Internal Audit progress report

Report: 7
Date: 27 March 2003
By: Director of Internal Audit

Summary

This report sets out progress made since the last Audit Panel in achieving the 2002/2003 Internal Audit Plan.

The report also summarises the results of significant Internal Audit work to date and the adequacy and effectiveness of control in MPS systems where Internal Audit has issued formal reports since April 1 2002.

A. Recommendations

1. Members to note the progress made in the last quarter of the year in achieving the 2002/03 Internal Audit Plan.
2. Members to note the current Internal Audit evaluation of the adequacy and effectiveness of internal control in the MPS.

B. Supporting information

Progress against the 2002/03 Internal Audit Plan

1. I anticipate that the majority of audits in the 2002/03 Systems Audit Programme will be completed to reporting stage by the end of the financial year. We have also carried out twenty-eight follow-up reviews during the year, a significant improvement on 2001/02. In addition, we have continued to promote our systems development role by supporting a number of high-risk projects. However, to ensure that higher priority work auditing systems could be achieved, less time than planned has been spent on BOCU audits with less than a third of the programme being completed.

2. During the year I have been unable to fill vacancies as quickly as anticipated and I continue to be understaffed. This, coupled with delays in completing work carried forward from last year has added to the pressures in achieving the programme. However, the time saved on the BOCU audit programme and making use of our entire planned contingency has helped to ensure coverage of the systems audit plan for 2002/03.

Opinion on the adequacy and effectiveness of MPS systems

3. Overall the pattern from our completed work is little changed from my Annual Report on 2001/2002. The encouraging news is that our follow-up audits are generally showing an improved level of control in the systems examined compared to our original audit findings. However, the adequacy and effectiveness of control in systems being reviewed for the first time remains below an acceptable level.

4. We have issued eight audit reports in high-risk areas, scoring an average of 3.8 (1 = excellent control and 5 = unacceptable lack of control).

5. Twenty-six medium risk audit reports have been issued with an average score of 3.5. Line management responses have generally accepted our recommendations to improve control and we are taking a keen interest in ensuring that progress is made.

6. The average score for the thirteen follow-up reports issued to date is an almost acceptable 2.6 (a score of 2 or less indicates adequate or better control).

Current review work - including investigations

7. We have continued with our major investigation into significant over-claiming of fees by linguists, which has led to two being arrested and a freezing order over part of the assets of one of them being obtained in the High Court. An error leading to a former MPS police officer receiving two salaries for over two years has resulted in over £60,000 being recovered and the officer charged with a criminal offence. We are also examining data matches returned to us by the Audit Commission as part of the National Fraud Initiative 2002 and responding to requests for further information from London Borough fraud teams.

8. Our systems development work continues in support of key projects such as the Scheme of Devolved Financial Management, MetHR and the Outsourcing of Major Services. In liaison with the Finance Directorate and following the MPA Scrutiny Review, our work continues in reviewing the arrangements for identifying and managing partnership initiatives and funding.

9. We have issued the following final reports on systems audited since my last Report to Audit Panel:

• Forensic Medical Examiners Follow up
• Air Support Systems
• Catering Procurement Follow up
• Caution Administration System
• Charities and Trusts
• Property Rents Leasing and Rates
• Warehousing, Stocks and Stores – Ammunition
• Uniform Services – Procurement and Support
• CO14 Property Stores Follow up
• Fixed Penalty Notices Follow up
• Interview Tapes Retention and Storage
• Firearms Registration
• System Supporting Underwater Searches Follow up
• Provision and Disposal of Vehicles (C)
• Acquisition and Disposal of Property (C)
• Registration Storage and Security of Documents
• Warehousing, Stocks and Stores – Transport Stores
• Major Enquiry Systems
• Management of IS/IT Outsourced Services
• IS Strategy Follow up

Responses to audit reports in high risk areas

10. There are no responses currently outstanding for high-risk reviews.

Implementation of high risk recommendations

11. Since our last meeting although progress has been made and a number of the high-risk recommendations that I previously reported as outstanding have now been implemented, three areas continue to give concern. I am content that strenuous efforts are being made to improve arrangements over Security and Vetting, however, I can see no reason for the delays in implementing our recommendations for two audits. These are Gifts and Hospitality – where three recommendations remain outstanding from our report of January 2002 and; Forensic Medical Examiners (reported in January 1998) where nineteen high-risk recommendations have not been implemented.

12. The Chair of the Audit Panel has written to the MPS Management Board member (AC Hogan-Howe for Gifts and Hospitality and Keith Luck for Forensic Medical Examiners) responsible and requested that they attend the Audit Panel to explain why the delays are occurring.

Staffing

13. I have promoted one of my Senior Auditors to Assistant Director since the last meeting of the Panel. This has created a further vacancy at Senior Auditor level and we continue to experience problems in recruiting Forensic Auditors. Overall, I currently have thirty-three staff in post.

14. In 2001/02 the Audit Panel approved an identified need for forty-three Internal Audit staff and my budget was set accordingly. At the same time as I intended to recruit my own permanent members of staff, the Internal Audit consultancy budget was reduced significantly.

15. The current level of funding for Internal Audit in 2003/04 allows me to recruit up to thirty-seven staff and I no longer have the capacity to fund additional work via consultancy. This inevitably impacts on my ability to deliver the identified audit need in full.

Liaison with other bodies, partnerships and joined-up working

16. We also continue to co-ordinate with other review agencies and to attend the newly formed group set up by the MPS for this purpose. I have also met with HMIC and the Audit Commission to discuss work programmes and the outcomes of our respective reviews.

C. Equality and diversity implications

None to report.

D. Financial implications

It is likely that MPA Internal Audit will underspend by around £80,000-£90,000 on a budget of £1.6 million for 2002-2003.

E. Background papers

None.

F. Contact details

Report author: Peter Tickner, Director of Internal Audit

For information contact:

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

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