Audit And Risk Management Sub-committee - 13/09/2004

At a MEETING of the AUDIT AND RISK MANAGEMENT SUB-COMMITTEE OF THE FINANCE COMMITTEE held at Dundee on 13th September 2004.

Present:-

BAILIE CHARLES D P FARQUHAR

COUNCILLORS

In attendance:-

John Philp, Audit Scotland

Councillor REGAN, Convener, in the Chair.

Unless marked thus * all items stand delegated.

I A JOB WORTH DOING: RAISING THE STANDARD OF INTERNAL AUDIT IN SCOTTISH COUNCILS - FOLLOW UP REPORT

There was submitted Report No 643-2004 by the Depute Chief Executive (Finance) providing a summary to Members of the Audit and Risk Management Sub-Committee of the follow-up report by the Accounts Commission on A Job Worth Doing - Raising the Standard of Internal Audit in Scottish Councils.

The Chief Internal Auditor explained the background to the report whereby a study was undertaken in 2000/01 by Audit Scotland on behalf of the Accounts Commission of the internal audit arrangements within Scottish Councils. At that time, the Internal Audit Service of the City Council was placed in Band 2, which represented Councils that generally comply with the Code.

As a result of the follow-up study by Audit Scotland in 2003/04, the Sub-Committee was pleased to note that the City Council had improved and placed in Band 1. Appendix A of the report contained a summary of Audit Scotland's key findings.

The Sub-Committee noted the contents of the report.

II INTERNAL AUDIT ANNUAL PLAN 2004/05

There was submitted Report No 644-2004 by the Chief Internal Auditor presenting to Members of the Audit and Risk Management Sub-Committee the Internal Audit Annual Plan for the 2004/05 financial year as detailed in Appendix A of the report.

The Chief Internal Auditor pointed out that the Plan covered a wide range of Council services. Any material changes to the planned work would be reported back to the Sub-Committee.

The Sub-Committee noted the information contained in the report.

III INTERNAL AUDIT REPORTS

There was submitted Report No 645-2004 by the Chief Internal Auditor submitting to the Sub-Committee a summary of the Internal Audit Reports finalised since the last Sub-Committee meeting.

The Chief Internal Auditor explained that Appendices A - X covered a wide range of subject matter and Departments covering for, for example, Overtime Procedures Benefit Application Forms, Ordering, Receipting and Creditor Payments and 2003/04 Year End Stock/Stores. Copies of the full reports were available to Members from the Finance Department upon request. Provision had been made in the Internal Audit Annual Plan to undertake follow up reviews where appropriate. The Depute Chief Executive (Finance) commented that 24 reports had been produced which represented a great deal of work. The Chief Executive confirmed that all copies of internal and external audit reports were distributed to him.

The Sub-Committee noted the information contained within the report.

IV EXTERNAL AUDIT REPORTS

There was submitted Report No 646-2004 by Peter Tait, Chief Auditor, submitting to the Sub-Committee External Audit Reports finalised since the last Sub-Committee meeting.

Mr John Philip, Audit Scotland, commented briefly on the following reports relating to the 2003/04 audit that had been finalised:-

Borrowing, Loans and Deposits.

Internal Audit arrangements

ISIS Payroll System - Review of the Agreed Action Plan

Council Tax Billing and Collection

Data Protection, Freedom of Information and Information Management Review

The Executive Summary in each report set out the principal focus of the review and summarised the main audit findings. The Action Plans contained detailed recommendations on the areas where further improvements could be achieved. The agreed Action Plans would be followed up as part of future audits.

The Sub-Committee noted the External Audit Report.

In response to the Convener, Mr Philp stated that he expected the 2003/04 Report to Members would be finalised by the target date of 30th November 2004.

V PROGRESS REPORT ON RISK MANAGEMENT PROJECT WORK 2004/05

There was submitted Report No 640-2004 by the Principal Insurance and Risk Management Officer providing an overview of Risk Management project work undertaken during 2004/05 to date.

The Principal Insurance and Risk Management Officer explained that Departments were encouraged to apply to the Risk Management Section for part funding of projects which were designed to reduce the level of self-insured payments the Council had to make from its Insurance Fund. A summary of projects underway in the current financial year was included as an Appendix to the report. This showed committed expenditure to date of 107,800 against an annual budget of 180,000.

The Sub-Committee noted the contents of the report and further noted the intention to report on progress with Risk Management bi-annually in future.

VI UPDATE ON STRATEGIC RISK MANAGEMENT PLAN 2004/2007

There was submitted Report No 641-2004 by the Principal Insurance and Risk Management Officer providing the Sub-Committee with an update on progress made in implementing the Council's recently approved Risk Management Strategic Plan, a copy of which was included as an Appendix to the report. The Risk Management Strategic Plan had been approved by the Audit and Risk Management Sub-Committee on 19th January 2004 in part to lend a more formal approach to Risk Management activity. An update on the Action Plan was included within the Appendix to the report.

The Principal Insurance and Risk Management Officer explained that the plan was fluid and could be amended in response to internal or external situations. Departments would be finalising formal continuity plans which were already largely in place.

The Sub-Committee noted the progress made to date and approved the proposal that the Council's Risk Manager should provide bi-annual reports on future progress.

VII CLAIMS PERFORMANCE REPORT TO 31ST MARCH 2004

There was submitted Report No 642-2004 by the Principal Insurance and Risk Management Officer providing an overview of the value and volume of claims incurred by the City Council over the last three complete financial years.

The Principal Insurance and Risk Management Officer pointed to the background claims information provided in the report which contained the following factors:-

(a) Skewing of value in 2001/02 due to the impact of the fire at TDI Factory.

(b) Stability (against the national trend of increase) in many of the classes of cover in respect of claims intimated.

(c) A significant (20%) reduction in the volume of Property Claims - evidence of the success of previous risk management expenditure designed to lessen malicious damage in particular.

The Sub-Committee noted the contents of the report and asked the Council's Risk Manager to report annually on the Authority's overall claims performance.

VIII TIMETABLE FOR FUTURE MEETINGS

There was submitted Report No 647-2004 by the Depute Chief Executive (Finance) providing the Sub-Committee with a proposed schedule of meetings for the 2005 calendar year.

The Sub-Committee agreed to the proposed programme of meetings as follows:-

24th January 2005

16th May 2005

26th September 2005

All meetings to commence at 9.30 am.

George REGAN, Convener.