reconciliations and a general lack of independent checking by 99x64kq9


									            Homes for Northumberland – Review of Rent Debit and Reconciliations 2009/10

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                                                 Page 1 of 18
1     Introduction

1.1   This audit was undertaken in accordance with the agreed 2009/10 Annual Audit Plan.

1.2   Testing carried out during the audit has concentrated on transactions, processes and systems during the financial year

1.3   The Audit staff involved were Sam Wood, Auditor and Chris Henderson, Senior Auditor.

1.4   Recommendations set out in this report are categorised as follows:

          Priority – High: A fundamental control issue, or other matter, that must be addressed immediately.

          Priority – Medium: A significant control issue that must be addressed within three months

          Priority – Low: An issue that must be addressed within the next year.

2     Background

2.1   Homes for Northumberland came into existence on 1 April 2009 following Local Government Reorganisation (LGR) in
      Northumberland. The company was originally founded in February 2002 as an Arms Length Management Organisation
      (ALMO) with the name of Blyth Valley Housing in order to manage the housing stock of the former Blyth Valley Borough

2.2   On 1 April 2009 the company changed its name to Homes for Northumberland and took over the management of the
      housing stock of the former Alnwick District Council. Homes for Northumberland is a non-profit making company. The
      new organisation manages over 8,500 homes on behalf of the Council under the terms of a formal management

                                                         Page 2 of 18
2.3   Northumberland County Council is responsible for setting the rent levels on an annual basis. It should be noted that in
      August 2009 for the first time a rent reduction exercise was carried out following an Amending Determination to the
      Housing Revenue Account Subsidy Determination by the Department of Communities and Local Government (DCLG).

2.5   The former Rents Manager at Alnwick has recently been appointed to the Neighbourhood Housing Manager’s position
      at Alnwick. Homes for Northumberland are now responsible for rent collection and reconciliations within the rent

2.6   Blyth and Alnwick currently use different computer administration systems. Blyth uses the Anite OHMS system and
      Alnwick uses the Northgate system. The Tenants Rental Account and Housing Revenue Account for both areas are
      maintained within the General Ledger of Northumberland County Council’s Oracle E-Business Suite. Reconciliations
      are therefore undertaken within the computer administration systems themselves and also with the Oracle E-Business

3     Operational Structure

3.1   The Director of Resources at Northumberland County Council is ultimately responsible for provision and maintenance of
      Northumberland County Council’s General Ledger within the Oracle E Business Suite.

3.2   The Director of Finance at Homes for Northumberland is ultimately responsible for the provision and maintenance of the
      two computer administration systems used by Blyth and Alnwick.

4     Audit Objectives/Approach

4.1   During the course of the audit discussions have been held with the following officers:

          Iain Henderson, Director of Finance and Resources, Homes for Northumberland
          Richard Bryan, Regional Operations Manager, Blyth
          Ian McLackland, Regional Operations Manager, Alnwick
          Dave Swaddle, Rents Manager, Alnwick
          Barry Gibson, Lettings Officer, Alnwick

                                                          Page 3 of 18
          Fiona White, Technical Officer, Alnwick
          Richard Tosney, Debit Control and Finance Officer, Blyth
          Andrew McGregor, ICT Manager, Blyth
          Philippa Storey, Housing Needs Manager, Blyth
          Sandra Richardson, Accounting Assistant, Financial Management, NCC
          Colin Logan, Head of Financial Services, NCC
          Elaine Gibb, Development Officer, NCC

4.2   Our work has concentrated on the following areas:

         Written Procedures
         Rent Setting
         Void Properties
         Deleted/Sold Properties
         Properties with ‘Nil’ rents payable
         New Tenancies
         Access to Computers and Security
         Reconciliations between the Housing Rents Systems and the General Ledger
         Reconciliations between the Housing Rents Systems and the Cash Collection System
         Reconciliations between the Housing Rents Systems and the Housing Benefit Systems
         Reconciliations at the 2008/09 Year End

