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									 QUALITY & PERFORMANCE                       25th JUNE 2001                      PART 1
 SCRUTINY COMMITTEE                                                       (OPEN TO THE PUBLIC)

                                                                                 ITEM NO.


 SUBJECT         : INTERNAL AUDIT ACTIVITY IN THE PERIOD                 PERFORMANCE REVIEW
                   17th March 2001 to 15th June 2001                           MATTER

 REPORT OF       : THE DIRECTOR OF CORPORATE SERVICES                       FOR INFORMATION

                                      A. REPORT SUMMARY

1.   PURPOSE OF REPORT:

To inform Members of Internal Audit activity in the period 17th March 2001 to 15th June 2001.

2.   RECOMMENDATION

Members are asked to note the contents of the report.

3.   ROUTING:

Direct to Council.

4.   IMPLICATIONS:

     4.1   Resources (Financial/Staffing)          :      N/A
     4.2   Performance Review                      :      Adherence to Best Value principles will
                                                          ensure that services match the best in
                                                          quality and efficiency.
     4.3   Environmental                           :      N/A

     4.4   Equal Opportunities                     :      N/A

     4.5   Community Strategy                      :      N/A

     4.6   Anti-Poverty Strategy                   :      N/A

IF YOU HAVE ANY QUERIES                     BACKGROUND DOCUMENTS
PLEASE CONTACT


Donald Simpson             793 3290




QUALITY CONTROL                             Report prepared by      Chris Griffiths    793 3217
                                            Checked by              Donald Simpson     793 3290
       Corporate Services (Finance), Salford Civic Centre, Chorley Road, Swinton. M27 5AW
                                                 Page 1
                         SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF            SUBJECT               AIMS/OBJECTIVES              MAIN CONCLUSIONS             MANAGEMENT RESPONSE

                                      CORPORATE SERVICES DIRECTORATE
1891   E-merge    Project                               The audit examined many
                             - The objective of the audit                                     Since         September,
       Purchasing                                       risks in the different
                               has been to identify the key                                   consultation has taken
                               risks     threatening    categories and found that
                                                        the                                   place with e-merge
                               success of the purchasingthey were adequately                  Project Management to
                               aspect of the e-merge    controlled.    The project            obtain agreed official
                               Project and assesses the team and other personnel              responses      to     the
                               degree of control over   have shown commitment                 recommendations.
                               these risks.             and worked hard to                    Agreement has not been
                                                        implement the system.                 fully reached in respect
                               Risks have been examined Various problems have                 to 11 out of the 15
                               and assessed in the been                 overcome,             responses. Accordingly,
                               following categories:    particularly those arising            the Appendix to the final
                                                        from        delays      in            report includes original
                                    Business and user establishing the Finance               responses, Internal Audit
                                     requirement risks, Support Group (FSG).                  comments and follow-up
                                                                                              responses for the 11 in
                                   Supplier        risks     The audit did, however,         question.
                                    (Consultancy              identify risks related to the   There are some 15
                                    services, as opposed      following issues that were      different     sets     of
                                    to software/hardware      not adequately controlled       conclusions,
                                    suppliers),               at the time of the audit:       recommendations,
                                                                                              responses and audit
                                   Personnel-related             User involvement           comments in the report.
                                    risks (project staff,          and commitment.            Internal Audit believes
                                    users,          FSG           Project management         that reference to the full
                                    purchasing team),              – commitment and           report is essential in


                                                        Page 2
                SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF   SUBJECT                AIMS/OBJECTIVES            MAIN CONCLUSIONS         MANAGEMENT RESPONSE
                          System development               understanding       of order to gain a real
                           /implementation                  Steering       Group understanding of the
                           risks,                           members.               issues involved
                                                           Project management
                            Project management             –            resource
                             risks.                         identification and
                                                            planning.
                                                           Business      Process
                                                            Re-engineering and
                                                            management
                                                            information needed
                                                            to achieve expected
                                                            benefits
                                                           Organisation issues
                                                            related     to     the
                                                            establishment of the
                                                            FSG               and
                                                            Directorate roles.
                                                           Implementation
                                                            support,            in
                                                            particular
                                                            communications
                                                            between the Project
                                                            Team              and
                                                            Directorates.
                                                           User training.

