Public Papers Tuesday 16 October 2018 Conference Room 1 ... · installing automatic door openers / closers to the fire doors for tenants where the new fire doors installed were causing

Homes for Haringey

Audit and Risk Committee Meeting

Public Papers

Tuesday 16 October 2018

Refreshments 6.15pm

Meeting 6.30pm - 8.30pm

Conference Room 1

48 Station Road

Wood Green

London

N22 7TY

Item Subject Presenter Status Page Time

1 Welcome and Apologies Chair Public - 18.30

2 Declarations of Interest Chair Public - 18.31

3 Minutes of the Meeting Held on 10 July

2018

Chair Public 1 18.32

4 Actions Log Chair Public 7 18.33

5 Internal Audit Programme:

i) Internal Audit Progress Report

ii) Recommendations Tracker

iii) Management Arrangements for

Contracts and Partnerships

iv) Corporate Governance

v) Gas Safety Checks

vi) Counter Fraud Report

Mazars

&

Executive Team

Public

10

14

20

32

44

55

18.35

6 Risk Review – Workshop Discussion Director of Corporate

Affairs

Public 62 19.15

7 Medium Term Financial Savings Plan Director of Corporate

Affairs

Public 67 20.00

8 Arrears Write Off Proposals Executive Director of

Operations

Confidential 70 20.10

9 Safeguarding Exception Report (Oral Item) Executive Director of

Operations

Confidential - 20.20

10 Any Other Business Chair - 20.25

Finance, Audit and Risk Committee Meeting

Agenda

Homes for Haringey

Finance, Audit and Risk Committee Meeting 10 July 2018

Meeting: Finance, Audit and Risk Committee Meeting

Date: 6.30pm, 10 July 2018

Venue: Conference Room 1, 48 Station Road, Wood Green

Present: Adzowa Kwabla-Oklikah (AKOk) – Chair

Officers in

Attendance:

Sean McLaughlin (SM), Chris Liffen (CL), Astrid Kjellberg-Obst (AKO),

Denise Gandy (DG), Esther Campbell (EC), Minesh Jani (MJ)

Apologies: Anne Gibson (AG), Andrew Crompton (AC), Anastasia Bloom (AB), El-

Farouk Cheik (EFC), Puneet Rajput (PR), David Sherrington (DS)

Item Minutes Action

31/18 Welcome, Apologies and Declarations of Interest

The Chair welcomed officers to the meeting.

Apologies were noted as above.

There were no declarations of interest.

32/18 Minutes of the Meeting 15 May 2018

Approval of the minutes of the meeting on 15 May 2018 was

deferred to the Board meeting on 31 July 2018 due to the absence

of Committee members.

33/18 Actions Log

CL advised that visits had been undertaken to review problem doors

within sheltered schemes. A programme of implementing automatic

openers for doors where people were frail and/or disabled is currently

under way.

AKO advised that the meeting dates for the Committee to attend the

Support and Wellbeing Hubs had been included in the meeting

papers. AKO will extend the invitation to Ward Councillors. AKOk

requested that the meeting dates be re-circulated as a separate

document, as Committee members may have missed them in the

papers.

AKO

34/18 Draft Financial Statements 2017/18

Andy Lowe (AL), Senior Auditor at PwC, was welcomed to the

meeting. AKOk declined the opportunity to talk to AL without officers

present stating that this was not needed.

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Item Minutes Action

AL confirmed that the external audit had been completed in

accordance with the original audit plan presented to the Committee

in February 2018.

AL stated that there are no outstanding actions and, subject to a few

minor amendments, he will issue an unqualified audit opinion on the

Company’s and subsidiary’s financial statements.

AL thanked EC and the Finance team for their assistance during this

year’s audit.

AL outlined the key risk in relation to HfH and Move 51, which was

the going concern assumption. The deficit in the Move 51 accounts

has been covered in the letter of support received from Haringey

Council. AL felt that the movement in the net pension asset, £1.4m,

was not significant based on the changes within the current climate,

and felt confident that this area had been sufficiently audited.

AKOk questioned the readiness for audit, which PwC had stated as

‘Moderate’ in their report to the Committee. EC explained this was in

relation to the Directors report and Strategic report not being

completed whilst the auditors were on-site, due to the focus on

preparing the accounts and the working papers. EC advised that the

reports would be produced quicker next year, although they may

need to be amended later to take into account any changes.

AKOk queried variances on premises costs and sundry income; EC

will provide detailed responses via email.

PR to circulate an email to the Committee to ask for any further

feedback on the financial statements to be sent to EC.

AKOk questioned the governance of Move 51 and asked who CL

reports to in his capacity as Chair. CL advised that he reports to

Homes for Haringey, the sole Move 51 shareholder.

AL advised that the narrative in the front half of the accounts needed

to be updated to reflect the recent director changes. AL

recommended that the Provisions table on page 41 be revised to

increase clarity.

AKOk passed on AC’s thanks to EC and the Finance team.

AL left the meeting.

EC

PR

EC

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Homes for Haringey


Item Minutes Action

35/18 Internal Audit Progress Report

The contents of this report were noted.

36/18 Internal Audit Recommendations Tracker

AKOk stated that it is a delegated Board function for the Committee

to receive assurance that risk is being managed effectively. She raised

concerns over the number of outstanding recommendations, as well

as many recommendations having no updates.

AKOk had asked at the last Committee meeting whether Internal

Audit had a high profile within the company and was told that it did.

AKOk acknowledged that there were some third party factors outside

of HfH’s control which affect their ability to achieve the target dates.

SM shared AKOk’s concerns and confirmed that we will improve the

process within the Company and provide updated, detailed

information to the Committee going forward.

PR

37/18 Internal Audit – Sheltered and Supported Housing

This audit had received a limited assurance.

MJ explained the assurance rating was due to the number of priority

two recommendations arising from the audit. Many recommendations

related to policy and process improvements, and the use of

SharePoint; the auditors found it difficult to obtain the paperwork

needed during the audit.

AKO confirmed that staff are now using tablet devices, which has

proved to be a more efficient method of recording support plans.

AKO also confirmed that training had been improved and there is

now a full cohort of staff in place.

AKO found the auditors input helpful and stated that the

recommendations with June and July deadlines had been completed.

38/18 Internal Audit – Fire Safety

This audit had received limited assurance.

MJ explained the assurance rating was due to the number of priority

two recommendations arising from the audit, and that although there

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Item Minutes Action

were broad roles and responsibilities in place, improvements were

needed in some areas to address weaknesses.

With regards to the recommendation to update the Tenant’s Terms &

Conditions to include fire-specific responsibilities, AKO stated that the

initial March 2020 deadline was too far away and that alternatives

ways were being considered to complete this action by December

2018.

MJ stated that he would review any new approach to assess the

potential level of risk.

39/18 Internal Audit – Bespoke IT Systems

This audit had received a limited assurance.

MJ expressed his surprise with the number of bespoke systems in

place, particularly the amount of spreadsheets in use, although he

did note that there were access controls in place. He stated that the

use of bespoke systems could be due to the high cost of upgrading

main systems, resulting in management having to find workarounds.

CL confirmed that some of the bespoke system use was due to

difficulties and delays with the Council upgrading the current OHMS

housing management system.

SM stated that this report would be used to support the required

system changes.

40/18 Internal Audit – Housing Rents

This audit had received a substantial assurance.

MJ stated there was only one recommendation arising from this audit

with no significant issues to note.

AKOk noted that the opening section of the audit report incorrectly

referred to the old Board composition and former Committees.

41/18 Internal Audit Annual Report

MJ explained that this report summarised last year’s work from an

audit perspective.

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Item Minutes Action

MJ stated that effective governance needs to be at the forefront of

HfH’s operations; the design of controls is good, but they lack

effectiveness as they are not always in place.

AKOk questioned whether unused audit days from cancelled audits

can be carried forward. EC undertook to check and advise AKOk.

AKOk requested that as 44% of recommendations had been

implemented on time, HfH develop performance indicators on

outstanding actions and track their progress at Committee meetings.

SM stated that many recommendations become overdue as the

proposed timescales for completion are unrealistic. More work will be

done to rectify this going forward.

MJ stated that the outcome for the counter fraud work was good, with

recovery of properties higher than target. MJ advised that Dan

Hawthorn will be preparing a briefing note for the Lead member of

the Council. MJ will share this with the Committee once complete.

SM is keen for the Board to support the Committee to take a strong

stance on housing fraud.

AKOk advised officers to consider the high level of media interest and

sensitivity when working with the fraud team on Broadwater Farm

decants. AKO noted this advice and confirmed that a few suspected

cases had been discovered, with further checks currently underway.

MJ stated that there will be fraud training for HfH staff which will

cover the next stages in fraud cases, such as prosecution. This will be

extended to other Council staff with an enforcement role, such as

parking attendants and trading compliance officers.

EC

PR

MJ

42/18 Data Quality Audit Update

This report was noted. There were no questions arising.

43/18 Risk Register Workshop

This item was postponed due to the absence of most Committee

members; this will be re-arranged by PR. PR

44/18 Safeguarding Exception Report

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Item Minutes Action

AKO provided an update on the fatal fire at the Sheltered Housing

scheme. The Coroners request has now taken place. PR will be

leading on an internal review to ensure there were no faults from any

agencies involved in the Multi Agency Risk Assessment Conference

(MARAC). This will follow the format of a Safeguarding Adults Review

(SAR), but will be carried out internally.

45/18 AOB

The Chair will seek delegated approval from Committee members –

via email – for the write off of former tenant arrears under £20.

AKOk commented that, due to Health & Safety updates now going to

Board, the Committee hadn’t reviewed anything since February. CL

advised that an update is being prepared for the Board meeting on

31 July 2018.

There was no other business.

The meeting closed at 19:55

AKOk/

PR

Signed:

Date:

6

Homes for Haringey

Finance, Audit and Risk Committee Meeting 16 October 2018

Action log

Date of

meeting

Agenda

item

Action Action

owner

Target

completion

date

Status and comments

15/05/17 18/18 Additional fire doors at sheltered

housing schemes were being

checked and a timescale for

completing this would be provided.

CL Complete – All of the sheltered housing schemes

will have been visited and fire doors assessed by

the end of October. HRS are in the process of

installing automatic door openers / closers to

the fire doors for tenants where the new fire

doors installed were causing difficulties. The

programme is targeted at the most vulnerable as

the automatic door system is costing £3,000 per

door.

15/05/17 29/19 A detailed review of the risk register

to be carried out and incorporate

weak income management and

delays to the IT system upgrade as

key risks.

ELT 10/07/18

16/10/18

This will be the subject of the risk workshop at

the meeting.

10/07/18 34/18 Explanation of variances on premises

costs and sundry income to be

provided

EC Complete

Summary of Decisions 10 July 2018

Agenda Item No. Decision

There were no decisions made as the meeting was inquorate

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Homes for Haringey


Action log

Date of

meeting

Agenda

item

Action Action

owner

Target

completion

date

Status and comments

10/07/18 34/18 Committee members to be asked for

any further feedback on the financial

statements.

PR Complete

10/07/18 34/18 Provisions table on page 41 of the

draft accounts to be revised to

provide further clarity

EC Jul-18 Complete

10/07/18 36/18 More detailed information to be

provided on outstanding internal

audit recommendations

PR Oct-18 Complete – an updated report is on the agenda

10/07/18 41/18 Scope for carrying forward unused

audit days to be explored

EC Oct-18 For the last 3 years we have budgeted and paid

for 95 days internal audit work which have all

been used on various audits (some emerging

during the course of the year). The SLA currently

doesn’t provide for any carry forward of unused

days but should the need arise for an unplanned

audit, Mazars would be flexible and

accommodate subject to resources and timing.

10/07/18 41/18 KPI to be developed to track

outstanding audit recommendations

PR Oct-18 Complete

10/07/18 41/18 Briefing note on counter fraud work

for Council Lead Member to be

shared with the Committee

MJ Oct-18 The briefing note is being prepared by HfH and

will be shared once drafted.

10/07/18 43/18 Risk register workshop to be re-

arranged

PR Oct-18 Complete – this is scheduled for the October

2018 meeting

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Homes for Haringey


Action log

Date of

meeting

Agenda

item

Action Action

owner

Target

completion

date

Status and comments

10/07/18 45/18 Delegated approval for the Chair to

write off former tenants arrears below

£20 to be sought

PR Oct-18 A report is on the agenda for Committee

approval

9

Homes for Haringey Internal Audit Progress Report

October 2018

This report has been prepared on the basis of the limitations set out on page 5.

