SUMMARY OF FINDINGS
Control Objective Findings / Risk Recommendations
Control Objective / Findings / Risk / Recommendations
1.GENERAL
1.1Policies and procedures over the control and the administration of key areas of operation are established with policies appropriately approved and reviewed. / Verbal Comment / Review new Head Teachers Handbook during the follow up.
1.2System access controls are established which are consistent with job responsibilities and achieve appropriate segregation of duties. / None / N/A
1.3Access to end user systems is adequately restricted with critical systems files backed up on a regular basis and adequate change control procedures in place. / Verbal Comment / Review the application of the 2008 ICT Security Policy and related Secure Operating Procedures during the follow up.
1.4The application of value for money criteria within Education is appropriately addressed. / Procurement
There is no centralised procurement of consumables or equipment across the service. It is accepted that this is a Council wide issue but at the same time, there are many areas where Education as a service could make economies of scale. Procurement and sharing within schools and school clusters is not evident, for example:
Cameras & Camcorders
From the nine schools visited during the audit an analysis of cameras and camcorders was taken from their inventories. Over the nine schools there were 115 cameras and 26 camcorders. The Anderson High School alone holds 56 cameras and 16 camcorders.
Devolved School Management Officers
Education is meeting the full costs of devolved school management when there is not yet full devolvement. Some Devolved School Management Officers are not taking full responsibility for their role. Refer to Audit Comment # 17.
Anderson High School Out of Hours Usage
The current arrangement allows the use of specific areas of the school for no charge provided certain criteria are met. This potentially allows charging organisations to make a profit from the school. Refer to Audit Comment #8.
Flexible Relocation Policy
Under the current Flexible Relocation Policy, it is possible for new employees to continue to be paid a Temporary Private Accommodation Allowance despite refusing up to two offers of temporary council accommodation if the second refusal is deemed by management to be reasonable.
In addition, some elements of the Flexible Relocation Package are offered to probationary teachers although, by definition, they might only remain in Shetland for one year. Refer to Audit Comment #7.
In the view of Internal Audit, best value cannot be clearly demonstrated in the areas mentioned above.
Audit Comment #21 / Management should review these areas with a view to demonstrating best value or alternatively pursuing other courses of action.
1.5Measures are in place to prevent interruption of critical areas of operation. / None / N/A
1.6Education Service Plan was submitted timeously. / None / N/A
2.HUMAN RESOURCE MANAGEMENT
2.1Staffing arrangements for Education are appropriately determined and administered in accordance with national conditions and local policies. / None / N/A
2.2Employee details held on CHRIS are accurate and up to date. / None / N/A
2.3Salary information submitted for payroll input is appropriately completed and subject to prior review and approval. / Expense Claims
A judgemental sample of 40 expense claims submitted during the audit scope period was reviewed. The results for this sample are as follows:
  • 12 claims were not appropriately ruled off
  • 30 claims did not have totals scored through
This results in 31 claims being completed incorrectly.
On two claims where subsistence was claimed, the hotel name and address was not detailed. It is stated on the guidance for completing expense claims that where overnight subsistence is claimed, the name and full address of the Hotel or Guest House must be detailed on the claim.
On one claim the wrong amount for dinner allowance had been claimed. It is not clear whether the authorising officer or Payroll had made the amendment. The correct amount had been paid to the employee.
Overtime Claims
Only seven overtime claims were submitted during the audit scope period. The results for these claims are as follows:
  • 2 claims were incorrectly totalled
  • 2 overtime requests were not dated by the authorising officer when signed
  • 2 overtime requests were prepared for 4 months, these should be prepared weekly
  • 3 overtime requests were authorised after the overtime was worked.
Time Sheets & Additional Hours Claims
A judgemental sample of 30 timesheets processed during the audit scope period was reviewed. The results for this sample are as follows:
  • On 2 occasions an employee was claiming for more hours than were worked
  • 28 timesheets were inappropriately authorised
A judgemental sample of 20 additional hours claims submitted during the audit scope period was reviewed. Nine of these claims were inappropriately authorised. This was evidenced through the Authorised Signatory Database which restricts employees’ authorisation to specific cost centres.
An e-mail was sent to the Head of Schools by Financial Accountancy stating that Head Teachers are authorising payment from budget codes that they do not have authority for. Confirmation was required for all staff that require authorisation for these codes. Education staff are now in the process of giving authorisation to all Head Teachers to sign for these codes. However, it was stated by Payroll that they accept all claims signed by authorised Head Teachers regardless of the budget code because it would be too time consuming to check all budget codes. This is outwith the authority granted on the database.
Expense Claims
Expense claim forms are being completed in a manner that could facilitate insertion of expense details after claims have been initially approved.

