Item 5 - Internal Audit Plan 2024-25 - Progress to 30 April 2025
West Dunbartonshire Council · 11 June 2025
Back to Audit Committee — 11 June 2025 and its agenda
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WEST DUNBARTONSHIRE COUNCIL Report by Chief Officer – Resources Audit Committee: 11 June 2025 Subject: Internal Audit Plan 2024/25 – Progress to 30 April 2025 1. Purpose 1.1 The purpose of this report is to advise Members of progress to 30 April 2025 against the Internal Audit Plan for 2024/25. 1.2 The report also advises Members of: • recently issued Internal Audit reports and action plans • the status of implementation progress relating to action plans from previously issued Internal Audit reports. 2. Recommendations 2.1 It is recommended that Members note the contents of this report. 3. Background 3.1 The annual audit plan for 2024/25 was approved by the Audit Committee on 4 December 2024. This report provides information on the progress in implementing the plan. 3.2 When audit reports are issued by Internal Audit, an action plan is agreed with management in relation to issues highlighted by the audit report. Progress on implementing the actions is monitored by Internal Audit on a monthly basis and reported to the Audit Committee. 4. Main Issues 4.1. The annual audit plan sets out the audit coverage for the year utilising available staff resources to enable the Shared Service Manager – Audit & Fraud to provide the annual internal audit opinion regarding the adequacy and effectiveness of internal control within the Council. 4.2 In accordance with the risk-based audit methodology, for each audit, one of four audit opinions is expressed: Strong In our opinion there is a sound system of internal controls designed to ensure that the organisation is able to achieve its objectives. Satisfactory In our opinion isolated areas of control weakness were identified which, whilst not systemic, put some organisation objectives at risk. Item 5
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Requires Improvement In our opinion systemic and/or material control weaknesses were identified such that some organisation objectives are put at significant risk. Unsatisfactory In our opinion the control environment was considered inadequate to ensure that the organisation is able to achieve its objectives. 4.3 Detailed findings and recommendations reported to management are graded using the following criteria: Red In our opinion the control environment is insufficient to address the risk and this could impact the Council as a whole. Corrective action must be taken and should start immediately. Overseen to completion by Corporate Management Team. Amber In our opinion there are areas of control weakness which we consider to be individually significant but which are unlikely to affect the Council as a whole. Corrective action must be taken (some exceptions may be agreed with Internal Audit) within reasonable timeframe. Overseen to completion by Chief Officer/Head of Service. Green In our opinion the risk area is well controlled or our audit highlighted areas for minor control improvement and/or areas of minor control weakness. Process improvements/efficiencies may be actioned at management discretion in consultation with Internal Audit. Managed by service owner. Not reported in Audit Committee papers. 4.4 There were 2 audit reviews finalised since the February 2025 Audit Committee. Void Management (May 2025) 4.5 The Council has a legal duty to ensure void (empty) properties meet the legal Re- Let Standards prior to a new tenancy agreement being entered into. The Council has 10,444 housing properties and aims to minimise the number of empty properties by effectively managing a high standard maintenance and repair service to ensure a quick efficient turnaround process is in place to avoid lost rental income. The average turnaround time to inspect and repair empty homes is 12 days, but actual days recorded in quarter 2 of 2024-25 was 15 days. Despite not achieving this target, the average length of time to re let properties target is 30 days which was exceeded with 27.6 days for quarter 2. This performance indicator is reported to the Scottish Housing Network on a quarterly basis. 4.6 The objective of this audit was to provide management and the Audit Committee with an assessment of the adequacy and effectiveness of the governance, risk management and control procedures surrounding the key risks in relation to the void management process. 4.7 The review focused on the high-level processes and procedures in relation to void management and concentrated on identified areas of perceived higher risk such as correct void management actions are not initiated in a timely manner, the amount of
