Document Sample
					                 Hertfordshire County Council

                     INTERNAL AUDIT


Chris Kay
Internal Audit
March 2009
                 Hertfordshire County Council

                       INTERNAL AUDIT




Introduction                                     3

Developing the Plan                              4
Key elements                                     5
Glossary                                         8

Work in departments

Adult Care Services                              9
Children, Schools and Families                   10
Corporate Services                               13
       Chief Executive‟s Office                  14
       Commercial Services                       14
       County Secretary‟s                        15
       Finance                                   15
       Information Systems                       19
       People & Property                         20
       Safety Emergency and Risk Management      21
Environment                                      21
Fire and Rescue                                  22

External clients & voluntary bodies              23

                                                            Hertfordshire County Council
                                                                      Internal Audit Plan


This Plan sets out Internal Audit‟s projected work for 2009/10. It is aimed particularly

   the Audit Committee
   Chief Officers
   other senior officers and managers throughout HCC
   the Audit Commission
   Internal Audit staff.

I am grateful for the input from all of the above to our planning process.

For each Department, the Plan once again groups our work into two categories,

   regular audits – those reviews which we carry out on a predetermined
    frequency, derived from our annual risk assessment exercise; and

   developments and audit issues – our input to new developments, or work
    resulting from concerns about possible control weaknesses or other audit

A Glossary on page 8 provides definitions of some of the audit and other jargon
used in this plan. The relevant Group Auditor or I will be glad to provide any further
explanations, or further copies of this document, which will also be available on the
Council‟s HertsDirect website at:

In the printed version of this Plan, a full schedule of planned audits may be found at
the Appendix.

Chris Kay
Chief Internal Auditor

                                                            Hertfordshire County Council
                                                                      Internal Audit Plan


In planning our work for the coming year, we have taken into account a number of
influences and processes, including:

                              setting out the Council’s priorities for action in

    contacts in services      discussions with managers and others in order
                              to assess the impact of change on the control

    risk assessment           our annual detailed analysis of risk factors
                              applying to all auditable activities of the
                              authority, to derive our audit priorities

    Audit Commission          co-ordination of our plans with those of the
                              external auditor (the Audit Commission’s local
                              audit team), and incorporation where possible
                              of their priorities and recommendations

    Chief Officers            presentations to each Chief Officer of our draft
                              Plan for their service, and adjustments where
                              possible to accommodate their priorities and

    Audit Committee           presentation of the draft Plan to the Committee
                              for their endorsement, and incorporation where
                              possible of their concerns.

                                                             Hertfordshire County Council
                                                                       Internal Audit Plan


Addressing the Priorities

Like all units of Corporate Services, Internal Audit will contribute to addressing the
Council‟s priorities, which are to:

       support economic wellbeing
       maximise independent living
       ensure a positive childhood
       secure a good education for all
       reduce carbon emissions
       ensure safe neighbourhoods
       be a leading council.

Our impact on these challenges is primarily through the recommendations for
improvement that we make to managers of the Council‟s services – particularly
those directly focused on the priorities.

Over the past year, global financial conditions have deteriorated markedly, with
serious impacts on the Council, including the failures of and uncertainties around
banks where the Council holds deposits, the increased risk of fraud and contractor
failure, the collapse of the property market, and considerable pressures on the
Council‟s resources. These and related uncertainties seem set to persist into

Meanwhile, the Council has been implementing a significant programme of change,
including among others:

       the transformation of Finance, HR and IT functions
       The Way We Work (TW3) project
       strengthening of the Council‟s performance management arrangements
       further development of strategic partnerships
       preparation for the Comprehensive Area Assessment
       introduction of new carbon management arrangements
       review of the Council‟s commercial strategy and procurement processes.

Such a high degree of change and turbulence has inevitably put staff, including
internal auditors, under significant pressure. These stresses show no signs of
diminishing – indeed this Audit Plan reflects yet further programmes of change,
referred to under the various sections headed “Developments and Audit Issues”
through the Plan. The departure of three corporate Chief Officers in 2009/10 will
mean a loss of “corporate memory” and further restructuring of accountabilities. It
will be particularly important for management to ensure, as far as possible, that the
existing change programme is given the time and support necessary for the new
arrangements to establish, before further disruptive change is introduced. The

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                                                                      Internal Audit Plan

Council‟s risk management arrangements will also have a key role to play in helping
to mitigate the risks inherent in the current economic situation.