This report (“Report”) was prepared by Mazars LLP at the request of London Borough of Haringey and terms for the preparation and scope of the Report have been agreed with them. The matters raised in this Report are only those which came to our attention during our internal audit work. Whilst every care has been taken to ensure that the information provided in this Report is as accurate as possible, Internal Audit have only been able to base findings on the information and documentation provided and consequently no complete guarantee can be given that this Report is necessarily a comprehensive statement of all the weaknesses that exist, or of all the improvements that may be required. The Report was prepared solely for the use and benefit of London Borough of Haringey to the fullest extent permitted by law Mazars LLP. accepts no responsibility and disclaims all liability to any third party who purports to use or rely for any reason whatsoever on the Report, its contents, conclusions, any extract, reinterpretation, amendment and/or modification. Accordingly, any reliance placed on the Report, its contents, conclusions, any extract, reinterpretation, amendment and/or modification by any third party is entirely at their own risk.

Please refer to the Statement of Responsibility at the end of this report for further information about responsibilities, limitations and confidentiality.

10

Internal Audit Progress Summary – October 2018

2

Delivery of 2018/19 Internal Audit Plan

Current progress with delivery of the 2018/19 Internal Audit Plan is detailed below. Final Reports on Corporate Governance and Management Arrangements for Contracts and Partnerships have been issued since the last meeting of the committee

The following table sets out the audits that were finalised since the last meeting of the Audit and Risk Committee and the status of the systems at the time of the audit.

Audit Title Date of Audit Date of Final

Report Assurance

level Direction of Travel

Number of Recommendations

(Priority)

1 2 3

2018/19

Corporate Governance July 2018 August 2018 Substantial N/A 0 2 2

Management Arrangements for Contracts & Partnerships

May 2018 August 2018 Limited N/A 1 4 0

Gas Safety October 2018 Substantial 0 3 1

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Homes for Haringey Internal Audit – October 2018 3

Current progress with delivery of the 2018/19 Internal Audit Plan is detailed in the following table:

Ref Audit area Agreed start date

Status Assurance Comments

1 HR - Staff Performance Management

20/8/18 Review In Progress. Fieldwork complete. In internal quality assurance prior to issue of draft report

2 Use of Consultants/Agency staff

4/2/19 Start date and scope agreed

3 Corporate Governance 9/7/18 Final Substantial Final Report issued

4 Safeguarding 16/4/18 Review Audit started April 2018.

Report delayed outwaiting outcomes of serious incident reviews.

5 Health & Safety (Gas Safety) 9/7/16 Final Substantial Final report issued.

6 Data Security (GDPR) 1/10/18 In progress Started 1st October

7 Budgetary Control 6/8/18 Review In Progress. Fieldwork complete. In internal quality assurance prior to issue of draft report

8 Payroll - Overtime 2/1/19 Scope agreed

9 Accounts Payable 2/1/19

10 Leaseholder Charges 17/9/18 In progress Brief out for consultation

11 Housing Rents 9/1/19

12 Homelessness 24/1/19 Scoping

meeting held Brief out for consultation

13 Responsive repairs 15/10/19 Scoping meeting held

Brief out for consultation

14 Management Arrangements for contracts and partnerships

8/5/18 Final Limited Final Report issued

12

Homes for Haringey Internal Audit – October 2018 4

Statement of Responsibility

We take responsibility to the London Borough of Haringey for this report which is prepared on the basis of the limitations set out below. The responsibility for designing and maintaining a sound system of internal control and the prevention and detection of fraud and other irregularities rests with management, with internal audit providing a service to management to enable them to achieve this objective. Specifically, we assess the adequacy and effectiveness of the system of internal control arrangements implemented by management and perform sample testing on those controls in the period under review with a view to providing an opinion on the extent to which risks in this area are managed. We plan our work in order to ensure that we have a reasonable expectation of detecting significant control weaknesses. However, our procedures alone should not be relied upon to identify all strengths and weaknesses in internal controls, nor relied upon to identify any circumstances of fraud or irregularity. Even sound systems of internal control can only provide reasonable and not absolute assurance and may not be proof against collusive fraud. The matters raised in this report are only those which came to our attention during the course of our work and are not necessarily a comprehensive statement of all the weaknesses that exist or all improvements that might be made. Recommendations for improvements should be assessed by you for their full impact before they are implemented. The performance of our work is not and should not be taken as a substitute for management’s responsibilities for the application of sound management practices. This report is confidential and must not be disclosed to any third party or reproduced in whole or in part without our prior written consent. To the fullest extent permitted by law Mazars LLP accepts no responsibility and disclaims all liability to any third party who purports to use or reply for any reason whatsoever on the Report, its contents, conclusions, any extract, reinterpretation amendment and/or modification by any third party is entirely at their own risk. Mazars LLP London October 2018 In this document references to Mazars are references to Mazars LLP. Registered office: Tower Bridge House, St Katharine’s Way, London E1W 1DD, United Kingdom. Registered in England and Wales No 4585162. Mazars LLP. Mazars LLP is the UK firm of Mazars, an international advisory and accountancy group. Mazars LLP is registered by the Institute of Chartered Accountants in England and Wales to carry out company audit work.

13

Homes for Haringey

Finance, Audit and Risk Committee 16 October 2018

Report for Audit and Risk Committee

Title Internal Audit Outstanding Recommendations

Agenda item 5ii

Report for Discussion

Classification Public

Report author Puneet Rajput, Director of Corporate Affairs

Contact email [email protected]

Contact telephone 020 8489 3728

Portfolio / Board lead N/A

1. Introduction

1.1 This report presents the committee with information on outstanding internal

audit recommendations for review and discussion.

2. Summary Position

2.1 Summary KPIs in relation to outstanding recommendations accompany this

report. There are 31 outstanding recommendations in total of which 16 have

exceeded their original target date.

3. Internal Audit Outstanding Recommendations

3.1 A full list of all outstanding recommendations is set out in the table

accompanying this report. There has been a 43% reduction in the total number

of outstanding recommendations since the last report to the committee in July.

3.2 There continues to be a focus on driving numbers down further, with regular

reviews of outstanding actions at Corporate and Executive leadership team

meetings.

3.3 Some of the outstanding recommendations are based on dependencies with the

Council, for example the housing IT system upgrade and testing of Business

Continuity Plans, and may be subject to further slippage if Council time scales

change.

3.4 We have also had discussions with Mazars to ensure that recommendations

should relate to HfH responsibilities and should generally be in HfH’s control.

Consideration of this will be led by each director at report finalisation stage for

future audits.

14

Change

1 2 3 1 2 3

Housing Demand 0 1 1 2 3.7% Housing Demand 0 0 0 0 0.0% -2

Corporate Affairs 8 29 3 40 74.1% Corporate Affairs 5 18 2 25 80.6% -15

Housing Operations 3 6 0 9 16.7% Housing Operations 1 2 0 3 9.7% -6

Property Services 1 2 0 3 5.6% Property Services 1 2 0 3 9.7% 0

Total 12 38 4 54 100.0% Total 7 22 2 31 100.0% -23

22.2% 70.4% 7.4% 100.0% 22.6% 71.0% 6.5% 100.0%

1 2 3 1 2 3

Housing Demand 0 0 0 0 0.0% Housing Demand 0 0 0 0 0.0% 0

Corporate Affairs 3 8 0 11 68.8% Corporate Affairs 3 13 0 16 94.1% 5

Housing Operations 2 3 0 5 31.3% Housing Operations 1 0 0 1 5.9% -4

Property Services 0 0 0 0 0.0% Property Services 0 0 0 0 0.0% 0

Total 5 11 0 16 100.0% Total 4 13 0 17 100.0% 1

31.3% 68.8% 0.0% 100.0% 23.5% 76.5% 0.0% 100.0%

Change

Total TotalTotal

Difference

2 0 -2

2 0 -2

0 3 3

2 0 -2

5 2 -3

2 0 -2

5 2 -3

0 3 3

4 1 -3

2 0 -2

0 5 5

5 0 -5

10 4 -6

0 5 5

3 2 -1

4 1 -3

3 1 -2

0 1 1

2 0 -2

3 1 -2

54 31 -23

Total

Difference

Total

Difference

Priority

PriorityTotal Total

Total

Safeguarding

Tenancy Management

Directorate

Directorate Total

Decent Homes

Housing Rents

Human Resources

OHMS Application Audit

Payroll

Budgetary Control and Financial ManagementBusiness Continuity arrangements and BC Plan (incl. suppliers

BCP)

Choice Based Lettings

Contracts and Procurement

Data Quality

OHMS Application Audit

Payroll

Safeguarding

Application of HR policies

All Outstanding Recommendations:

July 2018

All Outstanding Recommendations:

October 2018

Outstanding Recommendations Exceeding Original Target Date:

July 2018

Outstanding Recommendations Exceeding Original Target Date:

October 2018

Accounts Payable

Internal Audit Title

DirectoratePriority

DirectoratePriority

Outstanding Audits by Area:

July 2018

Outstanding Audits by Area:

October 2018

Contracts and Procurement

Data Quality

Decent Homes

Housing Rents

Human Resources

Internal Audit Title

Accounts Payable

Application of HR policies

Budgetary Control and Financial ManagementBusiness Continuity arrangements and BC Plan (incl. suppliers

BCP)

Tenancy Management

Value for Money (as critical friend)

Total Audits

Bespoke Systems Bespoke Systems

Fire Safety Fire Safety

Sheltered & Supported Housing Sheltered & Supported Housing

Corporate Governance - Board Effectiveness Corporate Governance - Board Effectiveness

Management Arrangements for Contracts & Partnerships Management Arrangements for Contracts & Partnerships

Value for Money (as critical friend)

Total Audits

Choice Based Lettings

15

INTERNAL AUDIT TRACKER 2018/19

Audit AreaAssurance

levelAudit Recommendation Management Response Audit Deadline Revised Deadline Executive Director Responsible officer's update (show date)

Payroll SubstantialThe current appointment forms and leaver forms used by Homes for

Haringey should be revised to include management signatures.Agreed. Jun-18 30/11/2018 Puneet Rajput

Email records currently provide an audit trail for

approval. The process is being revised to seek

signatures.

Human Resources Limited

An HR Strategy should be developed, which clearly and concisely

stipulates the strategic objectives of the service and the key actions to

be implemented in order to help achieve those objectives. The

Strategy should be subject to formal approval and incorporate a

document control section to indicate dates of review and

amendments. The Strategy should be communicated to all staff.

Agreed. The current strategy will be reviewed against HfH’s new business plan

and aligned to it. It will also address the points raised in the internal audit

recommendation.

Sep-18 10/11/2018 Sean McLaughlinDraft Strategy to be agreed with ELT in October 2018,

prior to Board approval in November 2018.


All policy and procedural documentation concerning Human

Resources should be reviewed and updated to ensure it reflects current

practices. The document control sections should be updated

accordingly to confirm reviews have taken place.

Agreed. ACAS are being commissioned to support a review and update of all HR

policies and procedures.Jul-18 31/01/2019 Puneet Rajput

The process of reviewing all HR policies is underway. A

more realistic timescale for completion is Jan 2019

Human Resources LimitedKey performance targets for the HR Service should be developed as

part of the HR Strategy, which is subject to formal agreement.Agreed. Sep-18 30/11/2018 Sean McLaughlin

Performance targets for the HR service will be developed

as part of a review of Council SLAs to be completed by

November


The performance targets for the HR Service that are formally agreed as

part of the HR Strategy should be reported and monitored by senior

management on a regular (at least quarterly) basis.

Agreed. Sep-18 30/04/2019 Sean McLaughlin

Targets will be agreed in the SLA in November and a

review of performance for 2017/18 will be reported in

April 2019.

Business Continuity

arrangements and BC Plan

(incl. suppliers BCP)

SubstantialHfH, in liaison with the Council, agree a programme to ensure that

appropriate testing of the BCPs is undertaken.

Agreed – once the new Business Resilience Manager is appointed at LBH this discussion

will occurSep-17 31/12/2018 Puneet Rajput

The Council has implemented plans for testing of BCPs

and this will include HfH.

Business Continuity

arrangements and BC Plan

(incl. suppliers BCP)

Substantial

Lessons learnt from testing of the Business Continuity Plans including

real life incidents, to be reported to the Executive Leadership Team

and communicated to staff. The Business Continuity Plans to be

revised where necessary.

