Summary of IA Reports complete
Renfrewshire Council · 4 November 2024
Back to Audit, Risk and Scrutiny Board — 4 November 2024 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
___________________________________________________________________ To: Audit, Risk and Scrutiny Board On: 4 November 2024 ___________________________________________________________________ Report by: Chief Auditor ___________________________________________________________________ Heading: Summary of Internal Audit Reports for period 1 July to 30 September 2024 ___________________________________________________________________ 1. Summary 1.1 In line with the Public Sector Internal Audit Standards, Internal Audit must communicate the results of each engagement to the Board. To comply with this requirement, Internal Audit submits regular reports on the findings and conclusions of audit engagements to the Audit, Risk and Scrutiny Board. 1.2 Appendix 1 provides details of audit engagements completed during the period 1 July to 30 September 2024 with the overall assurance rating and the number of recommendations in each risk category. The committee summary for each report is also attached. For each audit assignment where recommendations have been made, the relevant managers have put action plans in place to address the issues raised. 1.3 In addition to the reports listed in the Appendix, Internal Audit has an ongoing commitment to: • A range of corporate and service initiatives; • Progressing of information security matters in partnership with ICT and Legal Services; • The regular provision of advice to departmental officers; • The provision of internal audit services to the associated bodies for which Renfrewshire Council is the lead authority and to OneRen and Renfrewshire Health and Social Care Integrated Joint Board;
Page 2
• Co-ordination of the Council’s corporate risk management activity; • Management of the counter fraud team; • Management of the risk management and insurance team. ___________________________________________________________________ 2. Recommendations 2.1 Members are invited to consider and note the Summary of Internal Audit Reports finalised during the period from 1 July to 30 September 2024. ___________________________________________________________________ Implications of the Report 1. Financial - None 2. HR & Organisational Development - None 3. Community Planning – Safer and Stronger - effective internal audit is an important element of good corporate governance. 4. Legal - None 5. Property/Assets - None 6. Information Technology - None 7. Equality & Human Rights – None 8. Health & Safety – None 9. Procurement - None 10. Risk - The summary reported relates to the delivery of the risk-based internal audit plan. 11. Privacy Impact – None 12. COSLA Implications – None 13. Climate Risk – None 14. Children’s Rights - None ________________________________________________________________ Author: Karen Campbell, Interim Chief Auditor– 07768354651
Page 3
Appendix 1 Renfrewshire Council Internal Audit Service Update for Audit, Risk and Scrutiny Board Final Audit Reports issued from 1 July – 30 September 2024 Category Service Engagement Assurance Rating Recommendation Ratings Critical Important Good Practice Service Improvement Assurance Finance & Resources Non-Domestic Rates Reasonable Assurance 0 2 3 0 Environment, Housing & Infrastructure Transportation and Fleet – External Vehicle Hire Limited Assurance 1 5 2 0 Environment, Housing & Infrastructure Waste Management Limited Assurance 2 4 5 1 Note – No assurance rating can be given in respect of investigation assignments Assurance Level Substantial Assurance • There is a sound system of internal control designed to achieve the objectives of the area being reviewed. • The control processes tested are being consistently applied. Reasonable Assurance • The internal control processes are generally satisfactory with some areas of weakness being identified that could put some objectives of the area being reviewed at risk. • There is evidence that the level of non-compliance with some of the control processes may put some of the objectives of the area being reviewed at risk. Limited Assurance • Weaknesses in the system of internal controls are such as to put the objectives of the area being reviewed at risk.
Page 4
• The level of non-compliance puts the objectives of the area being reviewed at risk. No Assurance • Control processes are generally weak with significant risk to the achievement of the objectives of the area being reviewed. • Significant non-compliance with control processes leaves the processes/systems open to error or abuse. Recommendation Rating Service Improvement Implementation will improve the efficiency / housekeeping of the area under review. Good Practice Implementation will contribute to the general effectiveness of control. Important Implementation will raise the level of assurance provided by the control system to acceptable levels. Critical Addresses a significant risk, impacting on the objectives of the area under review.
