Contents
Report 5 of the 27 May 04 meeting of the Audit Panel and this report sets out the proposed plan for the use of Internal Audit resources from 1 April 2004 to 31 March 2005.
Warning: This is archived material and may be out of date. The Metropolitan Police Authority has been replaced by the Mayor's Office for Policing and Crime (MOPC).
See the MOPC website for further information.
Internal Audit Plan for April 2004 – March 2005
Report: 5
Date: 27 May 2004
By: Treasurer
Summary
The report summarises the work of the Audit Panel for the year 2003/
A. Recommendation
Members are asked to agree the report as representing the Panel’s work over the last year for submission to the Authority.
B. Supporting information
Introduction
1. The Authority requires each committee to produce an annual report on its activities. The reports are intended to give a general indication of member performance. They will also provide material for incorporation into the Authority’s published annual report.
Meetings and membership
2. The Audit Panel has met on four occasions during the year at appropriate points in the annual audit cycle.
3. The Panel comprises five members. Sir John Quinton has been Chair of the Panel for the year. Other members have been Eric Ollerenshaw (Deputy Chair), Rachel Whittaker and Diana Johnson with one vacancy throughout the year.
Responsibilities
4. The Panel fulfils the Authority’s duties in relation to internal and external audit. It has general oversight of the effectiveness of the control systems in operation. The Panel also reviews the Authority’s draft accounts before they are finally approved by the MPA.
Accounts
5. The Panel reviewed the draft final accounts for 2002/03 and agreed drafting amendments. The Panel recommended their approval by the full Authority.
External audit
6. The Panel received the external auditor’s annual audit letter on conclusion of the 2002/03 audit. For the first time the external auditor was able to provide an unqualified audit opinion on the accounts. He stated that ‘the procedures used to produce the accounts have again improved and the matters that led us to qualify the accounts in the past have now been resolved’. Whilst warning against complacency, the auditor’s letter pointed to improvements in the MPA’s financial health, the systems of internal financial control, arrangements for maintaining standards of conduct and for preventing fraud and corruption, and arrangements for ensuring the legality of transactions with financial consequences.
7. Under the general heading of ‘performance management’ the auditor considered that significant improvement was still required to achieve compliance with the National Crime Recording Standard, but assessed the plans for implementation of activity based costing as being compliant and consistent with national guidance. Reviews over a range of areas assessing use of resources identified good practice as well as opportunities for improvement. However, although the 2003/04 Best Value Performance Plan was considered a useful document in setting out the MPA’s improvement priorities some of the performance indicators within it did not comply with statutory requirements thereby requiring the auditor to give a qualified opinion on the plan.
8. External audit reports on specific subjects are generally considered by the committee with the appropriate responsibility. The Audit Panel has received regular reports on the progress of the external audit programme, which, following a change in the Audit Commission’s audit planning timetable, has covered two years of account, 2002/04.
9. The Panel has agreed the external audit programme and fees for 2004/05. The external auditor has agreed a reduction of £25,000 against the fee originally proposed for the two years 2002/04 and the fee agreed for 2004/05 incorporates a similar reduction, which reflects the auditor’s view that the risk level of the MPA audit is falling.
Internal audit
10. The Panel has received progress reports on the internal audit programme for 2003/04 and has considered the Director of Internal Audit’s annual report. The annual report shows continuing improvement in the overall control assessment with significant progress in areas which have previously been the subject of internal audit review. In particular, high risk audit recommendations are generally being implemented in a timely manner. The report also reflects commendable improvement in the performance of internal audit with 90% of the systems audit programme completed within the year.
11. The Panel has approved the internal audit plan for 2004/05 based on an updated audit needs assessment and risk analysis for five years ahead. The plan envisages increased internal audit time spent on BOCU/OCU reviews consistent with the extension of devolved management. There will also be increased emphasis on audit’s advisory role assisting the MPS in a range of developments.
Next year
12. In the forthcoming year the Panel will continue to oversee the internal and external audit programmes. The Panel will be looking for continuing improvement in the Director of Internal Audit’s rating of the adequacy of internal control in the MPS. In reviewing the accounts the Panel will consider particularly the statement of internal control which is a new requirement for 2003/04. It is also likely that the Panel will be taking a leading role on behalf of the Authority in overseeing risk management arrangements in the corporate governance structures of both the MPA and the MPS.
C. Equality and diversity implications
The Panel addresses equalities aspects if and when they arise in relation to its business.
D. Financial implications
The cost of the Panel’s activities are met within the MPA’s directly managed budget.
F. Contact details
Report author: Peter Martin, MPA.
For information contact:
MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18
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