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voids rental loss is not completely and accurately calculated and voids repair costs are not completely and accurately budgeted and monitored in a timely manner. 4.8 The update of Council Tax records for void properties was excluded from this review as this will be subject to a separate audit of the council tax billing and collection process. 4.9 The overall control environment opinion was Satisfactory. There were 4 AMBER issues identified as follows: Adequacy of Tenant Rechargeable Repairs Process (Amber) When a property becomes void, Building Services Officers (BSO) perform inspections to assess any work required to be carried out as standard before a new tenant moves in. Items left behind by the former tenants in the void properties require to be cleared out prior to any repair work being carried out. The audit identified that former tenants are not being fully recharged for personal items left and cleared out of the properties. The total clear out costs from 01.04.2024 to 31.10.2024 amounted to £248k of which only £153k has been invoiced as a recharge to former tenants. It was noted that clear out recharge costs are exempt on void properties when a former tenant has died. Where the clearing out recharge process to former tenants is not adequate there is a risk that the Council may not recover these additional costs. Adequacy of Job Costing Process (Amber) The Council’s Schedule of Rates is used for raising the void job orders on the QL Housing Management System for the in-house team. However, the audit identified that officers responsible for raising the job orders currently do not estimate the labour time and therefore the operatives are not provided with an expected timescale to complete the job. In the absence of accurately estimating labour time when job orders are raised, there is a risk that resource allocation and cost control may not be properly managed resulting in unanticipated delays, overspends and/or increased backlogs. Lack of monitoring and authorisation of repairs costs to void properties (Amber) During 2024-25 expenditure approval limits were agreed for repair work being carried out to void properties. This allowed Building Services to approve up to £12k of expenditure per property. Where costs were greater than £12k, further approval from Housing Operations was required. Audit testing identified that for 2 properties, although the estimated repair costs were under £12k, the actual costs were in excess of the agreed approval limit but approval was not sought from Housing Operations. Where there is no authorisation of additional costs and monitoring of job progression there is a risk that costs are not being properly controlled.
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Value for Money when using external contractors (Amber) Between September and December 2024 there was a reduction in the number of void property and high value repair jobs being carried out. However, the audit identified that only one contractor from the approved list is currently undertaking void repairs jobs. Competitive quotes are not being obtained in line with procurement processes to ensure value for money is achieved prior to issuing these void property repair jobs. Where a sufficient number of quotes are not obtained when issuing jobs to contractors, there is a risk that value for money cannot be demonstrated. 4.10 The audit identified 8 issues, 4 of which we consider to be individually significant and an action plan is in place to address all issues by 30 November 2025. Housing Repairs and Maintenance (May 2025) 4.11 Building Services deliver the Councils’ Maintenance, Repairs and Capital Funded Asset Improvement Projects such as new kitchen/bathroom installations and roof renewals. The service is responsible for carrying out repairs/alterations, capital investment improvements and safety checks to Tenant & Owner Occupied properties factored by West Dunbartonshire Council on an annual basis. Building Services currently work from 3 depots, namely Cochno Street, Clydebank covering the geographical area of Clydebank and Overburn Avenue & Elm Road, Dumbarton covering both Alexandria and Dumbarton geographical areas. The 2024/25 Housing Revenue Account repairs and maintenance budget was set at £14.983m. 4.12 The objective of this audit was to provide management and the Audit Committee with an assessment of the adequacy and effectiveness of the governance, risk management and controls over the key risks faced by West Dunbartonshire Council in relation to Housing Repairs & Maintenance. 4.13 The audit excluded repairs and maintenance in respect of non-domestic properties which is managed by the Resources Service as this would be subject to a separate audit review. 4.14 The overall control environment opinion was Requires Improvement. There were 2 RED and 11 AMBER issues identified as follows: Adequacy of Housing Client Function (Red) The audit identified that there is no separate client function within Housing. Currently Building Services deliver a repairs and maintenance service for West Dunbartonshire Council’s housing stock and the budgets for housing repairs (i.e. the client) fall under the same service area. This has resulted in a number of issues including: • There is limited financial oversight from Housing Services in relation to the housing repairs and maintenance budget to ensure best value repairs are being ordered, authorisation limits are adhered to and orders are raised against the correct budget.
