Audit And Risk Management Sub-committee - 15/05/2006

At a MEETING of the AUDIT AND RISK MANAGEMENT SUB-COMMITTEE OF THE FINANCE COMMITTEE held at Dundee on 15th May 2006.

Present:-

BAILIE

Charles D P FARQUHAR

COUNCILLORS

Fraser MACPHERSON

Nigel DON

Joe FITZPATRICK

In Attendance:-

Pearl Tate, Senior Audit Manager, Audit Scotland

Ian Craig, Audit Scotland

Councillor Macpherson, Convener, in the Chair.

Unless marked thus * all items stand delegated.

I DUNDEE CITY COUNCIL AUDIT RISK ANALYSIS AND PLAN 2005/06

There was submitted Report No 324-2006 by Pearl Tate, Senior Audit Manager, Audit Scotland, giving details of the 2005/06 Audit Risk Analysis and Plan (ARAP). Pearl gave a presentation to members on the ARAP and the steps Audit Scotland had taken to modernise the audit. The ARAP is essentially a tailored audit plan for Dundee City Council and provides a framework for the conduct of the audit. Reference was also made to the Priorities and Risks Framework (PRF), a national risk methodology tool, which was a key factor in the modernised audit approach. Two areas had been added to the 2005/06 PRF, the Role and Development of Members and Efficient Government. The speaker answered questions.

The Sub-Committee noted and approved the Audit Risk Analysis and Plan 2005/06. The Convener thanked Pearl Tate for her informative presentation.

II REVIEW OF PREVIOUS YEARS' EXTERNAL AUDIT REPORT ACTION PLANS

There was submitted Report No 304-2006 by the Depute Chief Executive (Finance) providing members with an update on the progress of implementing recommendations from previously agreed external audit reports. The Head of Finance reported that this was the first time this Report had been produced. In future it would be prepared on an annual basis. The Appendix to the Report provided details of the recommendations implemented, due to be implemented and not yet due for implementation. It was noted that all outstanding recommendations on Following the Public Pound were to be addressed in a Report to be submitted to the Policy and Resources Committee on 12th June 2006. Remaining outstanding recommendations re Social Work Debtors and Income would be implemented by October 2006.

The Sub-Committee noted the information detailed in the Report on progress in implementing previously agreed recommendations.

III INTERNAL AUDIT ANNUAL PLAN 2006/07 AND UPDATE ON INTERNAL AUDIT ANNUAL PLAN 2005/06

There was submitted Report No 320-2006 by the Chief Internal Auditor detailing the Internal Audit Annual Plan for 2006 providing an update on the Internal Audit Plan 2005/06. During the financial year 2006/07, the estimated Audit days available would be 1160 days. These had been allocated across a range of audit activities and services in line with the Internal Audit Strategic Plan 2005-2009. The Chief Internal Auditor advised that the Plan had been prepared on best information currently available but may be subject to change subject to issues arising and emerging risks. Any material amendments to the planned work would be reported back to the Audit and Risk Management Sub-Committee.

The Sub-Committee noted the information as detailed in the Report.

IV INTERNAL AUDIT REPORTS

There was submitted Report No 316-2006 by the Chief Internal Auditor providing the Sub-Committee with a summary of the Internal Audit Reports finalised since the last Sub-Committee meeting. Executive summaries for the reviews which had been finalised were provided in Appendix A to the Report.

The Chief Internal Auditor explained that the reviews covered a range of subject matter and departments covering, for example, Education Maintenance Allowances, Telecommunications - Mobile Phones, Follow up Reviews of the Prudential Code and Cemeteries and Burial Grounds. Copies of the full reports were available to members from the Finance Department upon request.

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

V INTERNAL AUDIT REPORTS - SUMMARY OF PROGRESS ON IMPLEMENTING RECOMMENDATIONS

There was submitted Report No 322-2006 by the Chief Internal Auditor updating members on progress in implementing internal audit recommendations previously reported to Management. Following a report to the Sub-Committee on 16th May 2005 by the External Auditor, it had been agreed that the Council should establish a system to monitor progress on and the implementation of agreed recommendations from audit reports and such progress should be reported to the Audit and Risk Management Sub-Committee. The Chief Internal Auditor advised that internal audit may undertake follow-up work for some of the reviews listed at Appendix A and for such work an allocation had been included in the 2006/07 Internal Audit Annual Plan.

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

VI PROPOSED RISK MANAGEMENT PROJECT WORK 2006/2007

There was submitted Report No 319-2006 by the Risk and Business Continuity Manager providing an overview of proposed Risk Management Project Work in the current financial year. It was noted from the Appendix to the Report that 155,000 out of the available budget of 180,000 had been committed. The Risk and Business Continuity Manager pointed out that 45,000 had been allocated to the provision of Business Continuity.

The Sub-Committee agreed the following recommendations:-

(a) to approve the proposed Risk Management expenditure;

(b) to approve the Council's Risk and Business Continuity Manager's Report on progress made within the areas identified for risk improvement.

VII INTERNAL BENCHMARKING OF INSURABLE LOSSES

There was submitted Report No 318-2006 by the Risk and Business Continuity Manager providing members with the first set of comparative loss figures for the financial years 2004/05 and 2005/06.

The Risk and Business Continuity Manager pointed out that the total malicious damage figure was expected to outturn at under 500,000 - this figure had reached 1 million per annum in the recent past. It was also pleasing to note that the number of public liability claims had reduced substantially. It was noted that motor costs had been relatively static over the two year period. However, whilst costs were controlled, the frequency of accidents was not falling and a further detailed Risk Management Report would be submitted to the next Sub-Committee meeting addressing all aspects of motor exposures.

The Sub-Committee approved the following recommendations:-

(a) to note the initial benchmark data provided;

(b) to agree to monitor the progress of the loss data presented;

Fraser MACPHERSON, Convener.

APPENDIX II

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