Agreed – this will follow from the above point so enough time is being left to enable a

test to occur and follow up lessons learned to be identified.Dec-17 28/02/2019 Puneet Rajput A lessons learned report will be produced by the Council

Safeguarding Substantial

Management information reports covering the safeguarding process,

including performance measures and serious case reviews, should be

produced on a periodic basis. The reports should be submitted to HfH

Safeguarding Group and Haringey Council Safeguarding Adults

Board and Local Safeguarding Children’s Boards on a periodic basis

for review.

The recommendation is accepted. A working group has been formed to develop a suite

of management information and a reporting process.Jun-17 01/12/2018

Astrid Kjellberg-

Obst

Sep-17 - This is still in progress. The expected

completion is revised to December 2017.

Dec 17 This has not yet been progressed and will be

addressed as an urgent priority at the next meeting of the

group.

Mar 18 - We have carried out initial scoping of what we

need to collect and the process/pathway for

safeguarding referrals. I now need to follow up with HIT

to be able to produce a report detailing what we want. If

we could set the target at June as I am uncertain how

easy this will be and the level of priority it can have, with

all else that is going on.

Oct 18 - Revised to December 2018. The Head of

Service is working with IT to ascertain the relevant

performance indicators and dashboards. Due to

unforseen cirumstances, the lead person will return to

work on the 22/10/18 after several months absence.

This work wil be completed by the end of November

2018.

Value for Money (as critical

friend)Substantial

HfH should develop dedicated webpages concerning VFM on both the

Intranet and Internet. The webpages should contain links to key

documentation, articles concerning cost savings realised and provide

opportunity for individuals to share VFM ideas and suggestions

Agreed Sep-16 01/01/2019 Puneet Rajput

The Board has approved a new VfM strategy and the

Audit Committee will approve target efficiencies for a 5

year MTFS. A project plan is in place to promote and

embed the objectives of the strategy.

Data Quality LimitedSelf-assessments against applicable information governance standards

should be undertaken on at least an annual basis.Agreed Jul-17 30/11/2018 Puneet Rajput

The standard in question is ISO 8000:2015. This will be

re-considered in light of current efforts to ensure

compliance with GDPR.

16

Audit AreaAssurance


OHMS Application Audit Substantial

An exercise should be conducted to map / understand how the system

permissions are configured in sufficient detail to demonstrate, which

members of staff can carry out each key function within the

organisation.

This is a significant piece of work due to the age of the system and the number of

different roles that have existed throughout its time of use. The audit was able to

evidence that critical data is managed by a controlled and limited group so the risk is

low. When we move to a new system in the next 12- 18mths we will have the opportunity

to review and rationalise the permissions so that they are clearer going forward.

Mar-18 30/09/2019 Puneet Rajput

Dec-17 Given the lack of a decision on the future

application strategy this target is likely to slip.

Jul-18 This will be part of the migration from OHMS to

NPS in 2019 estimated date for completion Sept 2019

OHMS Application Audit Substantial

A formal disaster recovery exercise of the OHMS application should

be conducted as soon as is possible (given the requirement to

introduce a new application server). Results of the exercise should be

reported formally to senior management and any corrective actions

required are reflected in an updated DR Plan.

Agreed. We are in the process of moving the application to a new server which will

allow us to test DR. We have been unable to test DR on the current server due to the

significant risk of crashing the server. A provisional date for Qtr 1 2017/18 has been

agreed in principal with the supplier, Northgate, and the network team.

Jun-17 01/04/2019 Puneet Rajput

Jun-17 - the date for completion has been delayed to

Q2. The DR will be completed and reported on by the

end of 2017.

Dec-17 New server has been deployed and the OHMS

application has been migrated to a fully supported

version on compliant operating systems. A request for

resources from the Shared Digital service to carry out a

DR test has not yet been approved so the deadline will

need to be moved to June 2018.

Jul-18 This will be part of the migration from OHMS to

NPS in 2019 estimated date for completion April 2019

Contracts and Procurement Limited

The review and update of Contract Regulations should be included as

an annual item on the Board Forward Plan. The Forward Plan should

also be amended to allow for a review and update of the Procurement

Strategy and the Procurement Code of Practice.

We propose two years for the Contract Regulations review. Procurement Code of Practice

will be updated in 18 months and the business will make a decision regarding the need

for a Procurement Strategy.

May-19 Puneet RajputThe Regs. Are scheduled for Board approval in May

2019 and a Code of Practice is in place.

Contracts and Procurement Limited

Where the exercise to identify non-Contract Register suppliers, it

should be confirmed that a formal contract exists for each such

supplier. In the event that a contract employed is the contractor’s own,

such contracts should be referred to Legal Services for review.

We are looking at how to resource the review of contracts Supplier contracts will be risk

assessed and accepted based on the outcome of any risk assessment.Mar-18 31/12/2018 Sean McLaughlin

All major contracts have been reviewed and the form of

contract agreed to be of the correct type. An exercise is

underway to reviewing remaining non contract register

suppliers.

Sheltered & Supported

HousingLimited

All policy and procedural documentation concerning the Sheltered

and Supporting Housing Service should be reviewed and updated to

ensure it reflects current practices. Document control sections should

be updated accordingly to confirm when reviews have taken place.

Accepted. The Policy and Procedure manual will be reviewed and updated during

2018/19. Funding has been identified for a dedicated officer to progress this work.

However, all current procedures are still relevant and there is no current impact on

operations from having procedures that are due for review.

Mar-19Astrid Kjellberg-

Obst

Oct 18 - On target - Policies covering the Support and

Wellbeing Service are monitored through the Policy

Register (this was created by Business Improvement to

ensure the organisation’s policies are in date/remain

relevant). All are currently in date. We are looking to

bring in a temporary resource to ensure our policies and

procedures reflect good practice. We expect to begin this

piece of work in the New Year.

Fire Safety Limited

A training register should be implemented which gives details of when

staff have completed training as well as future training dates, in line

with the current training refresh timescale of six months.

There are various records relating to planned and delivered training. These will be

reviewed in light of the audit findings. The training register and annual training plan will

be reviewed and updated following this audit and picked up with the auditor in a follow

up visit.

Jul-18 31/12/2018 Puneet Rajput

Training records are in place and a forward training plan

has now been introduced. The element of the

recommendation relating to refresh timescales is

currently being addressed.

Fire Safety Limited

All repairs and works done should be given a level of priority and

expected date of completion to ensure that effective remedial action is

taken.

It was proposed that the fire risk assessment team would have access to tablets whereby

they could raise jobs with pictures/ descriptions and appropriate SORs on site, with the

correct priority/ timeframe and risk significance, these jobs would then be automatically

filtered into the FIRE category by our system and diarised directly to operatives the same

day, giving a seamless digitally auditable trail and moreover continuity from start to end.

The current existing model can ever only hold basic information else the document

becomes discombobulated and unreadable.

Dec-18 Chris Liffen

The current FRA work are all raised under a planned

priority and then emergency or urgent repairs prioritised

by the line manager. The IT system development will

allow for the FRA's to be done electronically with

priorities allocated by the Fire Risk A

17

Audit AreaAssurance


Fire Safety LimitedThe service(s) should ensure that all evidence and relevant documents

are readily available and easily accessed.

Fortnightly meetings are held with H&S to monitor the ongoing works identified from the

FRA programme. HRS have accredited operatives to install Gerda fire doors. HRS are

also in the process of arranging training Q Mark Fire Door Maintenance Certification

training, the business is also looking at following up accreditation for fabrication of fire

Doors in line Q Mark Fire Doors. The certification will be kept in one collective place for

ease of reference and for auditing purposes and updating as and when required.

Regular meetings are held with the main partnering contractors which include the

monitoring of fire related works. These are design and build contracts where design

responsible sits with the main contractor. Under the SCMG arrangement, all

workmanship and supply of materials shall comply with current codes of practices and

any relevant BS standards, building regulations, Health and Safety regulations and

manufacturers.

No individual certificates are required for each door installed due to the contractors

being required, under the contract, to deliver as per the specification. The manufacturer

has carried out a global assessment of compliance for each door architype. The works

are carried out by SCMG supplier as per the specification, pre,

during and post installation photographs are taken as part of the sign off process by the

main contractor and checked by the clerk of works and subsequently signed off by the

lead consultant. Additionally, third party accredited assessors independently assess the

installation of fire doors. Increasing the frequency of third party checks to 100% of

installations is currently under consideration.

Dec-18 Chris Liffen

Asset Management : 1) Evidence of regular meetings

now collated in a single file 2) Working with fire door

manufacturers to obtain certification 3) Clerk of

Works visiting fire door installations to review

installations HRS: 1)

Fire Safety Limited

The Tenant’s Terms & Conditions should be updated to include fire

specific responsibilities, to ensure that tenants have acknowledged the

importance of their role in maintaining a safe environment to live in.

The tenancy conditions currently contain a full range of provisions on fire safety issues –

including prohibition of gas cylinders and inflammable liquids, requiring common ways

to be kept clear, and requiring tenants to have consent for any alterations. The purpose

of tenancy conditions is not to provide awareness and guidance, but to form the basis for

the legal relationship with the tenant, so that we can take appropriate action on any risks

that are presented by a tenancy breach.

There are other means through which we promote awareness of fire safety issues,

including information at sign up, welcome visits, vulnerability checks and information

provided through sources such as the website and Home zone. We will ensure that the

recommendation is incorporated into the next scheduled review of tenancy conditions so

that the wording is revised to reflect best practice in relation to fire safety.

Mar-20Astrid Kjellberg-

Obst

Oct 18 - on time - After careful consideration, it has

been agreed that amending the Tenancy Agreement (as

set out by the Auditors) is not the best approach to take.

The current tenancy agreement outlines tenant’s and our

responsbilities when it comes to fire safety. Moreover,

only new tenants would have the revised tenancy

agreement. Instead, to capture as many residents as

possible, we are introducing alternative ways to

communicate and remind our tenants about health and

safety and their responsibility to contribute to fire safety.

This includes newsletter campaigns, leaflets and

explanations at sign up and where there are known

issues. This has been discussed with Audit and an

overview has been provided for feedback.

Fire Safety LimitedFire safety signage should be implemented in all shared communal

residential blocks, including low and midrise blocks.

Tower blocks have evacuation signage installed with other properties having evacuation

signage installed via HRS on a rolling programme to be completed with 18 months. This

has been challenging due to high levels of vandalism where signage has been removed

requiring re-visits for new signage to be installed. Street conversions will have signage

installed as part of the installation of Automatic Fire Detection programme.

Nov-19 David Sherrington

July 18: The property list indicating which signage

should be installed has been passed to HRS (21/6/18)

and they are currently reviewing the resources that are

required to accelerate the programme

Bespoke Systems Limited

HfH's bespoke systems should be reviewed to determine whether user

access is appropriately restricted. User access should be subject to

periodic review.

Periodic reviews will be captured in the Information Management Register. The register

will include the owner of each system who will be responsible for carrying out regular

review of access to systems – this will be on top of them revising access as and when staff

members join/leave the organisation. It is the line manager’s responsibilities to revise

access rights for the staff they manage (as set out in the organisation’s Acceptable IT Use

Policy). The Customer Information Statement (known as the Privacy Notice) is now up on

our website and has been circulated to manager’s for them to ensure this is used instead.

A printable version of the statement is available for staff to send out with forms (where

appropriate).

Aug-18 01/12/2018 Puneet Rajput

An Information Management register has now been

created and is in place. We are assisting managers with

carrying out reviews of access to systems.

Bespoke Systems Limited

Bespoke systems utilised by HfH's services should be reviewed on a

regular basis (at least annually), to help ensure that the data held is

sufficient to meet business operations and that the system is operating

effectively and is fit for purpose. The outcomes following review should

be reported centrally and escalated accordingly when required.

A template review form will be created which will be completed periodically by each of

the system owners. This will be signed off by Directors to ensure the continued use of the

bespoke system has been formally reviewed and approved. This will be monitored

through the Information Management Register.

Jul-18 01/12/2018 Puneet Rajput

A template review form is in place to help managers

track the bespoke systems in use. The process of reviews

is currently underway.

18

Audit AreaAssurance


Bespoke Systems LimitedInformation concerning the use of bespoke systems and data should

be reported to management on a regular basis (at least annually).

The review template and Information Management Register referred to in

recommendation 6 will ensure bespoke systems are reported to management on a

regular basis.

Jul-18 31/12/2018 Puneet RajputOct-18

Deadline revised to December 2018.

Management Arrangements

for Contracts & PartnershipsLimited

While there is limited guidance on contract management in the

Procurement Code of Practice, there is no documented contract

management process in place for HfH. We were informed the Code of

Practice has been updated and includes greater guidance on contract

management.