Corporate Governance

We will work with other senior officers on the Performance and Planning Group
(PPG) to undertake the Annual Governance Review, as required under the Accounts
and Audit Regulations 2006. This will include an assessment of the policies and
procedures for internal controls operating throughout all departments.

As part of the Annual Governance Review, we will review service assurance
statements provided by each Department, and evidence that actions anticipated in
the 2007/8 Annual Governance Statement have been implemented. We will also
complete our annual audits of overall financial management arrangements in each
department. The annual review of Internal Audit will again be undertaken by the
Audit Committee, using factual information provided to it by the Chief Internal
Auditor, in line with guidance from CIPFA.

Our work on these areas will enable us to draft the Annual Governance Statement,
which will be reviewed by the Chief Executive, Monitoring Officer and Section 151
Officer prior to being scrutinised by the Audit Committee.

We will audit the measures in place to mitigate the red risks as identified in the
corporate risk register.

We will keep closely involved in the continuing development of the Local Area
Agreement and other significant partnerships, and will contribute to proposed
governance arrangements as appropriate.

We will continue to support the work of the Audit Committee, with the Chief Internal
Auditor both acting as the Committee‟s lead officer and attending its meetings to
report on internal audit matters.

Procurement, change programmes and strategic partnerships

Major challenges include ensuring that:

      the Procurement review is fully implemented and becomes operationally
       effective, including ensuring the effective bringing forward of the tendering of
       the major property, recruitment and financial services contracts
      the efficiencies negotiated with the Hertfordshire Highways contractors are
       effectively delivered
      the carbon management project establishes an effective and accurate basis
       for managing the county's carbon usage
      the tendering of the waste treatment procurement process is carried out in a
       sound and transparent manner
      the competitive dialogue process for the setting up of the Local Education
       Partnership (LEP) is properly carried out.

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                                                                        Internal Audit Plan

Anti-fraud and corruption work

Our work focussing on the prevention and detection of fraud and corruption will

      participation in the National Fraud Initiative
      analytical review of SAP, including investigation of large or unusual items
      core system reviews, through both financial and computer audit work
      contract audits, testing for controls to minimise the risk of corruption
      other work to detect and investigate possible expenditure or income frauds.

Information and Communications Technology

Major ICT audit challenges include helping to ensure:

      the successful re-launch of the e-recruitment module in SAP
      the achievement of successful accreditation for ContactPoint (the national
       child index) and the Council‟s ability to subsequently act as an accrediting
       body for partners
      the implementation of the full suite of modules that comprise Confirm, the
       new highways management system, including the migration of key data, and
       the ability to provide continuity of service
      the successful introduction of an electronic document management system
       across the County.

Service developments

This Plan reflects our focus on a wide range of service developments with financial
or other control implications. For each Department, these are shown under
“Developments and audit issues”.

The broader Internal Audit role

We will continue to fulfil a broader role within the authority, including:

      as necessary, any special investigations into suspected fraud, corruption or
       other irregularity
      projects and consultancy work at the request of senior managers
      corporate work, including chairing the Resources Board and membership of
       the Performance and Planning Group
      liaison with the Audit Commission‟s external audit team
      work related to the Comprehensive Area Assessment
      audits for external clients, ranging from the Police Authority to the Chilterns
       Conservation Board.

                                                           Hertfordshire County Council
                                                                     Internal Audit Plan


The following definitions cover some of the audit and other terms and abbreviations
used most frequently in this Plan.

Compliance test             An audit check of a small number of transactions
                            or records, to test whether controls are operating
                            as intended by management

Core financial system       A computerised or other process fundamental to
                            the operation of the authority’s financial affairs

Corruption                  The offering, giving, soliciting or acceptance of
                            an inducement or reward which may influence
                            the actions of the Council, its members or its

Fraud                       The intentional distortion of financial records,
                            carried out to conceal the misappropriation of
                            assets or otherwise for gain

Information and             A term covering all computer, telephone,
Communications              network and related technology
Technology (ICT)

Internal control            A procedure which ensures that an
                            organisation’s objectives are properly and
                            efficiently achieved

Regularity audit            The cyclical review and testing of a system or
                            establishment, aimed at providing an opinion of
                            the reliability and propriety of the financial

SAP                         HCC’s comprehensive computer system, known
                            as an enterprise resource planning package, for
                            managing finance and other key resources.

