Ms Niamh Larkin:

There are a number of issues there which I might compile when I answer them. I will start with the focus of the audit because the Senator mentioned it. We approach the audit every year on a risk basis. The local government auditor addresses that based on the issues in the prior audit year. At the commencement of each audit, they would find out from the chief executive, the head of finance and the directors of service the risk areas in the local authority during the year. That is built into our audit plan for the year so it means that the audit resources are focused on those areas that are considered to be of highest risk in the local authority. Obviously, we are unable to audit every transaction within a local authority so we must direct our resources accordingly. As a result of that, all of the issues that appear in an audit report would be revisited the following year. Therefore, if something is raised in an audit report, we follow that up to find out what progress has been made. If there is a lack of progress or insufficient progress has been made, that will be mentioned in the current year's audit report.

It is important to note that we also have a management letter. Where issues are not considered to be of a high enough risk or a high enough priority, they would form part of the management letter. There are additional issues that would not appear in the audit report but would appear in the management letter. This year, we have changed the layout of our management letter. As well as the recommendation from us as to what should happen and the feedback from the chief executive, the management letter also includes a timeline for addressing that issue. The idea is that we can address it instead of it being just an item that has to be looked at at some point in the future. We can then measure it in terms of when it should have been addressed, when it was committed to being addressed by the local authority, and whether that took place.

I have noticed as well that a number of the audit committees, and the committee referred to them and their important role, are now tracking the issues in both the audit report and the management letter. They are bringing them up at each audit committee meeting and asking the directors of service or various staff members to make representations as to what is happening in that area within the local authority. That is a further level of accountability and governance with regard to tracking issues and making progress on them.

We meet with the audit committee each year. The purpose of that is to provide further clarity about issues that come up in the audit report. The audit committee then prepares a report on that which it presents to the members in order that the members have a better understanding of some of the issues that are raised and their significance.

Delays in putting the reports on the website were mentioned. The procedure at the moment is that the reports go to the chief executive who corresponds with the directors of service and their management who reply to us. Once that is completed, we forward a copy of our final report to the audit committee. Out of courtesy, we wait for the next audit committee meeting. The audit committee meetings only take place every three months. Typically, they take place four times a year, so sometimes there is a time delay. After that, we wait for the audit committee to present its report to the council members, so we do allow time and there is a time delay between the audit being completed and being put up on the website. We can definitely raise ways to shorten that with the County and City Management Association, CCMA. It is not a delay on our end. It just relates to following the procedures that have been set. That is definitely something we can look at and we can consider circulating it.

Regarding sanctions, there are different levels of accountability. In each local authority, it is the chief executive who is accountable for following up on all of the issues raised. We then have the further layer of the audit committee which can also direct the internal audit unit to look at any issues we have raised and produce follow-up reports in that area or look at the area in more detail. The audit committee can direct the internal audit unit and follow up and assess the actions of management in following up on issues. Another feature is the report to the councillors.

Regarding the budget, there is a detailed note in the financial statements that explains at a high level the overs and unders in the year which we would look at as part of our audit. As part of our preliminary analytical procedures and our audit procedures, we would go through the overs and unders for the year and obtain explanations from management as to why they have occurred. We also look for the approval of the members regarding the overs and unders. We would note the committee meeting at which that happened.

The other point concerned a policy for write-offs. There is no standard policy as to when a debt should be written off but there is a process to be followed. Thirty days after the year end, a schedule of uncollected rates is prepared that is reviewed by the chief executive. A decision would then be made. There is a formal process before a write-off is taken, and all those write-offs would be approved by the chief executive and the heads of finance.

As part of our audit, we would look at the collection rates of the three main income streams, which are rates, rent and housing loans. All audit reports comment on those, whether they have improved or declined in the year and any reasons for that. We would also look at the controls and procedures behind rates and rent collection, what procedures are in place in the local authority and whether we consider those procedures to be adequate. I think that answers all of the points.