Issue - meetings

This report details the outcome of audit and fraud work undertaken in 2005/06 and provides an opinion on the overall adequacy and effectiveness of the Council’s internal control arrangements.

Members considered a report which detailed the outcome of audit and fraud work undertaken in 2005/06 and provided an opinion on the overall adequacy and effectiveness of the Council’s internal control arrangements.

The 2005/06 Audit and Fraud Plan had been agreed by the Executive Member for Resources and Advisory Panel (EMAP) on 21 March 2005.  Internal Audit had successfully delivered 91.3% of the Plan, as compared with 90% the previous year.  Details of the audits completed and the reports issued were set out in Annex 2 to the report.  Details of the Audit Plan variations, agreed by the Section 151 Officer (Director of Resources) and recommendations made to address any control weaknesses reported to Resources EMAP on 20^th February, were set out in Annex 3.  Annex 4 provided a summary of audit findings for all investigations into suspected financial irregularities completed during the year, together with identified. Annexes 5 and 6 summarised counter fraud work completed in accordance with the Plan, and prosecutions and sanctions achieved during the year.

With regard to external assessment, the Audit Commission’s annual review of the work of the audit and fraud teams had reported a significant improvement in the teams’ contribution to the Council’s system of internal financial control.  The self assessment undertaken in 2005 under the revised CPA process introduced by the Benefit Fraud Inspectorate (BFI) had scored ‘security’ as a 4 (excellent), thus contributing to an improvement in the overall Benefits Service CPA score from 1 to 3.

The opinion of the Chief Internal Auditor, based upon the results of work completed during the year, was set out in Annex 1 to the report.  This confirmed that the overall adequacy and effectiveness of the Council’s control environment was acceptable but drew attention to significant control weaknesses considered relevant to the preparation of the 2005/06 Statement of Control.  These related to:

• Observing EU procurement legislation and Financial Regulations across the Council when tendering for goods and services
• The Council’s recruitment and selection policy
• Controls over cash handling in the cashiers section
• Risk management arrangements.

RESOLVED: (i)         That the results of audit and fraud work undertaken in 2005/06 be noted.

                        (ii)        That the opinion of the Chief Internal Auditor on the adequacy and effectiveness of the Council’s internal control environment be accepted.

                        (iii)       That the significant control weaknesses identified during the year and their inclusion in the 2005/06 Statement of Internal Control, to be reported to the Committee on 26 June along with the Annual Statement of Accounts, be noted.

REASONS:    For information and monitoring purposes and to enable the Annual Statement of Internal Control to be prepared.