SMART targets               Targets which are Specific, Measurable,
                            Achievable, Realistic and Time-Bound.
TW3                         The Way We Work, a comprehensive change
                            programme for the whole organisation

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                                                                      Internal Audit Plan

                                Work in Departments


Developments and audit issues

We will review:
   the management of risk and mitigating actions in place relating to the
      department‟s “red” risks as identified in the Risk Register
   Self-Directed Support, which gives clients the opportunity to take control of
      and personalise their support, via the initiative called individual budgets. We
      will undertake some detailed testing on direct payments to clients
   the certification of the Supporting People grant.

We will also follow up our earlier work relating to Partnership working with Health.

Our Technical & Commercial audit team will also carry out contract audit reviews of
the following:

      the aspect of the Older People‟s Accommodation project which covers
       „Extra Care‟ housing, communications, nominations and referrals procedure
      the monitoring, administration and management of non-core contracts over
       £50k in value. This will cover contract monitoring, staff training, and how
       payments are verified for grants and charities to ensure that the service has
       been properly provided.

We will also provide input and challenge to:

      any changes to commissioning and contract activities as a result of the
       Elderly and Physical Disability business process review
      the project for replacing the IRIS and Abacus systems. These systems,
       which are due for replacement in April 2010, manage client data and provide
       an interface to SAP, to enable payments to be made to care providers and to
       financially assess and collect income from clients.

Regular audits

We will continue to undertake our annual audit of Service Financial Management,
to confirm that recommendations made previously have been implemented as
agreed, and that controls continue to operate effectively, addressing any issues that
have arisen.

We will resume our site visits to Supported Living and Respite Services for
people with Learning Disabilities, and Day Services. Following our detailed
review of the management of client finances last year, our individual visits to the

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                                                                    Internal Audit Plan

Supported Living Units will focus on compliance with the standard procedures and
documentation relating to clients‟ funds.

Type of Unit                           Planned number
                                         of unit visits

Supported Living and Respite Units             19
Day Services                                    8

We will finalise the work commenced last year on payments to care providers.
Our work will include investigating the results of the National Fraud Initiative 2008
exercise, relating to ACS clients indicated as deceased. We will also review detailed
transactions relating to ACS charging and financial assessments particularly
focusing on the accuracy of client data in Abacus, prior to the implementation of a
replacement system, due in April 2010.



Developments and audit issues

Our plan continues to be driven by the DCSF requirement for schools to meet the
Financial Management Standard in Schools (FMSIS) in accordance with the
DCSF timetable below:

Sector                                  FMSiS deadline

Secondary                               31st March 2007
40% non secondary (excluding            31st March 2008
nursery schools) - “Phase 1”
40% non secondary (excluding            31st March 2009
nursery schools) – “Phase 2”
20% non secondary (excluding            31 March 2010
nursery schools) – “Phase 3”

In the summer term 2009 we currently expect to complete the „light touch‟
assessments of all schools in Phase 2, having previously completed those of all
schools in Phase 1. Since the deadline for the Finance Director‟s annual return to
the DCSF, identifying the numbers of schools that have achieved or maintained the
FMSiS as at 31st March, is not until August each year, we are able to continue this
work into the summer term.

In the autumn and spring terms we plan to undertake „light touch‟ assessments of
the remaining non-secondary schools in Phase 3. We also intend to carry out audits

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                                                                     Internal Audit Plan

and FMSiS assessments of those secondary schools we did not manage to visit in
2006/7, before the extension by the DCSF of the FMSiS to all schools (other than
nursery schools).

Beyond this, we will, to the extent that our resources allow, undertake the audit and
first FMSiS re-assessments of those secondary schools last visited three years ago.
(The DCSF expects schools‟ compliance with the FMSiS to be formally assessed
every three years). Our approach to FMSiS reassessments will be informed by
guidance expected from the DCSF regarding this. Further, we are organising a
meeting of internal auditors from across the south-east of England to review the
approach to school audit in the context of the FMSiS and, we hope, the anticipated
DCSF guidance.

If our resources allow, once we have met the priorities explained above, we will also
undertake audits of those nursery schools and education support centres that
we have not visited in the last 5 – 6 years. The total resource we can deploy is
dependent on the level of resource available from the Financial Services for Schools
section (FSS). During 2008/9 members of FSS have undertaken training in the
conduct of school audits and FMSiS assessments. It is hoped that this training will
be concluded in the summer term 2009 and, thereafter, our overall capacity to
deliver school audits will be increased.

