No records lost, no money mislaid, no ‘sloppy admin’
Published: 9 July, 2010
• YOUR front-page report (The millions ‘mislaid in sloppy’ admin, July 2) is simply not accurate.
No money has been mislaid and it is a shame that a good report on the council has been so badly misrepresented.
The report referred to is the annual report by our own internal audit function, part of the finance department.
Its overall conclusion is that there has been an improvement in the council’s financial control over the year.
This is consistent with the opinion of the Audit Commission, our external auditors, which reported that our accounts last year were the best ever.
The annual report identifies strengths and areas for improvement from audits conducted over the last year (2009-10).
You have only reported on the latter and, given the number of these you have misrepresented, I will not respond to them all, but individual responses are on our website.
However, the main headline appears to relate to the £5.4million discrepancy between the old and new council tax systems which existed during the changeover of systems.
This is not “sloppy admin”, but rather it is best practice to ensure that all records are transferred to the new system before the old one is switched off.
At no time was any money “mislaid” and no records were lost.
To suggest otherwise is a complete fabrication.
Another point relates to a suspense account.
Again, no money has been lost or mislaid.
This is a point about accounting treatment.
People and companies sometimes pay us money with no account reference or they overpay us.
We keep that money in a suspense account until it can be returned or the sender identified.
Because we are a very large organisation, this can be a large sum, but all the money is safely recorded and in our bank account.
The council takes all instances of loss seriously, but like all organisations, public and private, we are not immune from theft, as was the case with the social services cash and the mobile phone loss reported.
The significant role we give to internal audit is a demonstration of our determination to keep such incidents to the minimum possible.
Duplicate payments are also relatively rare, but do occasionally arise.
It is right that we use internal audit to identify potential cases of duplicate invoices being paid.
It should be noted that most of the potential cases they identify will not turn out to be duplicates, but checking them is still good practice.
On the back of this work, we have now investigated and are recovering any instances of duplicate payments following a full review of all payments made by the council.
As with any large organisation, Islington Council can improve and our internal audit function has served us well by identifying ways for us to do so.
We have been completely transparent in reporting these findings to a public forum, the audit committee. All of the findings have been or are being addressed.
It would be a tragedy if the distortions presented in your article undermined this example of best commercial practice and the prospects for continuous improvement it presents.
JOHN FOSTER
Chief executive, Islington Council
Editor’s note:
The reference to mislaid money was made by the council’s own audit committee chairman, Councillor Phil Kelly. We reported his words.
Regarding the suspense account, the article stated that £1million was sitting in the account because officers could not work out which department it belonged to.
• ISSUES raised at Islington Council’s audit committee identified a number of concerns about the council’s performance, in particular in relation to its management of contracts.
It is the role of internal audit to raise these issues and the report summarised work done over the past year, so these concerns either have been or are being addressed.
I shall ensure all the issues raised are resolved.
It is essential that the council recovers any funds which have been incorrectly paid.
I do not regard £55,000 as a small amount of money and I can assure readers that council staff are doing everything possible to recover these funds.
However, your article was unfair in its implication that millions of pounds have been mislaid.
Nothing in the audit report supports such a conclusion.
The problem in reconciling new and old computer systems has been completely resolved without at any time compromising the council’s records of or control over the funds concerned.
You also did not report the internal auditors’ conclusion that “we have seen a significant improvement in the control environment around key and fundamental financial systems”.
CLLR RICHARD GREENING
abour executive member for finance