GLASGOW LIFE Review of Asset Management. Final Report

Transcription

1 GLASGOW LIFE Review of Asset Management Final Report INTERNAL AUDIT March 2012 Glasgow City Council Internal Audit 1

2 GLASGOW LIFE Review of Asset Management Table of Contents Section No Section Title 1 Introduction and Background 2 Audit Remit 3 Audit Opinion 4 Conclusions 5 Recommendations 6 Implications Action Plan Glasgow City Council Internal Audit 1

3 GLASGOW LIFE Review of Asset Management 1. Introduction and Background As part of the agreed programme of work for 2011/2012, Internal Audit has undertaken a review of the controls and processes in place for the management of moveable fixed assets at Glasgow Life. Culture and Sport Glasgow (CSG) is a company limited by guarantee with charitable status. CSG operates and carries out its activities under the name of Glasgow Life and also operates a trading subsidiary, the CSG Community Interest Company ( the CIC ), which is not a charity and is governed by a separate Board. Financial statements are prepared for each arm of the company separately. Both the Group and CIC balance sheets show CSG as holding two categories of tangible fixed asset: leasehold improvements and plant and equipment. As at 31 March 2011, the CSG Group balance sheet reports fixed assets with a net book value of 2.791m for the Group and 2.725m for the charity. The CSG (Trading) CIC balance sheet as at the same date reports tangible fixed assets with a net book value of 65, Audit Remit The purpose of the audit was to gain assurance that the there are robust arrangements in place to ensure the controlled, accurate and effective management of moveable fixed assets (e.g. sports and other equipment) owned by Glasgow Life. The arrangements for the management of assets owned by the Council but managed on its behalf by Glasgow Life e.g. the collection, property etc., were not considered as part of the audit. The scope of the audit included testing controls in operation to ensure: The existence of documented procedures in relation to asset management; Adequate processes and procedures for asset management are in place, including the compilation and maintenance of asset registers; The existence of a sample of assets as selected from the Asset Register through physical inspection; The completeness of the Asset Register by physical inspection of a sample of assets traced back to Register, and The provision of relevant asset management training. Glasgow City Council Internal Audit 2

4 3. Audit Opinion Based on the audit work carried out a reasonable level of assurance can be placed upon the control environment. Seven further opportunities for improvement which management should address were identified. 4. Conclusions Based upon the work carried out, the conclusions reached during the audit were as follows: 8 areas reviewed were found to be satisfactory including the existence of Asset Registers, in a suitable format, for both the Charity and the CIC; the identification of an appropriate officer as responsible for the maintenance of Asset Registers and the regular management review of Registers and reconciliation to the financial ledger. As there are no formal documented procedures in place, there is an increased risk that staff may be unaware of their role and responsibilities, the proper processes to be followed and therefore may adopt inconsistent working practices. As there is no formal process for the authorisation, tracking and recording of fixed asset movements, asset locations may be recorded inaccurately and assets may also be at increased risk of misappropriation. Without a standard process for informing Finance of any fixed asset additions and disposals, there is a risk that assets may be omitted from the Asset Register or that the Register may be overstated. Without quantifying the exact number of specific assets held, the usefulness of the Asset Register is diminished. As Glasgow Life does not check the completeness and accuracy of the Asset Registers, there is an increased risk of inaccuracies and over/understatement of assets. Assets are not tagged with unique identifiers, therefore they are not individually identifiable, there is no link between the physical asset and the Asset Register and there may be an increased risk of misappropriation. The usefulness of the Asset Register could be increased with the addition of information on the reason for asset disposals. Glasgow City Council Internal Audit 3

5 Sample testing indicated that the Asset Register entries for Glasgow Club Springburn are out of date and inaccurate. 5. Recommendations Resulting from the conclusions, 7 recommendations for improvement, 4 rated high priority, 2 rated medium priority and 1 rated low priority, were identified. These recommendations and the organisation s responses are shown below. 6. Implications Legal Financial Personnel Service Plan Environmental None Action is required to ensure the value of tangible fixed assets recorded in the Asset Register is accurate. None None None Glasgow City Council Internal Audit 4