The various „extended services‟ initiatives (children‟s centres and extended
services consortia) of recent years have resulted in a number of schools introducing
new and innovative financial arrangements for the various activities they are now
running. We understand that we may be called upon by Corporate or CSF
managers to review some of these financial arrangements to determine whether
they are within the school‟s legal powers and whether they comply with financial
reporting, tax and other relevant legal requirements.

Regular audits

We will continue to work with our colleagues in the School Funding Unit (SFU) to
review and monitor the financial administration of schools scheduled for merger
or closure during the „winding-up‟ period. We will undertake an audit visit where a
change of Head occurs, if we assess that the risk attached to a particular school
and the interval since its last audit warrant this.

We shall also continue to tackle queries and issues thrown up by the audits of
particular schools and to respond to such queries when raised with us by schools,
our colleagues in the SFU and CSF department generally, and occasionally other
sources. The requirement for schools to meet the DCSF Financial Management
Standard in Schools has led to an increase in such queries.

We will continue to require schools to submit summary details of any private
accounts at the end of the current financial year, or confirmation that these have
been independently audited, in order to derive an assurance that these accounts are

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                                                                       Internal Audit Plan

being properly kept. It seems likely that during 2009/10 governing bodies will be
expected to register many such accounts, given the requirements of the Charities
Act 2006. We anticipate that this will result in many queries from schools in relation
to this.

School-related audits

Our annual review of the transfer of the Schools‟ Budget Share Allocations, at the
beginning of the financial year, will continue.

Once again, we will allocate some time to respond to any request from SFU to
review school Annual Returns, where these are judged to be of questionable
reliability or accuracy.

We will continue to look into any unexplained shortfalls in primary school meal
income reported to us by Hertfordshire Business Services.

As in previous years, we will vet the proposed arrangements of any schools that
opt to leave the Serco payroll contract in favour of another payroll bureau, or
operation of the payroll in house.

Other audits

We will continue to undertake our annual audit of Service Financial Management
to confirm that recommendations made previously have been implemented as
agreed, that controls continue to operate effectively and to address any issues that
have arisen.

We will review the financial administration of:

      seven of the nine residential children‟s homes
      the Music Service
      adoption and residence orders, including the impact of the associated legal

Developments and audit issues

In 2009/10 we will again undertake a review of the „red risks‟ identified by each
service‟s management in the J-CAD on-line register of corporate and service risks.
We will seek evidence that management has taken the planned action to address
these risks, for both for newly identified risks (since 2008/9) and for those risks that
continue to occupy the highest category.

Our ICT Audit team will continue to review the ongoing development of the
Integrated Children‟s System as well carrying out a dedicated review of Controcc,

                                                            Hertfordshire County Council
                                                                      Internal Audit Plan

the system used for the administration of contracts and payments processing for
care packages.

The ICT Audit team will also look at the arrangements for the Authority and its
partners to interface with ContactPoint - the national child database.

Audits of the following are planned:

      the Primary capital “pathfinder” programme management (see also the entry
       under Herts Property)

      The project management and contracting for the new Radio Frequency
       Identification (RFID) management system, for use in libraries.

We intend to continue our contribution to the Building Schools for the Future
Programme as members of the risk watch group and by again contributing to the
project team. We will also audit the tendering, competitive dialogue, setting up and
operation of the Local Education Partnership in accordance with the Official
Journal of the European Union.

We will undertake an audit of the procedures within the department for the
timesheets / pay claims submitted by agency (or equivalent) personnel. Some
potential problems with current practice became apparent in 2008/9.

Given that the department is providing support to care leavers through its
independent support service directly, in place of previous contract arrangements
with the National Children‟s Homes, we will review the financial administration in this

With the formation of the Youth Connexions service, we will examine the financial
administration of two of the ten District Teams to assess this.

If time allows, we will also audit the operation, use and ownership of the property
Service Level Agreement by CSF.


We will undertake our annual audit of high level Financial Management within the
corporate services departments towards the end of the year. Financial Guidance,
Financial Regulations and Schemes of Delegation will require revision; we will
monitor implementation of the action plan to revise financial guidance across all
services. We will also check that the Financial Procedures, for which the new
Directors (Resources and Performance, and Strategy and Partnerships) will be
responsible, are drafted as appropriate to reflect the new structure.

