Internal audit plan for April 2002 to March 2003

Report: 9
Date: 19 March 2001
By: Director of Internal Audit

Summary

This report and associated appendices sets out the proposed plan for the use of Internal Audit resources from 1 April 2002 to 31 March 2003. The annual plan is based on an updated Audit Needs Assessment and Risk Analysis for the next five years ahead. The Treasurer has approved the proposed annual plan for submission to the Audit Panel.

A. Recommendations

1. The Audit Panel approves the proposed use of audit resources and notes the summary calculation of audit need and comparison to planned work set out in Appendices 1 and 2.
2. The Audit Panel approves the systems audit programme of Internal Audit work set out at Appendix 3.

B. Supporting information

Purpose and basis of the Annual Internal Audit Plan

3. The annual plan of Internal Audit work is designed to ensure that I have sufficient information to form an opinion on the adequacy of the arrangements to provide a proper and effective internal control framework for MPA/MPS business. 

4. The plan is risk based, with the highest current financial and business risks determining the systems that Internal Audit will review next year. In preparing the plan the risk assessment prepared by Willis and the views of District Audit have been taken into account. The proposed plan has been sent to the Director of Resources for comment and other MPS Management Board members have been approached about audits planned in their area of responsibility.

5. The plan ensures that key issues such as ethics and accountability, partnerships, programme management, budgetary control and financing of covert operations are addressed by relevant systems audits (see Appendix 3)

6. We have responded to MPS concerns on the volume of internal and external reviews and new and developing systems by ensuring that wherever possible we will offer proactive advice. We are also ensuring that only significant recommendations are formally reported. Lesser matters will be cleared locally during the audit. Although the plan shows a shortfall against need for routine audits, this is largely balanced by an increase in systems development and control advice work on key systems to help prevent weaknesses being built in.
7. The annual plan takes into account likely staffing levels and the need for some contingency time. The plan should enable 88% of the identified need for systems advice and routine audits to be met (3,199 audit days out of 3,646). Although only 72% of the need identified for investigative work is planned it will be sharply focused (1,406 out of 1,945 days). These calculations are set out in the reconciliation in Appendix 2.

Key themes of our work for 2002-2003

8. A major thrust for this coming year is to increase the advisory role of Internal Audit, particularly for new and developing business and financial systems. This will enable us to contribute on a broader base to the Treasurer’s Financial Management Strategy approved by the Finance, Planning and Best Value Committee. Concentrating more audit effort on advice will give an opportunity to build on some of our major pieces of advisory work in 2001/2002, such as those on outsourced contracts and budgetary control. 

9. We will offer advice to project boards for major projects on the controls to build into new processes and new and developing computer systems thus helping to prevent in-built weaknesses. Key areas for advice will include devolved financial management, best value, the new corporate HR system, property and future outsourcing.

10. The programme of systems audits will be supplemented by in depth reviews of financial, business and computer controls at local BOCU level. We will work in liaison with the ‘Going Local’ programme and the pilot project for devolved budgeting. 

Liaison with other Review Bodies

11. Time has been set aside in the plan to supplement the work of District Audit by carrying out health checks of the key financial systems. We will also be analysing data to support both this work and the Audit Commission’s National Fraud Initiative. We will continue to work together with District Audit to ensure that there is no unnecessary duplication of audit effort. To that end we will continue our liaison with the financial team of HMIC and the Best Value review team as well as the MPS internal Inspection Liaison and Analysis Unit.

Fraud Investigation and Liaison

12. We are planning for less investigative work next year to recognise the likely continuing shortfall in forensic auditors. Investigative work will still form 31% of the plan as against the need for 35% of the work to be for this purpose. It will be supplemented by approximately 100 days of analytical review work to enable a more focused approach with the level of resource available to us.

13. We will work in conjunction with investigative bodies in the MPS, including Professional Standards and the Fraud Squad. To that end, on behalf of the Treasurer we will be developing the draft anti-Fraud and Corruption strategy for the MPA in liaison with the MPS. We will also continue to share responsibility for the whistle blowing ‘Right Line’ with MPS Professional Standards.

C. Financial implications

The Annual Plan is designed to match the agreed budget for 2002-2003. There are no further financial implications.

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

Appendix 1

Appendix 2

Audit Plan 2002/2003 based on probable staffing levels

Reconciliation of need against plan

Appendix 3

Proposed system audit programme 2002-2003

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