Annual Report 2006-2007 - Cafcass

and advice on best practice. The committee has reviewed
its procedures against The Audit Committee Handbook
(HM Treasury March 2007) and concluded that it complies
with that guidance in all significant aspects of its work.
Internal audit
An independent firm of accountants, Bentley Jennison, was
employed throughout 2006–07 to provide an internal audit
service. The Audit Committee agreed the internal audit
strategy and plans for 2006–07 at the Audit Committee in
May 2006.
During 2006–07 we have used a log to track progress
of all internal and external audit recommendations and
to manage outstanding actions. Progress is reported
regularly to the Audit Committee. Formal sign-off
is obtained from the responsible officers along with
supporting documentation. During the year 92% of the
recommendations with a due date prior to 31st March 2007
have been completed.
I receive an annual report on the findings of internal audit,
which includes their professional opinion as to the level of
assurance that is applicable to Cafcass. For 2006–07 the
audit opinion was that Cafcass had adequate and effective
risk management, control and governance processes
in place to manage achievement of the organisation’s
objectives. Considerable progress has been made in the
year with the number of reports receiving “substantial”
assurance rising to 64% in 2006–07 (47% 2005–06).
As referred to by the internal auditors in the year two areas
received limited assurance, London Region Financial and
Case Management System (CMS). A follow up of London
was undertaken in February 2007, which concluded that
considerable progress had been made with 90% of the due
recommendation implemented and the remaining 10% in
progress. The CMS report is still at draft stage; further
work on this area will be required in 2006–07 to address
the weaknesses identified and develop an appropriate
action plan.
Budget Task Force
A Budget Task Force has operated throughout 2006–07,
consisting of myself, the Head of Strategic Finance, the
Chair of the Audit Committee and two Corporate Directors.
The Budget Task Force identified and co-ordinated areas of
budget savings and reviewed business cases.
Purchase orders
Cafcass introduced an electronic purchase ordering
(PO) system in April 2003. Whilst a PO supported all
expenditure, the majority of POs were raised after the
invoice was received. Considerable improvements in
compliance were achieved in 2005–06 with the percentage
of invoices having a PO raised in advance increasing from
26% to 60%. Further progress has been made in 2006–07,
we have continued to see month-on-month improvements
with compliance of 70% overall for the year, reaching a
peak of 84% in any one given month.
Full accruals
Full monthly accruals processes have been in place
throughout 2006–07. This has resulted in substantial
improvements in monthly management information and
forecasting.
Areas of further work for 2007–08
Cafcass has engaged PricewaterhouseCoopers as our
new internal audit provider with effect from 1st April 2007.
In 2007–08 Cafcass’ priority is to continue to strengthen
the financial control and compliance culture across the
organisation, building on the significant progress made
to date. Following the roll-out of the Case Management
System during 2006–07 and taking on board the results of
the recent audit, we will be working to embed the system
and ensure that the controls and procedures in place
are adequate to provide assurance around systems and
data quality. In 2006–07 considerable progress has been
made to improve controls in the area of procurement:
the advisory internal audit report undertaken in year will
be used to develop an action plan in 2007–08 to further
strengthen this area.
Anthony Douglas
Chief Executive and Accounting Officer
3 July 2007
Section 4: Statement on Internal Control | 43