Archived decisions

Contact: Adrian Thorne, (019620 847259); email: [email protected]

1. Introduction

1.1 This report updates members of the progress made by Adult Services in relation the Annual Internal Audit Opinion 2006/07 made by the County Treasurer in June which summarised the main issues facing the Department.

2. Recommendations

2.1 That the Governance Committee note the progress made by Adult Services in responding to the main issues raised in the summary of annual internal audit opinions.

3. Background

3.1 In line with the County Treasurer's report, Adult Services has a management responsibility to develop and maintain the internal control framework and to ensure that the County Council's resources are properly applied. Internal Audit is an assurance function that primarily provides an independent and objective opinion on the control environment by evaluating its effectiveness in achieving the County Council's objectives.

3.2 Adult Services have received an opinion from Internal Audit on the overall control framework for 2006/07 (against the four terms: comprehensive; appropriate; incomplete; and inadequate). This opinion was considered by the Performance Management Board on the 27 June 2007. The opinion for 2006/07 was appropriate and this showed an increase in the overall level of assurance provided compared to that given in 2005/06 due to the progress made by the department in the last year.

3.3 There were, however, a number of issues raised during the year and the purpose of this report is to update the Committee on the progress which has been made.

4. Update on progress

4.1 This section of the report shows the progress made by Adult Services against the issues raised by Internal Audit.

4.2 Internal Audit is now a standing item on Adult Services' Performance Management Board in order that that the Department can review the outcomes of audits as well as giving the opportunity for the Audit Manager responsible for Adult Services to report directly to the Department on any issues they wish to discuss. As examples both the Audit plan and the Audit opinion were presented to the Board by the Audit Manager and the outcomes of specific audits are presented particularly where action is required by the Department. This enables the work undertaken by Audit to be integrated into the management of the Department's performance.

4.3 Additionally the Head of Audit meets the Assistant Director (Performance and Business Management) periodically to discuss the outcomes of audits undertaken as well as future audit requirements.

Direct Payments

4.4 In relation to Direct Payments an action plan has been implemented which fits along side a comprehensive review which is being undertaken. The key issues were:

· Assessments are completed ensuring that the client is eligible to receive Direct Payments

o Action taken: A 47 item action plan setting out the problems and solutions has been implemented

· Direct Payments are used for the correct purpose

o Action: The 8 detailed recommendations have been implemented in full

· The Direct Payments review has completed it's first phase and agreement to enter into consultation on key changes was agreed by Cabinet in July 2007.

SAP/ Swift Interface

4.5 The SAP/Swift interface is in place to deal with orders which need some action to be taken before they move through to SAP, and there will always be orders which will need to go into the interface. Prior to the interface being re-designed and implemented in November 2005 the number of exceptions in the interface peaked at around 8,500. This had a huge impact on the commitment data in SAP. Following the implementation of the redesigned interface the number of exceptions was immediately reduced to around 4,500. At the start of 2006/07 the number had increased to 4,700 and this led to the conclusions within the Internal Audit report. A plan was put in place during 2006/07 as a result of the audit and by the start of 2007/08 the number was down to just under 700. The number of orders in the interface as at 19 August was less than 200 which is a more acceptable number in line with the numbers of orders which are expected to go into the interface. The numbers of exceptions in the interface are monitored on a regular basis by the Devolved Finance Unit.

Income and Debtors

4.6 The audit concluded that there were no set timetables for updating the Swift system, or for care managers to complete the assessment process. In response the Care Manual Practice manual has been updated to ensure that except in an emergency, a full assessment must be completed and recorded in Swift before eligibility and access to resources is agreed. The issue will be further addressed as part of the review of the `Seven Stages of Care Management' which is scheduled for later in the year.

Budgetary Control

4.7 Significant audit work was carried out in 2006/07 and continues into 2007/08 particularly as a result of the financial position at the end of 2005/06. The final accounts position for the end of the last financial year (2006/07) showed an improvement with the overspend being reduced to £7.5m rather than the anticipated £10.9m. The two year recovery plan aims to bring the outturn back into line with the budget in the current financial year (2007/08).

4.8 Audit recommended that a consistent approach should be adopted to ensure that only approved packages are authorised on Swift and that no amendments be made to provisions without panel approval. This has been agreed and accepted by the Department. This is being re-emphasised and strengthened as part of the business processing work currently being undertaken in respect of SAP / Swift processes.

4.9 In addition in line with Audit recommendation a report is being provided to Team Managers identifying those provisions which have been unauthorised for over four weeks.

4.10 Roles and responsibilities for budget monitoring between budget holders and budget reviewers have been allocated as part of the restructure process in line with Audit recommendations.

4.11 Audit also raised the issue that reports run from business warehouse (a financial system used for budget monitoring purposes) using identical input criteria resulted in different figures being reported. This is a systems issue relating to the configuration of business warehouse and the updating of figures in SAP. Further discussions will be held with IT Services to seek solutions to this issue.

4.12 This is an area where the Department has found Internal Audit's input particularly valuable in being able to strengthen the internal controls in place to ensure budgetary control is more robust. The areas being looked at in the current financial year have been decided upon as result of discussions between Internal Audit and the Devolved Finance Unit meaning they concentrate on key areas.

High Cost Placements

4.13 Concern was expressed that reviews were not being carried out on an annual basis for every client. Initially staff were reminded of current practice by the Area Directors, with care management leads reinforcing this message within teams. Additionally specific work has been carried out within Learning Disabilities and a high cost placement matrix has been developed which incorporates both qualitative and quantitative information to ensure appropriate placements. Elements of this matrix will be included in the best practice processes and protocols for other care groups. Performance information shows that at the end of July 81% of clients have received a timely review against comparator local authorities where the score was 68%.

Transport

4.14 The audit identified a risk of overpayment to a transport provider arising from a particular case. This has been resolved by ensuring that transport schedules from the Transport Team in Environment Department are disseminated to Area Finance Managers for action. In addition the Care Management Practice Manual has been updated to emphasise that Swift must be used to reflect changes to care management and transport.

4.15 A general reminder of the appropriate procedures has been issued to all Care Managers.

Access Controls

4.16 Following the Access Controls audit it was recommended that the Swift password length be set to a minimum length of six characters. IT Services were commissioned to undertake this enhancement, and testing has now been completed. The change is currently being planned for implementation in conjunction with IT Services. In addition the procedure for the removal of access has been strengthened, managers have been reminded of their obligation to notify Information Services when staff leave and an e-form is in place to enable this to occur. Also a monthly report is received from IT Services detailing when an ID has not been used, the ID is then suspended pending investigation with the manager.

Common Findings from Establishment Visits

4.17 The common findings from establishment visits are being followed up by the Compliance Team within the Devolved Finance Unit.

Section 100 D - :Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report.

NB: the list excludes:

1. Published works

2. Documents which disclose exempt or confidential information as defined in the Act.

(Quote list of documents here: either "none" if 1 or 2 above apply; or list the relevant letters, memos, etc and their location).