To provide the Committee with a periodic report on the Internal Audit function for the period March to April 2021.
The Committee had before it a report submitted by the Council’s Internal Audit Manager (A.1) which provided a periodic update on the Internal Audit function for the period March to April 2021.
Further to Minute 17 (25.2.21) the Council’s Theatre General Manager (Technical) (Kai Aberdeen) attended the meeting and updated the Committee on the progress made in relation to the audit actions that had been required following the ‘Improvement Required’ outcome of the Princes Theatre Audit.
It was reported that a total of five audits had been completed since the previous update to the Audit Committee in March. Four of the five audits completed had received a satisfactory level of assurance. One audit (Fleet Management) had received an overall opinion of ‘Improvement Required’.
Fieldwork had been completed on a further three audits with the draft report yet to be finalised.
Fieldwork was ongoing on another six audits of which three were close to completion, therefore the majority of audit resource for the 2020/21 Internal Audit Plan would be used for the final three audits with the Revenues and Benefits Department.
Members were aware that the Internal Audit function issued satisfaction surveys for each audit completed. In the period under review 100% of the responses received had indicated that the auditee had been satisfied with the audit work undertaken.
It was reported that there had been no changes to the resources available to the Internal Audit Manager since the previous update in March 2021. The Internal Audit Plan was expected to be completed in order to provide the Head of Internal Audit’s Annual Opinion.
The Internal Audit Team continued to support the Silver Cell and Community Hub in the COVID-19 Emergency Planning response. The impact on resourcing was however marginal at this stage.
Outcomes of Internal Audit Work
The Public Sector Internal Audit Standards (PSIAS) required the Internal Audit Manager to report to the Committee on significant risk exposures and control issues. Since the last such report five audits had been completed and the final report issued. Four audits had received an ‘Adequate Assurance’ audit opinion. One audit had received an ‘Improvement Required’ audit opinion.
Fleet Management – ‘Improvement Required’ Audit Outcome
1. Fleet Management Policy
Members were informed that there was no Fleet Management Policy in place which would set the standards and regulations for employees to comply with when using Council vehicles. There was a set of guidelines for staff to follow, however, they did not incorporate key legislative requirements and lacked key processes and procedures to ensure adequate accountability and effective monitoring was in place, ensuring all operational requirements were recorded in one policy.
Agreed Audit Action:
That a Fleet Management Policy be finalised, reviewed and communicated in order to ensure fleet operations and drivers were compliant with both legal and corporate requirements, effectively monitored and provided adequate accountability.
2. Fleet Management Structure
It was reported that the Council planned to appoint a Transport Manager with the relevant qualifications, who would have responsibility to manage all of the Council’s fleet. Currently, the Officer acting up as Transport Manager was responsible for managing all Council vehicles, excluding Building Services vehicles.
Agreed Audit Action:
That the Transport Manager has responsibility of all Council Fleet, including Building Services to mitigate the risk of vehicles being inadequately managed.
3. Departmental Vehicle Tracking
The Committee was made aware that Service Managers had use of the Hubio Tracking Software. This was a real time monitoring system, which should be used to monitor and manage vehicle use and to regulate the purposes for which the Council’s fleet was being used for. However, not all vehicles were able to be tracked due to the increased number of lease vehicles being used within the Building Services Team and Engineering Team as well as the tracking systems available not being used as effectively as possible through system errors and irregular monitoring.
Agreed Audit Action:
All vehicles to be fitted with Hubio trackers that could be removed and installed when lease vehicles were changed in order to ensure that all vehicles being used by Council staff could be continuously monitored. There would be an additional cost to the service which was currently being explored.
4. Fuel Card System
Members were advised that the majority of fuel cards were allocated to a vehicle rather than an employee, this allowed flexibility to use different drivers for each vehicle. However, this created a lack of accountability if the fuel cards were abused and driver records were not kept up to date. Without restrictions in place regarding fuelling activity, it was difficult to monitor fuel consumption. Anything outside of business use, could be classified as a benefit and had further financial implications on the employee and the Council.
Agreed Audit Action:
Controlled fuelling processes and procedures were to be included within the Fleet Management Policy which all drivers must agree to and follow ensuring that adequate accountability was in place
Both avenues of allocating to individual staff or vehicle were to be explored regarding the allocation of fuel ID cards. Both processes would require improved supplementary processes to ensure adequate controls were in place.
Management Response to Internal Audit Findings
Members were aware that there were processes in place to track the action taken regarding findings raised in Internal Audit reports and to seek assurance that appropriate corrective action had been taken. Where appropriate, follow up audits had been arranged to revisit significant issues identified after an appropriate time. There were currently no high severity issues overdue (by more than or less than three months).
Having considered and discussed the contents of the Internal Audit Manager’s report and its appendix:-
It was RESOLVED that the contents of the report be noted.