Agenda item

To provide the Committee with a periodic report on the Internal Audit function for the period January 2022 to March 2022.

The Committee had before it a report of the Internal Audit Manager (A.1) which provided it with a periodic report on the Internal Audit function for the period January 2022 to March 2022 together with the outcome of an annual self-assessment of the Internal Audit Team that had been conducted by the Principal Auditor against the Public Sector Internal Audit Standards (PSIAS).

 

Internal Audit Plan Progress 2021/22

 

It was reported that a total of six audits had been completed since the previous update to the Committee in January 2022 with fieldwork was ongoing on another six audits. Five of the six audits completed had received a satisfactory level of assurance. One audit (Careline) had received an overall opinion of ‘Improvement Required’ and details were provided as follows:-

 

Strategic Direction of Careline

 

Issue identified:

 

“In 2021, Careline won the contract to provide local Careline out of hours’ coverage for Essex County Council (managed by Provide), using its established team and building on work already undertaken for them.

 

During the audit, it became apparent that the service had struggled to provide the expanded contractual service required and had consistently underperformed call response times, with the major contributing factors being the availability of trained officers and increasing volume of calls.”

 

Risk:

 

“If the contract was exited without due attention to detail and evaluating all options, there was considerable financial and reputational risk to the Council which could affect budget performance and the future effectiveness and integrity of the Careline service.”

 

Agreed action:

 

“Following the cessation of the contract, it would be timely to review the strategic direction of the service, especially considering the operational and staffing issues and difficulties of fulfilling larger contracts.

 

For the short term, the service will concentrate on exiting the Provide contract in a professional manner, including continuing liaison meetings and ensuring all data and GDPR obligations are carried out as required.

 

Subsequently, the service will be reviewed and future strategic direction decided. Current options include a pivot to organic growth from private users, smaller contracts and continuing to work with Provide in other capacities. There are also other options to explore, including integration of some healthcare services.

 

Any options or direction chosen should be undertaken in consultation with, senior management, the Portfolio Holder and the appropriate committee.”

 

Management of Careline Debtors

 

Issue identified:

 

“Service users should pay on a monthly basis, using a direct debit mandate. Where funds were unable to be taken, the Council's debtor’s procedure was initiated and a series of up to three letters were sent until payment was made.

 

Should no payment be received, then the debt was returned to the department for further decision and action.

 

Currently, there was only a very ad hoc process in place and no scheduled monthly action. A spreadsheet was maintained and updates added by the Officer managing the debt. The spreadsheet showed that several months could elapse between contacts with the debtor, and follow up was not always prompt.

 

This had led to a build-up of debt, some quite long term.”

 

Risk:

 

“Without managing debtors, there was risk of payments not being collected at the due time, or at all, which had an adverse financial and resource impact.

 

If long term debtors were not managed, it could lead to the position of unfairly allowing some users to continue to use the service for no charge, while the majority continued to pay.

 

Agreed action:

 

“Outstanding debts are to be reviewed and actions taken to progress a resolution and substantially reduce the outstanding amount.

 

Options may include write off, further chasing or review supply of service in the event of longer term non-payment. In the latter, there needs to be a formal process developed where especially vulnerable users are concerned.

 

In addition, a new process involving a responsible officer will be introduced to monitor and manage ongoing outstanding debtors on a consistent regular basis, once the Corporate Debtors Policy process of automated debt management letters has been exhausted and the debt returned to the department.”

 

The Committee was informed that the service had developed a Careline Recovery Plan (as detailed in Appendix B to the report) which incorporated the actions highlighted above as well as more operational actions identified during the audit. The recovery plan had been reviewed and approved by Senior Management and was ready to be progressed and implemented.

 

Progress on all audits in the 2021/22 Internal Audit Plan was evidenced in Appendix A to the report and the Internal Audit Manager was confident that sufficient work would be completed prior to providing the Head of Internal Audit’s Annual Opinion in June 2022.

 

Members were made aware that the Internal Audit Team currently had audits on Depot Operations and Depot Waste Management in the audit plan. Initially, when the audit plan was initially drawn up Officers had been unsure of the level of work needed for both of those reviews which was why two separate audits had been set up. After initial discussions it was now felt that those two audits could be merged and reported under the one title of Depot Operations as the areas were linked and it would save time with regards to Officer meetings and reporting arrangements.