                                                    Most key issues were


                                               Page 3
                          SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF            SUBJECT                 AIMS/OBJECTIVES            MAIN CONCLUSIONS            MANAGEMENT RESPONSE
                                                              established at the start of
                                                              the audit testing in June
                                                              2000. Details of these
                                                              issues, together with a
                                                              number       of    informal
                                                              recommendations, were
                                                              discussed with the Project
                                                              Director at the time.

                                                              Audit testing of controls
                                                              was completed in August
                                                              2000 and the first draft
                                                              audit report was issued in
                                                              September. There has
                                                              been a considerable delay
                                                              in finalising the report (see
                                                              the “Response” column).

                                                              However,          continued
                                                              Internal Audit attendance
                                                              at e-merge steering group
                                                              meetings has established
                                                              that the key issues covered
                                                              in the final report have
                                                              remained relevant.
1936   Information       Society To identify the risks and The project is on course to There were no Audit
       Project                   controls associated with the achieve     it's    primary Report recommendations
                                 following aspects at this objectives:                    deemed necessary.


                                                         Page 4
                        SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF           SUBJECT               AIMS/OBJECTIVES            MAIN CONCLUSIONS          MANAGEMENT RESPONSE
                              stage in the project:            To improve service
                                                                 delivery.
                                  Requirements                To improve social
                                    analysis.                    inclusion.
                                  System solution -           To improve the
                                    software.                    local economy.
                                  System solution -       In recognition of its
                                    hardware.              achievements in this area
                                  Suppliers - internal    the Authority has recently
                                    and external.          been formally designated
                                  Personnel           -   as      an       Electronic
                                    development     and    Government       Pathfinder
                                    system users.          Authority.
                                  System development
                                    and implementation.
                                  Project and change
                                    management
                                    (including funding
                                    issues).
1931   Conveyancing           The objective of the audit   Overall the areas covered All recommendations
                              was     to    provide  an    by this review were found were accepted.
                              independent appraisal of     to      be      adequately
                              the adequacy of the          controlled.    Procedures
                              controls in the key          were found to be operating
                              functional processes that    effectively and only three
                              are operating relating to    recommendations      were
                              conveyancing. The agreed     deemed necessary in order
                              scope of the audit was to    to bring controls to a

                                                      Page 5
                          SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF             SUBJECT              AIMS/OBJECTIVES              MAIN CONCLUSIONS            MANAGEMENT RESPONSE
                                identify the risks and satisfactory level in all
                                controls associated with the areas.
                                following processes:
                                 Purchase of Land and
                                    Buildings
                                 Sale of Land and
                                    Buildings
                                 Leases, tenancies and
                                    easements.
                                 Rent Reviews
                                 Reports on Title
                                 Improvement
                                    grants/sale of Council
                                    Houses.

1926 Printing                   The audit sought to check     Satisfactory        controls   All     recommendations
                                that adequate controls were   existed in all areas that      have been accepted and
                                in place and operating        were subject to audit          agreed.
                                effectively in respect of     review.               Minor
                                key functional processes      recommendations        have
                                undertaken by the Printing    been made to improve
                                Unit.                         existing levels of control.
1902 Car Loans                  The scope of the audit        A number of weaknesses         Management accepted
                                included an independent       were identified in the         and agreed to implement
                                review of the following       various processes.             most        of      the
                                processes;                                                   recommendations.
                                    Receipt            and   Some of the weaknesses
                                       processing of car      relate  to   efficiency Other recommendations

