Milton Keynes Council...Services provided by partner organisations are appropriate and sufficient, performance is monitored and there is appropriate client side management. The audit

Milton Keynes Council

Internal Audit

www.milton-keynes.gov.uk/internal-audit

LICENSING PREMISES, PEOPLE AND VEHICLES – TAXI LICENSING

Internal Audit – Final Report JANUARY 2013

MKC INTERNAL AUDIT SERVICE LICENSING – TAXIS

AUDIT REPORT – E257/13 1 JANUARY 2013

EXECUTIVE SUMMARY

1 AUDIT AREA

An audit of Licensing Premises, People and Vehicles has been carried out in accordance with the annual audit plan. The audit this year was concerned only with two areas: taxis and alcohol & entertainment activities, which is reported separately. Audit testing for Taxi Licensing was carried out during September and October 2012 and related to activities during the financial year 2011-2012 and 2012-2013 to date.

This is an Internal Audit report of the current work processes as informed by the service staff. There was a lack of routine, expected controls and the processes themselves were so weak that audit testing was considered to be not appropriate. A review and process re-engineering of the existing service is currently underway. This wider review may have an impact on some of the findings, related risks and actions.

2 AUDIT OPINION – WEAK

Three key themes support a conclusion of Weak systems of control. Management have highlighted that this area was identified as requiring attention and issues have been progressed to improve the service and its governance.

(1) Administration of Taxi Live

Licensing checks are effective but the Council’s key system in this area is unable to support proactive assurance that vehicles, drivers and operators are appropriately licensed. Testing showed that the current database used is not fit for purpose nor is it accurately maintained. Management have already identified the need to replace this. Further testing to primary documentation gave assurance that key driver and vehicle documentation is maintained properly however the weaknesses in relation to the database and its upkeep prevent assurance that effective proactive enforcement is undertaken and prevents the service being able to easily identify over-due actions eg 10% of drivers over 45 were over-due for medical examination.

(2) Income control

The necessary assurance is not evident that income is properly safeguarded. The systems and processes passed to Mouchel, on 1st April 2011, were poor, but those shortcomings have not been addressed. The number of absent or ineffective controls increases the overall level of risk and prevents assurance that all income due and/or collected is properly banked and/or safeguarded.

(3) Vehicle Safety Checks

Extensive analysis was undertaken regarding the findings arising from the Police stop and search initiatives. It must be clearly stated that the Council does not carry the responsibility to maintain taxi vehicles to required safety standards. That responsibility rests with the drivers and operators. The proportion of vehicles referred for checks is 49% of those stopped. The



proportion of vehicles that fail those checks due to issues that affect the safety of the vehicle is high.

Those findings could be used by the service to focus enforcement action that promotes greater safety standards amongst drivers and operators. At the time of the audit, that intelligence is not being used by the service. The findings also question the perception expressed that out of area vehicles are more of a concern than vehicles administered by Milton Keynes Council (MKC).

3 THE FUTURE

All actions are reported in the Management Action Plan (Page 8).

The migration of records from Taxi Live to the Civica Authority Public Protection database (APP), (as already programmed by management) is likely to address many of the control issues and allow more effective proactive regulation. However the input of data into APP will not solve the issues on its own. The system must be administered effectively to prompt proactive regulation of this service eg challenge to drivers and operators if deadlines expire.

The database is the basis by which effective control is achieved rather than the system ‘being’ the control.

There is an opportunity for the service to use the information derived from Police operations and subsequent vehicle checks to encourage operators and drivers to give more attention to safety standards, promote public confidence and enable enforcement action to target repeat offenders. The data provides an opportunity to target pressured resources efficiently at minimal additional cost.

Income controls must be improved to basic standards in order to protect finances and staff from allegations of theft etc.



MANAGEMENT RESPONSE FROM HEAD OF REGULATORY UNIT AND REGULATORY COMPLIANCE MANAGER

On 10 September 2012, the taxi licensing function moved into the newly formed Regulatory Unit and as this area was high risk to the authority; plans were put in place to upskill officers to support the existing resources. Whilst the audit was being undertaken a number of officers received training and commenced a program of work shadowing to meet this aim.