4.3   Section 6 of this report highlights areas where it is recommended that improvements in control are made.

5     Audit Opinion

5.1   This section of the report is important in that it provides an audit opinion of the System/Service under review and highlights
      the degree of reliance that can be placed upon the internal control mechanism. The Audit Service uses a Standard
      Definition of Assurance document which categorises the levels of assurance as follows:

                                                           Page 4 of 18
                                                                       Assurance Classifications
       Full assurance           Full assurance that the system of internal control is designed to meet the organisation’s
                                objectives and controls are consistently applied in all the areas reviewed.
       Significant assurance    Significant assurance that there is a generally sound system of control designed to meet the
                                organisation’s objectives. However, some weakness in the design or inconsistent application of
                                controls put the achievement of particular objectives at risk.
       Limited assurance        Limited assurance as weaknesses in the design or inconsistent application of controls put the
                                achievement of the organisation’s objectives at risk in the areas reviewed.
       No assurance             No assurance as weaknesses in control, or consistent non-compliance with key controls, could
                                result (have resulted) in failure to achieve the organisation’s objectives in the areas reviewed.

5.2   Homes for Northumberland came in to existence on 1 April 2009, at the same time that the newly formed Northumberland
      County Council Unitary Authority came into existence following Local Government Reorganisation. As a result both
      organisations have experienced significant ‘teething’ problems during 2009/10 as systems and processes become

5.3   During the 2009/10 financial year Blyth and Alnwick have used different administration systems. Blyth has continued to use
      the Anite system and Alnwick has continued to use the Northgate system for rents administration. It is understood that
      plans are in place to migrate the data from the Alnwick Northgate System to the Blyth Anite System during 2010/2011. It is
      important that this migration is progressed as soon as possible so that common procedures and practices can be adopted.

5.4   Audit testing has highlighted a lack of documented procedures in relation to reconciliations and a general lack of
      independent checking. Issues regarding reconciliations at Alnwick, particularly between the Northgate System and the
      General Ledger are also a cause of concern particularly as responsibilities at the time of the audit were not clear.

5.5   As a result of the problems identified above and within section 6 of this report we can only offer limited assurance as
      weaknesses in the design or inconsistent application of controls put the achievement of the organisation’s objectives at risk
      in the areas reviewed. We are, however, aware that this year has been particularly difficult as staffing structures are
      reviewed and processes reviewed and embedded and we are confident that Homes for Northumberland will address these
      issues, increase control and reduce future risk to the organisation’s objectives.

                                                          Page 5 of 18
6        Matters Arising and Recommendations

         Findings from the 2009/10 review of Homes for Northumberland – Rent Debit and Reconciliations are detailed in the
         following table:

Ref             Risk                   System Details                              Finding                              Recommendation
Rent Debit
6.1     Objective: Procedures are operated in accordance with legislation and the organisation’s financial regulations and agreed
                       written policy
6.1.1   Without a clear policy The organisation should Rent calculation is currently the responsibility of 1.            The responsibility for
        misinterpretations      have a clear, written, NCC. At Blyth the rent was calculated by an calculating rents for Homes
        could occur             formal policy on rent Accountant who has now left the Authority. At for                          Northumberland
                                calculation and collection Alnwick the rent has been calculated by the Rents Properties from 2010/11
                                                             Manager however he has recently transferred to onwards            needs     to  be
                                                             the employment of Homes for Northumberland. determined.
                                                             The     Accounting     Assistant     in    Financial Priority: High
                                                             Management at NCC is now the key contact for Responsibility:               NCC –
                                                             the Housing Revenue Account however she has Financial Management
                                                             never calculated rents before.
                                                                                                                  2.      A policy for rent
                                                             There are no formal written policies at Alnwick or calculation        should    be
                                                             Blyth with regard to rent calculation although both documented.
                                                             use the Subsidy Determination issued by the Priority: High
                                                             DCLG.                                                Responsibility:       NCC –
                                                                                                                  Financial Management
6.2     Objective: There is documentary evidence to support the calculation of all gross rent amendments
6.2.1   Errors    could     be The calculation record The original rent calculation figures for both Blyth 3. Rent Setting calculation
        made      and       go should be checked and and Alnwick were obtained for the 2009/10 should be checked and
        undetected              initialled as correct by an financial year. Although both sets of calculations signed as correct by a
                                experienced,          senior were found to be correct neither set had been second employee to reduce
                                employee,                    checked and signed by a second employee.             the risk of error.
                                                             It is understood that the figures for Blyth Priority: High
                                                             calculated by the Accountant have been checked Responsibility:             NCC –

