Agenda item

Report attached.

The Head of Assurance submitted the Quarter 2 progress report for the Committee’s attention. At the previous meeting in September the Head of Assurance had given a reasonable assurance that the internal control environment was operating adequately.  Based upon the work undertaken in quarter 2 no material issues had arisen that would impact on that opinion.

At the September meeting the Head of Assurance had advised the Committee that as a result of the time taken to complete the restructure and the fact that the restructure was not fully populated the service would be unable to deliver the entire work plan.

Officers had undertaken a review of the work plan and identified a number changes to take account of the number of days previously added to the plan and identifying a number of audits which could be moved back to early 2017/18 or where the number of hours allocated to the work could be reduced. The outcome of this review was that Havering audits would be reduced by 74 days and oneSource audits by 45 days.

The Committee noted the revisions to the work plan.

To make the restructure work more effectively a ‘One Policy, Strategy and Procedure’ approach was being adopted to achieve a consistency of approach across the three boroughs. Some of this work had started before the formal creation of the new Assurance Structure. In particular, a consistent approach to the Audit Opinions given at the completion of each audit had been introduced earlier this year.

Previously the Havering reports had one of four opinions. Earlier this year the Internal Audit team at Havering had introduced the following revised levels of assurance:

• Substantial Assurance – There was a robust framework of controls and appropriate actions were being taken to manage risks within the areas reviewed. Controls were applied consistently or with minor lapses that do not result in significant risks to the achievement of system objectives.

• Moderate Assurance – Whilst there was basically a sound system of control within the areas reviewed, a need was identified to enhance controls and/or their application and to improve the arrangements for managing risks.

• Limited Assurance – There were fundamental weaknesses in the internal control environment within the areas reviewed, and further action was required to manage risks to an acceptable level.

The Committee noted the revised level of Assurance and asked officers to review these on a regular basis.

Having considered the audit reports the Committee noted that the audit of the Direct payments system had only received a limited assurance. The Head of Assurance advised the Committee that a follow up report would be coming back to the Committee 6 months from the date of the audit opinion.

Details of the proactive audit and counter fraud work were provided to the Committee. The bulk of the Investigations Team’s time had been focussed on the Tenancy Fraud Project which to date had resulted in net savings of £3.1m.

The Head of Assurance informed the Committee that he was reviewing the work of the Proactive Audit and Counter Fraud service with the intention of focussing resources in high risk areas and passing some of the low risk work back to managers and HR. The areas which were being considered for passing back to management and HR included misuse of Internet. If this was acceptable to management the Policies, Protocols and Procedures would need to be revised.

Officers would be reviewing the Audit Charter and this would be submitted to the next meeting for approval. This would include details of the new levels of assurance.

The Committee supported the need to refocus resources towards tackling high risk areas.

Officers advised the Committee of issues that arose from claimants who had ’no recourse to public funds.’ In certain circumstances the local authority had an obligation to provide support. The London Borough of Bexley had seen an increase in the number of claimants with a proportionately higher number of fraudulent claims. Conversely the London Borough of Newham had seen a decrease. The problem appeared to be a lack of understanding of the regulations by front-line staff and processes and training were being updated to tackle the issue.

The Committee requested an update for the next meeting on the number of claimants in the three boroughs and an estimate of the cost of the fraudulent claims.