Overtime Claims

  • Claims are not being adequately checked before authorisation
  • Instructions to complete overtime requests weekly are not being followed
  • Overtime is being worked without prior approval

Time sheets & Additional Hours Claims

  • Claims are not being checked before authorisation
  • Claims are being inappropriately authorised
Audit Comment #3 / Expense Claims
Authorised signatories should ensure that expense claim forms are completed in a manner that would prevent any subsequent amendment of expense details and ensure sufficient information is provided prior to authorisation.

Overtime Claims

  • Authorised signatories should ensure that overtime claims are correctly completed prior to authorisation.
  • Overtime requests and advanced authorisation forms must be completed weekly and authorised in advance in accordance with Council Policy.

Time sheets & Additional Hours Claims

  • Claims should be checked for accuracy before being signed by an appropriate authorised signatory.
  • Authorised signatories and the database should be reviewed in order to reflect the service requirements.

2.4Staff terminations, transfers, extensions and promotions are timeously notified to payroll. / Verbal Comment / Changes should be notified to payroll as soon as possible after authorisation.
2.5Time sheet information is appropriately completed and accurately compiled. / Refer to Control Objective 2.3 / Refer to Control Objective 2.3
2.6Employee performance reviews are undertaken in accordance with Council policy with staff training and development carried out accordingly. / In April 2006 the Employee Review and Development Policy (the Policy) became operational. The Policy establishes a set of minimum requirements and guidelines on best practice. All employees in the Council should receive at least one formal recorded review and development session each year. This is in addition to any ongoing performance monitoring.
In some schools, the Head Teachers were reluctant to allow access to confidential files. Internal Audit is authorised to review files for the purpose of ensuring policies are being adhered to, however, in the interest of co-operation, it was agreed that evidencing the cover page which dates the review and signatures would suffice for this test.
From the nine schools visited:
  • 5 schools provided adequate evidence of regular annual employee review and development
  • 1 school refused to provide any evidence
  • 1 school partially fulfilled the requirements
  • 1 school stated they carried out reviews but on an informal basis
  • 1 school could not locate any records of employee review
From a sample of 16 employees (Head Teachers and Hayfield House staff):
  • 6 reviews were current, dated and signed off by line management
  • 7 employee reviews were dated prior to November 2006 and therefore considerably over due
  • 1 review appears never to have been done
  • 1 review is for a temporary post and will be due before June 2008 – n/a
  • 1 file was not evidenced but interview had taken place.
The Employee Review and Development Policy is not being adequately adhered to.
Audit Comment #20 / The Employee Review and Development Policy should be appropriately applied by line management across the Schools service.
2.7An up to date register of employees’ interests is maintained. / A judgemental sample of 20 Education employees was selected to ensure up to date Register of Employees’ Interests forms were held. For this sample, nine Register of Interests forms could not be located.
Without securing up to date written declarations of interest from all employees, the Council cannot ensure that staff will avoid potential conflicts of interest with their primary responsibility to the Council.
Audit Comment #4 / The Register of Interests should be brought up to date in accordance with Council Policy and in the standard format available on the Council’s Intranet.
2.8Holiday entitlements are carried out in accordance with Council Policy / APT&C and Chief Officials
A sample of 20 holiday requests and records was reviewed at Hayfield House. The findings for this sample are as follows:
  • Authorisation could not be found on 2 occasions where more than 5 days leave was carried forward.
  • Annual leave requests could not be located for 1 employee.
  • Annual leave was authorised after the leave was taken on 2 occasions.
School Based Staff
For the nine schools visited copies of the SAL5 return for Sep – Dec were obtained.
  • In one instance a deduction was not processed prior to the employee leaving the Council. A repayment was sought and received.
  • In three cases of leave of absence granted without pay between September and December, no deductions have been evidenced up to and including the February 2008 pay-run.
  • In one instance the deduction was made five months after the leave of absence and in another three months after the leave of absence was taken.
  • One primary school has discontinued submitting the returns because they thought the responsibility now lay with the DSMO.
  1. Not all unpaid leave is being appropriately deducted.
  1. Information regarding deductions is not being timeously supplied to Payroll.
  1. The practice of submitting the SAL5 return has ceased in one school.
Audit Comment #9 / 1.SAL5 returns, including Nil returns must always be timeously submitted in order to ensure that full deductions are carried out.
  1. The roles and responsibilities regarding the submission of the SAL5 return must be clearly defined and communicated to the DSMOs and the school staff.

