Blackpool Borough Council: Internal Audit & Investigations
Assuring Quality Services for Blackpool
Internal Audit & Investigations
Quarterly Report April-June 2005
ContentsPage
1.First quarter summary
Corporate Issues
Business/Operational Issues
2.Progress against 2005-2006 business plan actions
3.Performance
Internal audit performance results for 2005/6 year to date
Investigations performance results for 2005/6 year to date
Standards and quality assurance
4.Conclusion
Appendix A: Performance & Summary Tables for Quarter 1st April–30th June 2005
Internal audit reviews completed & final reports issued in period
Internal audit reviews currently in progress
Internal audit advice provided in period......
Frauds, irregularities and whistle blowing incidents investigated in period
Investigations Team Statistics
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Blackpool Borough Council: Internal Audit & Investigations
Assuring Quality Services for Blackpool
Quarterly Report April – June 2005- First quarter summary
Corporate Issues
1.1The fraud team have been shortlisted in the Institute of Revenues, Rating and Valuation 2005 Awards in the category of ‘Anti-Fraud Team of the Year’. An inspection visit will take place in the near future after which it will be known if the team has made it through to the finalist stage.
1.2The audit team entry in the Strategic Risk European Risk Awards 2005 in the ‘Best Risk Training Programme’ was highly commended. This recognition in such a prestigious European risk management award was very gratifying for the team involved in designing and running the Risk for Managers course.
Business/Operational Issues
1.3The fraud team have come top nationally in recent sanction reward tables published by the Department for Work and Pensions. The results focus of the team is reflected in sanction rewards that more than cover service costs.
1.4Internal audit secondments have continued. Steve Roberts completed three months working on risk management issues in Children’s Services at the end of June. Tracy Greenhalgh has now gone to the Organisational Change Unit to work on Council strategic planning issues until September.
1.5The investigations team have contributed significantly to the National Fraud Initiative data matching work. This inter-Council collaboration with the Audit Commission is an important anti-fraud drive.
1.6The internal audit team has begun to include work on value for money in its audit plan with a study of vehicle utilisation. This focus on value for money has proved to be timely given the new requirements for VFM review in the Corporate Performance Assessment.
1.7Investigations staff attended the Council Open Day at the Winter Gardens to promote benefit fraud awareness. The Chief Internal Auditor completed the team’s assistance to Benefits Beacon authority by speaking at a learning event for Midlands authorities at the National Exhibition Centre.
1.8Tony Cooke, Paul Brook, Dave Jordan and Chris Reeve have passed the Bond Solon Advanced Investigations Certificate. Stephen Dunstan has completed the Professionals in Security (PINS) manager qualification. This means that all investigations staff other than administrative support are qualified to industry standard or above.
1.9Stephen Dunstan has been appointed Money Laundering Reporting Officer for the authority, with Niki Riley as the deputy MLRO. This is a new requirement on the Council, and it has been agreed that internal audit is an appropriate area for the reporting function to be operated from.
- Progress against 2005-2006 business plan actions
2.1Action - Development of value for money work as part of the annual audit plan.
Progress – One of two planned value for money studies in annual audit plan completed.
2.2Action – Use new fraud management system and increased admin support to increase investigator caseloads by 5%.
Progress – Above target at end of Quarter 1.
2.3Action – Effective follow-up of all significant recommendations, including an effective tracking mechanism and appropriate escalation measures.
Progress – Follow-ups conducted during first quarter, new tracking mechanism still to be implemented.
2.4Action – Enhancement of assurance provided by financial compliance testing work through revision of approach and scope and more effective marketing of the benefits and results of the work.
Progress – Approach being revised, marketing pending full completion of revision to approach.
2.5Action – Enhancement of the audit section’s involvement in corporate governance, including annual review of the CIPFA SOLACE guidance.
Progress – CIPFA SOLACE review undertaken, responsibility for remaining actions to be in conjunction with Head of Risk and Assurance who is now taking this area forward.
