Review of recruitment and retention difficulties in the Internal Audit Directorate

Report: 8
Date: 4 October 2001
By: Clerk

Summary

The Audit Panel at its meeting on 19 September considered a report (see Supporting material) concerning the pay arrangements for Internal Audit staff. Whilst broadly supporting the recommendations the Panel agreed to defer the final decision on the matter to the Finance, Planning and Best Value Committee.

A. Recommendation

That the Committee consider the recommendations in the attached report by the Treasurer.

B. Supporting information

1. At its meeting on 4 September the Committee received a report on the pay arrangements for MPA staff which had been considered by the Human Resources Committee on 6 September. The Human Resources Committee had agreed the broad principles of the pay of Internal Audit staff subject to consultation with existing staff and the Treasurer making a more detailed report to the Audit Panel

2. At its meeting on 19 September the Audit Panel considered the a detailed report by the Treasurer which is attached as appendix 1. The report by consultants Cornwell Affiliates is not included since the proposals recommended by the Treasurer are set out fully in his report.

4. The Panel noted that as was the case with all MPA staff the proposed new ranges incorporated several allowances e.g. a location allowance and that no specific location allowance would be paid once internal audit staff are on the new pay ranges.

5. The Panel noted the severe recruitment problems especially in the area of forensic audit work. Traditionally these posts have often been filled by retired police officers and the salary levels have substantially lagged behind those of systems auditors. The Hay evaluations demonstrate that forensic audit and systems audit work is of similar weight. To assimilate the forensic posts into the new ranges would mean an increase in salary of 15% rather than the proposed general increase of 5%. The same percentage increases would apply to a very small number of other posts. The Panel noted that there was a certain sensitivity about making increases of this order albeit that the high vacancy levels in this area of work meant that very few individuals were actually in post to receive the increase.

6. The Panel agreed that the present recruitment and retention situation needed to be addressed and broadly supported the recommendations of the Treasurer. The Panel felt that it would be more appropriate for the final decisions in this matter to be made by the Finance, Planning and Best Value Committee in the context of the overall budgetary position.

7. The following additional points are made by the Treasurer in support of implementing his recommendations.

• Delivering an adequate and effective internal audit, which is a responsibility placed directly on the Authority, requires provision of the necessary resources.
• With a current level of vacancies at 30% we will never achieve better than two thirds of the annual planned programme.
• The primary function of internal audit is to provide the Authority with an opinion about the adequacy of internal control. However in practice internal audit also identifies financial savings and limits financial loss. Over the last two years internal audit has identified savings totalling nearly £2 million.
• Under the proposals the majority of existing staff will receive a 5% increase in salary in order to move them on to the new higher pay ranges. Higher increases, limited to 15%, will be paid to a small number of staff whose current position is anomalous, principally forensic auditors.
• The new salary ranges are broadly on a par with those being offered for comparable professional posts in the MPS Finance Department.
• The proposed ongoing funding is from the same source as has been used for the enhancement of the MPS Finance Department.
• It is expected that other MPS civil staff will shortly benefit from the outcome of the Hay review.

C. Financial implications

These are set out in the attached report.

D. Background papers

None

E. Contact details

Report author: John Crompton, MPA.

For information contact:

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

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