                                                                 Page 6 of 18
                                                   by the current Finance Manager - Performance         Financial Management
                                                   and Technical however there was no formal sign
                                                   The Alnwick figures are calculated by the Rents
                                                   Manager and the Northgate Rents System also
                                                   generates a set of calculations based on
                                                   parameters entered into the system by the
                                                   Development Officer. A sample of properties are
                                                   checked to ensure that the spreadsheet
                                                   calculation and the system generated figures
6.2.2   Amendments     could The originals of the Blyth                                                 4. Suitable security should
        subsequently     be calculations should be The rent calculation spreadsheet is currently held   be put in place to ensure that
        made                 held independently of by the Accounting Assistant in Financial             the      rent       calculation
                             housing               Management at NCC. When asked to supply the          spreadsheets for Alnwick
                                                   original rent calculations for April 2009 the        and Blyth are not modified in
                                                   Accounting Assistant experienced difficulties        any way.
                                                   accessing the spreadsheet due to its size. The       Priority: High
                                                   sheet was found to be distorted however with the     Responsibility:       NCC –
                                                   help of Computer Services it was recovered and       Financial Management
                                                   is now held on Financial Management’s Shared
                                                   Drive at NCC. Many people have write access to       5. A hard copy of the rent
                                                   this drive and it would be possible for the          calculation    spreadsheets
                                                   spreadsheet to be modified, either by accident or    should be retained following
                                                   deliberately.                                        each years calculation as a
                                                   Alnwick                                              backup in case the electronic
                                                   The rent calculation spreadsheet for Alnwick is      copy is lost, destroyed or
                                                   held on the Rent Manager’s own computer. The         modified.
                                                   Northgate system also retains the parameter          Priority: High
                                                   information input by the Development Officer.        Responsibility:     NCC –
                                                                                                        Financial Management

                                                           Page 7 of 18
6.3     Objective: All relevant records and accounts are updated to record rent increases, payments and refunds
6.3.1   Properties may be Annual             independent Blyth                                               6. Consideration should be
        taken out of the checks           should      be Information regarding void properties is entered given to undertaking periodic
        rental masterfile in undertaken to confirm directly onto the Anite system. There is no other independent             checks  to
        error or deliberately that the dates when record held of void properties. The Homefinder ensure                 that   for  the
        for personal gain.    properties were shown as Section is mainly responsible for void control organisation’s properties the
                              void during the year however as the Anite system is the only system dates when properties were
                              agrees with the dates per used to record and monitor voids no independent shown as void during the
                              the masterfile             checks are undertaken to ensure that the year agree with the dates in
                                                         information is correct.                             the Rents System.
                                                         Alnwick                                             Priority: Medium
                                                         The Lettings Officer is mainly responsible for void Responsibility: HfN
                                                         control. Since October 2009 a spreadsheet has
                                                         been used to monitor voids on a weekly basis.
                                                         Prior to this a whiteboard combined with a paper
                                                         ‘Record of Vacancies and Lettings’ form was
                                                         used. No independent checks are undertaken to
                                                         ensure that the information regarding voids on the
                                                         Northgate system is correct.