Periodic sample checking of contracts will be added to the programme of audits

undertaken by the Business Improvement team.Apr-19 Puneet Rajput



The training package to be offered to managers should be agreed to

include all aspects of contract management. Managers should be

identified across all HfH services who have responsibility for contracts

and a

programme of training should be developed.

Raising awareness of the Code of Practice is ongoing via usual interactions. Feb-19 Puneet Rajput



The training package to be offered to managers should be agreed to

include all aspects of contract management. Managers should be

identified across all HfH services who have responsibility for contracts

and a

programme of training should be developed.

Specific training sessions for groups of commissioning managers will be scheduled

separately. Feb-19 Puneet Rajput

Two specific training courses have been identified and

will be added to the training forward plan



Guidance on contract management should include the requirements

for the agreement of appropriate targets and monitoring of such

targets through the receipt of performance reports and periodic

contract meetings.

The provision of formal guidance forms part of the role of a new Contracts Manager

position identified in the Property department restructure. The guidance produced will be

written and produced so that it is equally useable by any manager within HfH responsible

for managing a contract.

Jan-19 Chris Liffen



Guidance on contract management should include the requirement

that on the award of any contract, the identified Contract Manager

should complete an assessment of the dependence of HfH on the

supplier should be undertaken. Where suppliers are identified as

critical, the service should develop a plan to maintain services in the

event of supplier failure.

The need to identify ‘critical suppliers’ and ‘critical supply’ is set out in the Procurement

Code of Practice. Where criticality is identified such contracts will be supported with a

contingency plan.

Feb-19 Chris Liffen

Corporate Governance –

Board EffectivenessSubstantial

HfH should utilise the knowledge gained from the risk management

training day and embed within the revision of the Risk Management

Framework.

Agreed. The strategy and framework will be updated following training and presented to

the Board for approval in January 2019.Jan-19 Sean McLaughlin



HfH's Board should receive a copy of the Policy and Procedure

Monitoring spreadsheet (specifically the RAG Summary) on a quarterly

basis.

The monitoring spreadsheet is a tool for directors. A KPI on overdue policy reviews will be

incorporated in the Board scorecard with exception reporting in the performance

commentary.

Nov-18 31/01/2019 Puneet Rajput



HfH should review and update the Risk Management Framework

including the Risk Management Strategy and Risk Register.

Furthermore, the Risk Management Strategy should be amended to

include a document control section to detail approval and review

dates.

Agreed. The strategy and framework will be updated following training and presented to

the Board for approval in January 2019.Jan-19 Sean McLaughlin

19

Final Internal Audit Report 2018/19

Homes for Haringey

Management Arrangements for Contracts & Partnerships

September 2018


This report (“Report”) was prepared by Mazars LLP at the request of London Borough of

Haringey and terms for the preparation and scope of the Report have been agreed with them.

The matters raised in this Report are only those which came to our attention during our

internal audit work. Whilst every care has been taken to ensure that the information provided

in this Report is as accurate as possible, Internal Audit have only been able to base findings

on the information and documentation provided and consequently no complete guarantee

can be given that this Report is necessarily a comprehensive statement of all the weaknesses

that exist, or of all the improvements that may be required.

The Report was prepared solely for the use and benefit of London Borough of Haringey to

the fullest extent permitted by law Mazars LLP. accepts no responsibility and disclaims all

liability to any third party who purports to use or rely for any reason whatsoever on the Report,

its contents, conclusions, any extract, reinterpretation, amendment and/or modification.

Accordingly, any reliance placed on the Report, its contents, conclusions, any extract,

reinterpretation, amendment and/or modification by any third party is entirely at their own

risk.

Please refer to the Statement of Responsibility at the end of this report for further information

about responsibilities, limitations and confidentiality.

20

Haringey Council – Final Internal Audit Report – HfH Management Arrangements for Contracts & Partnerships

1

Introduction As part of the 2018/19 Homes for Haringey (HfH) Internal Audit Plan approved by the

Finance and Audit Committee on 20 February 2018, we have been required to

complete an internal audit of Management Arrangements for Contracts and

Partnerships.

HfH is the Arms-Length Management Organisation (ALMO) for Haringey Council,

created in April 2006 to manage Haringey’s council housing. They currently manage

around 16,000 tenanted and 4,500 leasehold properties. Homes for Haringey were

created as a limited liability company, whose sole shareholder is Haringey Council.

HfH is responsible for two separate accounts, which are the Company Account and

the Managed Account. These are as follows:

(i) Company Account – This is the housing management service required by the

Council and paid for through the Management Fee received by HfH from the

Council. Purchases under this account must be made in accordance with the

HfH Contract Procedure Rules and Financial Regulations; and

(ii) Managed Account – These are Haringey Council funds managed on the

Council’s behalf by HfH. These funds are primarily the budgets whose cost is

covered by fees raised from tenants and leaseholders. The Managed Account

is required to be managed in accordance with the Council’s Contract

Procedure Rules and Financial Regulations.

Management Fee for HfH for 2017/18 and 2018/19 is as follows:

(i) HRA £40,032,057 (2017/18) and £40,139,076 (2018/19).

(ii) General Fund £3,949,842 (2017/18) and £3,930,240 (2018/19).

(Source 2018/19 Draft Budget presented to HfH Finance, Audit and Risk Committee 20

February 2018).

The audit will obtain a supplier spend report for HfH Company Account and from this

select a sample of suppliers to confirm the contract management arrangements in

place for each supplier.

This report sets out our findings from the internal audit and raises recommendations

to address areas of control weakness and / or potential areas of improvement.

The audit was completed in accordance with our planning letter issued on 24th April

2018.

Audit Opinion & Direction of

Travel

None Limited Substantial Full

No previous audit

N/A

21


2

Key Findings

• The HfH Procurement Intranet page includes the Procurement Code of Practice. This was last

updated in May 2016 and includes guidance on contract management as follows:

o Arrange an implementation meeting to confirm contract implementation, performance

monitoring and contract management procedures; and

o During the course of the contract monitor contractual / financial performance, savings on

procurement quarterly, conduct regular review meetings and strategic review meetings.

• We were informed by Procurement Service that the Code of Practice has been updated and includes

greater guidance on contract management though it has yet to be published.

• There is no documented contract management process in place for HfH.

• In discussion with individual officers responsible for managing the contractors selected, some

received some guidance on procurement, but none on contract management. We were informed

that Procurement Service will provide training on the new Code of Practice, and include guidance

on contract management, though the content has yet to be agreed.

• We obtained a Company Account Supplier Expenditure list for 2017/18 and from this selected:

o Community Resourcing Ltd (T/A Retinue) £2,276,180 – HfH outsourced its recruitment

service to this company. As Human Resources (HR) Services are provided to HfH by the

Council’s HR Service under a Service Level Agreement, the Council’s HR Service manage

this contract;

o Lex Autolease, £587,900 – supplier of vehicles under lease agreements;

o Openview Security Solutions Ltd, £550,900 – maintenance supplier for door entry systems

and TV aerials;

o Everything Everywhere Ltd, £234,000 – supplier of telephone services, which are provided

under a contract managed by the Council;

o Orbis Property Protection Ltd, £220,000 – supplier of security services, door screens and

guard & dog if required, and also undertake some void clearances for environmental

clearances, vermin infestation and final void cleansing;

o Shell UK Oil Ltd, £180,800 – supplier of fuel cards for the vehicle fleet fuel;

o Medlock Electrical Ltd, £124,880 – supplier of electrical materials, kitchen and white goods

but ceased with effect from August 2017;

o Symphony Group Plc, £102,400 – supplier of residential furniture, kitchen doors,

components; and

o United Guarding Services £31,200 – supplier of security patrols to buildings subject to anti-

social behaviour on a historic basis, for which there is no formal contract, but employed on

small, one off jobs.

• The officer responsible for managing Symphony Group Plc, Shell UK Ltd and Orbis Property

Protections Ltd did not hold a copy of the formal contracts with these service providers.

• Symphony Group Plc were employed from London Housing Consortium Framework, which has

since expired. We were informed a waiver to continue using this contractor has been prepared as

an interim measure, to complete a full procurement.

• The original agreed contract is held by Procurement Service in their Contract Safe, and recorded

sequentially in a Contracts Log. The Contracts Log was examined, and it was confirmed that there

was an entry for seven of the nine contracts tested – apart from Everything Everywhere and United

Guarding Services Ltd as explained above.

22


3

• We confirmed that a formal contract was held for five of the seven recorded in the Contracts Log.

The exceptions were Shell UK Oil Ltd (which only included terms and conditions for Fuel Cards). As

this was a standard agreement for a service Shell offer to many organisations this was deemed

appropriate. The second example related to Symphony Group Plc (which only held the framework

agreement procurement guides).

• Performance measures, reporting on performance and formal contract meetings were not in place

for contractors such as Symphony Group Plc, Lex Autolease Ltd, Shell UK Oil Ltd and Orbis Property

Protection Ltd, although for Orbis Property Protection Ltd jobs are issued through Service Connect

by HfH which allows for on-line review of all such jobs.

• In discussion with those officers managing the contractors, we were informed there has been no

assessment to judge whether such suppliers are critical to the Council’s operations or not.

• We were informed by Procurement Services they do identify those suppliers who are deemed to be

‘established suppliers’ which are for key services, such as gas servicing and lift maintenance and

which in event of supplier failure would have a quick impact on services. Such contracts are

periodically re-tendered.

Statistics and Benchmarking

A report was obtained which identified £27,624,988.74 on 292 suppliers was incurred on the HfH

Company Account in 2017/18. These were analysed as per the following table:

.From To Number Total Spend Spend with Non Contracted Suppliers

Contracted Suppliers

> £1,000,000 5 £18,756,136.78 £9,383,556.79 £9,372,579.99

£500,000 £1,000,000 3 £1,967,196.91 £0.00 £1,967,196.91

£250,000 £500,000 1 £320,085.34 £0.00 £320,085.34

£150,000 £250,000 10 £2,030,339.66 £1,486,720.69 £543,618.97

£100,000 £150,000 10 £1,204,144.46 £1,069,536.43 £134,608.03

£50,000 £100,000 18 £1,384,024.23 £1,055,692.99 £328,331.24

£10,000 £50,000 70 £1,612,238.15 £1,230,366.98 £381,871.17

£0 £10,000 171 £355,954.97 £340,905.05 £15,049.92

Total 292 £27,630,120.50 £14,566,7778.93 £13,063,341.57

Percent 52.71% 47.29%

23


4

Area of Scope Adequacy of

Controls

Effectiveness of

Controls

Recommendations Raised

Priority 1 Priority 2 Priority 3

Guidance Amber Amber 1 1 0

Contracts Green Amber 0 1 0

Contract Monitoring Green Amber 0 1 0

Supplier Resilience Green Amber 0 1 0

Critical Supplier

Management

Green Green 0 0 0

Management

Reporting

Green Green 0 0 0

Total 1 4 0

Please refer to Appendix B for a definition of the audit opinions, direction of travel, adequacy and

effectiveness assessments and recommendation priorities.

Acknowledgement We would like to thank Procurement Service staff and officers across HfH for

their time and co-operation during the course of the internal audit.

24

Haringey Council – Final Internal Audit Report – HfH Management Arrangements for Contracts & Partnerships 5

Ref Issue Risk Recommendation Priority Management

Response

Responsible

Officer(s)

Deadline

Guidance

1 While there is limited

guidance on contract

management in the

Procurement Code of

Practice, there is no

documented contract

management process in place

for HfH. We were informed the

Code of Practice has been

updated and includes greater


management.

There is an increased risk

that the management of

contractors is variable

and inconsistent, which

may result in accusations

of bias, and in addition

could see incomplete

management of suppliers

and some contractor risks

not managed.

A formal date should be

agreed when the

updated Code of

Practice is to be

published.

On completion of

provision of training, a

periodic sample check

of contracts based on

an assessment of risk to

confirm satisfactory

contract management

should be undertaken.

2 The Procurement

Code of Practice

has now been

published on

HfH’s intranet.

Periodic sample

checking of

contracts will be

added to the

programme of

audits undertaken

by the Business

Improvement

team

Head of

Procurement

Business

Analyst (LW)

Complete

April 2019

2 In discussion with individual

officers responsible for

managing the nine

contractors selected, some

received some guidance on

procurement, but none on

contract management.

We were informed that

Procurement Service will

provide training on the new

Code of Practice when it is

published, and include



that the management of

contractors is variable

and inconsistent, which

may result in accusations

of bias, and in addition

could see incomplete

management of suppliers

and some contractor risks

not managed.