Page 5
Internal Audit Report Finance & Resources Non-Domestic Rates (A0082/2024/001) Date: September 2024 COMMITTEE SUMMARY Audit Objectives The objectives of the audit were to ensure that: a) There is an adequate system in place to ensure the calculation and payment of non- domestic rates. b) All exemptions and discounts have been properly applied. c) All NDR income due is properly accounted for and recorded on the system. d) All accounts have been issued in line with statutory timescales. e) All income due to East Renfrewshire Council has been remitted to their bank account. f) Outstanding debt at the year-end is being appropriately managed. Audit Scope 1. Interviewed the appropriate officers to ascertain the system in place in relation to the billing, collecting and monitoring of NDR income and updating for any recent changes. Identified any areas for improvement. 2. Undertook a series of tests to ensure the system was adequate and operating as intended. 3. Prepared a certificate for East Renfrewshire Council based on the outcome of the audit. Key Audit Assurances 1. There is an adequate system in place for the calculation and payment of Non-Domestic Rates. 2. All exemptions and discounts tested were properly applied. 3. All NDR income due is properly accounted for and recorded on the system. 4. Demand notices are issued according to statutory timescales. 5. All income due to East Renfrewshire Council has been remitted to their bank account. Key Risks Where income and refund reconciliations are not carried out regularly, errors may not be identified timeously.
Page 6
Internal Audit Report Finance & Resources Non-Domestic Rates (A0082/2024/001) Date: September 2024 Overall Audit Opinion The audit identified that satisfactory controls are in place for the billing and collection of NDR. Reviews of NDR reliefs, granted on the basis of a prior year's applications, have not been carried out in the 2023/24 financial year because management needed to consider the impact of changes in legislation, specifically relating to reliefs, which superseded the normal review process. Evidence for current year reliefs and refunds were available for the samples tested. However, some actions that management stated would be put in place after previous audit recommendations are not fully implemented. It was noted that staff changes have resulted in income and refund reconciliations not being carried out regularly. Also, a significant number of historic credit balances were found to still exist on the NDR system, for which no actions had been taken to identify if these should be cleared or result in refunds to customers. Recommendations in the report to address areas of weakness identified will, if implemented, help strengthen the controls in place for NDR. Management Commentary We are currently in the process of implementing the audit recommendations. Detailed plans have now been put in place to undertake reviews and independent checks on Non-Domestic Reliefs and Discounts. A procedure note has been drafted detailing the process to be followed by staff to review and action credit balances. In relation to the income and refund reconciliations, this is a complex area and we are currently working with our external partners on plans to improve the current process.
Page 7
Internal Audit Report Environment, Housing & Infrastructure Transportation and Fleet - External Vehicle Hire (A0025/2024/001) Date: August 2024 COMMITTEE SUMMARY Audit Objectives In order to achieve best value when a vehicle is required, there is a centralised service operated by Environment, Housing & Infrastructure Service for the external hire of vehicles. Senior Management Team recognised that there had been a complete change of staff responsible for operating this service and therefore requested a review of the processes in place to ensure that they were adequate. The objectives of the audit were to ensure that: a) There is a clear process for obtaining external vehicle hires and determine if there are any exceptions that do not go through the hire desk and identify the reasons for this. b) There is an authorisation process in place for requesting an external hire. c) There is a clear justification of business need for each hire. d) Contracts are in place for external vehicle hires where necessary and only contracted suppliers are being used. e) Hire costs are being verified prior to processing the invoices and are in line with the contracted rates. f) Determine if costs are recharged and if so, ensure that recharges are accurate. Audit Scope 1. Interviewed the appropriate officers to understand the arrangements in place for administering hire vehicles. 2. Carried out sample testing to confirm the adequacy of the controls in place over hire vehicles. Key Audit Assurances A contract framework has been put in place by Scotland Excel covering vehicle hires. Through sample audit testing we ascertained that all hires are procured from approved suppliers that are on this framework. Key Risks 1. Council staff could be unaware of how to request a vehicle hire as no document guidance could be found. 2. Unsanctioned expenditure spend could be committed as the internal controls surrounding the request and ordering processes for external vehicle hires was found to be unsatisfactory.