2.9Recruitment is performed in line with Council procedures. / None / N/A
2.10Where applicable staff and contractors are adequately screened prior to appointment. / It is recognised that there are significant improvements regarding the controls surrounding the administration and security of disclosure information. It was stated that there are robust procedures now in place to ensure relevant new posts are disclosed prior to commencement of work. This was tested with the recruitment processes. However testing of the actual database still revealed various discrepancies.

Disclosure

IDEA is an interaction data extraction analysis tool that enables audit to read, display, analyse, manipulate, sample or extract data from data files from almost any source.
IDEA was used to extract Education employee data from the current Chris Payroll System and the Disclosure Access Database. IDEA analysed the data to find relevant employees currently being paid in Education that were not located on the Disclosure Database.
It further identified non-employees e.g. parent helpers named on the Disclosure Database that did not have a clearance date attached or an application pending. In total 85 Education employees and parent helpers who require to be disclosed under both legislative requirements and the Disclosure Policy are not disclosed.
A further examination of the Disclosure Database revealed that over 180 Education Service names located in the Disclosure Database were recorded as disclosed prior to 1st January 2005 and were therefore all due a new disclosure check prior to 1st January 2008. These renewals have not been progressed to date.

Administration

The Retention & Destruction Schedule has been updated to state that Disclosures should be destroyed after 90 days. The Disclosure Policy (14.5) suggests that information is kept for no longer than 6 months.
It was stated by the Staffing Section administrators of the scheme, that there were many areas within the Disclosure Policy and the associated Procedure documentation that require more clarity such as details on how to deal with office based staff, volunteers, students and non continuous employees etc as similar posts are treated inconsistently.
  1. 85 Education employees / volunteers in an excepted area of work have not been disclosure checked. Therefore, adequate checks have not been performed in respect of POCSA 2003 which leaves the Council potentially exposed.
  1. Over 40 Education employees that have been identified and contacted by the Staffing Section as requiring Disclosure have not responded. Currently there is no procedure to pursue the refusals and the situation remains an impasse.
  1. The currently required rolling programme of renewals after three years has not been implemented resulting in over 180 Disclosures being out of date.
  1. The Disclosure Policy does not correspond with the Retention and Destruction Policy with regard to retention periods and destruction.
  1. Procedures documentation and perhaps the Policy require review in order to clarify various ‘grey areas’ such as office based staff, volunteers etc.
Audit Comment #1 /
  1. A full review should be undertaken to ensure that all current employees who should be disclosed are in fact disclosed.
  1. All those employees identified by Staffing as requiring Disclosure should be pursued and management must take appropriate action if refusal continues.
  1. A structured approach and plan must be devised to accommodate the required 3 yearly renewal programme.
  1. The Disclosure Policy should be updated to agree with the Retention and Destruction Policy and the Procedures documentation should be reviewed in order to clarify inconsistencies.

2.11Absence management policy requirements are observed. / APT&C and Chief Officers
A Seagate report was created detailing Education APT&C and Chief Officer staff sickness over the audit scope period. Twenty eight employees were reported sick over the period and in seven instances, a return to work interview (RTWI) was required. The results are summarised as follows:
  • On 2 occasions there was no evidence of a RTWI on file.
  • In 2 instances RTWI had been carried out but two months after the return to work.
A Seagate report was produced detailing sickness and return to work requirements for the nine schools that were visited during the audit. The results from those schools are as follows:
  • In Brae and Urafirth (same cluster), the DSMO stated that it was not her responsibility to report to the Head Teachers or trigger the requirement to hold return to work interviews. The Job Profile states that the DSMO must ensure that the necessary forms are completed accurately and timeously in respect of absence management within the cluster. In both of these schools it was stated by the Head Teachers that return to work interviews are carried out on an informal basis and no records were available. Six instances were identified within the audit scope period and no RTWI were evidenced.
  • AHS - There is a monthly report produced by the DSMO for the Head Teacher which records the sickness and triggers the requirement for a RTWI. From a random sample of eleven RTWI’s required within the audit scope, 1 interview had not been carried out.
  • Sound – There is a monthly report produced by the DSMO for the Head Teacher which records the sickness and triggers the requirement for a RTWI. Five RTWI’s should have been carried out during the audit scope period. One formal RTWI was carried out and the remaining 4 were carried out on an informal basis at the Head Teachers discretion. It was stated that these were all either long term or sensitive cases and that it was appropriate that the formal processes had not been carried out.
  • In 4 schools there was no sickness within the audit scope period.
  • In one school two RTWI’s were due but employee files were not located and therefore this area could not be tested.