                                                             Page 8 of 18
6.4     Objective: Rent is charged on all housing property and is correctly calculated and valued
6.4.1   Failure to set up Checks should be made Blyth                                                          7. Part of the rent setting
        payment     methods to ensure that the total Once the rent increase has been entered onto the          process at Alnwick should
        may result in the gross rents income figure Anite system by Northgate Consultants the Debit            include checks to ensure that
        build     up      of collectable     per   the Control & Finance Officer verifies that the correct     the total gross rents income
        unnecessary arrears masterfile (i.e. number of rents have been input by comparing values from          figure collectable per the
                             properties multiplied by the original rent calculation spreadsheet to an          system agrees to the gross
                             the rent per property) output report from the Anite system.               The     rent income expected per
                             agrees to the gross rent reconciliation for April 2009/10 was obtained. A         manual             calculation
                             income expected.          small number of discrepancies had been noted            spreadsheets.
                                                       and followed up by the Debit Control & Finance          Priority: High
                                                       Officer at the time of the reconciliation. An overall   Responsibility: HfN
                                                       difference of £1.99 was noted due to roundings.
                                                       The Rents Manager calculates the rents for each
                                                       property on a rent calculation spreadsheet. The
                                                       Development Officer inputs parameters onto the
                                                       Northgate System. The Rents Manager then
                                                       checks for a small sample of properties that the
                                                       figures agree. The overall gross rent figure on the
                                                       rent calculation spreadsheet is not reconciled to
                                                       the overall gross rent figure on the Northgate

                                                               Page 9 of 18
6.5     Objective: All rent transactions are initiated promptly for new and existing tenants
6.5.1   Failure to set up Rent cards, standing Blyth                                                            8.    A record should be
        payment     methods order,      direct      debit The Homefinder Section sets up new tenancies          maintained of the date that
        may result in the mandates, swipe cards including the rent account and start date on the                new tenants are issued with
        build     up      of etc should be promptly Anite System. The Debit Control & Finance                   their   rent    card  and/or
        unnecessary arrears sent to new tenants prior Officer produces rent cards based on the                  account       number    and
                             to the date their first rent information he receives on the weekly allocation      payment details. This could
                             payment is due.           A reports from the Homefinder Section.                   be facilitated using the
                             statement            should The Debit Control & Finance Officer has recently       ‘notes’ section of the rents
                             accompany this showing started to maintain a record of when he issues              system     for   each   new
                             the gross and net rent rent cards, mainly as a result of some tenants              account.
                             due                          claiming that they have not received them.            Priority: Medium
                                                          On most occasions rent cards are issued               Responsibility: HfN
                                                          following the start of the new tenancy. Most are
                                                          sent out either on the day the tenancy
                                                          commences or within a couple of days following
                                                          the start of the tenancy.
                                                          With regard to the annual rent increase in April
                                                          the Neighbourhood Housing Manager confirmed
                                                          that all rent cards are hand delivered prior to the
                                                          start of the financial year.
                                                          Rent Cards are no longer used at Alnwick. The
                                                          Rents Assistant informs new tenants of their rent
                                                          account number and rent payment details
                                                          following notification of new tenants from the
                                                          weekly allocation reports.     No information is
                                                          retained to show when new tenants were sent
                                                          their payment and account details.
                                                          At both Blyth and Alnwick new tenants are
                                                          informed of their rent payments during sign up