The training package to

be offered to managers

should be agreed to

include all aspects of

contract management.

Managers should be

identified across all HfH

services who have

responsibility for

contracts and a

programme of training

should be developed.

1 Raising

awareness of the

Code of Practice

is ongoing via

usual interactions.

Specific training

sessions for

groups of

commissioning

managers will be

scheduled

separately.

Head of

Procurement

February 2019

25



Response

Responsible

Officer(s)

Deadline

management, although the

content has yet to be agreed.

Specific training in

contract

management will

be sourced and

offered in 2019

once the

restructure of the

Property

department is

complete.

Head of HR

& OD

February 2019

Contracts

3 The formal contracts with

Symphony Group Plc, Shell

UK Ltd and Orbis Property

Protections Ltd were not held

by the Contract Manager.

In discussion with the Head of

Procurement, it was noted

that it is the service’s

responsibility to identify a

Contract Manager, and

ensure that they hold a copy

of the contract, but this is not

always achieved, especially in

the instance of staff changes.

It was also discussed that it

may be possible to save

contracts to SharePoint,

although there could be an

issue of all staff accessing

confidential contractor prices.


that without access to the

actual contract, the

original agreed terms and

conditions may not be

adhered to, which may be

to the disadvantage of

HfH, and all the expected

benefits are unlikely to be

achieved.

Heads of Service

should be identified as

the responsible

Contract Manager,

where no other officer is

identified as such.

Each identified Contract

Manager should be

responsible for saving

contracts, but excluding

any confidential data,

within Sharepoint.

2 Contract

Managers are

identified and

recorded in the

Contracts

Register

A secure

SharePoint folder

will be set up and

maintained for

electronic storage

of contracts

Business

Intelligence

Officer

Contracts

Manager &

Records

Manager

Complete

January 2019

26



Response

Responsible

Officer(s)

Deadline

Contract Monitoring

4 Performance measures,

reporting on performance and

formal contract meetings were

not in place for contractors

such as Symphony Group Plc,

Lex Autolease Ltd, Shell UK

Oil Ltd and Orbis Property

Protection Ltd, although for

Orbis Property Protection Ltd

jobs are issued through

Service Connect by HfH

which allows for on-line

review of all such jobs.


that poor supplier

performance is not

identified and/or

remedied, which may

undermine the delivery of

HfH services.

Guidance on contract

management should

include the

requirements for the

agreement of

appropriate targets and

monitoring of such

targets through the

receipt of performance

reports and periodic

contract meetings.

2 The provision of

formal guidance

forms part of the

role of a new

Contracts

Manager position

identified in the

Property

department

restructure. The

guidance

produced will be

written and

produced so that it

is equally useable

by any manager

within HfH

responsible for

managing a

contract.

Executive

Director of

Property

January 2019

Supplier Relationship Management

5 In discussion with those

officers managing the

contractors, we were informed

that there has been no

assessment to judge whether

such suppliers are critical to

the Council’s operations or

not. We were informed by

Procurement Service that it


that where key suppliers

are not identified, in the

event of their failure,

services provided by HfH

may be disrupted,

damaging the reputation

of the Company, and

Guidance on contract

management should

include the requirement

that on the award of any

contract, the identified

Contract Manager

should complete an

assessment of the

dependence of HfH on

2 The need to

identify ‘critical

suppliers’ and

‘critical supply’ is

set out in the

Procurement

Code of Practice.

Where criticality is

identified such

Contracts

Manager

February 2019

27



Response

Responsible

Officer(s)

Deadline

would be the responsibility of

individual services to identify

such critical suppliers.

possibly incurring greater

costs to make good.

the supplier should be

undertaken.

Where suppliers are

identified as critical, the

service should develop

a plan to maintain

services in the event of

supplier failure.

contracts will be

supported with a

contingency plan.

28


Appendix A `– Definition of Audit Opinions, Direction of Travel, Adequacy and Effectiveness Assessments, and Recommendation Priorities

Audit Opinions

We have four categories by which we classify internal audit assurance over the processes we examine, and these are defined as follows:

Full There is a sound system of internal control designed to achieve the client’s objectives.

The control processes tested are being consistently applied.

Substantial While there is a basically sound system of internal control, there are weaknesses, which put some of the client’s objectives at

risk.

There is evidence that the level of non-compliance with some of the control processes may put some of the client’s

objectives at risk.

Limited Weaknesses in the system of internal controls are such as to put the client’s objectives at risk.

The level of non-compliance puts the client’s objectives at risk.

None Control processes are generally weak leaving the processes/systems open to significant error or abuse.

Significant non-compliance with basic control processes leaves the processes/systems open to error or abuse.

The assurance gradings provided above are not comparable with the International Standard on Assurance Engagements (ISAE 3000) issued by the International Audit and Assurance Standards Board and as such the grading of ‘Full Assurance’ does not imply that there are no risks to the stated objectives.

Direction of Travel

The Direction of Travel assessment provides a comparison between the current assurance opinion and that of any previous internal audit for which the scope and objectives of the work were the same.

Improved since the last audit visit. Position of the arrow indicates previous status.

Deteriorated since the last audit visit. Position of the arrow indicates previous status.

Unchanged since the last audit report.

No arrow Not previously visited by Internal Audit.

Adequacy and Effectiveness Assessments

Please note that adequacy and effectiveness are not connected. The adequacy assessment is made prior to the control effectiveness being tested.

The controls may be adequate but not operating effectively, or they may be partly adequate / inadequate and yet those that are in place may be operating effectively.

29


In general, partly adequate / inadequate controls can be considered to be of greater significance than when adequate controls are in place but not operating fully effectively, i.e. control gaps are a bigger issue than controls not being fully complied with.

Adequacy Effectiveness

Existing controls are adequate to manage the risks in this area Operation of existing controls is effective

Existing controls are partly adequate to manage the risks in this area

Operation of existing controls is partly effective

Existing controls are inadequate to manage the risks in this area Operation of existing controls is ineffective

Recommendation Priorities

In order to assist management in using our internal audit reports, we categorise our recommendations according to their level of priority as follows:

Priority 1 Major issues for the attention of senior management and the audit committee.

Priority 2 Important issues to be addressed by management in their areas of responsibility.

Priority 3 Minor issues resolved on site with local management.

30


11


We take responsibility to the London Borough of Haringey for this report which is prepared on the basis of the limitations set out below.

The responsibility for designing and maintaining a sound system of internal control and the prevention and detection of fraud and other irregularities rests with management, with internal audit providing a service to management to enable them to achieve this objective. Specifically, we assess the adequacy and effectiveness of the system of internal control arrangements implemented by management and perform sample testing on those controls in the period under review with a view to providing an opinion on the extent to which risks in this area are managed.

We plan our work in order to ensure that we have a reasonable expectation of detecting significant control weaknesses. However, our procedures alone should not be relied upon to identify all strengths and weaknesses in internal controls, nor relied upon to identify any circumstances of fraud or irregularity. Even sound systems of internal control can only provide reasonable and not absolute assurance and may not be proof against collusive fraud. The matters raised in this report are only those which came to our attention during the course of our work and are not necessarily a comprehensive statement of all the weaknesses that exist or all improvements that might be made. Recommendations for improvements should be assessed by you for their full impact before they are implemented. The performance of our work is not and should not be taken as a substitute for management’s responsibilities for the application of sound management practices.

This report is confidential and must not be disclosed to any third party or reproduced in whole or in part without our prior written consent. To the fullest extent permitted by law Mazars LLP accepts no responsibility and disclaims all liability to any third party who purports to use or reply for any reason whatsoever on the Report, its contents, conclusions, any extract, reinterpretation amendment and/or modification by any third party is entirely at their own risk.

Mazars LLP

London

September 2018

In this document references to Mazars are references to Mazars LLP.

Registered office: Tower Bridge House, St Katharine’s Way, London E1W 1DD, United Kingdom. Registered in England and Wales No 4585162.

Mazars LLP. Mazars LLP is the UK firm of Mazars, an international advisory and accountancy group. Mazars LLP is registered by the Institute of Chartered Accountants in England and Wales to carry out company audit work.

31

Final Internal Audit Report 2018/19

Homes for Haringey

Corporate Governance – Board Effectiveness

August 2018










The Report was prepared solely for the use and benefit of London Borough of Haringey. To

the fullest extent permitted by law Mazars LLP accepts no responsibility and disclaims all





risk.



32

Internal Audit Report – Homes for Haringey – Corporate Governance – Board Effectiveness 2018/19 2

Introduction As part of the 2018/19 Internal Audit Plan, we have undertaken internal audit work in relation to Corporate Governance – Board Effectiveness at Homes for Haringey (HfH).

This report sets out our findings from the internal audit and raises recommendations to address areas of control weakness and/or potential areas of improvement.

HfH are an Arm’s Length Management Organisation (ALMO), which was set up in April 2006 to manage Haringey’s council housing. HfH currently manage around 16,000 tenanted and 4,500 leasehold properties. HfH was created as a limited liability company, whose sole shareholder is Haringey Council. HfH operates from many sites with main offices in Wood Green.

HfH employs staff for its corporate functions, as well as the day-to-day management of Haringey’s council stock, including roles within housing management, supported housing, community engagement, asset management, and repairs including major works. HfH are also responsible for assessing homelessness applications and sourcing temporary accommodation.

Corporate Governance is defined in the Cadbury report (1992) as the system by which companies are directed and controlled. It means ensuring that business is done competently, with integrity and with due regard for the interest if all stakeholders (Institute of Directors 2009).

In 2015, The National Housing Federation issued a Code of Governance for housing associations.

Some of the factors affecting governance include legislation, self-regulation, culture, structure and best practice.

The attributes of good governance include:

� Transparency;

� Honesty;

� Integrity;

� Intelligence;

� Leadership;

� Competence; and

� Accountability.

Audit Opinion & Direction of Travel

No previous audit


N/A

Key Findings

• A Governance Handbook is in place, which details HfH’s formal governance structure and

framework. The latest version is dated September 2017, which was when it was approved by the

Board. Review of the Governance Handbook showed that it comprises sections including the role of

the Board and senior management, and stipulates the protocol with regard to the quorum, notice for

meetings and reporting requirements for the Board and Committees.

• HfH’s Scheme of Delegation stipulates the activities delegated to senior management including the

Managing Director and Executive Directors. The document also incorporates detailed Terms of

33


Reference (ToR) for the Board and both the Audit and Risk Committee and the Remuneration and

Appointment Committee. We were informed by the Director of Corporate Affairs, that the Scheme of

Delegations document is currently being revised ready for Board approval in September 2018.

• The roles and responsibilities concerning a member of HfH’s Board are formally documented.

Review of the Board Member Role profile, which is disseminated to Board Members, showed that it

stipulates that the overall purpose of the position is to provide leadership and direction in managing

the business of HfH and to ensure compliance with Legal / Regulatory obligations, and working as

part of a team to decide the strategic direction of HfH. Responsibilities of the Board include: acting

within powers set out in the articles and governing documents, attending induction, training and

performance review sessions as required, being adequately prepared for and attending meetings of

the Board and Committees, declaring any relevant conflicts of interests, and maintaining high

standards of governance, conduct and behaviour. The document also stipulates that the Board

Members are to participate in risk awareness training and to recognise threats to the delivery of

objectives and actively flag potential threats to the business.

• The competencies required for HfH's Board members are incorporated within the organisation's

Governance Handbook. Review of the document showed that as part of the provisions under section

14 - Board Skills and Competencies, ‘the Board aims to have members who collectively have the

following core essential skills and experience with at least one member with a strong background in

each of the following:

a) Financial management and control; b) Senior management experience of housing property maintenance / asset management; c) Senior general business / commercial management skills; d) Understanding of customer's perspective; e) Good political awareness and acumen; and f) Senior level management of housing services experience.

• As stipulated within the Governance Handbook, the number of Board members is 12 comprising;

four resident Board Members, four independent Board Members, three Council Board members and

the Chair. We were informed by the Director of Corporate Affairs that following a recruitment process,

positions of the Board are now fully occupied and include members with specific experience and skill

sets.

• We confirmed during the review of Board Member profiles, which are available for public perusal on

HfH’s website, that 12 Board Members are in place and their profiles demonstrate compliance with

the competency requirements with strong backgrounds in accounting, project and asset

management and community engagement.

• A self-assessment exercise is undertaken of HfH's Board on an annual basis. HfH complete the National Housing Federation's (NHF) Code of Governance: Compliance Checklist 2015. Review of the latest Checklist showed that it comprised the following sections:

� Section A Compliance with this code;

� Section B Constitution and Composition of the Board;

� Section C Essential functions of the Board;

� Section D Board skills, renewal and review;

� Section E Conduct of Board and Committee business;

� Section F Audit and Risk;

� Section G The Chief Executive; and

� Section H Conduct, probity and openness.