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• Housing Services do not monitor and scrutinise the performance of Building Services and external contractors in relation to repairs and maintenance. • Current budget reports produced by Finance capture actual costs incurred by the repairs and maintenance team, however forecasting of expenditure is difficult as significant cost variations can be applied to jobs by the repairs and maintenance team in terms of original estimates versus final costs. Where there is no separate monitoring function within housing there is a risk that the repairs and maintenance service provided is not efficient or does not deliver value for money to tenants of rented properties. Lack of Checking of Overtime Claims (Red) The audit identified that there are no controls in place to ensure that overtime claimed by operatives working for the emergency call out service are valid and appropriate for the hours worked. Specifically, supervisors approve overtime claims without carrying out any checks to ensure the hours claimed were valid. The total amount of overtime paid for the period 1 April 2024 to 31 March 2025 in relation to emergency callouts was £536,284. Where supervisors do not check that the overtime claimed was valid and appropriate, there is a risk that invalid claims are processed and fraud or error goes undetected. Adequacy of Stock Control Procedures (Amber) The audit identified some issues regarding the adequacy of stock control procedures as follows: • Although stock items have a unique identifier (commodity code) there is no barcoding system in use which results in the QL Housing Management System requiring to be updated manually when items are entered into and removed from stores. The audit identified that the manual input and update of stores records is time-consuming and prone to human error and can result in difficulties when reconciling stock. • The functionality of the QL Housing Management System for automatic re- ordering of materials when the minimum level has been reached has not been fully developed. Stock is re-ordered based on the experience of stores staff. • In relation to stock checks, there are no perpetual stock checks carried out throughout the year. The stock is only reconciled once a year as part of the year end process. • Due to current staffing issues, physical security surrounding the stores is not sufficient to prevent unauthorised access. • There is no documented guidance for staff working in the stores. Where manual processes are prone to human error, this may result in some items being unavailable when required. Lack of regular stock counts could result in errors, losses or thefts occurring which may go undetected.
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Lack of Recovery Plan to Reduce Overspend (Amber) The HRA 2024/25 responsive repairs budget was set at £7.1m with a forecast savings target of circa £200k. The budget savings target was planned to be managed by the repairs service becoming more efficient and the introduction of a new repairs policy in 2024/25 to manage demand on a more prioritised and cost- effective basis to deliver a balanced budget. The audit identified the HRA 2024/25 budget forecast revenue expenditure was circa £8m at the September Building Services Board and there was no documented recovery plan setting out measures required to reduce the overspend and deliver a balanced HRA responsive repairs budget for 2024/25. Ineffective budget monitoring, forecasting and the absence of clear action plans to reduce overspends and deliver a balanced budget in this area can lead to financial instability and limits the ability to make informed financial decisions. Adequacy of Monitoring the Schedule of Rates for Specifying and Controlling Repairs & Maintenance Work (Amber) The Schedule of Rates is updated on the QL Housing Management System to reflect changes to material and labour costs for each standard repair job carried out, however operatives and contractors have significant discretion over job variations i.e. the actual labour time to perform standard jobs and additional materials used. The audit identified that there is no review of costs and performance to ensure that repairs and maintenance jobs undertaken are within agreed industry standards. Failure to review and monitor costs and ensure performance against repairs and maintenance jobs are within the agreed industry standards can lead to poor budget management and in terms of forecasting expenditure could result in unanticipated budget overspends and inaccurate performance measurement and reporting. Lack of Post Inspections (Amber) In relation to post inspections, the new Housing Repairs Policy approved by the Housing Committee in November 2024 states ‘We will carry out post inspections of a range of repairs to ensure that they are completed to a high standard’. However, it is not specific in terms of the number/targets of post inspections to be carried out. From discussions with senior officers, due to conflicting demands on resources, post inspections are not being carried out. Where post inspections are not carried out, management cannot be confident that service standards and the right first-time strategy are being adhered to.
