Agenda item

         3.1  Outstanding Matters

  3.11  Previous Priority One Recommendations

  3.15  Debtors

  3.18  Progress and new issues since the last meeting

  3.24  Waivers

  3.32  Value for Money (VfM)

3.46  Current Matters

3.47  New Priority One Recommendations

3.49  Housing Benefit Update

3.52  Partnership Working

3.54  Risk Management 

The report advised of the recent audit activity across the Council and provided updates on matters arising from the last meeting of the Audit Sub-Committee in December 2010.

(a)  Notification of Fraud Prosecutions to Benefits Claimants (Appendix A)

The Chairman drew Members’ attention to Appendix A which was a leaflet that would be sent to all residents who received the Council’s annual benefit statement. The leaflet, which appeared in the agenda as black and white, would be reproduced in the Council’s corporate logo colours.

The Sub-Committee commented on the design and wording of the leaflet and whilst some felt that the wording setting out the risk of prosecution for fraudulent behaviour was not strong enough, many others felt that the leaflet’s message was couched in the correct wording, used the right tone, and assumed that most recipients were not of a criminal frame of mind. It was suggested that the line “Help your Council to protect your public funds” be highlighted. After a few more design suggestions, the Chairman asked that Officers change the leaflet as they felt necessary in light of Members’ comments.

RESOLVED that officers be authorised to amend the leaflet attached at Appendix A of the report as appropriate.

(b)  Reclaiming Staff Costs for Successful Prosecution

The Chairman advised that a progress report on this subject would be submitted to the Sub-Committee at its meeting in March 2012.

RESOLVED that a report on the Reclamation of Staff Costs for Successful Prosecutions to be submitted to the March 2012 meeting of the Audit Sub-Committee.

(c)  Housing Benefit Future Proposals

The Chairman drew Members’ attention to a letter he had sent to Lord Freud on this subject and agreed to circulate it to Members of Parliament for the Borough.

RESOLVED that the letter written by the Chairman of the Audit Sub-Committee to Lord Freud be circulated to all Members of Parliament for the Borough.

(d)  Officer Expenses

The Sub-Committee was advised that the perceived increase in staff expenses within Children and Young People Services was as a result of payments previously being paid from petty cash and payments now being paid through the payroll system.  The Head of Finance (CYP) stated that all managers had been informed that staff expenses should be claimed through payroll in future.

(e)  Progress and New Issues Since the Last Meeting

A question was raised in relation to schools applying for academy status and those schools not having internal audits carried out by the Council. The Head of Finance (CYP) advised that the government had discontinued the rules for financial management in schools in November 2010. Schools would still be required to have an audit but they would not be obliged to buy services from the Council. It was noted that private accountants could carry out systems audits. Members asked if schools would save money if they did not use the Council services and whether the Council audit was considered “too tough”. The Chief internal Auditor advised that the feedback received from schools had been very positive and there was an obvious need to be competitive with regard to the cost charged for the Council service.

Following a question in relation to schools being charged a proportion of the Dedicated Schools Grant (DSG) administration cost, Members were advised that as a result of Section 251 costs could not be charged to the DSG.

(f)  Waivers

A list of waivers across the Council for the period September 2010 to February 2011 was submitted for Members’ consideration (Appendices C and D refer).

In relation to paragraph 3.29 of the report, a Councillor drew attention to the fact that the agreement of the Director of Legal, Democratic and Customer Services, the Director of Resources and the appropriate Portfolio Holder were required to sign off contracts (or proposed contracts) exceeding £1 million, and the fact that this did not seem correct. The Chief Internal Auditor agreed to investigate this matter.The Sub-Committee was advised that the approval of the Executive was required for such contracts. The approval for sign off on waivers should not be higher than the limit above which Executive approval was required for contracts.

Members were informed that services and supplies costing under £5,000 did not need competitive quotations. Anything above £5,000 required officers to obtain three quotations unless exempted.

Councillors raised the following questions:

·  Whether it was the Council’s policy to use local contractors wherever possible to encourage the Borough’s economy.

·  The lack of tendering process for smaller undertakings.

·  Whether waivers were reported to the appropriate Policy Development and Scrutiny (PDS) Committee.