• Under each section of the Checklist, there are details of the main requirement, provisions, whether HfH is compliant and any additional comments, evidence of compliance, and details of any actions required. HfH’s Compliance Checklist stipulates compliance under the code for Section A and refers to the statement of compliance that is detailed within the Annual Report and Financial Statements. We confirmed during the review of the Annual report and Financial Statements presented at the Annual General Meeting held in September 2017 that compliance with the NHF Code of Governance is detailed within the annual statement.

34


• We were informed by the Director of Corporate Affairs, that HfH’s Board Members, receive sufficient training as and when required in order for them to be able to effectively perform their roles and to therefore help enable the organisation to achieve its strategic objectives. It became apparent from further discussion that a few of the Board Members cited risk management awareness as an area of weakness which needed improving. As a result a Risk Management training day has been arranged for September 2018, which is to be attended by six (50%) Board Members and three Directors. The training is to be delivered by Andrew Waite Independent Consultancy Services (AWICS), and will provide an introduction and overview of risk management in public services and will address areas including; identifying risks, evaluating risks and integration of risk management into business planning.

• HfH has a Business Plan in place for 2018 that was approved by the Board in March 2018. The Business Plan sets out the organisation’s vision and key strategic objectives for a period of five years. The strategic objectives or key priorities are: � Tackling homelessness; � Focussing on our customers; � Improving our services; � Developing our organisation; and � Investing in our homes. The Business Plan details actions for how the key priorities above are to be achieved, for example under Investing in our Homes: “install a new district heating system across the Broadwater Farm estate and to complete the remainder of the current capital programme and close out all contracts related to the existing framework.”

• We confirmed during the review of the Board papers available for public perusal on HfH's website, that a scorecard comprising Key Performance Indicators (KPI) is used to monitor the performance of the services provided by HfH, for example the percentage of all homelessness decisions made within 33 days would therefore be used as one of the KPIs to monitor the delivery of the Tackling Homelessness priority. Review of the Action Log contained within the Board Papers for the meeting held in July 2018 stipulated that HfH have carried out a review of the KPI suite to ensure that it aligns with the strategic priorities within the Business Plan.

• Review of the Board papers for the meetings held from March to July 2018 confirmed that review of the performance report and the KPI suite is a standing agenda item at each of the meetings.

• An annual Away Day is held for Board Members to take part in strategic planning for the coming year. We were informed by the Director of Corporate Affairs that the next Away Day is scheduled for November 2018 and will involve setting Business Plan objectives for 2019/20, high level allocation of budget resources based on priorities, efficiency target setting and reviewing how the Board is performing with areas identified for improvement.

• Review of the Action Log contained within the Board papers for the meeting held in July 2018 confirmed that the annual away day is scheduled for November 2018 and will incorporate a review of the Board champion framework in line with a Skills Audit.

• HfH has a set of policies and procedures in place for key areas of business of the organisation and these are subject to appropriate approval. Review of the minutes for the Board meeting held in November 2017 showed evidence of review and approval of the Health and Safety Policy.

• Review of the Policy and Procedure Register in place showed that it details the service area, whether LBH has a strategy or policy in place and HfH’s strategies, policies and procedures in place. We noted under Rents and Income Management, which is governed by LBH's Financial Regulations that HfH have Income Management Procedures 2017-20 in place and that an HfH Income Management Policy has been proposed for development.

• There is also a Policy and Procedure Monitoring spreadsheet in place comprising a Red, Amber Green (RAG rating) Summary. The RAG Summary contains details including the service area, the number of policy documents maintained and the number of policy documents that have passed their review date.

• Further review of the Monitoring Spreadsheet identified that there were areas where a number of policy and procedure documents had passed their review date, including People Management (HR), in which 19 out of 24 policies have passed the scheduled review date and 12 out of 13 procedures have passed the scheduled review date. Under the comments section of the Monitoring Spreadsheet, it was cited that a Consultant is to undertake a review of HR policies and procedures between July and September 2018. We were informed by the Director of Corporate Affairs, that the Policy and Procedure Monitoring Spreadsheet is received by the Executive Leadership Team for quarterly review but not the Board.

35


• We have confirmed as part of other audits undertaken at HfH that policies and procedures are available to staff within the relevant services including via SharePoint. We also confirmed that policies within key business areas including Finance and Human Resources, are available to staff via HfH’s Intranet.

• A Risk Management Strategy is in place which forms part of HfH's Risk Management Framework. We noted that the strategy was dated November 2015 and does not comprise a document control section to indicate approval and review dates.

• The Strategy comprises the following sections; Definitions and Context, Risk Management Approach incorporating the level of risk appetite, Roles and Responsibilities, Embedding Risk Management, Training and Awareness, and an open and blameless culture. We were informed by the Director of Corporate Affairs, that the strategy along with the Risk Register is in the process of being reviewed and is to be incorporated within the risk management training scheduled for September 2018.

• HfH’s Risk Register provides details of the assessed risks to the organisation including a description of the risk, probability and impact of the risk, severity of the risk, risk movement, mitigations and control rating. There are currently nine risks detailed on the Key Risk Register, an example being an excessive reliance on Temporary Accommodation resulting in substantial financial pressure on the London Borough of Haringey. The probability of the risk is detailed as ‘likely’ and the impact ‘critical’. Cited as mitigating actions are for greater use of Council owned stock and for the London Borough of Haringey to consider new supply initiatives.

• The Risk Management Strategy stipulates that high level risks will be presented at every Board meeting to enable scrutiny and challenge with regard to the strength of the mitigating controls. We confirmed during the review of the minutes for the Audit and Risk Committee meetings held in February, May and July 2018, that the Committee receives a copy of the Key Risk Register at each of its meetings. Further review of the minutes demonstrated reasonable scrutiny of the risks including the justification for some of the control RAG ratings.

• We confirmed during the review of the minutes of the Board meetings held January, March and July 2018, that the reporting documentation for the quarterly Audit and Risk Committee meetings was presented including the review of the Risk Register.

36



Controls

Effectiveness

of Controls



Framework and

Responsibilities

Green Amber 0 1 0

Competence Green Green 0 0 0

Training Green Amber 0 0 1

Strategy Green Green 0 0 0

Policies and Procedures Green Amber 0 0 1

Risk Management Green Amber 0 1 0

Total 0 2 2

Please refer to Appendix A for a definition of the audit opinions, direction of travel, adequacy and


Acknowledgement We would like to thank the management and staff of Homes for Haringey for their

time and co-operation during the course of the internal audit.

37



Response

Responsible

Officer

Deadline

Scheme of Delegations

1 A copy of Homes for

Haringey’s (HfH)


was obtained during the

audit, which was dated

March 2015. We were

informed by the Director

of Corporate Affairs,

that the Scheme of

Delegations is in the

process of being

revised ready for

approval by the Board in

September 2018.

Where the Scheme of

Delegations is not reviewed

to ensure that it is up-to-date

and reflects current practice,

there is an increased risk of

a lack of accountability

where roles and

responsibilities have not

been formally assigned.

The review of the


should be reviewed to

ensure that it is up-to-

date and reflects current

practice.

2 Agreed. This is

currently under review

and scheduled for

Board approval in

September.

Director of

Corporate

Affairs

25 Sept.

2018

Embedding of Risk Management knowledge

2 We were informed by

the Director of

Corporate Affairs that

members of HfH's

Board cited Risk

Management as an

area of weakness,

which could be

improved upon from

receiving sufficient

training. As a result of

this, a Risk

Where learning from risk

training sessions is not fed

into the risk management

process, there is an

increased risk that the risk

management, HfH may miss

the opportunity to strengthen

its management of the risk

environment. Furthermore,

risks may materialise which

could have been potentially

avoided.

HfH should utilise the

knowledge gained from

the risk management

training day and embed

within the revision of the

Risk Management

Framework.

3 Agreed. The strategy

and framework will be

updated following

training and presented

to the Board for

approval in January

2019.

Director of

Corporate

Affairs

Jan. 2019

38



Response

Responsible

Officer

Deadline

Management training

day to be provided by an

external consultant, is to

be attended by six

Board Members

representing half of the

Board, and three

directors.

Monitoring of Policies and Procedures

3 We noted during the

review of HfH's Policy

and Procedure

Monitoring

Spreadsheet, that there

were a number of HR

policy and procedure

documents that had

passed their review

dates. These are

scheduled to be

reviewed by a

Consultant.

We were informed by

the Director of

Corporate Affairs, that

the Policy and

Procedure Monitoring

Spreadsheet is received

by the Executive

Where the Board do not

receive updates concerning

the organisation's policies

and procedures in place,

there is an increased risk

that the Board are unaware

of obstacles to the review

and update of policies and

procedures which could

inhibit the organisation from

achieving its strategic

objectives.

HfH's Board should

receive a copy of the

Policy and Procedure

Monitoring spreadsheet

(specifically the RAG

Summary) on a quarterly

basis.

3 The monitoring

spreadsheet is a tool

for directors. A KPI on

overdue policy

reviews will be

incorporated in the

Board scorecard with

exception reporting in

the performance

commentary.

Head of

Business

Improvement

Nov. 2018

39



Response

Responsible

Officer

Deadline

Leadership Team but

not the Board.

Risk Management Framework

4 A copy of HfH's Risk

Management Strategy

dated November 2015

was provided during the

audit. Review showed

that the Strategy did not

contain a document

control section detailing

review and approval

dates. We were further

informed by the Director

of Corporate Affairs,

that the Strategy along

with the Risk Register is

in the process of being

reviewed and is to be

incorporated within the

risk management

training scheduled for

September 2018.

Where HfH does not review

and update its Risk

Management Framework

comprising the Risk

Management Strategy and

Risk Register, there is an

increased risk that the

effectiveness of risk

management is

compromised causing risks

to materialise. As a result,

HfH could suffer long-term

reputational and financial

damage.

HfH should review and

update the Risk

Management Framework

including the Risk

Management Strategy

and Risk Register.

Furthermore, the Risk

Management Strategy

should be amended to

include a document

control section to detail

approval and review

dates.

2 Agreed. The strategy

and framework will be

updated following

training and presented

to the Board for

approval in January

2019.

Director of

Corporate

Affairs

Jan. 2019

40


Appendix A – Definition of Audit Opinions, Direction of Travel, Adequacy and Effectiveness Assessments, and Recommendation Priorities

Audit Opinions





risk.

There is evidence that the level of non-compliance with some of the control processes may put some of the client’s objectives

at risk.





The assurance gradings provided above are not comparable with the International Standard on Assurance Engagements (ISAE 3000) issued by the International Audit and Assurance Standards Board and as such the grading of ‘Full Assurance’ does not imply that there are no risks to the stated objectives.

Direction of Travel

The Direction of Travel assessment provides a comparison between the current assurance opinion and that of any previous internal audit for which the scope and objectives of the work were the same.





41




The controls may be adequate but not operating effectively, or they may be partly adequate / inadequate and yet those that are in place may be operating effectively.

In general, partly adequate / inadequate controls can be considered to be of greater significance than when adequate controls are in place but not operating fully effectively, i.e. control gaps are a bigger issue than controls not being fully complied with.



Existing controls are partly adequate to manage the risks in this area Operation of existing controls is partly effective







42






Mazars LLP

London

August 2018




Mazars LLP is the UK firm of Mazars, an international advisory and accountancy group. Mazars LLP is registered by the Institute of Chartered Accountants in England and Wales to carry out company audit work.

43

Draft Internal Audit Report 2018/19

London Borough of Haringey

Homes for Haringey: Gas Safety Checks

October 2018










The Report was prepared solely for the use and benefit of London Borough of Haringey to

the fullest extent permitted by law Mazars LLP. accepts no responsibility and disclaims all





risk.



44

Internal Audit Report – The London Borough of Haringey – Homes for Haringey: Gas Safety Checks 2018/19

1

Introduction As part of the 2018/19 Internal Audit Plan, agreed by the Audit & Risk Committee,

we have undertaken an internal audit in relation to Gas Safety Checks.

Homes for Haringey (HfH) is the Arm’s Length Management Organisation (ALMO)

set up by Haringey Council, with the support of residents, to manage over 21,000

tenanted and leasehold homes. Owned and monitored by Haringey Council, their

mission is to work with residents to provide quality housing services and decent

homes.