During the autumn of 2012, a feasibility study was undertaken to determine how the service should be delivered and from where. The outcome of that study led to a decision being taken that the service should continue to be delivered at Bleak Hall although steps are now being taken to separate out enforcement from the licensing elements.

Enforcement operations have been stepped up and with the council wide enforcement policy being in place from September 2012, consistent enforcement decisions can now be taken to ensure the outcomes of the service can be delivered.

A working group was formed to migrate records to a new database and significant effort is currently being made to improve the efficiency of our financial controls and reporting.



MAIN REPORT

4 BACKGROUND INFORMATION

4.1 The purpose of the Taxi Licensing Service can be summarised as: to ensure safe vehicles are used to transport the paying public and only those who are fit and proper are able to drive them.

4.2 MKC Administers the regulation of drivers, operators and vehicles but the legal framework does not place a requirement on the Council to enforce compliance other than the administration of applications for licenses that require certification of drivers and vehicles etc. Drivers and operators hold the responsibility to maintain compliance with all regulatory and safety requirements.

4.3 Examples include that all taxi vehicles licensed by MKC are required to undertake safety tests: Hackney Carriages (HC) under 10 years old and Private Hire (PH) vehicles under 6 years old must be tested every 6 months; older vehicles must be tested every 4 months. Driver checks are also required eg all licensed drivers must be checked by the Criminal Records Bureau (CRB) every 3 years.

4.4 This service is managed in-house by MKC and administrative support (income and the licensing process) is provided by Mouchel (Milton Keynes Service Partnership (MKSP) from 1st January 2013) as part of the Public Private Partnership.

4.5 Volumes

Audit figures 7th April 2010

Information from Taxi Live database on 4th October 2012

N.B. Figures below include licences past expiry date.

40 44 Hackney Carriage drivers

289 292 Private Hire drivers

605 806 Hackney Carriage and Private Hire drivers

934 1142 Total Drivers

141 New driver licences issued during past 12 months

195 216 Hackney Carriages

588 717 Private Hire Vehicles

53 38 Temporary Hire Vehicles*

836 971 Total Vehicles

328** New vehicle licences issued during past 12 months

63 69 Private Hire Operators

* Temporary Hire Vehicles are used when taxis are off the road e.g. for accident repairs.

** Not all vehicles are re-licensed.



4.6 Information provided by Taxi Licensing Service about Thames Valley Police (TVP) “Stop and Search” operations during the 12 months to 23 October 2012.

% Total % of those

tested Number of Operations 9

Number of Vehicles Stopped by TVP 281

Number of Vehicles Referred by TVP and Tested by MKC 139 49%

Number of Vehicles Passed Test 22 8% 16%

Number of Vehicles Failed Test 117 42% 84%

Number of Vehicles Failed only on Technical issues 6 2% 4% Number of Vehicles with Safety issues 111 40% 80%

Prohibition Notice 11 4% 8%

Fixed Penalty Notice 25 9% 18%

Being Taken To Court By TVP 1 <1% <1%

4.7 Preliminary work identified that the Council’s current financial system is unable to fully automate the income and costs associated with this activity, see MAP 10. Best information available, as calculated by Finance in April 2012 for a Freedom of Information request, is set out below.

Year 2009-10 2010-11 2011-12

Income

Includes licensing and knowledge tests etc

£468,303.25 £495,434.60 £513,536.50

Expenditure Includes management and administration of the service plus committee governance

£505,189.51 £497,491.14 £462,781.73

Balance Carried Forward £36,886.26 DR £2,056.54 DR £50,754.77 CR

3 Year cumulative balance £11,811.96 CR



5 AUDIT AREAS AND AUDIT SCORE

a)

Activities are appropriately licensed in accordance with relevant legislation.

Licenses are initially granted and renewed in accordance with legislation. However, Internal Audit is unable to give assurance that vehicles, drivers and operators continue to comply with licensing conditions (see MAP 2 and 3).

