Annual Audit Letter
11 Pages
English

Annual Audit Letter

-

Downloading requires you to have access to the YouScribe library
Learn all about the services we offer

Description

Annual Audit Letter National Probation Service - London Audit 2007-2008 October 2008 Contents Summary 3 Purpose, responsibilities and scope 5 Audit of the accounts 6 Use of resources 7 Closing remarks 10 The Audit Commission 11 Status of our Reports The Statement of Responsibilities of Auditors and Audited Bodies issued by the Audit Commission explains the respective responsibilities of auditors and of the audited body. Reports prepared by appointed auditors are addressed to non-executive directors/members or officers. They are prepared for the sole use of the audited body. Auditors accept no responsibility to: • any director/member or officer in their individual capacity; or • any third party. Summary Summary Overview 1 Once again it has been a busy and challenging year for London Probation. At the start of the financial year 2007/08 the new board was appointed and inducted, and LP embarked on a major redesign and restructuring exercise with the aim of delivering more efficient and effective offender management. This exercise is now complete and a new operational structure based around 12 borough clusters has been implemented. 2 LP has, for the first time, produced a three year strategic plan that covers 2008-11 and sets out LP's vision as 'achieving public confidence in our work to protect the people of London' and its mission, 'cutting crime for a safer London'. The plan also articulates the strategic results LP ...

