Agenda item

Report FSD17036

The Head of Audit introduced a report providing information surrounding recent audit activity across the Council and providing information on matters arising from previous meetings of the Audit Sub-Committee.

Further progress had been made on existing Priority One recommendations comprising Extra Care Housing (1 priority one recommendation made which had been implemented); Transition Team (1 priority one recommendation made which had been implemented); Learning Disabilities- (3 outstanding priority one recommendations not tested pending management report to Care Services PDS); Community Infrastructure Levy (2 priority one recommendations which were outstanding); Manorfields (2 priority one recommendations made which had been implemented); Document Storage and Retention (2 priority one recommendations which remained outstanding);Temporary Accommodation (3 priority one recommendations that would be followed up and reported to the Audit Sub-Committee in June 2017); NNDR (1 recommendation made that will be followed up and reported to the Audit Sub-Committee in June 2017).

A number of new Priority One recommendations had also been identified comprising Reablement Team; Waivers (2 Priority one recommendations both accepted by management for implementation); Leaving Care; Waste Services. Details of the recommendations were contained in Part 2 of the agenda.

Since the last meeting a further 12 redacted final reports had been published on the web, making 166 since publication first started.

From April 2016 to February 2017, 142 cases had been referred to the Single Fraud Investigation Service (SFIS).  The Council had been advised that there had been no prosecutions on these referrals in 2016/17, however, 6 cases were awaiting decision by the Crown Prosecution Service (CPS). The DWP had advised that they had recommended 30 administrative penalties for authorisation by Bromley in 2016/17 based on its referrals. The DWP had stated that they completed 5 prosecutions in 2016/17 in respect of Bromley claimants that were not referred by the Council with a further 9 cases awaiting decision by the CPS not referred by Bromley.  Members had previously agreed that given the absence of any agreement with the DWP for joint prosecutions, Officers should proceed to investigate and prosecute the Bromley fraud element of these cases, where appropriate, for council tax support if the overpayment exceeded £3,000, or below if there were some cases of blatant fraud e.g. submission of false documentation. This had already been implemented and there had been 4 successful prosecutions with others pending.

The Sub-Committee noted that following a recruitment process, Mr David Hogan, who was currently Head of Assurance for One Source, had been appointed Head of Audit.

At a previous meeting of the Sub-Committee, officers had set out the three ongoing objections to the accounts which had resulted in the accounts for 2012/13, 2013/14 and 2014/15 remaining open and costs escalating to a final total cost of £74,500.  The work of the previous external auditors had now been concluded and the objections were now closed. The previous auditors had issued Bromley with revised annual audit letters for each of the three years that made reference to the objections and proposed recommendations. There had been no objections to the 2015/16 accounts audited by KPMG, the Council’s current external auditors.

Councillor Huntington Thresher suggested that instead of contracts being waived, there may be scope for more reporting to Councillors prior to the waiver process being activated. The Director of Finance explained that LBB did work through a rigorous process in this regard and improvements to this arrangement were being implemented as reported to the Contracts Sub Committee.

The Committee noted section 3.67 of the report which provided a breakdown of the work of the External Auditors.

Members noted section 3.68 of the report which was the HMRC update. An audit would be undertaken to ensure that LBB were meeting new HMRC requirements on IR35, and that LBB were undertaking the proper checks to ensure that contractors were genuine limited companies, and were not claiming limited company status for tax avoidance purposes. The Director of Finance stressed the importance of undertaking the correct checks as under no circumstances would he wish LBB to be pursued by HMRC for tax.

Finally, the Committee noted section 3.72 of the report relating to Risk Management. Members noted that Risk Management training for staff had now been launched. Following agreement by the Audit Sub Committee, the Corporate Risk Register had been published on the web. It had been agreed that going forward, the Audit Sub Committee would have sight of both the departmental and contract risk registers. It was also intended that risk registers would go to PDS Committees to raise awareness. Risks would be reviewed twice a year and referred to PDS Committees. The purpose of this was not to review the risks themselves, but to review the controls around the risks. Members were informed that Zurich Insurance who were Bromley’s insurers had been commissioned to carry out a comprehensive review of LBB’s risk registers. They had already commenced work initially with a desk top review. The outcome would be reported to the Audit Sub Committee in November 2017. 

RESOLVED: That

1.  The progress report be noted.

2.  The list of Internal Audit Reports publicised on the web be noted.

3.  The list of waivers sought since October 2016 be noted.

4.  The update on cases referred to the DWP be noted.

5.  The latest position on the options to appoint a local auditor be noted.

6.  The outcome of the recruitment process for the Head of Internal Audit be noted.

7.  The final outcome of the objection to the accounts from the External Auditors be noted.

8.  The launch of the web based training for risk management, audit controls and focus on fraud be noted.

9.  The update on high and significant risks and actions taken to improve the process and approve the revised corporate risk register be noted.

10.The Chairman write to Bromley MPs to raise concerns with the issues identified concerning the SFIS.

Post Meeting Note:

Action with respect to resolution 10 would now be taken post General Election.