2.6Action – Further develop fraud awareness by training other relevant Council staff outside Benefits and introducing new methods of promoting fraud awareness to the citizens of Blackpool.
Progress – Attended Council Open Day at Winter Gardens, included fraud awareness in Risk for Managers course run in June.
2.7Action – Develop effective customer feedback mechanisms for the investigations service.
Progress – Outstanding.
- Performance
Internal audit performance results for 2005/6 year to date
PI Ref.(BVPI, Local, PSA) / Performance Indicator
(Description of measure) / 2005/06 Target / 2005/06 Actual
Local IAPI1 / Percentage audit plan completed (annual target). / 90% / 18%
Local IAPI2 / Percentage draft reports issued within deadline. / 80% / 75%
Local IAPI3 / Percentage audit work within resource budget. / 80% / 88%
Local IAPI4 / Percentage of positive satisfaction surveys. / 85% / 94%
Local IAPI5 / Percentage compliance with quality standards for audit reviews. / 95% / 100%
Investigations performance results for 2005/6 year to date
PI Ref.(BVPI, Local, PSA) / Performance Indicator
(Description of measure) / 2005/06 Target / 2005/06 Actual to date
BVPI76b / Number of fraud investigators employed per 1,000 caseload. / 0.41 / Annual
BVPI76c / Number of fraud investigations, per 1,000 caseload. / 50 / Annual
BVPI76d / Number of prosecutions and sanctions, per 1,000 caseload. / 11 / Annual
Local IPI1 / Percentage cases closed resulting in changes to benefit. / 63% / 45%
Local IPI2 / Percentage cases closed resulting in changes to benefit with sanction rewards. / 59% / 86%
Local IPI3 / Value of income as percentage of investigations team costs / 100% / 274%
Local IPI4 / Percentage internal investigation cases closed resulting in management action. / 100% / 100%
Standards and quality assurance
3.1There are no issues to report in this regard in the current quarter. The Audit Commission will be reviewing the CPA block on use of resources, which both audit and fraud contribute to, in the forthcoming quarter.
- Conclusion
- Both teams continue to receive significant recognition for the quality and quantity of work performed. Progress has been good in the first quarter, but it is important to maintain momentum during the year ahead
Stephen Dunstan ACA
Chief Internal Auditor
01253 478560
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Blackpool Borough Council: Internal Audit & Investigations
Assuring Quality Services for Blackpool
Quarterly Report April – June 2005Appendix A:
Performance & Summary Tables for Quarter 1st April–30th June 2005
Internal audit reviews completed & final reports issued in period
Directorate / Review Title / Assurance StatementBusiness Services / Stress Management / We consider that the service is adequately controlled to address the level of business risk. Whilst a number of initiatives relating to stress management are yet to be implemented, we are satisfied that progress is being made on these and that they will be launched during 2005.
Business Services / Customer First / Generally, we consider that the service is adequately controlled to address the level of business risk. Whilst we have made a number of recommendations concerning internal relations and capacity issues, these are to help ensure that robust processes are in place and that roles and responsibilities are clearly defined.
Tourism & Regeneration / Best Value Performance Indicators / We consider that the controls are inadequate to address the level of business risk. We have concerns regarding each of the BVPIs included within the scope of the audit. Problems encountered included incorrect calculations and incorrect base data being used. Most commonly, for the majority of BVPIs covered, evidence sheets and files were not in place and therefore we are only able to give limited assurance that adequate evidence has been collated for each of the indicators pre the external audit.
Occupational Change Unit and the BVPI owners are currently addressing these issues in time for the Audit Commission review.
Tourism & Regeneration / Tourism On-line booking system / We consider that the tourism on-line booking system is adequately controlled to address the level of business risk. The internet carries inherent risks and it would be difficult to safeguard against all possible scenarios, however our discussions with the system administrator and ICT services give us reasonable assurance that the system will operate in a controlled environment.