                                                               Page 10 of 18
6.6     Objective: Amendments could be made to commit fraud
6.6.1   Errors could have Independent             checks No independent checks are undertaken at Blyth or         9.      Ideally independent
        been made on input should be undertaken to Alnwick to ensure that rents are being charged for             reconciliations should be
        resulting in loss of ensure that the correct all of the organisations properties.                         undertaken on a regular
        income               level of rent is charged for It is understood that the processes currently in        basis at Alnwick to ensure
                             every property let           place at Blyth would pick up any unauthorised           that rents are being charged
                                                          changes to rent levels either through tenants           on all the organisations
                                                          contacting their Housing Officer or through the         properties and that the
                                                          weekly reconciliation process.                          correct levels are being
                                                                                                                  Priority: Medium
                                                                                                                  Responsibility: HfN
6.6.2   Fraudulent    credits   Independent                 Blyth                                                 10. In order to prevent the
        could be posted         reconciliations should be   A report was obtained from the ICT Manager            risk of inappropriate or
        against accounts in     undertaken to ensure that   listing all non payment credit postings.        All   fraudulent transfers between
        order    to     hide    all ‘non-payment’ credit    transactions related to decoration allowance and      accounts each transfer at
        misappropriated rent    postings are valid and      tidy homes payments. A sample of 10 payments          Alnwick should be supported
        payments                supported by adequate       was chosen at random and the Debit Control &          by adequate documentation
                                documentation               Finance Officer provided suitable documentation       and ongoing reconciliations
                                                            to support each transaction.                          carried out.
                                                            Alnwick                                               Priority: High
                                                            A report was obtained from the Development            Responsibility: HfN
                                                            Officer listing all non payment credit postings. A
                                                            number of negative cash adjustments and
                                                            payment transfers were noted. It was discovered
                                                            that the four negative cash adjustments related to
                                                            a system error. No documentation was provided
                                                            to support the payment transfers between
                                                            accounts all of which related to tenants moving
                                                            house and continuing to pay rent on their old
                                                            account numbers.

                                                               Page 11 of 18
6.7     Objective: Rents received are posted to the correct accounts and are banked in full
6.7.1   Discrepancies may The        Housing    Rents In 2009/10 a six month reconciliation between the      11.     The Housing Rents
        go unnoticed        system      should      be housing rents systems and the General Ledger          system at Alnwick should be
                            reconciled    at   regular was undertaken at the end of the period from 1        reconciled       at    regular
                            intervals by a senior April 2009 to 30 September 2009.                           intervals (at least monthly) to
                            employee to the main Blyth                                                       the main accounting system
                            accounting        system, The Debit Control & Finance Officer provided           (Oracle E-Business Suite),
                            discrepancies should be details from the Anite system and these were             discrepancies should be
                            reported and investigated reconciled to the figures on the Oracle E Business     reported and investigated.
                                                       Suite. A number of discrepancies were recorded        Priority: High
                                                       by the Debit Control & Finance Officer which are      Responsibility: HfN
                                                       in the process of being corrected by Cashiers.
                                                       Monthly Journals are sent to the Accounting           12.       Responsibility for
                                                       Assistant to enter onto the Tenants Rental            undertaking reconciliations
                                                       Account on the E-Business Suite.                      between     the    Northgate
                                                       Alnwick                                               System at Alnwick and the
                                                       The six month reconciliation had only been partly     main accounting system
                                                       undertaken at the time of the audit. The Rents        (Oracle E-Business Suite)
                                                       Manager at Alnwick had provided details from the      need to be agreed.
                                                       Northgate System and these had been compared          Priority: High
                                                       to figures produced from the E-Business Suite by      Responsibility: HfN
                                                       the Finance Manager – Performance & Technical.
                                                       It was noted that many of the figures did not         13. The current system in
                                                       reconcile however it was understood that no one       place for reconciling the main
                                                       had looked into reasons for non-reconciliation due    accounting system to the
                                                       to a lack of time.                                    housing rents system should
                                                       In the past reconciliations and journals at Alnwick   be documented.
                                                       have only been processed at the year end.             Priority: Medium
                                                                                                             Responsibility: HfN
                                                          It was noted that the current system for
                                                          reconciling the main accounting system to the