Under the Gas Safety (Installation and Use) Regulations 1998, Homes for Haringey

as the landlord of relevant premises, have a duty to ensure that all gas appliances,

fittings and flues provided for residents’ use are safe.

Homes for Haringey are not responsible for ensuring that gas safety checks are

completed on leasehold properties. However, Homes for Haringey have a duty of

care for tenants residing in premises adjacent to leaseholder properties and therefore

undertake gas safety checks where possible to minimise risk. In the case of the

Broadwater Farm Estate where the service is managed from, gas safety checks are

undertaken for all premises. In an effort to remove fire safety risks, all gas cookers

have been replaced on the estate and there are plans to completely remove gas

supply to the estate by October 2018.

The gas safety checks are completed on a 10 month cycle by external gas

contractors (Purdy and PH Jones) with the day to day contract administration carried

out by an internal gas team. This comprises of a Gas Contracts and Compliance

Manager, Technical Support Officer, Engineering Compliance Team Leader, four

Engineering Compliance Officers, and three Mechanical inspectors. At least 5% of

gas safety checks completed by the term gas contractor are independently audited

by gas inspection companies such as, Phoenix Compliancy Management (PCM)

Limited and Morgan Lambert Limited. Inspections are arranged by appointment as

well as the use of cold calling. Following completion of the annual gas safety

inspection, a Gas Safety Certificate known as a Corgi Proforma 12 (CP12) is issued.

A monthly performance report is produced which includes the results of the

inspections carried out and customer satisfaction data. The information of all

properties associated with gas are available via a daily compliance report generated

by OHMS, which is emailed to the gas team.

Properties where entry is refused to gas safety inspectors is monitored by Homes for

Haringey and letters are issued to tenants accordingly. Continued refusal to allow

entry results in a court warrant being issued for forced entry under the Environmental

Protection Act 1990.

45


2

Audit Opinion &

Direction of Travel


Key Findings

• A Gas Safety and Maintenance Policy and Procedure was produced on 27 August 2014, which covers

the requirements with regard to gas safety checks. It was determined that this Policy has not been subject

to a regular review process, and discussions with the Gas Contracts and Compliance Manager confirmed

the Policy no longer reflects working practice regarding referrals.

• Gas safety checks are completed by two Gas Safe Registered contractors who are as follows:

o Lot 1 Tottenham: British Gas Social Housing Ltd, trading as P H Jones; and

o Lot 2 Hornsey, Wood Green and all sheltered accommodation properties: Purdy Contracts Ltd.

• Engineers employed by the two contractors are Gas Safe Registered. This is checked by Homes for

Haringey and evidence of this check was provided during our review.

• A Landlord’s Gas Safety Record (LGSR) is required to be retained for two years for each property which

has undergone a gas safety check.

• We confirmed that a LGSR was held for a sample of 20 properties that was selected for testing.

• It was determined during discussions with the Executive Director of Property that a risk assessments on

gas at leasehold properties has been undertaken and this has been assessed as a high risk for Homes

for Haringey. We understand that leases for properties in Broadwater Farm have been revised to require

leaseholders to provide gas safety certificates and discussions are ongoing with LB Haringey Legal

Officers to extend this requirement across the housing estate. As action is on-going in this area we have

not raised a formal recommendation.

• The schedule of properties for each Lot is included in the contract based on the HfH Asset Register.

• The Key Performance Indicator (KPI) for gas safety checks stipulates that 100% of all properties must

be compliant. Discussions with the Gas Contracts and Compliance Manager confirmed this KPI is

ineffective for monitoring the performance of the contractors’ delivery of service, because inaccessible

properties that are referred back to Homes for Haringey are not included in the calculations of

performance statistics. As a result, contractors are able to adhere to the 100% compliance target

regardless of the number of properties actually accessed by them. Information provided by management

indicates that that contractors do manage to access 95% of properties referred to them but this is not

formally measured as a KPI.

• The contractors periodically submit Master Lists which detail the properties for which they are

responsible.

• The contractors Master Lists record for each property, the date of the last service, a countdown to when

the service will expire and when letters have been issued to properties seeking to complete the service.

• Where a contractor cannot gain access to a property after three attempts have been made, the case is

referred back to the HfH Gas Compliance Team. They attempt to make further appointments, and where

this cannot be achieved, the matter is referred to the Council’s Legal Service. Management have stated

that cases are referred to the HfH’s Gas Compliance Team whose processes ultimately result in the

granting of an Access Warrant with forced entry if necessary.

46


3

• A review of the referral process confirmed, for a sample of ten referrals, in all cases, that the contractor

had not acted in compliance with the Gas Safety and Maintenance Policy and Procedure regarding gas

servicing appointment notice periods. The Policy stipulates that a 14 day notice period should be given

between when a notice is issued and when a visit is scheduled, however, there was no case examined

where this was adhered to for all three notifications. Examination of the ten randomly selected cases

confirmed the following:

o In the case of property 246288, the difference between the first notice and appointment date

was eleven days, the difference between the second notice and appointment date was seven

days, and the difference between the third notice and appointment date was eight days.


was seven days, the difference between the second notice and appointment date was eight

days, and the difference between the third notice and appointment date was nine days.


was seven days, the difference between the second notice and appointment date was seven

days, and the difference between the third notice and appointment date was seven days.


was nine days, the difference between the second notice and appointment date was ten

days, and the difference between the third notice and appointment date was seven days.


was nine days, the difference between the second notice and appointment date was ten

days, and the difference between the third notice and appointment date was twelve days.


was 15 days, the difference between the second notice and appointment date was 13 days,

and the difference between the third notice and appointment date was eight days.



and the difference between the third notice and appointment date was nine days.


was eleven days, the difference between the second notice and appointment date was 14

days, and the difference between the third notice and appointment date was eight days.


was eleven days, the difference between the second notice and appointment date was 12

days, and the difference between the third notice and appointment date was 14 days.



and the difference between the third notice and appointment date was 13 days.

• The Gas Safety and Maintenance Policy and Procedure requires that 10% of all LGSR shall be validated

by an independent and external agency. A new Service Level Agreement has been established between

Homes for Haringey and Morgan and Lambert Ltd. Homes for Haringey have also temporarily received

this service from Phoenix Compliancy Management between the previous and current Service Level

Agreements with Morgan and Lambert Ltd.

47


4


Controls

Effectiveness of

Controls



Gas Requirements &

Governance

Green Amber 0 1 0

Inspection of Properties Green Green 0 0 0

Performance & Contract

Monitoring Green Amber 0 2 0

Data Quality &

Management Reporting Green Amber 0 0 1

Total 0 3 1

Please refer to Appendix B for a definition of the audit opinions, direction of travel, adequacy and


Acknowledgement We would like to thank the management and staff of the Gas Safety Team for their

time and co-operation during the course of the internal audit.

48

London Borough of Haringey – Internal Audit Report – Homes for Haringey: Gas Safety Checks 2018/19 5


Response

Responsible

Officer(s)

Deadline

Gas Requirements & Governance

1 It was determined through

discussions with the Gas

Compliance Manager that the

Homes for Haringey Gas

Safety and Maintenance Policy

and Procedure is out of date.

The day-to-day procedures

followed when referrals are

received have changed and

therefore the policy needs to be

updated to reflect this.

Where policies and

procedures do not accurately

reflect current practices,

there is an increased risk

that staff will carry out wrong

actions and that the

organisation’s objectives will

not be met.

The Homes for Haringey Gas

Safety and Maintenance

Policy and Procedure should

be reviewed and updated

where necessary, and a

version control section should

be included to encourage the

scheduling of future reviews.

2 The Gas Safety

& Maintenances

Policy will be

reviewed and

updated. A

regular review

process will be

implemented

R Dixon Nov 2018

Performance & Contract Monitoring

2 Examination of ten randomly

selected referrals confirmed, in

all ten cases, that the

contractor had not complied

with the Homes for Haringey

Gas Safety and Maintenance

Policy and Procedure with

respect to notice periods before

attempted visits.

Where the notice periods

before attempted visits are

not adequate and compliant

with the Homes for Haringey

Gas Safety and Maintenance

Policy and Procedure, there

is an increased risk that

tenants will be unavailable

for gas safety checks.

As part of the new Gas Safety

Contract that is being put in

place, Homes for Haringey

should consider the

possibility of implementing

Key Performance Indictors

(KPIs) that are designed to

encourage compliance with

the 14 day notice period

written into their policy.

2 The Gas

Manager has

already

implemented

monitoring of

compliance with

the notice

periods. The

Notice period will

be reviewed and

a KPI introduced

with new gas

contracts.

M Brown April 19

49


3 We understand that warrant

remain the property of the court

and as such as returned to the

Court after service. However,

examination of ten randomly

selected forced entry cases

confirmed in three cases

(21809, 73581, and 150532)

that there were no copy of the

signed warrants available for

examination, and in one case

(195946) there was no copy of

the signed warrant nor forced

entry checklist available for

examination.

Where copies of signed

warrants are not securely

retained, there is an

increased risk that Homes

for Haringey are subject to

legal challenges regarding

forceful entry into properties

and possible reputational

damage.

Homes for Haringey should

retain copies of signed

warrants once they have

been executed and securely

retain them electronically.

2 Homes for

Haringey are

now retaining

copies of all

Warrants

M Brown Sept 18

Data Quality & Management Reporting

50


5 The Key Performance Indicator

(KPI) for gas safety checks

stipulates that 100% of all

properties must be compliant.

Discussions with the Gas

Contracts and Compliance

Manager confirmed this KPI is

ineffective for monitoring the

performance of the contractors’

delivery of service, because

inaccessible properties that are

referred back to Homes for

Haringey are not included in the

calculations of performance

statistics. As a result,

contractors are able to adhere

to the 100% compliance target

regardless of the number of

properties actually accessed by

them. Information provided by

management indicates that that

contractors do manage to

access 95% of properties

referred to them but this is not

formally measured as a KPI.

Where KPIs are ineffective in

measuring contractor

performance, there is an

increased risk that poor

performance by the

contractor cannot be

identified and managed

effectively.

In the compilation of the new

contract, Homes for Haringey

should consider new KPIs to

measure contractor

performance such as the

percentage of properties that

are accessed before the

minimum 42 day threshold or

the percentage of properties

per month that are referred

back to the Compliance team.

3 As Part of the

new gas

contracts Homes

for Haringey will

consider the best

KPI’s to ensure

effective

management of

the contractors.

R Dixon Apr 19

51


Appendix B `– Definition of Audit Opinions, Direction of Travel, Adequacy and Effectiveness Assessments, and Recommendation

Priorities

Audit Opinions





risk.

There is evidence that the level of non-compliance with some of the control processes may put some of the client’s objectives

at risk.





The assurance gradings provided above are not comparable with the International Standard on Assurance Engagements (ISAE 3000) issued by the

International Audit and Assurance Standards Board and as such the grading of ‘Full Assurance’ does not imply that there are no risks to the stated

objectives.

Direction of Travel

The Direction of Travel assessment provides a comparison between the current assurance opinion and that of any previous internal audit for which the

scope and objectives of the work were the same.





52




The controls may be adequate but not operating effectively, or they may be partly adequate / inadequate and yet those that are in place may be operating

effectively.

In general, partly adequate / inadequate controls can be considered to be of greater significance than when adequate controls are in place but not

operating fully effectively, i.e. control gaps are a bigger issue than controls not being fully complied with.



Existing controls are partly adequate to manage the risks in this

area Operation of existing controls is partly effective







53

DRAFT REPORT FOR DISCUSSION ONLY


10

Statement of

Responsibility







Mazars LLP. Mazars LLP is the UK firm of Mazars, an international advisory and accountancy group. Mazars LLP is registered by the Institute of Chartered Accountants in England and Wales to carry out company audit work.

Mazars LLP

London

October 2018

54

Counter-fraud Report

2018/19 – Quarter 2

55

Counter-fraud outcomes 2018/19 – Quarter 2

Tenancy Fraud Investigations

Haringey Council’s Fraud Team works with Homes for Haringey to target and investigate housing and tenancy fraud. The Audit Commission* estimated that each fraudulent tenancy costs councils an estimated £18k in temporary accommodation and other associated costs. Although this figure is considered low if the properties have been sublet for some years, no new national indicators have been produced.

The HfH Tenancy Management Officer’s secondment to the Fraud Team to assist with the tenancy fraud work has been formally extended on a long term basis as a result of the successful outcomes achieved in and previous years; the post will be funded by HfH.

The Fraud Team will continue to work with HfH to develop the most effective use of fraud prevention and detection resources across both organisations to enable a joined up approach to be taken, especially where cases of multiple fraud are identified e.g. tenancy fraud, right to buy fraud and benefit fraud.

