Internal Audit progress report – 2001/02

Report: 8
Date: 19 March 2001
By: Director of Internal Audit

Summary

This report summarises current progress against the 2001/2002 Internal Audit Plan. In particular it highlights audit and investigative work concluded in the three month period since the last update to the December Audit Panel. 

A. Recommendations

1. Members note the progress against the 2001/02 Internal Audit Plan.

B. Supporting information

Progress against the 2001/02 Internal Audit Plan

2. At the Audit Panel meeting in December 2001 I anticipated that we would achieve 65% coverage of the original audit plan by the end of the financial year. Although we have had to continue to divert resources to assist the MPS in dealing with the aftermath of the collapse of the vehicle recovery contractor, we are on course to meet this revised target. 

3. The reasons for the variance against the original plan are as previously reported (i.e. staff shortages, re-direction of resources to emerging high-risk areas and the voluntary freeze on consultancy spend). However, in this quarter the Treasurer has authorised me to use a small part of our under spend on staff pay to buy in contractors to conduct four planned audits. This will enable me to achieve the 65% coverage. 

Current review work - including investigations 

4. Our work on the budgetary control framework has been taken forward by the Treasurer and supported by the Finance, Planning and Best Value Committee. The framework will now form the basis for controlling the budget in 2002/03. In addition the agreed principles will also be applied to the development work that is being carried out around devolved financial management. We will continue to advise the MPS and monitor progress throughout the coming year. 

5. We are providing considerable support to the MPS team dealing with vehicle recovery following the liquidation of the contractor. As well as advice on developing MPS systems to deal with vehicle recovery in future, we have provided detailed supporting information from our investigations and audit work for a counter claim against the £2.9 million being claimed by the liquidator from the MPA. The audit team working on this case has shown considerable commitment, often working long hours in some difficult conditions. I am particularly grateful for their efforts.

6. We are carrying out reviews of the contract management arrangements for the major outsourced services. This work dovetails and has been co-ordinated with District Audit’s review of Client Side Management Contracts. I am also continuing to provide advice to Procurement and Finance in the MPS on aspects of financial evaluation during the letting and management of contracts. 

7. Since my last report we have finalised our investigations on a number of cases involving misuse of computers; one involving pornography. One case is being progressed by the Police and two are in the course of disciplinary action. 

8. Our work on the National Fraud Initiative for this year is drawing to a close. Recoveries of £15,333 have been made, future losses have been prevented and one voluntary disclosure that entitlement to a pension has ceased obtained. We matched data with that supplied by other London Authorities and our Forensic Team followed up thirty cases involving pension payments and second occupations. As a result one person has been arrested for theft, one employee resigned prior to disciplinary action, one employee received a final written warning and six have received 'words of advice'. 

9. We have continued our active participation in Londonwide counterfraud initiatives with our membership of the Public Sector Partnership together with that of a number of working parties to the Partnership. We are also continuing to develop our close links with both the MPS Directorate of Professional Standards - where we have now produced a draft Memorandum of Understanding [1] in line with best practice - and SO6 (Fraud Squad).

10. In addition we have issued the following audit final reports since the last Audit Panel meeting:

• Gifts and Hospitality
• Warehousing, Stocks and Stores Control (OTSU)
• Energy Policy and Procedures
• Environmental Policy and Procedures
• Marketing and Advertising Contracts
• Security Clearance and Vetting
• Systems Supporting Underwater Searches
• Dispatch and Distribution – Follow Up

Responses to Audit Reports in High Risk Areas

11. I am pleased to report that at this stage there are no significant delays.

Implementation of High Risk Recommendations

12. At the previous meeting the Panel expressed concerns around the lack of data that had been supplied concerning the number of high-risk recommendations that had been implemented for reports issued in the first half of this year. I can confirm that during the first half of the year eleven reports containing sixty-six high-risk recommendations accepted by MPS management were issued. Forty-four of these (67%) have already been implemented.

13. I had also requested an update on those high-risk recommendations that remained outstanding from last year. Sixty-seven high-risk recommendations were outstanding from ten audits. I have now had responses for seven audits, indicating that twenty-nine high-risk recommendations have been implemented and a further five superseded by a change of system. A further ten recommendations are in the process of being implemented. Twenty-three recommendations remain outstanding.

Staffing

14. I currently have 31 staff in post from a complement of 43. Since we last met one of my most experienced Senior Auditors has retired and we have recruited one analyst. As a result of our recent recruitment campaign on the back of the pay and grading review, we are holding a series of interviews in early March. I will give a verbal update on progress at the Panel meeting.

C. Financial implications

None at this stage.

D. Background papers

None.

E. Contact details

Report author: Peter Tickner, Director of Internal Auditor, MPA.

For information contact:

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

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