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                                                                      Internal Audit Plan

We will briefly review the adequacy of mitigating controls identified on the corporate
Risk Register for the red risks within Corporate Services, and those which have a
wider impact across the authority‟s services.

Our work relating to the sections of Corporate Services will be as follows.


Developments and audit issues

We have allocated time to review the data collection for the National Indicators,
during which we will check the processes against the Audit Commission data quality

Strategic partnerships

We will continue to provide:

       advice on data quality and the adequacy of the performance management
        processes in respect of the Local Area Agreement 2 (LAA2) and
        Comprehensive Area Assessment (CAA) to ensure that validated,
        definition compliant, performance information is in the public domain
       consultancy time to input to the CAA self assessment process
       checks that “SMART” measures are included in the Corporate Plan, and that
        processes are in place for collection and reporting of the appropriate data
       advice on data sharing protocols, in particular with our LAA partners.

Other planned audit work on significant partnerships is covered under the relevant
service heading.


Developments and audit issues

Strategic Procurement Group (SPG)

We will audit:

       Strategic Procurement Group‟s charging and trading arrangements, with
        particular reference to budgets and the operation of the SPG Service Level
        Agreements (SLAs)

       the management of the implementation phase of the procurement review

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                                                                     Internal Audit Plan

      the use and process of the Delta electronic contracting software, using
       samples from different areas of the county council operations

      the project management arrangements of the preparatory work for re-
       tendering the IT Facilities Management and Managed Financial Services
       contracts, including any re-configuration of existing contracts.

We will continue to contribute to the Contract Best Practice Group and the Major
Commissioning Board.

Herts Business Services

We will audit the operation of the new Contract Management Services Unit.


Regular audits

We will carry out a review of the financial arrangements within the Registration


Developments and audit issues

We will provide scrutiny of the implementation of the revised Treasury Management
policy and Temporary Lending processes following the collapse of the Icelandic
Banks and the PricewaterhouseCoopers reviews.

We will also continue to contribute to the project for implementing a new Asset
Accounting system, and will review the processes for recording capital transactions
during the transition period, following our 2007/8 audit and issues raised by the
external auditor in 2008/9.

We will allocate time to support the Business Process Re-engineering
developments (in particular the continuation of HR transformation referred to in the
People and Property section below), and the Pathfinder Shared Services

We will review the adequacy of Authorisation procedures within the new Finance
structure, and the client/contractor split of responsibilities for SAP transactions.

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                                                                      Internal Audit Plan

Regular audits

Core financial system audits will include the following areas.


Our work will include:
   Payroll Control accounts
   employment Status for Income Tax purposes
   recruitment incentives
   Relocation and Lodging allowances
   Travel and Subsistence allowances
   Leased Car contributions deducted from pay
   Disturbance payments where the employees normal place of work has

Many of these audit reviews will involve checks within Serco and the HR function
(see People and Property section below). Our review of the Payroll controls will also
include the use of the recently introduced Employee Self Service (ESS) module of
SAP to amend personal data held on pay records and the Manager Self Service
(MSS) module of SAP particularly to record sickness absences whilst being aware
that ESS and MSS is not operating in schools which represent a larger volume of the
payroll transactions.


We will focus on the Local Government Pension Fund administration,
Investment Fund Management and Governance arrangements, which will all be
tested against the best practice guidance. This guidance results from the national
review of the effective audit of pension funds, and will inform our compliance and
regularity testing. In addition, we will review controls in place to account for Fire
Pensions. We will work with Serco to agree the Teachers Pensions
reconciliation, before it is submitted to the Audit Commission for certification.


Our reviews will include checking of controls over Value Added Tax, Foster Parent
Payments, Payments to Sub-Contractors, and Purchasing Cards; as the original
intention was that these cards would replace the need for Imprest Accounts, we will
review the continued use of these, including that within Serco Cashiers. We will
follow up cheque frauds & queries.

Income and Debtors

Our Debtors work will include:
   the Education Billing System

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                                                                    Internal Audit Plan

      Home Care charging
      Periodic Income Records
      Car Loans
      the remaining Mortgages, including right to buy
      Income Monitoring
      Cash Processing.