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Inefficient Allocation of Resources (Amber) The audit identified that the Dynamic Resource Scheduling system is not working efficiently. This is mainly due to the service relying on manual intervention when scheduling multi-trade jobs due to a lack of system functionality which results in Job Planners having to manually assign jobs to multiple operatives over multiple dates which is time-consuming to undertake. Failure to use the Dynamic Resource Scheduling System efficiently will result in the continuation of manual intervention more specifically for multi-trade jobs which is time-consuming and not an efficient use of Job Planners time. Lack of Risk Assessments – secondary employment (Amber) The audit identified that for those employees with secondary employment, risk assessments had not been carried out. Where employees have secondary employment and risk assessments have not been carried out, there is a risk that performance at work could be impacted or a conflict of interest has occurred which has not been properly managed. Adequacy of Monitoring of Vehicle Usage (Amber) The audit identified that although there are some vehicle tracking reports reviewed and management intervention carried out by service supervisors/managers, there is no consistency in the approach taken in relation to how investigations should be carried out where issues have been identified e.g. erratic driving or journeys outside West Dunbartonshire Council boundaries. Where adequate monitoring is not carried out, there is a risk that the service cannot demonstrate that vehicles are being efficiently and effectively utilised. Completeness and Accuracy of Right First Time Performance Indicator (Amber) Within the West Dunbartonshire Council Housing Charter there is an agreed performance indicator for Right First Time reactive repairs. The audit identified that this indicator is prepared by one officer using data extracted from the QL Housing Management System however there is no independent check of the indicator to ensure completeness and accuracy. Where there is no independent check of performance indicator calculations management cannot be confident that the performance indicator reported is correct. Lack of a Standard Operating Procedures Manual (Amber) There are a number of manual processes which are not covered by QL Housing Management System procedures and written procedural guidance is not available for these processes. Where no comprehensive procedures manual is in place there is a risk that processes are not carried out in a consistent manner or at all.
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Compliance with HMRC Benefit in Kind Guidelines (Amber) A Home Start Protocol is in place for operatives who have been allocated a Council vehicle. The audit identified the following issues: • The protocol was last reviewed and approved in February 2016. Management have confirmed that the protocol is planned to be reviewed by 30 September 2025. • The protocol states that data from tracker and fuel emission technologies will be used to monitor fleet movements’, however routine checks of vehicle tracking is not carried out by management to ensure employees are complying with the protocol. • The protocol states that employees will be required to sign a personal use disclaimer form on an annual basis however these were last signed off by relevant employees in March 2022. Failure to adhere to HMRC guidelines may result in incorrect taxation for employees and the potential for fines being imposed on the council. Adequacy of Contract Monitoring(Amber) Building Services enters into a number of contracts for the supply of goods and materials and for the execution of works. For service led procurement between £10,000 and £49,999, the procuring service is required to log details of the planned contract with procurement through populating the contract award notice on PCS quick quote unless a framework has been agreed. Audit testing identified some issues in relation to a specific supplier including: • The supplier was not identified on the register of suppliers on Public Contracts Scotland (PCS). • Management were unable to provide sufficient evidence to demonstrate that the correct procurement route had been followed. • Expenditure incurred from 1/4/24 to 31/12/24 for this supplier was in excess of £60,000. The corporate procurement team should lead procurement of contracts in excess of £50,000 but in this case they have had no involvement. In addition, although key budgets are monitored there is no monitoring undertaken at an individual contract level. Where there is a lack of contract management and monitoring, management cannot be confident that all contracts are being managed in accordance with relevant financial regulations. 4.15 The audit identified 16 issues, 2 of which we consider to be material control issues and 11 of which we consider to be non-material systemic control issues resulting in an overall control environment opinion of Requires Improvement. 4.16 An action plan is in place to address all issues by 31 March 2026 and a follow up audit will be undertaken as part of the 2026/27 internal audit plan to provide additional assurance on this area.
