The Chief Internal Auditor reported that in order to assist in effective corporate governance and fulfil statutory requirements, the Internal Audit Section of the Finance Department reviewed management and service delivery arrangements within the Council as well as financial control systems. Work areas were selected for review on the basis of risks identified on the Corporate Risk Register and as assessed by Internal Audit in consultation with Chief Officers and Managers. His report identified and evaluated the performance of the Internal Audit Section in accordance with the Internal Audit Plan and included details of the audit work undertaken during the period 1 September – 31 October 2011. He commented that the format and content of his report was currently under review and a working party of officers and Members had recently met and had considered the development of a revised template for future reports.

He identified a number of items of note concerning ongoing audit work, one of which related to an investigation by the Counter Fraud Team into a number of concerns raised by a whistleblower in relation to the activities of an arms length organisation that undertook work on behalf of the Council. In response to questions from Members, the Chief Internal Auditor indicated that the Chief Executive and the Director of Law, HR and Asset Management were aware of the investigation. Upon its conclusion, a report would be prepared by Internal Audit for the Chief Executive.

An item of significance which required action by Members had also been highlighted in relation to a follow up audit undertaken in respect of the DASS Day to Day Procurement system, where a high priority recommendation had still not been addressed. This was in relation to a failure to locate a contract and he reported that following a recent re-organisation, responsibility for the management of the system now rested with the Department of Law, HR and Asset Management. Although a number of requests to the Department for a swift resolution of the matter had been dispatched, no response had yet been received. In response to a number of comments from Members that the Director of Law, HR and Asset Management, or his legal representative, should have been present at the meeting to address Members’ concerns, the Chair advised that he had released the Head of Legal and Member Services from the meeting in order for him to prepare for a tribunal hearing. The Deputy Director of Finance reported that he had discussed the matter with the Head of Legal and Member Services prior to him leaving the meeting. He had advised that the transfer of responsibility had only occurred recently; he was fully aware of the urgency and steps were in place for the matter to be addressed.

The Chief Internal Auditor commented also upon pressures as a result of a shortfall in staffing resources, brought about by absence, sickness, secondment and jury service. However, in the short term, to ensure that service delivery targets were achieved for 2011/2012, the Deputy Chief Executive/Director of Finance had agreed to the recruitment of a number of temporary agency staff.

Resolved –

(1)  That the report be noted.

(2)  That the Director of Law, HR and Asset Management be requested to write to the Chair and group spokespersons at the earliest opportunity to indicate the likely timescale for compliance with the high priority audit recommendation in relation to the DASS Day to Day Procurement system.

(3)  That the Chair be requested to write to the Chief Executive, in order for him to ensure that all Chief Officers, or their representatives, should, in future attend every meeting of the Audit and Risk Management Committee, as a matter of course.

(4)  That the Director of Law, HR and Asset Management and the Director of Adult Social Services be requested to ensure their attendance at the next meeting of the Committee.

(5)  That an update in relation to the Counter Fraud Investigation be presented to the next meeting of the Committee.