Subjects

Informations

Published by
Reads 18
Language English
Annual Audit
Letter
National Probation Service - London
Audit 2007-2008
October 2008
Status of our Reports
The Statement of Responsibilities of Auditors and Audited Bodies issued by the Audit
Commission explains the respective responsibilities of auditors and of the audited
body. Reports prepared by appointed auditors are addressed to
non-executive directors/members or officers. They are prepared for the sole use of the
audited body. Auditors accept no responsibility to:
any director/member or officer in their individual capacity; or
any third party.
Contents
Summary
3
Purpose, responsibilities and scope
5
Audit of the accounts
6
Use of resources
7
Closing remarks
10
The Audit Commission
11
Summary
Summary
Overview
1
Once again it has been a busy and challenging year for London Probation. At the start
of the financial year 2007/08 the new board was appointed and inducted, and LP
embarked on a major redesign and restructuring exercise with the aim of delivering
more efficient and effective offender management. This exercise is now complete and
a new operational structure based around 12 borough clusters has been implemented.
2
LP has, for the first time, produced a three year strategic plan that covers 2008-11 and
sets out LP's vision as 'achieving public confidence in our work to protect the people of
London' and its mission, 'cutting crime for a safer London'. The plan also articulates the
strategic results LP seeks to achieve and its priorities for action.
3
During the first half of 2008 Her Majesty's Inspectorate of Probation (HMIP) completed
its Offender Management Inspection (OMI) in London. The primary purpose of the
inspection was to assess the quality of start to end offender management and HMIP is
visiting all 42 National Offender Management Service areas over a three-year period
from May 2006. The report found that there was a mixed picture of practice, but that
following reorganisation LP is 'travelling in the right direction under committed
leadership.' It was the first full inspection concluded at LP without HMIP requiring a
follow-up inspection. The OMI action plan has been completed and sent to HMIP.
4
There continue to be national developments, that impact on all probation areas, with
the National Offender Management Service (NOMS) that oversees offender
management, becoming an Executive Agency of the Ministry of Justice in April 2008,
bringing the probation and prison service closer together. The first probation trusts
were established in April 2008 with six boards becoming trusts, however there has
been a delay in the original timetable which envisaged all boards becoming trusts over
a three year period and no new trusts are expected to be establish in April 2009.
NOMS has also been consulting on introducing a best value regime into probation
boards and trusts, but no final decision has yet been reached.
5
NOMS introduced a new performance framework in 2007/08 setting out national
performance targets for probation boards. HMIP recognised in its OMI report that LP
has made sustained improvement against its performance targets, but that some areas
of performance continued to require attention. LP recognises that it needs to improve
its performance and has drawn up a performance plan to help deliver this
improvement. LP received the maximum performance bonus available for 2007/08 of
£1.8m.
6
LP continues to develop its arrangements to meet the challenges it faces. Both
members and senior managers should continue to promote and support sustained
improvement in performance and delivery. Looking forward LP has begun to take the
action necessary to help deliver its objective of achieving trust status.
3
National Probation Service - London
Summary
Key messages
We gave an unqualified opinion on the LP's financial statements and an unqualified
value for money conclusion for the arrangements made for the use of resources.
LP continues to respond well to the key challenges it faces, senior management
are aware that they need to continue to focus on improving performance and
developing governance arrangements towards meeting the standards required to
obtain trust status.
Recommendations
The Board should continue to remain vigilant to ensure threats to financial health
are promptly identified and addressed.
The Board should ensure that the medium term financial plan is kept under review
and developed as needed to help deliver LP's priorities.
The Board should ensure that the recommendations from our reviews as set out in
action plans continue to be implemented in accordance with agreed timetables.
National Probation Service - London
4
Purpose, responsibilities and scope
Purpose, responsibilities and
scope
7
This Annual Audit Letter (letter) summarises the key issues arising from our work
carried out during the year. We have addressed this letter to Board members as it is
the responsibility of the Board to ensure that arrangements are in place for the conduct
of its business and that it safeguards and properly accounts for public money. We have
made recommendations to assist the Board in meeting its responsibilities.
8
The letter also communicates the significant issues to key external stakeholders,
including members of the public. We will publish this letter on the Audit Commission
website at
www.audit-commission.gov.uk
.
9
We have prepared this letter as required by the Statement of Responsibilities of
Auditors and Audited Bodies issued by the Audit Commission. This is available from
www.audit-commission.gov.uk
.
10
As your appointed auditor we are responsible for planning and carrying out an audit
that meets the requirements of the Audit Commission’s Code of Audit Practice (the
Code). Under the Code, we review and report on:
the Board's accounts; and
whether the Board has made proper arrangements for securing economy,
efficiency and effectiveness in its use of resources.
11
This letter summarises the significant issues arising from both these areas of work and
highlights the key recommendations for the Board to consider. The closing remarks
section at the end of this letter contains a list of all reports issued to the Board relating
to the 2007/08 audit.
5
National Probation Service - London
Audit of the accounts
Audit of the accounts
12
Before giving my opinion we presented the Annual Governance Report to the Audit
Committee on 17 June 2008.
13
We gave our unqualified opinion on the financial statements on 10 July 2008. This was
after the submission deadline of 27 June 2008. However, the delay was not due to LP,
but was a result of outstanding pension assurances from the auditor of the London
Pension Fund Authority (LPFA). This was because the LPFA works to a different
accounts closedown timetable to that followed by the LP. We will continue to work with
the auditor of the LPFA to improve the timeliness of pension assurances.
14
LP produced a comprehensive account closedown plan, and the draft financial
statements were again produced in a timely manner, well constructed and the quality
of working papers provided was good.
15
As part of our audit we identified and reviewed the key controls within the LP’s material
financial systems and sought to place reliance upon their operating effectiveness to
provide us with an assurance that the financial statements were free from material
misstatement. We were able to conclude, as last year, that the LP’s material financial
systems have adequate controls in place to ensure that that the risk of a material mis-
statement to the financial statements from the information produced by these systems
is low. As part of this process we worked closely with Internal Audit and placed
reliance on their findings wherever possible. Our review of work undertaken by Internal