                                                             Page 12 of 18
                                                      housing rent systems at Blyth and Alnwick was
                                                      not documented.
6.7.2   Errors    may   go Reconciliations should be Blyth                                                    14.     The procedure for
        unnoticed          carried out to ensure that There are currently no documented procedures            reconciling the net rent
                           the net rent received for reconciling the net rent received to the net rent        received to the net rent debit
                           equals the net rent debit  debit at Blyth.                                         should be documented.
                                                      The Debit Control & Finance Officer reconciles          Priority: Medium
                                                      the debit on the Anite system on a weekly basis         Responsibility: HfN
                                                      using the ‘Debit Reconciliation 2009/10’
                                                      spreadsheet.        At the time of checking             15. Reconciliations of the
                                                      reconciliations were up to date. As a check             net rent received to the net
                                                      during the audit the Week 42 Debit reconciliation       rent debit at Alnwick should
                                                      was re-performed.                                       be carried out regularly (at
                                                      Alnwick                                                 least monthly)
                                                      There are currently no documented procedures            Priority: High
                                                      for reconciling the net rent received to the net rent   Responsibility: HfN
                                                      debit at Alnwick.
                                                      The Rents Manager undertakes monthly debit
                                                      reconciliations. At the time of checking the
                                                      reconciliations were two months behind schedule.
                                                      As a check during the audit the week 35
                                                      reconciliation was re-performed.

                                                            Page 13 of 18
Void Properties
6.8     Objective: All relevant records and accounts are updated with all termination, transfer and exchange of tenancy details
6.8.1   Lack of information Procedures           should Blyth                                             16.   An extra column
        available in cases of ensure that all void The Homefinder Section records termination dates detailing the date and time
        queries or disputes   properties            are and the dates that keys were handed in on the that keys are returned should
                              immediately recorded, to Anite system. The Maintenance team then record be added to the “Rolling”
                              include dates vacated and when they pick up the keys, when the property is Voids spreadsheet used to
                              dates when keys were inspected when repairs are completed, and when monitor void properties at
                              returned                  the keys are handed back to the Homefinder Alnwick.
                                                        Section on the Anite system. The Homefinder Priority: High
                                                        Section then progresses the new tenancy.          Responsibility: HfN
                                                        The “Rolling” void spreadsheet is maintained on a
                                                        weekly basis. The Lettings Officer explained that
                                                        if keys are not handed back by 12am on the
                                                        Monday following a tenancy termination a further
                                                        weeks rent is charged however it was noted that
                                                        the “Rolling” voids spreadsheet does not record
                                                        the date or time that the keys were returned.

                                                           Page 14 of 18
6.9     Objective: All void properties should be correctly calculated, valued and monitored
6.9.1   Lack               of Regular        management It was noted that the void management report              17. A column detailing the
        management            reports       should     be produced at Alnwick did not list the length of the      length of the void period for
        information           produced (e.g. weekly) void period, if this was included it would help to           each property should be
                              listing:                     highlight quickly and easily any properties nearing    added to reports used for
                              (a) All void properties;     the 25 day re let target.                              monitoring void properties at
                              (b) The reasons why each                                                            Alnwick.
                              property is empty;                                                                  Priority: Medium
                              (c) Length of void period                                                           Responsibility: HfN
                              to date
6.9.2   Poor         property Exception reports should There is evidence that voids are carefully                 18. A report showing any
        management            be             automatically monitored at Blyth and Alnwick. Information on re-     voids which exceed the
        performance would produced which show any letting times is included in the monthly                        organisation’s performance
        not be identified     voids which exceed the Performance             Reports     prepared      by   the   target should be included as
                              organisation’s               Performance         and       Quality       Manager.   a standard item in monthly
                              performance target           Benchmarking with the Housemark National Club          performance           reports
                                                           is also undertaken on a Quarterly basis.               including reasons for the
                                                           It is understood that regular exception reports are    delays.
                                                           not produced which show any voids which exceed         Priority: Medium
                                                           the organisation’s performance target of 25 days.      Responsibility: HfN
                                                           During the audit a sample of 40 properties which
                                                           exceed the 25 day target was chosen (20 each           19. Controls should be put in
                                                           from Blyth and Alnwick).          Explanations were    place to ensure that void
                                                           sought for the delays in re letting.                   start and end dates are
                                                           It was noted that four of the properties chosen for    entered correctly onto the
                                                           Blyth appeared on the Void Property report in          Anite system.
                                                           error. On further examination it appears that the      Priority: High
                                                           reason for these properties appearing as void          Responsibility: HfN
                                                           when they are in fact occupied is because they
                                                           have been entered with a void end date prior to
                                                           the void start date on the Anite system.