We will review the monitoring processes in respect of:
   the Ledger
   Budgetary Control
   Balance Sheet accounts
   the action plan to implement the adoption of International Financial
      Reporting Standards (IFRS), which is a major change in the public sector's
      financial reporting framework
   the revised Closure Procedures.

Treasury function

Banking transactions will be reviewed during our audits of the Bank Reconciliations
and Cheque & BACS Control and Cancellation procedures. We will also
undertake a brief review of Bank Accounts in advance of the re-tendering process
in 2010/11.

We will undertake reviews of the accounting transactions and financial reporting in
respect of:
    Specific Reserves & Capital Receipts
    Central Recharges
    Precepts
    Insurance
    Training Expenditure and Charges
    funding and support to Voluntary and Community Organisations

We allocate time to follow up the implementation of our recommendations.

Government Grants

We will undertake checks on the validity of data which has been used to determine
the level of the Formula Grant and Area Based Grant settlement; Pupil Numbers,
Supported Residents, Flood Defence and Coast Protection and Road Lengths.
We will check the systems and provide the Performance Reward Grant
certification for each of the elements of the Local Area Agreement which are on
track to qualify for reward grant.

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                                                                       Internal Audit Plan

Fraud prevention and detection

Many of our audits include an element of checking that adequate safeguards exist to
prevent fraud, and we will pay extra attention to these during our Fraud Detection
checks during the coming year, as the credit crunch may lead to increased
temptation to misappropriate the Council‟s funds.

All our core system reviews include a component of fraud detection and prevention,
through the audit objective of evaluating the continuing adequacy and effectiveness
of the systems in operation, ensuring that the risk of errors or irregularities occurring
and remaining undetected is minimal.

We will follow-up the National Fraud Initiative data matches identified by the Audit
Commission after the submission of information in October 2008.

We will also continue to liaise with the Police and the bank as and if Cheque Frauds

We will undertake additional Analytical Review of the information within SAP to
extract volume information, assess levels of amendments, cancelled transactions
etc. We will identify where procedures are not being followed and investigate
exceptionally large or unusual transactions in the core financial systems (payroll,
creditors, debtors and the ledger).


Developments and audit issues


Our ICT Audit team will continue to input to matters relating to SAP. In addition,
they will carry out reviews of the new Web Payments System, that will allow
customers greater flexibility and security when paying for services, and the controls
around BACS, the Authority‟s largest mechanism for making payments.


Our infrastructure work encompasses the arrangements that support the accuracy
and integrity of financial data, and this year includes reviews of the arrangements in
place for the Backing Up and Restoring of systems and data, as well as the way in
which Virus Protection for those systems is managed.

The process for ensuring that adequate support and changes are planned and
provided for during the development of systems will be reviewed in our ICT audits of
the Service Launch Process and Change Control.

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                                                                    Internal Audit Plan

We will also carry out an ICT-related audit of Electronic Document Records

Other planned ICT audits are included elsewhere under the relevant service.


Human Resources

Many of our audits have a HR dimension, for which we will require access to the HR
records to check compliance to HCC policies and procedures as referred to under
Finance above. These include our coverage of the Employee Self Service (ESS)
module of SAP to amend personal data held on pay records, and the Manager Self
Service (MSS) module particularly for recording sickness absences, whilst being
aware that ESS and MSS are not operating in schools, which represent a larger
volume of the payroll transactions. Our regularity audits of schools and services
may also require us to check personnel files and transactions.

Our audit of the “Required to reside” system (see Corporate Estates section
below), whereby it is a condition of an employee‟s employment that they reside on
HCC premises, will also involve HR processes.

Developments and audit issues

We will audit:

       the data link between the Criminal Records Bureau (CRB) clearance
        system and SAP
       the effectiveness of the CRB arrangements within partners (Manpower and
       HR pre-recruitment checks and implementation of Vetting and Barring
       the savings achieved by the Manpower contract, including the Key
        Performance Indicator system
       the e-Recruitment system
       the ICT system used to administer pensions (AXISe).

We will provide consultancy time to review:

       the Shared Services (Pathfinder) developments including Human
        Resources (HR)
       the Business Process Re-engineering of the HR Transactions, redefining
        of the client and contractor roles in respect of services provided by Serco

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                                                                    Internal Audit Plan

       work to reconfigure the existing Manpower contract for Recruitment
        Services including changes to client-side arrangements.

Hertfordshire Property

Developments and audit issues

We will continue to attend and contribute to the Hertfordshire Property
partnership board and MACE liaison meetings where appropriate.