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4.17 In relation to audit work for the Integration Joint Board, work is now complete for the 2024/25 audit plan with regular reporting to the Integration Joint Board Audit & Performance Committee. 4.18 In relation to the Valuation Joint Board, the audit for 2024-25 is now complete. 4.19 In relation to the Leisure Trust, audit planning is underway. 4.20 Internal Audit Action Plans In relation to audit action plans, these are monitored by Internal Audit on a monthly basis. The status report at 30 April 2025 is provided at Appendix 2. Ongoing Corporate Fraud Team Work 4.21 The Corporate Fraud team’s day to day work continues to focus on referrals relating to council tax reduction/single person discounts, joint working with DWP in relation to housing benefit and council tax reduction, referrals relating to housing tenancies and investigating relevant national fraud initiative matches. 4.22 The Internal Audit Team and the Corporate Fraud Team continue to work together as appropriate in order to ensure a joined-up approach to fraud investigation and detection for example in relation to whistleblowing enquiries. National Fraud Initiative 4.23 The National Fraud Initiative is a series of biennial exercises run by the Cabinet Office and Audit Scotland to identify or prevent fraud and error by matching electronic data held by public bodies. Participating bodies are required to investigate data discrepancies within a set timescale and report back on any savings. 4.24 In relation to the 2024 exercise, a significant number of matches have now been received at 30 April 2025 in relation to a range of datasets including Housing Benefit, Council Tax Reduction, Payroll, Business Rates, Creditors and Blue Badges. Progress is as follows: Matches Received Number Investigated No Issue Fraud (1) Error (2) Value of Fraud/Error 8243 610 524 6 80 £4312.36 (1) Fraud relates to CTR cases where income was not declared. Recovery is in progress. (2) Errors relate to blue badges which had not been cancelled on the system and one case where CTR was not updated in relation to a deceased case. Benchmarking 4.25 In accordance with the Council’s Strategic Improvement Framework, the Council’s Internal Audit service continues to be part of a benchmarking group which involves seven other Councils. 4.26 Meetings will continue to take place during 2025 to review performance and identify other areas for sharing of best practice.
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5. People Implications 5.1 There are no people implications. 6. Financial and Procurement Implications 6.1 The Corporate Fraud Team activity can result in actual recoveries, charges and re-billings. The total amount of actual recoveries, charges and re-billings identified from 1 April 2024 to 31 March 2025 was £123,651. 6.2 There are no procurement implications arising from this report. 7. Risk Analysis 7.1 There is a risk that failure to deliver the Internal Audit Plan would result in an inability to provide a reasonable level of assurance over the Council’s system of internal financial control to those charged with governance. The main basis for providing assurance is coverage of the planned risk-based audits. Every endeavour is made to ensure that no material slippage occurs in risk-based audits by concentrating resources on these audits. 8. Equalities Impact Assessment (EIA) 8.1 There are no direct equalities impacts arising from the report however where an agreed action results in a change in process this will be considered for equalities impact by the relevant service. 9. Consultation 9.1 This report has been subject to consultation with appropriate Chief Officers. 10. Strategic Assessment 10.1 This report helps ensure strong governance and will help support delivery of the Council Plan, and in particular priority 4: Inclusive and Adaptable, with the Council seeking to provide high quality and adaptable services that deliver value for money. .................................... Laurence Slavin Chief Officer - Resources Date: 13 May 2025 Person to Contact: Andi Priestman, Shared Service Manager – Audit & Fraud E-mail: andi.priestman@west-dunbarton.gov.uk Appendices: 2024/25 Annual Audit Plan – Progress to 30 April 2025 (Appendix 1) Status of Internal Audit Action Plans at 30 April 2025 (Appendix 2) Internal Audit Reports - Copies available on request
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Wards Affected: All wards
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