* No new national indicators have been developed since the Audit Commission was dissolved in 2015 and the Cabinet Office assumed this function

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Referrals received and outcomes

Brought forward from 2017/18 110

New referrals in 2018/19 127

Total referrals for investigation 237

Properties recovered 29

No fraud identified 73

Total investigations completed 102

Ongoing Investigations 135*

Tenancy FraudIn Quarters 1 of 2018/19, the numbers of referrals received, investigations completed and properties recovered by the Fraud Team are summarised below:

*Note 1: Of the 135 ongoing investigations; 52 of these cases (39%) are where tenancy fraud has been identified and court proceedings were in progress as at 30 September 2018. The property will be included in the ‘recovered’ data when the keys are returned and the property vacated.

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Right to Buy (RTB) Investigations

The team currently has approximately 254 ongoing applications under investigation. The team reviews every RTB application to ensure that any property where potential tenancy, benefit or succession fraud is indicated can be investigated further. In the last two quarters, the numbers of tenants applying to purchase their properties under the Right to Buy legislation has reduced as valuations continue to rise. However, the proportion of fraudulent applications remains consistent.

At end of Quarter 2, 63 applications have been withdrawn or refused either following the applicants’ interview with the Fraud Team, further investigations and/or failing to complete money laundering processes.

58


Pro-active counter-fraud projects

During 2018/19, the Fraud Team have continued with a number of pro-active counter-fraud projects. Progress reports on this work will be reported to the Audit & Risk Committee on an ongoing basis; the findings and outcomes are all shared with service managers as the projects are delivered.

Homelessness

A joint working programme is being developed to utilise grant funding around homelessness. The purpose of this programme is to visit all homelessness units and ensure legitimate claimant is living at the unit.

59


Gas safety – execution of warrant visits

Since July 2016, the Fraud Team accompany warrant officers on all executions of warrant of entry visits where it was suspected that the named tenant was not in occupation.

The Fraud Team aim to interview any occupant and establish the legitimacy of the tenancy, or investigate further if the property is empty, or identified as being potentially sublet or abandoned. The Fraud Team may also identify cases where the tenant is a vulnerable adult, in which case a referral is made to social workers and/or tenancy management. The Gas Safety Team can (and do) make referrals to the Fraud Team if they identify any potential fraud indicators through the normal course of their work.

In 2018/19, the Fraud Team have assisted with 62 Gas Safety warrants of execution and seven properties were re-possessed as a result of the Fraud Team’s investigations; these figures are included in the ‘properties recovered figures reported as part of the tenancy fraud table.

60


Financial Values 2018/19

Tenancy Fraud – council stock and temporary accommodation: The Audit Commission valued the recovery of a tenancy, which has previously been fraudulently occupied, at an annual value of £18,000, mainly relating to average Temporary Accommodation (TA) costs. No new national indicators have been produced; therefore although this value is considered low compared to potential TA costs if the property has been identified as sub-let for several years, Audit and Risk Management continue to use this figure of £18k per property for reporting purposes.

In Quarter 2, 29 council stock properties have been recovered through the actions and investigations of the Fraud Team; therefore a total value of £522k can be attributed to the recovery, or cessation, of fraudulent council and temporary accommodation tenancies.

Right to Buy Fraud: Overall, the 63 RTB applications withdrawn or refused represent over £6.8m in potential RTB discounts; and means the properties are retained for social housing use.

61

Homes for Haringey



Title Risk Review – Workshop Discussion

Agenda item 6

Report for Discussion






1. Introduction

1.1 The purpose of this report is to facilitate a discussion with the committee to

review the key risks facing HfH and to assist the committee with agreeing how it

can be supported in its ability to effectively scrutinise risk management and

seeking controls assurance.

2. Background

2.1 This report, and discussion with the committee, is intended to build on learning

following a risk training workshop with the Board on 4 September. Presentation

material from the training was circulated to all Board members.

2.2 The Executive are in the process of reviewing risk management and controls

assurance processes and this will be reflected in a revised Risk Management

Strategy to be presented to the Board for approval in January 2019.

3. Risk Review

3.1 Following feedback from the committee, each directorate has carried out a

review of the existing risk register. The ‘key’ risks, based on the opinion of the

Executive are summarised at appendix 1. These exclude health and safety

related risks which are still currently under review.

3.2 We want to avoid scoring the risks as this may detract from the purpose of the

exercise at this stage which is to agree, based on knowledge and experience of

HfH and the current operating environment (economic, demographic, political

etc.) what we believe are the key risks that require a shared awareness and

understanding by the Board.

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Homes for Haringey


3.3 For information, the new scoring criteria that we will use to evaluate the risks is

set out below.

Probability Impact

Score Category Score Category

1 Almost certain not to happen 1 Insignificant

2 Unlikely 2 Minor

3 Possible 3 Moderate

4 Likely 4 Major

5 Almost certain 5 Catastrophic

4. Risk Training Learning Points

4.1 Some of the main learning points that emerged from the risk training are listed

below. They are areas for further exploration and discussion with the committee.

a) What early warning mechanisms are in place to identify potential / emerging

risks?

b) Are reserves earmarked / LBH or HfH provisions adequately made as a

contingency against risk crystallisation on e.g. inflation, income, bad debt,

poor performance, contractor claims etc?

c) Assurance mapping – are risks and activities mapped to identify the types of

assurance needed and whether there are any gaps?

d) What should the Board’s attitude to each type of risk be – avoid, accept,

minimise, manage/control, transfer, contingency planning?

e) Many risks are inter connected and multiple risks may be experienced at

once – how prepared is HfH for this, how is this managed and how are the

committee and the Board involved?

4.2 For the purpose of the meeting the committee is asked to focus on the following:

a) Are the list of key risks set out at appendix 1 those that the committee would

expect to see and are there any company wide risks that the committee feels

haven’t been identified by any directorate? Does the committee feel there

should be any others that are significant enough to warrant Board and

committee awareness and attention?

b) As an exercise – identify one (or two if there is sufficient time) risk and discuss

with the Executive:

i) What the attitude should be (see 4.1d above)

ii) What the possible causes are in order to determine how the risk is

controlled

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Homes for Haringey


iii) How effective the controls are and if controls don’t exist or are weak

– what actions should be put in place to introduce / strengthen the

controls if possible

iv) What source(s) of assurance the committee and the Board should rely

on to ensure the risk is being effectively managed? Sources can

include management assurance, internal audit, resident scrutiny,

accreditation, external audit, independent/consultancy review.

4.3 If there are other areas the committee would like to include in this discussion

then members are asked to contact the Director of Corporate Affairs in advance

so this can be planned and incorporated.

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Homes for Haringey


Appendix 1

HfH Key Risks

Ref Description

Housing Demand

1 Increasing homelessness demand and lack of supply options leading to an

excessive reliance on temporary accommodation resulting in substantial financial

pressures on the General Fund.

2 Loss of the use of council stock as temporary accommodation which has been

utilised within regeneration areas and handback of short life lodges resulting in

reliance in more expensive temporary accommodation types.

Property

3 Contractor Management – claims against HfH from contractors resulting in

financial loss / contract overspend or contractor insolvency impacting ability to

repair and maintain homes and possible financial loss. Poor sub-contractor

management resulting in a fraudulent activity, loss of assets and reputational

damage.

4 Compliance – Insufficient budget provision to meet property compliance related

responsibilities. Non-compliance with regulatory or legal obligations in relation

to gas, fire, electric, asbestos and legionella resulting in risk to health and safety,

reputational damage and fines.

Housing Operations

5 Poor customer income management leading to high levels of total debt,

irrecoverable arrears and financial loss to the council.

6 A failure to adequately prepare residents for the impact of Universal Credit

leading to poor tenancy sustainment and detrimental financial impact on both

LBH and HfH.

7 Failure to manage our safeguarding responsibilities leading to death or serious

injury, service failure and reputational damage.

8 Customer fraud (e.g. illegal subletting) leading to loss of revenue / assets and

reputational damage.

Corporate

9 Failure to manage budgets effectively, including non-achievement of target

efficiency savings, impacting the ability for timely planning for the use of

projected underspends.

10 Poor procurement, tendering practices and delays resulting in more costly

engagement of supply chain, possible breach of regulations, external challenge

and potential fines.

11 Serious breach of data protection resulting in sanction from the ICO and

possible reputational damage.

12 Perception of a high cost low performing ALMO by new Council administration

leading to a loss of confidence and council intervention.

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Homes for Haringey


Ref Description

13 Failure of staff to follow policies, procedures and business terms and conditions

resulting in serious injury, reputational damage, external challenge or financial

irregularity.

14 Failure to achieve improvement in current levels of customer satisfaction leading

to a loss of confidence and council intervention.

15 Brexit adversely impacting labour supply and wages, sub-contractor availability

and prices, maintenance programmes and the property market.

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Homes for Haringey



Title Medium Term Financial Savings Plan

Agenda item 7

Report for Decision






1. Introduction

1.1 This report presents proposals for the committee to consider and agree target

efficiency savings over a five year period as part of HfH’s five year Medium Term

Financial Savings plan.

2. Background

2.1 The Board, at its meeting on 31 July, approved a Value for Money (VfM)

strategy for HfH. It delegated the review and approval of a five year MTFS to the

Audit and Risk Committee.

2.2 The VfM strategy identifies the need to proactively plan and achieve efficiencies

against our management fee in order to grow reserves to fund growth,

innovation and unforeseen cost pressures. The HfH reserve is currently £1.301m

with £385k earmarked to fund potential cost pressures.

3. Medium Term Financial Savings Plan

3.1 The Executive and Heads of Service have reviewed a number of different areas

for potential cost efficiency savings over the next five year period. Examples

include:

Procurement efficiencies through re-tendering contracts

Potential savings from in-sourcing certain services

Efficiency savings from upgrading the housing IT system

Continued restructuring of HfH teams and business processes

Potential capital programme efficiencies from changes in standards and

projected component lifecycles

Better use of property assets (garages and pram sheds)

67

Homes for Haringey


3.2 In addition, opportunities for income generation are also being explored,

including business growth opportunities recently approved by the Board.

3.3 At this stage however, areas for efficiency savings and growth opportunities are

not sufficiently progressed to quantify savings or new income with certainty in a

five year MTFS plan.

3.4 The recommended approach is to agree a target for efficiency savings and to

reflect this in the 2019/20 budget setting process which has commenced and

will also be the subject of discussion at the Board away day on 10 November.

3.5 The table in appendix 1 sets out a draft MTFS based on information known with

certainty at this stage. The intention is to review and update the MTFS each

quarter as more information comes to light and as cost efficiency savings and

new income generation become known with greater certainty.

3.6 The table also illustrates, as examples, the level of cost efficiency savings for a

range of targets from 0.5% to 2.0% to help with agreeing an achievable target.

3.7 To aid the committee’s thinking, HfH’s track record of achievement over the last

three years is set out below.

Year Saving Management Fee % Saving

2017/18 £916k £43.09m 2.13%

2016/17 £1.12m £40.67m 2.75%

2015/16 £212k £35.74m 0.59%

3 Year Average: 1.88%

4. Recommendation

4.1 The committee is recommended to agree a target level of cost efficiency saving

against HfH’s management fee over a five year period.

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Homes for Haringey


Appendix 1

Homes for Haringey Medium Term Financial savings Plan

2018/19 2019/20 2020/21 2021/22 2022/23

Initial management fee 40,032,057 39,275,110 39,438,735 39,438,725 39,438,735

Supporting People grant 200,000

Decrease in Council SLA charges to HfH (1,326,093)

Employers pension contribution reduction (348,540) (348,540)

Annual pay award (2% 18/19 and 19/20) 512,165 512,165

TA complaints service transfer to HfH 21,860

Street properties cleaning team transfer to HfH 183,661

Total service amendments to management fee (756,947) 163,625 0 0 0

Net management fee for the year 39,275,110 39,438,735 39,438,735 39,438,735 39,438,735

Target savings at 0.5% of initial fee 200,160 196,376 197,194 197,194 197,194




Management fee as per Council’s current MTFS 40,139,000 40,139,000 40,139,000 40,139,000 40,139,000

Revised management fee 39,275,110 39,438,735 39,438,735 39,438,735 39,438,725

Savings against Council’s MTFS 863,890 700,265 700,265 700,265 700,265

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Documents

Public Papers Tuesday 16 October 2018 Conference Room 1 ... · installing automatic door openers / closers to the fire doors for tenants where the new fire doors installed were causing