                                                        Page 6
                SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF   SUBJECT              AIMS/OBJECTIVES              MAIN CONCLUSIONS            MANAGEMENT RESPONSE
                           loan applications.       measures      within     the   were     accepted    but
                          Payment of loan          system, whilst others          require some delay or
                           advances.                could result in financial      further work before they
                          Recovery           and   loss to the City Council.      can be implemented.
                           repayment of loans.
                          Monitoring of loans.     Recommendations were           The incorporation of car
                                                    made to improve controls       loans into the SAP
                                                    within each of the             payroll system was
                                                    processes.                     accepted, but will be
                                                                                   delayed until 1st April
                                                    Efficiency improvements        2002 due to current
                                                    recommended        include     resource difficulties in
                                                    checking and verifying         the payroll team within
                                                    loan application details by    the FSG.
                                                    a senior officer and the
                                                    updating of the computer Finance staff need to
                                                    package used to reconcile liase with legal staff
                                                    loan accounts.              relating to the car loan
                                                                                agreement.
                                                    Incorporating the loans
                                                    service into the SAP The linking of the
                                                    payroll system could also amount of loan to the
                                                    make                further salary grading structure
                                                    improvements             to was agreed in principle
                                                    efficiency.
                                                                                The implementation will
                                                    The       most      serious be linked to the new loan
                                                    weakness, which could agreement subject to


                                              Page 7
                       SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF          SUBJECT              AIMS/OBJECTIVES            MAIN CONCLUSIONS           MANAGEMENT RESPONSE
                                                         result in financial loss,     research     into    other
                                                         relates to the recovery and   authorities practices and
                                                         repayment of loans. The       experiences,      together
                                                         legal agreement used does     with consultation with
                                                         not have the necessary        the trade unions.
                                                         provisions required by the
                                                         consumer credit act and so
                                                         is not legally enforceable.

                                                         This has caused problems
                                                         on     occasions     when
                                                         employees have left the
                                                         Authority             with
                                                         outstanding loan balances.

                                                         In addition an upper limit
                                                         to loans was suggested,
                                                         linked in proportion to an
                                                         officers salary.

1939 Council Tax             The Audit considered the                         All but two of the
                                                         It is acknowledged that
                             risks and controls                               recommendations made
                                                         controls have now been
                             associated with the         introduced to remedy were accepted. The two
                             following areas; -                               outstanding ones were
                                                         many of the weaknesses
                                                         identified   during  agreed to in principle,
                                                                             the
                                 Banding of             previous audit.      but are not considered by
                                  properties                                  management       to    be
                                                         However, a number of feasible until the new


                                                    Page 8
                SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF   SUBJECT              AIMS/OBJECTIVES                MAIN CONCLUSIONS         MANAGEMENT RESPONSE
                          Assessment of             weaknesses still exist computer system is
                           liabilities               within the Council Tax introduced in 2003.
                                                     system.
                          Awarding of relief                                  Audit have suggested
                                                     The main areas of concern introducing       interim
                          Generation of Bills       are; -                    control measures.

                          Financial                      Student     dwelling
                           Information                     exemptions are not
                                                           reviewed. This task
                          Enforcement of                  has     not     been
                           debts                           completed due to
                                                           time     constraints.
                          Council Tax                     The omission of the
                           Database                        exercise       could,
                                                           however result in a
                                                           considerable
                                                           financial loss to the
                                                           authority.

                                                          Formal          Data
                                                           Protection training
                                                           is not provided to
                                                           staff to assist in
                                                           adequately
                                                           safeguarding
                                                           confidential data.



                                                Page 9
                            SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF             SUBJECT                AIMS/OBJECTIVES              MAIN CONCLUSIONS         MANAGEMENT RESPONSE
                                                                    An excessively high
                                                                     number             of
                                                                     reminders         are
                                                                     currently issued for
                                                                     overdue     accounts
                                                                     before        formal
                                                                     recovery action is
                                                                     taken, resulting in
                                                                     outstanding debts
                                                                     not being collected
                                                                     in the most effective
                                                                     and timely manner.

                                                                    The number of staff
                                                                     with access to the
                                                                     manual adjustment
                                                                     screen is too high,
                                                                     weakening control
                                                                     over the system and
                                                                     increasing       the
                                                                     possibility of the
                                                                     taxpayer      being
                                                                     charged incorrectly.

