Internal Audit - 25-11 Assessment and Charging
Perth and Kinross Council · 21 September 2026
Back to Audit and Risk Committee — 21 September 2026 and its agenda
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1 PKC - GENERAL Internal Audit Report Finance & Business Support 25-11 Assessment & Charging September 2026 Final Report (Report No. 26/255) Legal and Governance Perth & Kinross Council Council Offices 2 High Street Perth PH1 5PH
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2 PKC - GENERAL 25-11 Assessment & Charging Contents by Section 1. Introduction 2. Executive Summary 3. Audit Background Information 4. Scope and Limitations 5. Assessment of the Control Environment 6. Summary of Findings 7. Conclusions 8. Acknowledgement 9. Action Implementation & Follow Up 10. Authorisation 11. Distribution 12. Assessment Definitions
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3 PKC - GENERAL 1. Introduction 1.1 The audit of Assessment & Charging was undertaken as part of the Internal Audit plan for 2025/26, which was approved by the Audit & Performance Committee on 25 June 2025. The period under review for the purposes of the audit exercise was financial year 2025/26. 1.2 The indicative scope for the audit was to review progress with the improvement action plan. 1.3 This audit is not linked to the Strategic Risk Register; it is other assurance work. 1.4 Our review was limited to consideration of whether there is evidence that the controls documented on the Service’s ‘Audit - Risk’ spreadsheet have been implemented. 2. Executive Summary 2.1 The audit has found that there is Substantial Assurance that the controls documented on the Service’s ‘Audit - Risk’ spreadsheet have been implemented. 2.2 There are no actions arising from the findings in Section 6. 3. Audit Background Information 3.1 Areas of concern around assessment and charging for Council-placed residents in care homes and Council-supplied care at home were identified from a 2016 Internal Audit report and extended follow-ups reported to the then Audit Committee in 2018 and 2019, a 2018 Changing Point consultants’ report, along with subsequent Internal Audit advisory activity which took place in 2023. Responsibility for the Assessment and Charging function transferred from the Health and Social Care Partnership to the Council’s Finance and Business Support area in January 2024. 3.2 On transfer to Finance and Business Support, to ensure that all aspects highlighted historically by Internal Audit and by Changing Point are managed, a spreadsheet of the areas of concern was prepared detailing risks and actions. A review of the areas identified has been undertaken annually by the Service Manager and Team Leader to identify if they are still relevant, how the risk is being managed and if any areas have changed. Reviews were undertaken on 9 December 2024 and 24 October 2025 and recorded in the spreadsheet.
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4 PKC - GENERAL 4. Scope and Limitations 4.1 The audit has considered the actions recorded and form an opinion on whether the risks are being mitigated and/or managed. 4.2 The Internal Audit consisted of reviewing the spreadsheet, identifying actions and obtain evidence on a test basis of the actions being undertaken and sustained. 4.3 The audit was limited to the review of the actions documented on the spreadsheet and any questions arising from the review. This audit is not a whole-scale review of all activity within Assessment & Charging. 4.4 The details of the control objectives reviewed and the Internal Audit’s assessment of their strength of control in each area are contained within Section 5 of this report. 5. Assessment of the Control Environment 5.1 The table below contains a summary of the number of findings and their ratings, as detailed in Section 12, against each control objective, along with Internal Audit’s assessment of the adequacy and effectiveness of the controls in place to meet each of the objectives agreed for this audit. Further details, including any improvement actions, are set out in the Management Action Plan. No. Control Objective Action Rating Control Objective Assessment 5 4 3 2 1 1 To ensure that risks identified from the areas of concern identified from the report by Changing Point consultants and previous audits by the Internal Audit team have been mitigated. No actions arising Substantial Assurance 5.2 The auditor has assessed that Substantial Assurance can be placed on controls overall in relation to the progress with the improvement plan of Assessment and Charging from the audit. Meaning: A sound system of governance, risk management and control exist, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. 5.3 A summary of the key findings are provided in section 6. Please note, however, the following areas of good practice which have been highlighted during the audit:
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5 PKC - GENERAL 5.4 The service has made substantial progress in completion of monthly reconciliations; with all historical reconciliations now completed and monthly reconciliations being maintained on an up-to-date basis. Regular reconciliations provide assurance that transactions are accurately recorded, balances are monitored, and any discrepancies are identified and investigated in a timely manner. This has significantly reduced the risk of mismanagement of client funds and strengthened the overall financial control environment. 5.5 The process for managing deceased client funds has improved with standard forms (Microsoft forms) and a more formal approach to obtaining information from next of kin or executors. This has helped ensure that deceased client cases are dealt with more quickly and efficiently, reducing the risk of funds being held by PKC for long periods and improving the timely return of deceased client monies. 5.6 With reconciliations now up to date and calendar reminders in place, outstanding bills can be identified quickly and paid on time. This helps ensure that all payments are monitored regularly and any issues are actioned promptly. 5.7 The Team Leader is content that an adequate team plan is in place and appropriate induction, and training arrangements are being delivered for staff. 5.8 We found that appropriate arrangements are in place to ensure care homes and care-at-home providers are paid on time, and no significant payment delays were identified during the audit. As per the Team Leader, care homes are paid through the Independent Sector Payment (ISP) process on a four-weekly basis using Mosaic and Integra systems, while care-at-home providers are paid based on invoices submitted. 5.9 The current arrangements for working with care homes and care-at-home providers are effective, with regular meetings helping to resolve issues promptly. Communication with social workers has also improved through regular drop-in sessions, training, and ongoing engagement, supporting better information sharing and joint working between teams. 5.10 There is clear guidance provided for the staff to follow proper policies and procedures. The audit did not identify any areas of non-compliance noticed through the audit. 5.11 Oversight and engagement from the Strategic Lead – Finance & Business Support, Finance Manager, and Team Leader have improved significantly, contributing to continued progress and improvement in this area. 5.12 Internal Audit is satisfied that all previously identified concerns have been effectively addressed and the team has implemented a range of improvements, including completing all outstanding reconciliations, strengthening management oversight, improving performance monitoring, reducing backlogs, enhancing staff training, and improving communication with key stakeholders. These actions have helped strengthen controls and improve the overall effectiveness of the service.