Key findings are that a contract is not yet in place with the web developers and there is a lack of business continuity in place for the system. We have therefore made priority 2 recommendations in these areas. Other recommendations throughout this report relate to best practice and their implementation will help improve the controls surrounding the on-line booking system.
Children’s Services / Children’s Services Preparation for CPA / We consider that the service is making adequate preparation for the forthcoming CPA inspection. We believe the key risks to achieving an improved score relate to the inadequacy of current IT facilities and potential staff losses resulting in a shortage of frontline staff. CS recognise these risks and have taken positive steps to reduce them but in the short term it is extremely challenging to fully mitigate them.
Social Services / Transport at Social Services Establishments / The review identified potential improvements in the documentation of procedures which management agreed to take on board. Other minor control improvements were identifed and an agreed action plan has been developed to address these.
External Companies / Sandcastle Waterworld / We consider that the Sandcastle Waterworld is well controlled to address the level of business risk.
Our testing revealed a satisfactory level of compliance with controls. We did however identify some lapses in control of purchasing procedures and non-compliance with insurance limits for cash in transit to the bank.
Internal audit reviews currently in progress
Directorate / Review Title / Stage of CompletionBusiness Services / Energy Management / Fieldwork
Business Services / Treasury Management / Fieldwork
Business Services / Cemeteries & Crematorium / Draft report
Business Services / Creditors / Fieldwork
Tourism & Regeneration / Blackpool Challenge Partnership Self-assessment / Draft report
Tourism & Regeneration / Corporate funding / Draft report
Children’s Services / Outdoor Visits / Fieldwork
Children’s Services / Transport / Fieldwork
Children’s Services / Children’s Assessments / Fieldwork
Learning & Leisure / Libraries Restructure / Draft report
Housing & Social Services / Creditors & Management Support Services / Draft report
Housing & Social Services / Funding of PCT Occupational Therapists / Draft report
Cross Cutting / CRB compliance / Fieldwork
Cross Cutting / Education & Social Services vehicle utilisation / Draft report
Internal audit advice provided in period
Directorate / SubjectLearning & Leisure / Claremont School & Early Excellence Centre
Learning & Leisure / Devolved Capital
Learning & Leisure / Palatine Leisure Centre Risk Assessment
Learning & Leisure / Partnering contractor selection – Stanley Park
Learning & Leisure / Stanley Park Risk workshop
Children’s Services / New Opportunities to Day Care Centre
Business Services / Income received via ITS PARIS system for Income & Debt Strategy Group
Business Services / Security of confiscated items
Business Services / ESCROW agreements
Business Services / Use of company credit cards
Business Services / ICT Strategy & Projects Board
Tourism & Regeneration / Group Repair Schemes
Tourism & Regeneration / Licensing Project
Corporate / Corporate Governance
Corporate / Project post-implementation reviews
Housing & Social Services / Supporting People IT project board
Housing & Social Services / Use of consultants
Housing & Social Services / Meals on wheels advice
Frauds, irregularities and whistle blowing incidents investigated in period
Directorate / Nature of Incident / Investigation OutcomeSocial Services & Housing / Alleged misappropriation of client monies / No inappropriate activity identified
Corporate / Alleged fraudulent claiming of council tax discounts / Ongoing
Business Services / Theft of time / Ongoing
Investigations Team Statistics
Month / Weekly Incorrect Benefit Savings / SanctionsCautions / Admin Penalties / Completed Prosecutions / Total / Target / +/- Target / Sanction Rewards
Apr / £2,330 / 19 / 13 / 9 / 41 / 26 / 15 / £68,400
May / £2,029 / 22 / 3 / 14 / 39 / 25 / 14 / £77,200
June / £1,984 / 19 / 4 / 10 / 33 / 25 / 8 / £59,600
TOTAL / £6,343 / 60 / 20 / 33 / 113 / 76 / +37 / £205,200
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