Quality and asset management

We will review the:

       management of the SMART metering project, the roll out to schools and use
        made in achieving financial and carbon management targets
       preparation for and tendering of maintenance contracts on a measured term
       Condition Surveys and service property priorities system
       re-configuration of existing property contracts and any work arising from the
        renewals originally scheduled for 2012: this involves responsive repairs and
        maintenance (Property Direct), programmed repairs and maintenance,
        asbestos and emergency response, capital project management, estates,
        valuation and security services
       programme management of framework construction contract projects for HCC
        awarded under the SMARTE–EAST strategic alliance with Suffolk and Essex
        County Councils, and the arrangements regarding outside users
       work on Building Schools for the Future and the appointment of the Local
        Education Partnership is included under the CSF section of this Plan.

Corporate Estates

We will review the project management of the Integrated Asset Management
System (IAMS) project, including arrangements for the asset register held on IAMS
to reconcile with and relate to the financial system.

We will also follow up work done on the “Required to reside” system which cuts
across CSF, Fire and Rescue, HR and County Secretary‟s departments as well as
Hertfordshire Property.

Property Business Services

We will audit a sample of Primary capital projects‟ management (see also CSF).

                                                        Hertfordshire County Council
                                                                  Internal Audit Plan


Regular audits

We will audit:

      the Authority's arrangements with regard to Business Continuity

      the Risk Management Process, particularly focusing on the effectiveness of
       the JCAD risk system in monitoring risks.


Developments and audit issues


We will audit the following areas:

      Financial management arrangements following the centralisation of Finance,
       Information and Communication Technology and Human Resources and the
       restructuring of the services under the new Director of Environment and
       Commercial Services.

      Mitigation of Red risks under the new management arrangements.

Environmental management

We will review the management and monitoring of the Waste Treatment
procurement process by competitive dialogue.

Strategic planning and Partnerships

We will audit the following:

      the project management and financial management arrangements for the
       Joint Infrastructure and Investment Strategy for Hertfordshire

      the East of England Development Agency work carried out and grants

We will review the arrangements for monitoring and managing the delivery of the
council‟s aims and objectives in respect of carbon management including Salix
funding. Salix is an independent financial company, set up by the Carbon Trust in
2004, working with the public sector to reduce carbon emissions through investment
in energy efficiency measures and technologies. Salix supplies finance towards

                                                             Hertfordshire County Council
                                                                       Internal Audit Plan

schemes, monitors performance, and reports regularly to the Carbon Trust and
periodically to stakeholders on the performance of the participants.

Herts Highways

We will undertake the following audits:

      The application of contract extension conditions including the
       arrangements to ensure that the Herts Highways contract extensions deliver
       efficiencies. We will include a sample of target cost schemes that were
       market tested as part of the contract extensions. We will try to identify
       lessons applicable to the new contract.

      As necessary work arising from our audit in 2008/9 on Integrated Works
       Programme projects where revisits have been necessary.

      The replacement for the Highways Management System (CONFIRM) from
       an ICT perspective.


Regular audits

We will carry out our annual review of the service‟s financial management,
updating our assessment of its key controls.

Developments and audit issues

In 2009/10 we will again undertake a review of the „red risks‟ identified by the
service‟s management in the J-CAD on-line register of corporate and service risks.
We will seek evidence that management has taken the planned action to address
these risks, for both for newly identified risks (since 2008/9) and for those risks that
continue to occupy the highest category.

If time allows, we will review the costs of the current arrangements for Catering
provision (with cooks employed at many sites) and possible alternatives.

                                                            Hertfordshire County Council
                                                                      Internal Audit Plan


Regular audits

Coverage of our largest external client, the Hertfordshire Police Authority, is set
out in a separate plan agreed by that Authority (via its Audit Committee), following
consultation with its Treasurer, Executive Director, and the Chief Constable‟s senior
managers. The plan includes time allocated to follow up matches identified through
the National Fraud Initiative, as we undertake the Audit Commission „key contact‟
role for the Police.

We will deliver an internal audit service under contract to the Board of the Chilterns
Area of Outstanding Natural Beauty.

We will also continue to provide a very brief audit service to the following bodies
which have links with the County Council:

      Herts Association of Town and Parish Councils
      Bowley Charity
      Dimsdale Charity
      Staff Social Club.