Agenda item

(a)       That the report be noted;

(b)       That the Internal Audit Manager provide details on the number of recommendations made and how many had not yet been implemented;

(c)        That the Internal Audit Manager ask the relevant Head of Service to provide details on the estimated implementation date of the Contract Procedure Rules and how any risks would be covered, before the next meeting of the Committee; and

(d)       That from the June 2013 meeting, the appropriate and accountable Head of Service/Director may be invited to appear before the Committee to explain why Internal Audit recommendations have not been implemented within the agreed timescale.

The Internal Audit Manager presented the update report on progress of the Internal Audit department.

Following a proposal previously made by the Committee and subsequent Cabinet approval, it was reported that additional resources had been sought to carry out work on the Plan which was aimed to be completed in April 2013.  The report indicated that since the Committee had last met, three projects had been deferred from the Plan and one added.  The Internal Audit Manager advised that a project on Pollution Control had also been deferred.

On Recommendation Tracking, the Internal Audit Manager said that the request previously made by the Committee for information on the reason for non-implementation of recommendations had been raised with the Corporate Management Team (CMT) with the support of the Chief Executive and it had been agreed that accountable senior officers would need to give their own feedback on the reason for any failure to do this.  It was hoped that this additional pressure would have a positive impact as the new system had been introduced and the additional information sought would be included in the next progress report at the June 2013 meeting.

The report detailed reasons for non-implementation of recommendations on Procurement, Consultants and Finance.  On the latter, the Head of Finance gave assurances on the value of audit work but said that she had been unable to meet the timescale required to respond due to budget work during the first quarter of 2013 which was a particularly challenging time, taking into account the introduction of new regulations on the Council Tax Support Scheme.  It was envisaged that three of the four reports would be dealt with by the end of March 2013 with the Capital Programme item expected to be resolved at the end of April.  She said that the department had undergone a major review and would be in a stable position going forward.

Mr. P. Williams acknowledged budget work pressures faced by the department but pointed out that some recommendations dated back to 2010.  In raising concerns about resources within the department, he asked for details on the number of recommendations made on audit reports and how many of these were not yet implemented.  The Internal Audit Manager agreed to provide a note on this to the Committee and pointed out that this type of slippage was an issue across other Council departments and not confined to Finance.  The figures in the report represented those recommendations due only at this point in time.

In addressing concerns raised by Members on resources, the Head of Finance said that the section had undergone a review to put in place a new structure which, for a number of organisational reasons, had taken longer than expected to achieve.  The new structure had been implemented from 1 January 2013 following the evaluation of jobs having been completed.  A number of vacant posts had been retained to give greater flexibility and mitigate any risk of redundancy, and it was intended that interim/temporary arrangements would soon be brought to a close with appointments made to those posts.  The Head of Finance said that the structure was fit for purpose and that throughout the review, the department had continued to support the organisation on some major pieces of work.  She hoped that Members would appreciate the deadlines which applied to the work of the department, for example the Statement of Accounts, which in the majority of cases were fixed with no opportunity for delay.

Mr. Williams said that this was recognised and that if there was an issue with resources in the department, he hoped that the Committee would support any request for assistance.

Councillor A. Woolley said that the issue was one of accountability and which level of officer should make a response on outstanding items.  The Internal Audit Manager explained that following discussion of final recommendations with managers/Heads of Service of the areas audited, those officers responded to Internal Audit with an action plan to meet the recommendations and naming the officer responsible, who was usually a manager or Head of Service.  Under the new system, failure to respond to non-implementation of a recommendation would be pursued at Director level.

Councillor Woolley said that adequate resources must be made available if recommendations were to be progressed.  The Chair commented that the Head of Paid Service was responsible for ensuring staff resources.  Mr. Williams pointed out that in agreeing the implementation deadline with Internal Audit, the relevant manager must take into account the available resources.

Ms. A. Hughes of Wales Audit Office (WAO) said that the WAO report received at the end of 2012 had drawn attention to the issue which was more about ensuring that managers had regard to the importance of responding to Internal Audit.