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6 PKC - GENERAL 6. Summary of Findings 6.1 Internal Audit has identified below areas where continues controls could be beneficial particularly in relation to better performance. 6.2 A reconciliation summary and action (checklists) are maintained and clearly records the relevant reconciliation period, with comments such as "No action required" or "No issues identified". We noted that reconciliations are being completed on a monthly basis and are currently up to date. To support ongoing effective control operation, management should continue this process consistently, as it helps to identify any gaps, delays, or recurring issues with client’s funds. 6.3 While client’s bills are being paid on time, there are reasonable steps taken for keeping supporting evidence for these payments. To improve transparency and provide a clear audit trail, the team should continue to follow the proper procedure to collect and retain as much supporting evidence as possible, such as invoices, receipts, and correspondence relating to client payments. This would help demonstrate that payments are accurate, appropriate, and properly supported and no further audit action is considered necessary at this time. 6.4 With diary alerts in place and reconciliations kept up to date, clients approaching State Pension age can be identified promptly and the necessary action taken to ensure they receive their pension when due. However, the diary alert control was not operating consistently for the sample tested and cannot be fully relied upon. Therefore, management should continue to implement robust reconciliation to ensure all eligible clients are identified, and State Pension applications are submitted promptly. No further audit action is considered necessary at this time. 6.5 Internal Audit also noted that resource pressures were historically a challenge for the team. Since the move to Finance and Business Support, action to address this through recruitment initiatives, including advertising and restructuring activities has been undertaken. Given the actions already taken, no further audit action is considered necessary at this time. 7. Conclusion 7.1 The Internal Audit review is able to place Substantial Assurance on the overall control environment for Assessment and Charging. The agreed actions, once implemented, should enable Internal Audit to place Substantial assurance on these. 8. Acknowledgements 8.1 Internal Audit would like to thank all officers who were involved in this audit, particularly officers within the Assessment and Charging team, C Fraser, Team Leader - Assessment & Charging.
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7 PKC - GENERAL 9. Action Implementation & Follow up 9.1 Responsibility for the maintenance of adequate and effective controls rests with management. Where the audit has identified areas for management action, these are identified in the Management Action Plan. Where a decision is taken by management not to act in response to finding from this review, it is the responsibility of management to assess and accept the risk arising from non- implementation. 9.2 Achievement of the agreed actions is monitored through Internal Audit’s ‘follow up’ arrangements. 10. Authorisation 10.1 The auditor for this assignment was M Stewart. The supervising auditor was D Arachchilage. This report is authorised for issue by J Clark 11. Distribution 11.1 This report has been distributed to: T Glen, Chief Executive C Mailer, Depute Chief Executive S Walker, Strategic Lead, Finance & Business Support C Robertson, Finance Manager/Business Partner L Simpson, Strategic Lead, Legal & Governance Committee Services External Audit
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8 PKC - GENERAL 12. Assessment Definitions 12.1 The following table contains the definitions of the control objective assessment. Control Objective Assessment Level of assurance Definition Substantial Assurance A sound system of governance, risk management and control exist, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. 12.2 The following table contains the definitions applied by Internal Audit in rating audit findings/actions. Risk Rating for Individual Findings Rating Rating description Definition 5 Critical Significant observations/ major concerns which require immediate action. Management will need to add these to the appropriate Service risk register. Issue represents a control weakness which could cause, or is causing, severe disruption of the process or severe adverse effect on the ability to achieve process objectives 4 High Significant observations regarding the absence / failure of key controls requiring urgent action. Management should consider adding these to the appropriate Service/ divisional risk register Issue represents a control weakness which could have, or is having, major adverse effect on the ability to achieve process objectives 3 Medium Observations regarding the effectiveness of key controls requiring reasonably urgent action. Management should consider these when updating any divisional / team risk registers
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9 PKC - GENERAL Issue represents a control weakness which could have, or is having, significant adverse effect on the ability to achieve process objectives 2 Low Minor observations regarding the adequacy of controls which require action to improve the efficiency, effectiveness, or economy of operations or which otherwise require to be brought to the attention of Senior Management Issue represents a minor control weakness with minimal but reportable impact on the ability to achieve process objectives 1 Trivial / Minor Very minor observations which will be raised during the audit and may not be included within the final report Issue represents a very minor control weakness with negligible impact on the ability to achieve process objectives. The issue will be raised during the audit and may not be included within the final report.