'Poor record keeping' behind transport service's audit rating
“Poor record-keeping” led to a council transport service being audited last autumn, but its accounting practices have improved since then, a committee has heard.
Telford and Wrekin Council’s Fleet Management Services called in the authority’s internal auditors, and received a “red” rating – the lowest level on the four-step scale – in September.
Principal Auditor Tracey Drummond said the rating was upgraded to “yellow” after a follow-up inspection three months later.
She told the borough’s Audit Committee no evidence of misappropriation was found, but bookings and the cash takings were not recorded properly and not always traceable back to bank deposits.
Fleet Management Services is based at St George’s Industrial Estate, in Donnington, and operates services including the council’s “Dial-a-Ride” scheme for elderly residents or those with mobility problems.
A report for the committee, co-written by Ms Drummond and Audit and Governance Team Leader Robert Montgomery, said improvements had been made since the September audit.
“This has been done in the most challenging of years during which the service area has been responding to a number of emerging and immediate issues arising out of the pandemic,” they added.
Committee member Adrian Lawrence asked for an explanation of what caused the initial “red” rating.
Ms Drummond said: “I think it was just record-keeping, really. The evidence wasn’t there for us to establish the proper controls were in place and there had been a bit of a change of management as well.
“They called us in, actually, and wanted us to do a deep dive, a full audit.”
Cllr Lawrence asked for an example of the kind of paperwork error auditors found.
He asked: “Were they drawing fuel with no evidence of where it was going, or something like that?”
Ms Drummond said: “No, it was more bookings and the taking of cash and not recording it properly.
“For example, I couldn’t trace it back from taking the cash through to the bankings.
“When I double-checked it all, I didn’t have any problems that were misappropriation.
“It was just poor record-keeping, rather than misappropriation.”
Ms Drummond’s and Mr Montgomery’s report explained that red ratings mean the level of audit assurance is “poor” and “the system of control is weak and there is evidence of non-compliance with the controls that do exist”.
Yellow, or “reasonable”, is the second-highest assurance level and indicates a “sound system of control”.
Their report added that, besides Fleet Management, seven service areas had been audited since September. Three of these received “green” ratings.