Audit found that their work was of a sufficient standard for us to place reliance upon it.
National Probation Service - London
6
Use of resources
Use of resources
Financial position
16
Public sector bodies are required to have in place proper arrangements to ensure
soundly based financial standing.
17
In last year's letter we reported that LP faced significant financial pressures in 2007/08.
Substantial savings were required, including a service redesign and restructuring, and
a freeze on non-business critical recruitment to achieve a balanced budget for
2007/08. The financial constraints, particularly the freeze on recruitment enabled the
LP to achieve an underspend for 2007/08 of £2.4m, which NOMS allowed LP to carry
over into 2008/09.
18
The positive impact of the financial constraints and the reorganisation were
contributory factors in enabling a balanced budget for 2008/09 to be agreed by the
Board, at its meeting on 20 March 2008, without recourse to the strict measures that
had been required to achieve a balanced budget for 2007/08.
19
Subsequent to the budget for 2008/09 being drawn up the Ministry of Justice allocated
additional funding of £40m to probation boards and trusts to provide 'more tough and
effective community sentences'. A project board has been established to manage LP's
£6.8m share of this allocation. The full year budget has now been amended to reflect
this additional allocation.
20
To help improve the monitoring of LP's financial position two revised forecasts are
planned during 2008/09. The current outturn projection for the year end 2008/09 is that
there is likely to be an underspend within the 2 per cent NOMS budget carry over
criteria, mainly due to unfilled vacancies. However, the Board should continue to
remain vigilant to ensure threats to financial health are promptly identified and
addressed.
21
For the first time a strategic plan incorporating a medium term financial plan that
covers the three financial years to the end of March 2011 has been drawn up, this
should help LP to make best use of its financial resources to achieve its strategic
objectives. The Board should ensure that the medium term financial plan is kept under
review and developed as needed to help deliver LP's priorities.
Recommendation
R1
The Board should continue to remain vigilant to ensure threats to financial health
are promptly identified and addressed.
R2
The Board should ensure that the medium term financial plan is kept under review
and developed as needed to help deliver LP's priorities.
7
National Probation Service - London
Use of resources
Value for Money conclusion
22
We concluded that the LP did have proper arrangements in place to secure economy,
efficiency and effectiveness in the use of resources against the criteria for probation
boards set out in Table 1 and we issued an unqualified value for money conclusion on
10 July 2008.
Table 1
Value for money conclusion
LP satisfied all the criteria.
Criteria
Satisfied?
The probation board has put in place arrangements for
monitoring and scrutiny of performance, to identify
potential variances against strategic objectives,
standards and targets, for taking action where
necessary, and reporting to board members.
3
The probation board has put in place arrangements to
maintain a sound system of internal control.
3
The probation board has put in place arrangements to
manage its significant business risks.
3
The probation board has put in place arrangements to
ensure that its spending matches its available resources.
3
The probation board has put in place arrangements for
managing performance against budgets.
3
The probation board has put in place arrangements to
manage and improve value for money.
3
The probation board has put in place arrangements that
are designed to promote and ensure probity and
propriety in the conduct of its business.
3
Other use of resource work
23
Our review of fraud risks reported to the Audit Committee in June 2008 included:
a review of specific areas identified as potentially at risk from fraud; and
the results of the Audit Commission's 'Your business@risk' survey that focuses on
the business risks associated with information and communication technology.
National Probation Service - London
8
Use of resources
24
We concluded that the control environment for the specific areas reviewed was
generally sound with a low risk that undetected fraud could occur. Some scope for
improvement was identified and was set out in an action plan agreed with
management. The survey's results were analysed and were found to be broadly in line
with the national comparators. Where inconsistencies with national comparators were
identified they have been explored by management and used to help inform
improvement.
25
In addition to this review the LP continues to fully participate in the Audit Commission's
National Fraud Initiative which is a data matching exercise that compares sets of data
to identify inconsistencies or other circumstances that might indicate fraud or error.
26
During the year we also undertook a survey to assess how board members and senior
managers view existing ethical governance arrangements, identifying any areas of
concern on which further action may be needed. A draft report has been issued and
discussed with management and a workshop to explore some of the issues further has
been arranged. The final report will be presented to the Audit Committee.
27
Our review of the Integrated Probation Performance Framework is nearing completion
and will be issued to management shortly and presented to the Audit Committee when
finalised.
Recommendation
R3
The Board should ensure that the recommendations from our reviews as set out in
action plans continue to be implemented in accordance with agreed timetables.
9
National Probation Service - London
Closing remarks
Closing remarks
28
We have discussed and agreed this letter with the Chief Office and the Director of
Finance and Facilities. We will present a copy of the letter at the Audit Committee on
30 September 2008, and provide copies to all Board members.
29
Further detailed findings, conclusions and recommendations on the areas covered by
our audit are included in the reports issued to the Board during the year. These are
listed in the following table.
Table 2
Report
Date of issue
Audit plan
March 2007
Annual governance report
June 2008
Opinion on financial statements
July 2008
Value for money conclusion
July 2008
Review of fraud risks
June 2008
Ethical governance
July 2008 (draft)
Annual audit letter
September 2008
30
The Board has taken a positive and constructive approach to our audit. We would like
to thank the Board for its help and cooperation during the audit.
Les Kidner
District Auditor
September 2008
National Probation Service - London
10
The Audit Commission
The Audit Commission is an independent watchdog, driving economy, efficiency and
effectiveness in local public services to deliver better outcomes for everyone.
Our work across local government, health, housing, community safety and fire and rescue
services means that we have a unique perspective. We promote value for money for
taxpayers, covering the £180 billion spent by 11,000 local public bodies.
As a force for improvement, we work in partnership to assess local public services and
make practical recommendations for promoting a better quality of life for local people.
Copies of this report
If you require further copies of this report, or a copy in large print, in Braille,
on tape, or in a language other than English, please call 0844 798 7070.
© Audit Commission 2008
For further information on the work of the Commission please contact:
Audit Commission, 1st Floor, Millbank Tower, Millbank, London SW1P 4HQ
Tel: 0844 798 1212
Fax: 0844 798 2945
Textphone (minicom): 0844 798 2946
www.audit-commission.gov.uk