                                    COMMUNITY & SOCIAL SERVICES DIRECTORATE
1919   Care First Project         The audit monitored the The computer system The            implementation
                                  project implementation on procured will meet the timetable     will    be
                                  an ongoing basis and needs of Social Services.   reviewed      in   mid-


                                                         Page 10
                SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF   SUBJECT              AIMS/OBJECTIVES               MAIN CONCLUSIONS           MANAGEMENT RESPONSE
                      assessed the degree of         The new system will           February 2001 to take
                      control over the following     provide new facilities and    account of the BPR
                      risks:                         management information        recommendations      and
                           Project/Change           that can be used to           other factors such as the
                             Management risks.       monitor and improve           progress of training and
                           Requirements risks.      performance and service       future availability of
                           Software risks.          delivery.                     OLM staff for a 'go live'
                           Technology risks.                                      date.
                           Supplier risks.          Planned activities should
                           Implementation           ensure that the new system    It is accepted that all
                             risks.                  interfaces and operates       activities should have a
                           Personnel risks.         effectively with other        clear named person
                                                     computer systems.             responsible. To some
                           Funding risks.
                                                                                   extent this is due to the
                      The monitoring and risk
                                                     The system hardware is        way documentation has
                      assessment           process
                                                     resilient, compatible with    been set out but will be
                      included      an    ongoing
                                                     network standards and         addressed to ensure
                      examination of appropriate
                                                     will     support    system    clarity in who is
                      project and other control
                                                     development            and    responsible for each
                      documentation. There was
                                                     operational requirements.     activity.
                      an     ongoing     dialogue
                                                     The Project Management
                      between Internal Audit and
                                                     organisation structure and
                      the Project Manager in
                                                     the     methods    adopted
                      respect of the management
                                                     should ensure a successful
                      of risks, as the project has
                                                     implementation.
                      progressed.
                                                     Internal Audit considered
                                                     that the plan timescale for


                                              Page 11
                SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF   SUBJECT              AIMS/OBJECTIVES             MAIN CONCLUSIONS           MANAGEMENT RESPONSE
                                                   the          Phase         1
                                                   implementation       might
                                                   have been too tight. There
                                                   was a concern that
                                                   shortcuts may be taken to
                                                   achieve       the     target
                                                   implementation date. The
                                                   resolution of       various
                                                   Business            Process
                                                   Review/Re-engineering
                                                   (BPR) issues and changes
                                                   to     existing    working
                                                   procedures could have
                                                   been significantly delayed,
                                                   an area where significant
                                                   improvements              in
                                                   performance              are
                                                   anticipated.

                                                   There were a small
                                                   number of project plan
                                                   activities that should have
                                                   resource names against
                                                   them showing who is
                                                   responsible      for   their
                                                   completion.




                                             Page 12
                         SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF            SUBJECT                AIMS/OBJECTIVES           MAIN CONCLUSIONS               MANAGEMENT RESPONSE
                                       EDUCATION & LEISURE DIRECTORATE
1930   Catering Services –     The audit sought to              The processes of the          Where      practical  to
       Staff Management      & examine the procedures           Recruitment and Selection     implement,           the
       Personnel               operating with regard to the     of    Staff,   Monitoring     recommendations were
                               staff management within          Annual              Leave     readily accepted.
                               school kitchens and the          Entitlement,
                               associated        personnel      Disciplinary/Grievance        There are two areas
                               function.                        Procedures, Monitoring of     where assessment and
                                                                Kitchens/Maintenance of       training will have to be
                                                                Records       and      the    carried out prior to
                                                                Processing              of    implementation of the
                                                                Starters/Leavers are well     recommendations.
                                                                controlled.

                                                                The controls operating
                                                                within the processes of
                                                                Training of Staff and
                                                                Monitoring/Recording of
                                                                Sick Leave are less
                                                                effective.
                                    ENVIRONMENTAL AND CONSUMER SERVICES
1865   Skip Hire                The audit sought to check       Audit testing provided        The Pro-forma document
                                that adequate controls were     management with the           currently used will be
                                in place and operating          confirmation that there are   reformatted and systems
                                effectively in respect of the   several areas in need of      introduced to enable
                                following key functional        review                        more           effective
                                processes undertaken by                                       monitoring.
                                the Skip Hire Service:           There is insufficient


