Review of recruitment and retention difficulties in the Internal Audit Directorate

Report: 14
Date: 1 November 2001
By: Clerk

Summary

The Human Resources Committee (HRC), Audit Panel and Finance, Planning and Best Value (FPBV) Committee have recently considered reports containing details of the review of recruitment and retention difficulties in the Internal Audit Directorate carried out by Cornwell Associates. Hay Management Consultants conducted an evaluation of the pay ranges to supplement this work and ensure consistency with other staff in the MPA Secretariat. This report contains details of the pay arrangements for Internal Audit staff and how existing staff will be assimilated onto the new pay ranges.

A. Recommendations

That Members agree the pay and assimilation arrangements for Internal Audit staff.

B. Supporting information

1. The programme of Internal Audit reviews is the responsibility of the Metropolitan Police Authority (MPA) by virtue of the Accounts and Audit Regulations 1996. The programme of Internal Audit reviews is established according to a risk assessment and assumes that all systems will be reviewed over a five-year period. In practice, the annual programme of internal audits has never been completed, although the last two years have seen a noticeable improvement on previous years.

2. There are a number of causes for this, namely:

• MPS management's failure to meet deadlines for responses
• the requirement for ad hoc investigations
• the continuing shortage of auditors, with a current vacancy level in excess of 30%

3. The major cause, the shortage of auditors, resulted in a review being carried out by Cornwell Associates as an extension of work previously carried out for the MPS Finance Department. The review confirmed that the salaries being paid to auditors were not competitive in the current employment market.

4. At its meeting on 6 September, the HRC agreed that the broad principles of the pay and pay ranges of Internal Audit Directorate staff outlined be accepted, subject to Hay evaluations being carried out of internal audit jobs, consultation with existing staff transferred under TUPE conditions, and the Treasurer making a more detailed report to the Audit Panel. Hay Management Consultants conducted a job evaluation, similar to that carried out for MPA Secretariat staff, and broadly supported the findings of Cornwell Associates.

5. At its meeting on 19 September, the Audit Panel agreed the recruitment and retention situation needed to be addressed and broadly supported the arguments of the Treasurer. The Audit Panel referred the issue to the Finance Planning and Best Value Committee, in view of the budgetary implications.

6. At its meeting on 4 October, FPBV approved the cost of the proposals, including advertising to fill the vacant posts. It agreed that it would be appropriate to fund them in the same way as the MPS Finance Department restructuring, i.e. via the MPA contingency.

7. As originally intended, this paper has now been returned to HRC to consider how the pay and assimilation arrangements will be applied. The pay ranges agreed at the last HRC were:

8. For vacant posts as Auditors and Senior Auditors (including Forensic Auditors), advertisements have been drafted offering salaries at around the mid range point. The pay ranges are in line with those recently advertised for Finance Department posts

9. For existing staff, the following criteria will be applied in relation to assimilation:

• Existing differentials based on experience, qualifications and past performance are maintained.
• The existing allowances of staff are assimilated into basic pay, e.g. Market Related Allowances (MRAs), location allowances, ADP allowances
• Forensic Auditor pay ranges and salaries are brought in line with systems auditors. (The Cornwell and Hay reviews concluded that there is no distinction in market conditions and job weightings between systems and forensic auditors).
• All staff move into the new salary ranges, receiving an increase of 5% except where current pay anomalies, e.g. forensic auditors, can only be addressed by a higher increase not exceeding 15% in any case. A significant majority of staff will receive 5%.
• The new pay ranges and salaries are effective from 1 October 2001.

10. Internal Audit staff currently agree their performance objectives as part of the performance management framework. All staff are performing to a satisfactory standard, with 4% having been assessed at performing above the requirements of the role.

11. All existing Internal Audit staff will be balloted on the assimilation arrangements agreed by this Committee. The opportunity will also be taken to assimilate terms and conditions of Internal Audit staff with MPA Secretariat staff.

C. Financial implications

The estimated cost of the revised salary budget (including vacant posts costed at mid point) will represent an increase of £97,000 (7.7%) in a full year. The part year cost in 2001/02 can be contained within the current budget because of the high level of vacancies. The Finance Planning and Best Value Committee has agreed the source for budget provision in 2002/03 (para 6). The final budget requirement will be reviewed in the light of the overall budget for internal audit.

D. Background papers

None.

E. Contact details

The author of this report is Alan Johnson, MPA.

For information contact:

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

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