RESOLVED that the Chief Internal Auditor investigate the terms of approval for sign off of contracts exceeding £1 million.

(Would Members note that paragraph 3.29 of the Internal Audit Progress Report was incorrect and should read “Where the value of a relevant contract (or proposed contract) exceeds £1 million the agreement of the Director of Legal, Democratic and Customer Services, the Director of Resources and the approval of the Executive or Council as appropriate shall be obtained.”.)

(g)  Parking Income

The Vice-Chairman asked if the rationalisation of the car parking charging structure would take into consideration the impact on businesses in the area and not just the number of users of the parking facilities. This issue had been raised at Environment PDS Committee. Another Councillor commented that VfM in this area was problematic and suggested that officers look at benchmarking data. The word rationalise could be taken to mean standardise. There should be a variety of charges based on supply and demand, and local conditions.

RESOLVED that the Chief Internal Auditor email the Audit Sub-Committee giving details of the criteria used when setting car parking charges.

(h)  Town Centre Management

Orpington Town Centre had recently enjoyed a £2 million improvement scheme. A Councillor enquired whether a VfM exercise had been carried out since the improvements had been concluded. For example, had the footfall increased as projected at the inception of the project? The same exercise could also apply to Langley Park Boys School concert hall. The Chief Internal Auditor responded that audit did not ask such overt VfM questions but rather looked at the arrangements in place to deliver VfM.

(i)  Waste

Officers were congratulated for meeting the criteria fully after a review of VfM arrangements.

(j)  CareLink

Members noted that there would be a report to the next meeting of the Sub-Committee in relation to CareLink. The officer advised that there had been teething problems in the methodology of these audits and the issue needed to be moved forward. CareLink would be referred on to the Improvement Team.

RESOLVED that a report on CareLink audit issues be submitted to the June 2011 meeting of the Audit Sub-Committee.

(k)  Planning

It was noted that compared to other local authorities the Borough Planning service was considered to be low cost. Officers were asked what was being done to engage and enthuse departments into accepting the audit process. The Chief Internal Auditor responded that although it was early days, the response from officers had been fairly positive. It was intended to develop and refine the matrix and Audit would start to share accrued knowledge and details of benchmarking clubs and arrangements with the relevant clients.

(l)  Risk Register

RESOLVED that an updated Risk Register be submitted to the June 2011 meeting of the Sub-Committee.

(m)  Previous Priority One Recommendations – Appendix B

Following a question from the Chairman the Sub-Committee was advised that the Chief Cashier was investigating parking income reconciliations and the Audit Team would be following this up with a report back to the Sub-Committee. A credit card reconciliation would also take place within the next three to six months.

RESOLVED that a report on parking income reconciliation be submitted to the June 2011 meeting of the Audit Sub-Committee.

In relation to FMSIS Assessment of Primary School C 2010-11 and staff salaries at the school being paid twice in one month, concern was expressed that some teachers had not brought the double payment error to the School’s attention. Members were advised that some of the double payments had still not been returned, mainly from staff that had since resigned or retired from the school. Arrangements were being made for them to pay back the outstanding amount over a six month period.

(n)  Waivers (Appendix C)

Concern was expressed that although the information contained in Appendix C, especially in the “Reason” column, was sufficient for the Audit Sub-Committee, should the PDS Committees be advised of this information, then the “Reasons” were not good enough.

Following a question regarding the Christmas lights, the Deputy Chief Internal Auditor explained that a full tendering process for the supply of Christmas lights for three consecutive years had been undertaken. A tender for £197,000 for three years had been considered but because of current budget constraints it was felt that a year at a time at £65,000 per year would be prudent so therefore a waiver had been permitted.

(o)  Waivers (Appendix D)

Rule 13, as mentioned in the Appendix, was clarified as Contract Procedure Rule 13.

RESOLVED that:

(a)  the report be noted;

(b)  the continuing achievements of the counter fraud benefit partnership with Greenwich Council be noted;

(c)  the action proposed for publicising to claimants the successes in prosecuting benefit fraud cases be noted; and

(d)  the findings of the review of VfM arrangements be noted.