Internal audit progress report 2003/04

Report: 6
Date: 22 March 2004
By: Director of Internal Audit

Summary

This report sets out progress made since December 2003 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; and
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. We remain on course to meet 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 completed six audits of local Borough Operation Command Units (BOCUs) financial and business systems. Seven of the ten planned BOCU audits will have been carried out by the end of the year, significantly more than in previous years.

3. We are also advising on twenty-four of the twenty-eight areas published in our systems development programme. The remaining four areas will now be reviewed as part of next year’s programme in line with the MPS proposed timetable for the development of these projects.

4. We have completed twenty-seven follow up audits to report stage, with a further four in progress. This is a significant improvement on previous years. However, as a result of some delays in issuing final reports, 50% of the follow ups in the published programme will now be included in next year’s work programme.

Opinion on the adequacy and effectiveness of MPS systems

5. As part of my annual opinion for 2002/03 I reported that, on the scale where 1 = excellent control and 5 = unacceptable control, the MPS had a score of 3.6 for completed audits and 2.6 for follow-up audits. The overall score was 3.3. At this late stage in the year the equivalent scores are 3.4 for completed audits and 2.1 for follow-up audits. This gives an overall score of 2.9 compared to 3.3 for last year.

Current investigations

6. We are bringing to a conclusion two further cases involving interpreters, both have been reported to Directorate of Professional Standards for criminal investigation and will also result in substantial civil recoveries of over-claimed fees. A third case has been reported to Directorate of Professional Standards for criminal investigation in relation to non-financial matters. A second interpreter, the former highest earning linguist in the MPS has now been convicted on nine out of ten criminal charges and she is awaiting sentencing. We will now resume the stayed civil proceedings to recover the monies we estimate have been fraudulently obtained. Civil proceedings have already commenced against the interpreter who I reported to you at the last meeting as being convicted on criminal charges in relation to his over-claiming of fees.

7. Our investigation into the circumstances surrounding the MPS Keyholder Database project (Project Penates) is drawing to a close. Two papers of our findings have been presented to the MPA Finance Committee and a report will also be presented to the Director of Resources.

8. Clooned MPS cheques are occasionally presented at a bank for payment. The latest, for £75,000, like all known previous cheques was detected before payment as a result of the robust procedures operated by the MPS Finance Directorate.

9. Since the last meeting we have provided advice to the GLA over an internal matter and assistance to the Directorate of Professional Standards on a number of matters.

10. Since 1 April the number of new cases recorded in 85 (up from 63 in the same period last year). The increase is due to additional work as a result of the National Fraud Initiative 2002.

Current advice and review activity

11. We are continuing to work with the Head of Business Support, Finance Services and the Devolution Team in reviewing the Scheme of Devolved Financial Management. We are advising on the issues that need to be addressed following our audit of the systems supporting the Scheme, prior to its planned roll out in April 2004. Other advice in high-risk areas includes our review of the Control Framework in operation for the Outsourcing Work Programme, the upgrade of the MPS corporate accounting system, partnerships and MetHR.

12. In our aim to increase awareness of basic financial and business risks and controls, we are issuing an Audit Advice Note to all BOCU Commanders and their management teams. The note is based on the findings emerging from our BOCU review work and will highlight some practical steps that can be taken to help achieve a sound control framework at a local level. We will also continue to support the Financial Awareness Training Programme that is currently under review.

13. We have issued the following final systems audit and follow up reports since our update report in December 2003:

• Management of Outsourced Payroll Services.
• Police Probationer Training.
• Statutory Pay and Net Pay Reconciliation.
• Data Protection Enforcement and Control.
• Brent BOCU.
• Programme Management Framework.
• Accounts Control SCD11.
• VAT Control.
• Receipt and Banking of Income.
• Fees and Charges Follow up.
• Catering Sales and Trading Follow up.
• Air Support Systems Follow up.
• Charities and Trusts 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. Eleven high-risk recommendations from previous years were reported as outstanding at the December 2003 Panel meeting. A further 30 high-risk recommendations have been made from January 2003 to December 2003. An oral update on progress made in implementing the high-risk recommendations will be given at the Panel meeting.

Staffing

16. I currently have thirty-six staff in post. Since the last Panel meeting a Senior Auditor has left to take up a post as the Deputy Head of Internal Audit at the University of the City of London and we are also in the process of appointing two Forensic Auditors.

Liaison with other bodies, partnerships and joined-up working

17. We are continuing to work in liaison with the MPS Risk Manager and internal and external inspection and review bodies. We also hosted a National Group of Police Auditors seminar where issues such as risk management and the impact of the CIPFA Code of Practice for Auditors was discussed.

C. Equality and diversity implications

Internal Audit continue to reflect the diverse community within which the MPS and MPA operate. Three staff have been appointed this year to date, taking the percentage of visible ethnic minority staff up to 33% and increasing the number of female staff to seven.

D. Financial implications

The Internal Audit Budget is currently on target (the underspend on salaries has been off set against the cost of employing 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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