                                                         Page 13
                SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF   SUBJECT                AIMS/OBJECTIVES             MAIN CONCLUSIONS          MANAGEMENT RESPONSE
                                                      evidence to confirm         A VFM review will be
                            Hiring              of   that       management       carried out in the near
                             skips/compactors to      performs       adequate     future.
                             the     public/private   monitoring of the           Procedures    will   be
                             enterprises.             performance of the          introduced to enable
                            Collection        and    service.                    payment to be made by
                             disposal of waste       It is not evident           the customer in advance
                            FLARE            diary   whether or not the          of the service being
                             database                 service is providing        provided.
                            Booking          diary   value for money.
                             database.               Prompt payment is not       Written notification will
                                                      always assured as some      be issued to all relevant
                                                      invoices are issued         personnel      informing
                                                      after the service has       them of the need to sign
                                                      been provided.              all           appropriate
                                                     Much        of       the    documentation.
                                                      documentation relating
                                                      to jobs completed by        The relevant pro-forma
                                                      the skip drivers are not    will be reformatted
                                                      signed            and/or    accordingly.
                                                      authorised.

                                                      No audit trail exists to
                                                       monitor     the     skip
                                                       drivers’ workloads.




                                               Page 14
                          SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF            SUBJECT                AIMS/OBJECTIVES          MAIN CONCLUSIONS              MANAGEMENT RESPONSE
                                        HOUSING SERVICES DIRECTORATE
1920   Integrated     Housing The audit aims were to          The computer system           All    recommendations
       Management Project     monitor       the     project   procured will meet the        were agreed.
                              implementation on an            needs       of     Housing
                              ongoing basis and assess        Services.                     The recommendations
                              the degree of control over      The new system will           will be implemented
                              the following risks:            provide new facilities and    when appropriate, as the
                                  Project/Change             management information        Project progresses.
                                     Management risks.        that can be used to
                                  Requirements risks.        monitor and improve
                                  Software risks.            performance and service
                                  Technology risks.          delivery.
                                  Supplier risks.            Planned activities should
                                  Implementation             ensure that the new system
                                     risks.                   interfaces and operates
                                  Personnel risks.           effectively with other
                                                              computer systems.
                                  Funding risks.
                                                              The system hardware is
                              The monitoring and risk
                                                              resilient, compatible with
                              assessment            process
                                                              network standards and
                              included      an     ongoing
                                                              will     support    system
                              examination of appropriate
                                                              development            and
                              project and other control
                                                              operational requirements.
                              documentation. There was
                                                              The Project Management
                              an     ongoing      dialogue
                                                              methods adopted should
                              between Internal Audit and
                                                              ensure      a    successful
                              the Project Manager in
                                                              implementation       within
                              respect of the management
                                                              budget. However, it was
                              of risks, as the project


                                                        Page 15
                        SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF           SUBJECT              AIMS/OBJECTIVES              MAIN CONCLUSIONS          MANAGEMENT RESPONSE
                              progressed.                  recognised that failure to
                                                           clarify changes to the
                                                           Housing Allocation policy
                                                           before the end of February
                                                           2001 would cause plan
                                                           slippage.
                                                           The         only      audit
                                                           recommendation was that
                                                           all     outstanding    plan
                                                           activities should show
                                                           who was responsible for
                                                           their completion. A small
                                                           number of plan activities
                                                           did not contain this
                                                           information at the time of
                                                           the audit.
1932   Urban Renewal          The audit sought to          The process of budget         Management accepted
                              examine the procedures       monitoring is particularly    and agreed to implement
                              currently operating in       well controlled. The          all       of        the
                              respect of the               procedures operating          recommendations.
                              administration, calculation, within the processes of
                              approval and award of        Administering Grants, the
                              Urban Renewal grants by      Maintenance of Builder’s
                              the Strategy team.           List and the Management
                              The audit has considered     of Associated Data stores,
                              the procedures operating     although generally
                              within the following areas; effective, are in need of
                                                           additional controls.


                                                      Page 16
                SUMMARY OF REPORTS ISSUED 17TH MARCH 2001 TO 15TH JUNE 2001
REF   SUBJECT              AIMS/OBJECTIVES             MAIN CONCLUSIONS      MANAGEMENT RESPONSE
                          Administering           A small number of
                           Grants                  recommendations are
                          Maintenance of          contained in the
                           Builder’s List          Conclusions and
                          Budget Monitoring       Recommendations report.
                          Management of
                           Associated
                           Datastores




                                             Page 17

								
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