Page 8
Internal Audit Report Environment, Housing & Infrastructure Transportation and Fleet - External Vehicle Hire (A0025/2024/001) Date: August 2024 3. There is a risk that incorrect rates could be being charged and paid for as there are no verification checks in place to confirm that hire costs on received invoices are in line with the most up to date contracted rates from Scotland Excel. Overall Audit Opinion Hiring external vehicles on behalf of Council Departments is one of the services the Fleet and Sustainable Transport section is responsible for. The current processes being carried out in relation to this task need to be amended to ensure there is a satisfactory level of internal control, particularly in relation to the ordering and authorisation processes. Clear, concise instructions also need to be readily available to services to ensure they are aware of the process to follow for requesting the hire of a vehicle and this would help services to submit properly completed hire request forms to the hire desk. The auditor made recommendations to address these issues. Management Commentary We are currently in the process of actioning the recommendations. Procedures for both service staff and fleet management staff are being finalised detailing the processes to be followed when an external hire is required. The procedures for fleet management staff will cover the checks that require be undertaken when a request is received as well as the ordering, payment and recharging processes.
Page 9
Internal Audit Report Environment, Housing & Infrastructure Waste Management (A0028/2024/001) Date: August 2024 COMMITTEE SUMMARY Audit Objectives The objectives of the review were to ensure that: a) There is an adequate management and supervisory structure in place with clearly defined roles and responsibilities for the collection of commercial waste. b) There is procedural/guidance documentation in place in relation to commercial waste which has been communicated to and is easily accessible by staff. c) Up to date route lists, which include the number of bins to be collected from each commercial property, are issued and followed by operatives. d) Any deviations from the route lists, including missed uplifts are properly authorised and there is an adequate audit trail which supports any changes. e) There are appropriate contracts in place with commercial customers. f) Arrangements are in place within the service to ensure that commercial clients are invoiced accurately, non-payment is notified timeously and services suspended where required and any updates to invoicing are communicated to the debtors’ team. g) There are appropriate Key Performance Indicators (KPI’s) in place which are adequately monitored by management and when necessary, action is taken to investigate and resolve any issues where targets are not met. Audit Scope 1. Interviewed the relevant officers and obtained the required information and documentation relating to commercial waste uplifts. 2. Prepared a series of tests to meet the detailed audit objectives. Key Audit Assurances 1. An adequate supervisory structure is in place with clearly defined roles and responsibilities. 2. Route lists are prepared and issued to operatives detailing the number of bins to be collected from each commercial property. Key Risks 1. Outstanding debts will continue to rise in the absence of a policy for dealing with the service provision to those customers who do not pay their invoices. 2. Income is not maximised where customers are not issued with invoices or where invoices are incorrect. Overall Audit Opinion Although roles and responsibilities relating to the provision of the commercial waste service are clearly defined and processes are in place in relation to providing this service, issues were identified in relation to the invoicing of customers for the uplift of commercial waste. Furthermore, concerns were identified in relation to the level of outstanding debts for the uplift of commercial waste. Although work has commenced by the Waste Service to determine the information available on clients not paying their invoices, there is no formal policy in place for staff to follow regarding the continued provision of the
Page 10
Internal Audit Report Environment, Housing & Infrastructure Waste Management (A0028/2024/001) Date: August 2024 service for clients with outstanding debts and this needs to be addressed as soon as possible. For these reasons, assurance within this area was found to be limited. Management Commentary We are currently working on implementing the recommendations. Processes are being amended to ensure invoices are correct. Commercial customers are required to submit Duty of Care documents annually and when these are received the service provided and subscription invoice will be checked to ensure they are accurate. Prior to suspension of the service, a review/reminder process is now in place to ensure these documents are returned by customers if they wish to continue with the service. In relation to the outstanding debt, we are working with our Finance and Resources colleagues to ensure procedures are tightened up to ensure customers pay for the service timeously and if they fail to pay, suspension of service action will be invoked.