 

The Committee was informed that during this time the Internal Audit Team was also planning and scoping audits within the 2022/23 Internal Audit Plan for the coming financial year.

 

Quality Assurance

 

The Committee was 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 was satisfied with the audit work undertaken.

 

Resourcing

 

Members were advised that the IAT had opted out of the 30 day consultation period required when a restructure took place. This would allow the Team to begin the recruitment process for the vacant Audit Technician post in the coming weeks.

 

Management Response to Internal Audit Findings

 

The Committee was reminded 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.

 

The number of high severity issues outstanding was as follows:-

 

Status	Number	Comments
Overdue more than 3 months	1	Planning Enforcement Policy – This had now been added to the table of outstanding actions since the last update from the Acting Director (Planning).
Overdue less than 3 months	0
Not yet due	2

 

Quality Assurance Improvement Programme (QAIP)

 

The Committee was aware that the Internal Audit function were required to undertake an annual self-assessment against the Public Sector Internal Audit Standards (PSIAS). This assessment was then used to create a Quality Assurance Improvement Programme (QAIP) which Officers used for the continuous improvement of the service. Due to resource limitations the Internal Audit Manager had been unable to undertake this assessment for the January 2022 meeting of the Committee and had requested that it be deferred. The assessment had now been completed by the Principal Auditor and the attached QAIP (as detailed in Appendix C to the report) had been reviewed and updated.

 

It was reported that the review had identified that a number of actions had been completed and therefore were compliant with the Standards particularly around staff training and experience. As the Council’s Auditor had completed her apprenticeship and was now a qualified Internal Audit Practitioner with over two years’ experience it was felt that the experience of the current team was sufficient to meet those standards and therefore it had been removed from the QAIP.

 

Members were informed that the actions relating to aligning Internal Audit’s assessment of risk with the Council’s risk management framework remained ongoing with further work needed at a departmental / operational level.

 

In addition, actions in the QAIP relating to ‘Proficiency’ remained unchanged. The Internal Audit Team remained a small team and it continued to do the best it could to meet those standards with limited resources. It had been identified that although all members of the Team have had training in fraud detection historically, it might be worthwhile to refresh the knowledge base.

 

In so far as measures to prevent ‘over-familiarity or complacency’ in internal audits, the Committee was informed that steps are taken to alternate who within the Internal Audit Team undertakes repeat audits.

 

The Committee was advised that a new action had also been identified relating to policy and procedures. The Internal Audit Manual had not been updated since 2017 and although the main body of the manual was still relevant it would need to be updated to reflect changes in software usage and audit techniques for future staff training purposes.

 

In considering the report from the Internal Audit Manager, the Committee heard from the Head of Customer and Commercial Services on the administrative issues that had given rise to the large number of debtors (with total debts to the Council of £20K) in respect of the Careline Service across the two years of the Covid-19 pandemic and related periods of lockdown restrictions.  He confirmed that processes were in place to underway to address those issues and the implementation of the plan to recover the situation was being overseen by a management board of senior management.  Some of those recorded as debtors had ceased to receive the service as they no longer required it.  As such, these debts would be cancelled. Others had stopped paying for the service, or never commenced payment, and these would be contacted individually. The practice was to provide non-payers with three notifications to request payment.  Those struggling to meet the Careline costs to use the service could now be sign-posted to the comparable service provided by Essex County Council as the costs to use that service was means-tested.

 

The Committee was further advised that the ending of the PROVIDE sub-contract arrangements with Careline had immediately improved the workload of Careline and enable it to look at options for the future.  These were being assessed internally by Officers with a view to ensuring the service was viable and sustainable going forward.  All those who had been passed to Careline through the PROVIDE sub-contract arrangement would now access the same service but through PROVIDE’s other arrangements. 

 

In respect of the table of outstanding actions set out earlier, the Committee expressed concern that the refreshed Planning Enforcement Policy remained outstanding.  The Committee was advised that the reviewed Policy was scheduled to be considered by the Council’s Corporate Enforcement Group in June 2022 and then submitted for approval.  The need to keep the Committee updated with progress with the development of this Policy was emphasised.

 

After a discussion it was:-

 

RESOLVED that –

 

(a)    the contents of the report be noted; and

 

(b)    the Quality Assurance Improvement Programme be agreed.