In response to Mr Williams’ comment, the Democracy & Governance Manager said that the Committee should acknowledge the potential for exceptional issues, such as the Council Tax Support Scheme, to emerge after agreement of the timescale by managers, which may require diversion of resources.  He suggested that the introduction of the new system for more senior officers to provide explanation would result in positive changes and suggested that this be given a chance to make an impact.

The Head of Legal & Democratic Services reiterated that the option to invite relevant Directors, backed up by Heads of Service or managers, would be helpful in reminding officers of actions to be done.  He pointed out the timings between this meeting and the previous meeting of the Committee, and said that the new system would require time to adjust and move forward in time for the next meeting in June 2013.  In addition, he suggested that the briefings held with the Chair and Vice-Chair could be used to identify and raise any concerns about outstanding responses and to decide on whether to invite a senior officer to attend the Committee meeting.

Councillor Jones felt that the commitment to agree on deadlines to respond to Internal Audit should be included as part of managers’ appraisals.  The Chair commented that concerns had previously been raised on staff appraisals.

Councillor I.B. Roberts said that outstanding responses from officers to Internal Audit had been an issue for some time and that this was a problem throughout the Authority.

Mr. Williams asked about the reason for deferral of the Pollution Control item and whether there was any implication of risk.  He also asked for clarification on the reason for outstanding responses on Procurement, some of which dated back to 2010.  It was explained that the deferral had been requested due to a service review of the area currently taking place.  The Internal Audit Manager had agreed to the deferral due to the reason stated and was satisfied with the risk.  On Procurement, the reissuing of the Council’s Contract Procedure Rules (CPRs) had been delayed as these needed to be in line with the national set of CPRs yet to be finalised.  Mr. Williams asked if a response could be shared before the next meeting on how long the new system would take to be implemented and how any risks would be covered.  The Internal Audit Manager agreed to provide this.

Councillor Roberts asked if a note could also be provided by the Chief Executive, as Head of Paid Service, on steps being taken to ensure that actions and responses were made in response to Internal Audit recommendations.  He subsequently withdrew this request as the Democracy & Governance Manager gave a reminder that the new system had been agreed by CMT chaired by the Chief Executive.

The Head of Legal & Democratic Services pointed out that the expectation to provide reasons for non-compliance was now in place following agreement at CMT and he felt that the relevant Heads of Service may be better placed to provide answers.  The Chair commented that the Director should also be invited to the relevant meeting to ensure they were aware of the issue.

Councillor Woolley proposed an additional recommendation that from the June 2013 meeting, the responsible officer may be invited to appear before the Committee to explain why Internal Audit recommendations had not been implemented within the agreed timescale.  The Democracy & Governance Manager suggested that this be changed to appropriate Head of Service/Director.  This proposal was moved and seconded by Councillors Jones and Roberts and then agreed by the Committee.

In response to a query by Councillor G.H. Bateman, the Internal Audit Manager was unable to give an estimate of the timescale of the ongoing major investigation.  Following a question by Mr. Williams, the Internal Audit Manager replied that there were sufficient resources for this.

On Performance Indicators, the Internal Audit Manager reported on the average number of days taken to return draft reports and said that there were a number of stages leading up to the final reports.  The current timing of reports coming through the system meant that the target was not currently being met, but was improving.

It was also reported that following analysis of the self-assessment questionnaire, the Internal Audit Manager had contacted each Member of the Committee to identify any training needs.  No requests for training had been received to date, however the Committee was encouraged to contact the Internal Audit Manager if they required more detail on a particular area.

RESOLVED:

(a)       That the report be noted;

(b)       That the Internal Audit Manager provide details on the number of recommendations made and how many had not yet been implemented;

(c)        That the Internal Audit Manager ask the relevant Head of Service to provide details on the estimated implementation date of the Contract Procedure Rules and how any risks would be covered, before the next meeting of the Committee; and

(d)       That from the June 2013 meeting, the appropriate and accountable Head of Service/Director may be invited to appear before the Committee to explain why Internal Audit recommendations have not been implemented within the agreed timescale.