to launch their strategic plan for fighting fraud across the public sector. The case studies on areas of best practice produced to support the strategy include our fraud awareness workshops and fraud risk assessment previously presented to this Committee.

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 2.9 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 95% of recommendations from 2009 and 82% from 2010 have been implemented.

8. Our analysis of recommendations made to date this year shows that the main issues continue to be around record keeping (26%), management supervision and review (23%), guidance and training (15%) and authorisation and approval (15%). We are working with the MPS Head of Organisational Learning to ensure any underlying training and development issues are identified and addressed.

Key Reviews Planned for the 4th Quarter

9. In the fourth quarter of the year we plan to finalise those reports currently issued in draft. In particular, these will include; major incident response, procurement of major contracts, police overtime, project funding and control, procurement of covert assets, attendance management, and transport and travel arrangements. Our follow up reports on police operational training, security of information and criminal justice processes will also be finalised.

10. Our risk and assurance audit reviews of equalities and diversity risk management framework, ACPO TAM governance framework, change management control framework, material systems review and contract management are due to reach report stage by the end of the quarter. Our review of four B/OCUs will also be completed.

11. We will continue to focus our advisory work on two key aspects of the MPS Major Change Programme, TP Development and Finance Modernisation. We are also advising on the development of the governance arrangements for the Mayor’s Office of Policing and Crime. The next series of fraud awareness workshops will commence in January 2012.

12. Our planning for next year’s work programme is also underway. We are currently reviewing our risk assessment in line with the available MPS and MPA risk registers and will be consulting with senior management from January 2012.

Shared Internal Audit Services

13. We continue to provide 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 position has now been filled 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. A total of 92% 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. Thirteen follow ups have been carried forward to the first quarter of the next financial year due to the timing of the issue of the original final reports.

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

1. 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 Met Forward

2. 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

3. 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

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

Environmental Implication

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

Risk Implications

6. 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, MPA

For information contact:

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

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