Agenda item

To consider the attached report of the Head of Risk Management and Audit Services.

The Head of Risk Management and Audit Services submitted a report, which summarised the work performed by the Service Unit and provided assurances as to the adequacy of the Council’s system of internal control.

The key achievements of the service unit for 2017/18 were highlighted and included:-

·         The Internal Audit function was judged to be compliant with the Public Sector Internal Audit Standards following an External Peer Review in March 2018. 

·         The implementation rate for audit recommendations was 90%.

·         Customer feedback was very positive with continued high levels of satisfaction demonstrated on customer questionnaires.

·         Annual reports, plans and regular progress reports presented to Members via the Audit Panel and the Greater Manchester Pension Fund Local Board.

·         The Annual Governance Statement was produced in accordance with best practice and agreed timescales and no adverse comments were received from the External Auditors (Grant Thornton).

·         The National Anti-Fraud Network delivered its most successful AGM / Summit in London in October 2017, with 249 delegates representing 124 organisations.

·         Twenty three fraud cases were investigated during the year.

·         A School Bursar was charged with three counts of fraud by abuse of position, and after pleading guilty was sentenced to 9 months imprisonment suspended for 12 months and 180 hours unpaid work for misappropriating £19,000 in monies / equipment belonging to the school.

·         NAFN received an excellent inspection report from the Investigatory Powers Commissioners Officer in December 2017 with no recommendations received.

It was explained that the report presented to the Audit Panel in May 2017 provided an overview of the work planned for 2017/18.  The plan, as reported during the year, had been revised to ensure that it was aligned to changes in service priorities, risks, directorate structures and resources available.

The full year position of the audit plan by Directorate / Service Area was detailed, which displayed the approved and revised plan for 2017/18, actual days as at 31 March 2018 and the percentage completed.  In terms of the overall plan 1,485 actual days were delivered against a revised plan of 1,489.

Examples of the audit work undertaken in each directorate and a summary of the audit opinions issued in relation to system based audit work and also schools for 2017/18, compared to 2016/17 and 2015/16, was provided.

With regard to anti-fraud work, 23 cases had been investigated during the period April 2017 to March 2018 and a table detailing the investigations by fraud type, value, the amount recovered to date and potential annual savings was provided.  Seventeen of the cases involved frauds perpetrated against the Council by claimants or third parties.  Several of the cases were still being investigated or prepared for prosecution therefore the value of the fraud could change as the case progresses.

In relation to the National Fraud Initiative 2016 data matching exercise, it was reported that the majority of the investigations had been finalised and the results were summarised.

The report further detailed the following:-

• Risk Management and Insurance;
• Performance indicators;
• Quality Assurance and Improvement Programme;
• Independence of Internal Audit; and
• Audit opinion based on results of 2017/18 activity.

The report concluded that reasonable assurance should be taken as arrangements to secure governance, risk management and internal control were suitably designed and effectively applied.  It was accepted that the gross risk for the Council had increased in recent years (due to reduced capacity, whilst still having to deliver a significant change programme to meet financial challenges).  Controls were in place to mitigate these risks and where improvements had been highlighted, managers had agreed to implement the suggested recommendations.  This would aid the management of risk and support the overall control environment.

RESOLVED:

That the report be noted.