Internal Audit progress report

Report: 6
Date: 1 December 2003
By: Director of Internal Audit

Summary

This report sets out progress for the first six months of the financial year in achieving the 2003/2004 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 2003.

A. Recommendation

1. Members to note the progress made in achieving the 2003/04 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 2003/04 Internal Audit plan

1. Unless any major unplanned work arises in the next three to four months, we are on course to meet or exceed the performance target set by the Treasurer for completion of our audit plan this year (audits finished and a report issued for 90% of the plan).

2. We have also carried out three successful audits of local Borough Operation Command Unit (BOCU) financial and business systems following which we have received requests from a number of BOCUs for a visit from Internal Audit to check their systems. I am confident that we can carry out five further BOCU reviews this financial year, just short of the planned target (and also short of the current demand for our services). If we are able to find any additional audit resource within our budget before the end of the financial year we will carry out further BOCU reviews.

3. We are currently advising on twenty-four of the twenty-eight areas published in our systems development programme at the beginning of the year. Work is due commence in the remaining four areas in the next two months.

4. We have completed twenty-one follow-up audits to report stage, with a further sixteen planned for the second half of the year. This is a significant improvement on previous years. However, as a result of some delays in issuing final reports, 46% of the follow-ups in the published programme are not now due until next year (the timing of the follow up review is dependent on the date the final report is issued).

Opinion on the adequacy and effectiveness of MPS systems

5. In my Annual Report for 2002-2003 I noted that, on the scale where 1 = excellent control and 5 = unacceptable control, the MPS had a score of 3.6 from our final audit reports - but for follow-up audits the score improved to 2.6. This gave an overall score of 3.3 for last year. At the half-year stage for 2003-04 the equivalent scores are 3.6 for completed audits and 2.4 for follow-up audits. High-Risk completed audits score better than average at 3.2. Overall, the current score is an improved 2.9.

6. Although these signs are hopeful, they reflect a gradual improvement in high-risk systems and little or no improvement in medium-risk systems. There is however a more marked improvement where we have competed follow-up audits. The overall level of control in MPS systems remains below the satisfactory level although some progress has been made.

Current investigations

7. The Forensic Audit Branch resources within Internal Audit continue to be directed towards our work on claims by interpreters and are currently supported by contract staff to finalise this line of enquiry within the current financial year. The first case to come to criminal trial resulted in a conviction and a 4 month custodial sentence. A substantial civil claim has been prepared against this offender. We have submitted reports to the MPS Directorate of Professional Standards on several other interpreters and further criminal prosecutions are anticipated.

8. The Director of Resources has invited Internal Audit to examine a number of issues in connection with the keyholder database (Project Penates) income generation project.

9. National Fraud Initiative work is coming to an end. We have now dealt with over 200 statutory requests for assistance from Local Authorities and the Department for Work and Pensions. These relate to MPS pensioners and staff who have failed to declare income when claiming benefits. We have also been dealing with 3 pensioner cases where pension payment has continued to made after the pensioner’s death and we expect at least one criminal case and the recovery of funds.

10. Since 1 April my Forensic Audit Branch have recorded 66 new cases (up from 44 in the same period last year). Most of the additional casework flows from the National Fraud Initiative work.

Current advice and review activity

11. Our work on key developing systems has included reviewing the Scheme of Devolved Financial Management. We are working with the Head of Business Support, Finance Services and the Devolution Team to address the issues that have arisen. We are also advising on the next formal evaluation of the Scheme that will be conducted by MPS Consultancy Services. Work also continues in supporting other high-risk areas including, the Outsourcing Action Groups, the upgrade of the MPS corporate accounting system, MetHR, partnerships and the MPS procurement framework.

12. In our aim to increase awareness of basic financial and business risks and controls, we have delivered training to 1,200 Police Inspectors under the MPS Financial Awareness Training Programme. This work will continue following the training needs assessment that is being conducted by the MPS Management Training Board. We have also recently conducted risk and control awareness training for staff in Finance Services and the Directorate of Information. This area of our work continues to be well received.

13. We have issued the following final reports on systems audited since the publication of my 2002-2003 Annual Report:

• Hillingdon BOCU Business and Financial Systems
• Creditor Payment System
• Police Collision Claims and Insurance
• Induction and Assessment of New Recruits – Police
• Payroll Starters and Leavers
• Claims Against the Commissioner
• Engineering Maintenance
• Interview Tapes – Retention, Storage and Disposal
• Provision of Legal Advice
• Professional Standards (C)
• Gifts and Hospitality Follow Up
• Pay and Negotiations Follow Up
• Road Accident and Intelligence Follow Up
• Financial and Accounting Advice Follow Up
• Responses to Audit Reports in High Risk Areas

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

High risk recommendations

15. Of the Nineteen high-risk recommendations reported as outstanding from the previous financial year at September’s Panel, eight have now been implemented.

16. Of the sixty-four high-risk recommendations we have made from April 2003 to September 2003, twenty-eight have now been implemented.

Staffing

17. Currently we have thirty-seven staff in post, the nearest to our budgeted figure since the creation of the MPA. The move back to a central location has attracted a higher quality and number of candidates for audit posts, enabling effective recruitment to fill vacancies.

Liaison with the MPS, partnerships and joined-up working

18. My six-monthly meeting with the Commissioner and his SMT enabled me to emphasise the positive impact that we have made on the organisation and the success of our BOCU work, which has led to many requests for similar audits. We have also continued our liaison with the MPS Risk Manager and internal inspection and review co-ordinating bodies.

19. We are hosting a National group of Police Auditors seminar later this month, at which the MPS Risk Manager will give a presentation.

C. Equality and diversity implications

We continue to reflect the diverse community within which the MPS and MPA operate. Since the year end three staff have been appointed, taking the percentage of visible ethnic minority staff up to 34% and increasing the number of female employees to eight.

D. Financial implications

The Internal Audit Budget is currently on target (any underspend on salaries is being used to fund the employment of contractors to assist with our investigation work).

E. Background papers

None

F. Contact details

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

For information contact:

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

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