                                                                Page 15 of 18
2008/09 Year End Rollover
6.10    Objective: Year End rollover is performed accurately and timely
6.10.1 Incorrect information Year End rollover should Blyth                                                20.      Suspense account
        and delays           be performed accurately The Debit Control & Finance Officer provided a        transactions    at    Alnwick
                             and timely               copy of the ‘Debit Year End 2008/09’ spreadsheet     should be reviewed and
                                                      for Blyth Valley Housing. This was then compared     cleared on a regular basis, at
                                                      to a business objects report on the Tenants Rental   least weekly
                                                      Account run from TASK (former Blyth Valley           Priority: High
                                                      Borough Council accounting system).           The    Responsible: HfN
                                                      reconciliation between TASK and Anite was re-
                                                      performed. There were no matters to report.
                                                      At the start of the 2009/10 financial year the
                                                      Senior Auditor and Auditor undertook some work
                                                      on the 2008/09 Rent Account Reconciliation for
                                                      Alnwick following a request from the Director of
                                                      Resources at NCC. The scope of the work was to
                                                      review discrepancies in the Tenants Rent Account
                                                      Reconciliation for Alnwick, as follows:
                                                        A £10k discrepancy between the Rent System
                                                          and the General Ledger System
                                                        A small unexplained discrepancy between the
                                                          Rent Arrears carried forward and brought
                                                          forward figures (An explanation for this
                                                          discrepancy was provided by the Former Rents
                                                      In addition to these there were general concerns
                                                      regarding processing and reconciliations at
                                                      The review had two main objectives:
                                                        To resolve the discrepancies in the Rent
                                                          Account reconciliation between Northgate and

                                                            Page 16 of 18
                                                         the General Ledger System by working
                                                         alongside Accountancy staff at Alnwick
                                                       Consider underlying issues with regard to
                                                         processing and reconciliations at Alnwick.
                                                     The main conclusions were summarised as
                                                       Little confidence in arrangements in place for
                                                         reconciling the Rents System to the General
                                                         Ledger – at the time this was only done once
                                                         per year at the year end
                                                       Absence of procedures notes
                                                       Lack of staff knowledge and experience
                                                       Irregularity of clearing suspense accounts
                                                     No formal recommendations were made or
                                                     followed up in the report at the time. As a result
                                                     they will be made and followed up in this report.
                                                     (See also recommendations 11, 12 and 13 above)

7     Conclusion

7.1   The audit has revealed that there are a number of areas within Rent Debit and Reconciliation Systems where
      improvements in control could be made. It is appreciated that this year has been particularly difficult and that a number of
      systems and processes are still to be documented and embedded. We are however confident that Homes for
      Northumberland will take on board the suggested improvements contained within this report. Implementation of the
      recommendations in this report will increase the operational effectiveness and efficiency of rent debit and reconciliations
      and reduce the risk of loss and error.

Northumberland County Council
Audit Service
5 May 2010

                                                         Page 17 of 18

Richard Tosney, Debit Control and Finance Officer, HfN
Bryan Turner, Neighbourhood Housing Manager, Income Management, HfN
Richard Bryan, Area Housing Manager, Blyth, HfN
Dave Swaddle, Rents Manager, NCC
Ian McLackland, Regional Operations Manager, Alnwick, HfN
Iain Henderson, Director of Finance and Resources, HfN
Colin Logan, Head of Financial Services, NCC
Alison Elsdon, Finance Manager – Adults & People, NCC
Paul Czerepok, Finance Manager – Performance & Technical, NCC
Ray Ashman, Head of Financial Management, NCC
Ian Morton, Audit Manager, NCC
Sue Bumby, Head of Audit
Steven Mason, Director of Resources

                                                 Page 18 of 18

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