Agenda item

The Risk Manager presented the report. He reminded Members that the Internal Audit plan had been presented to the Committee in May. 43% of the plan was either completed or in progress. The shortfall arose from unplanned work, which had increased to 20% from 14% in the previous year. Also a member of the Audit & Risk Team had been seconded to the Procurement Team, resulting in a reduction of the Audit & Risk Team from just of 10 FTE posts to just over 9. 37.5% of reviews had been completed in the assigned days. The explanation of this was that the scope of a number of reviews had been widened. Customer satisfaction had been 91% and 73% of critical/high recommendations had been implemented by follow-up. He drew attention to the table of the position of Audit Reviews at the end of the second quarter on page 49. Councillor Macrae suggested that the clarity of this table when copied in black and white might be improved by the addition of a column containing the letter G, O, Y to show whether rows were red, green, orange or yellow in the colour original. He asked whether the Audit and Risk Team could be strengthened by the use of temporary staff. The Risk Manager replied that authority had been given for the recruitment of a temporary member of staff, but it the problem was that it could be time-consuming to train them in the use of specialised software.

In response to a question from Councillor Ward, the Risk Manager said that the methodology for identifying areas for investigation by risk level had been included in the information presented at the May meeting. When unplanned work was received, it was the lower risk items that were deferred. Councillor Ward asked whether it might be more efficient to review a whole service, rather than just individual aspects. The Risk Manager said that he did not rule this out, but at the moment that single issue approach was felt to be better. Councillor Macrae agreed that single-issue audits were preferable, because different activities had different values and different levels of risk. As he saw it, the Committee could either accept that 30% of planned work was dropped every year, or express concern that the same areas were being deferred repeatedly.

Mr Barker said that when lower-risk items were displaced by unplanned, it was not always clear whether or not they were permanently displaced. He suggested that this might be better managed in the context of 2-3 year operational plans, as he had previously suggested. The Risk Manager replied that there used to be 5-year and 3-year service plans for the Audit and Risk Team. At present it was felt that 1-year plans were more flexible, though he acknowledged there was an issue about the management of displaced work.

In reply to a question from Councillor Ward, the Divisional Director, Risk and Assurance said that factors used in assessing risk include the size of a budget, handling of cash, IT and the level of assurance achieved at the latest review.

RESOLVED to note progress made against the Internal Audit Plan for 2012/13.