6 Title of the Audit: High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Risk Ratings for Recommendations Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendations Priority Accepted Service s Comments (if appropriate) Officer Responsible for Timescale for Key Control: Comprehensive documented procedures are in place detailing all aspects of the asset management process. 1 Glasgow Life must formulate documented procedures detailing the asset management process. These should include the following: (a) A step by step breakdown of the process to be followed by operational staff when fixed assets are acquired/disposed of or are moved/transferred from one location to another. This should include obtaining the required authorisation prior to the transfer, completion of the appropriate paperwork, tracking assets in transit and advising Finance of the move to allow the correct High Yes Will prepare a guidance note to support Financial Procedures Manual and provide guidance to Extended Management Team. Stephen Wilson 30 June 2012 Glasgow City Council Internal Audit 5

7 location to be recorded on the Asset Title of the Audit: (Continued) No. Audit Recommendations Priority Accepted Service s Comments (if appropriate) Officer Responsible for Timescale for Key Control: Comprehensive documented procedures are in place detailing all aspects of the asset management process. 1 Register. High (b) The steps to be taken by operational staff in the event of theft, loss or damage to an asset. (c) The steps to be taken by the Finance Team to ensure that the Asset Register is reviewed and reconciled to the ledger on a regular basis. These procedures must be issued to all relevant Finance and operational staff with training delivered as necessary Glasgow City Council Internal Audit 6

8 Title of the Audit: (Continued) No. Audit Recommendations Priority Accepted Service s Comments (if appropriate) Officer Responsible for Timescale for Key Control: The Asset Register provides a comprehensive record of all assets in use across the organisation. 2 Where possible for existing assets and for all future additions, Glasgow Life must ensure that the number of assets purchased is clearly quantified Medium Yes Will ensure asset register info is more detailed in relation to number of physical assets purchased. Stephen Wilson Ongoing Key Control: Regular physical inspection of assets listed on the register is undertaken to confirm completeness of the register and existence of assets. 3 Glasgow Life should consider introducing periodic, and as a minimum, annual reviews and sample testing of the Fixed Asset Registers to ensure the completeness and accuracy of the information recorded and the physical existence of assets Medium Yes Will introduce process for periodic review including introducing a sample check as part of year end procedures. Stephen Wilson 2011/2012 year end Glasgow City Council Internal Audit 7

9 Title of the Audit: (Continued) No. Audit Recommendations Priority Accepted Service s Comments (if appropriate) Officer Responsible for Timescale for Key Control: Assets are tagged with unique identifiers to provide a link between the physical asset and the entry in the Asset Register. 4 Glasgow Life must introduce an asset tagging system to allocate unique identifiers to assets and provide a link between physical assets and the corresponding entries on the Asset Register. This could be applied to assets over a certain monetary value to be determined by Glasgow Life High Yes Require a practical solution for assets with individual value of > This is predominately gym equipment and will initiate individual asset tags as part of the ongoing refresh programme with new assets being tagged as they are installed. For certain assets (Synthetic Pitches) it is not practical to actually tag the asset. Billy Garrett/ Nicky Watterson Ongoing Key Control: All appropriate information is recorded on the Asset Register. 5 Glasgow Life should ensure that the reasons for any future disposals are recorded in the Asset Register Low Yes See response to recommendation 1. Stephen Wilson 30 June 2012 Glasgow City Council Internal Audit 8

10 Title of the Audit: (Continued) No. Audit Recommendations Priority Accepted Service s Comments (if appropriate) Officer Responsible for Timescale for Key Control: Arrangements are in place to ensure the completeness and accuracy of the information in Asset Registers. 6 Glasgow Life must investigate the discrepancies identified at Glasgow Club Springburn and must ensure that the Asset Register is updated to present an accurate record of the assets held on site. 7 A similar exercise must then be rolled out across the organisation to ensure there are no similar issues arising. High Yes Stephen Wilson June 2012 High Yes See response to recommendation 3. Stephen Wilson 2011/2012 year end Glasgow City Council Internal Audit 9