Further detail

Core Financial Systems - General Financial Controls (Appendix A)

Background:

It was agreed with management that BDO would perform this review, as the new internal auditor, to give an understanding of the organisation, it’s finance function and systems. Specifically, BDO would undertake a review of processes surrounding cash and bank, purchasing and payables, property, plant and equipment (PPE), and payroll, given the material significance of these balances and volume of activity.

The purpose of this review was to provide management and the ARAC with assurance over the design and operational effectiveness of the key financial controls in place, and to assess whether key finance processes are well designed and appropriately controlled.

Internal Audit Findings:

BDO is able to provide substantial assurance over the design and moderate assurance over the operational effectiveness of the Scottish Police Authority’s arrangements in place in relation to Core Financial Controls. Overall, BDO found the control environment to have a robust design and controls were mostly operating effectively in line with this design.

Four identified findings are highlighted where processes could be improved upon.

There were several limitations to current systems, resulting in manual input requirements, and noted that SPA have plans to review these systems in the next 3-4 years as part of a larger transformation project. However, it should be noted that, at present, manual inputting heightens the risk of error or manipulation.

Summary of Findings of Core Finance Report:

TABLE

Findings Agreed Actions
High 0 0
Medium 2 5
Low 2 3
TOTAL 4 8

Of the total of eight actions:
One (Medium rated) has already been addressed.
Four (Medium rated) are scheduled to be implemented by August/September 2023.
The remaining three actions (Low rated) are scheduled to be implemented by September 2023/January 2024.