Furthermore, the public register is not readily available and there is no plan for provision of the register after the change of database (see MAP 4).

b)

Applications and renewals are dealt with in a timely manner.

Applications and renewals are processed and the licences are provided in a timely manner. However;

• renewals are not proactively chased e.g. 42 drivers’ medicals were overdue (see MAP 2).

• there is limited availability in excess of current numbers for driver licensing appointments and vehicle tests (see MAP 16).

c)

Licensed activities are monitored to ensure compliance with appropriate conditions.

Licensed activities are not sufficiently monitored (see MAP 1, 2, and 7).*

* Text has been removed from the published report due to its sensitive nature.

d)

Enforcement action is undertaken as necessary and in accordance with relevant legislation and/or best practice guidance.

There were 9 “Stop and Search” operations carried out by the Police during the 12 months to Oct 2012 with vehicles sent to MKC for testing if they suspected safety issues. The action is encouraging but the data of subsequent pass / fail is concerning. (See MAP 1).

e)

Accurate and appropriate records are maintained.

There are significant issues with accuracy and completeness of the database, e.g. 4 drivers with birth dates in 2011 and 483 PH drivers with no operator listed. (See MAP 2, 3, 5, 6, 7 and 8).



Key: 1 = Poor, 3 = Good

f)

Budgets are controlled and monitoring is robust (to include fees and identifying costs of providing the services to inform future changes in legislation).

The following issues were identified:

• no routine monitoring of full costs, i.e. including those recorded on other SAP budget codes (see MAP 10 and 14),

• absence of controls over the income process (see MAP 11 and 12),

• procurement procedures have not been applied; therefore best value cannot be demonstrated (see MAP 13, 14 and 15).

However, it is pleasing to be able to report that prompt action was taken during the audit to address some of the weaknesses identified, i.e. the cash counting process.

g)

Services provided by partner organisations are appropriate and sufficient, performance is monitored and there is appropriate client side management.

The audit was unable to evidence the reasons why additional staffing resources have been required from Mouchel and its impacts. As identified elsewhere in the report, there are issues with

• controls over income (see MAP11),

• security of plates and badges (see MAP 9),

• record-keeping (see MAP 3).

h)

Risks have been identified and mitigated as appropriate.

There has been no recognition or work to address the high level of vehicles that fail safety tests during enforcement operations (see MAP 1).

Despite requests, there is no evidence that there has been a risk assessment of the new reception area at Bleak Hall (see MAP 17).



MANAGEMENT ACTION PLAN The Agreed Actions are categorised on the following basis:

Essential - Implementation is required to address a risk that fundamentally undermines the control or objective of that system.

Important - Implementation is required to address a risk that seriously undermines the control or objective of that system.

Standard - Implementation is required to address a risk that undermines the control or objective of that system.

Ref. Findings

Risk

Agreed Action Management

Comments

Manager Responsible

& (Target Date)

1

Risk, Monitoring and Enforcement – Vehicles

84% MKC licensed vehicles re-tested during enforcement activities failed the test and there was an average of 4 failure items per vehicle. 80% of the vehicles tested had issues relating to the safety of the vehicle which included engine problems and oil leaks; issues with lights, tyres, exhausts, brakes, seats and seat belts, inadequate or missing first aid kits and/or fire extinguishers. A further 4% failed on technical items, e.g. smoking signs. Of the 281 vehicles stopped during Police operations, 139 (49%) were referred for testing and 22 passed. Of the 117 vehicles that failed the test:

• 32 (27%) were Skyline (MKC administered) Private Hire,

• 31 (26%) were Speedline (South Northamptonshire administered) Private Hire,

• 24 (21%) were MKC administered Hackney Carriages,

• 16 (14%) were Raffles (MKC administered) Private Hire,

• 8 (7%) were Eezycabs (MKC administered) Private Hire,

• 6 other companies (5 non MKC administered).

Vehicles’ licence plates are removed and they are not able to operate as taxis until they pass the safety test.

N.B. There is no information available about the other 51% of vehicles that were stopped during operations but considered by the Police to be satisfactory and therefore were not sent for testing. However, it is pleasing to report that this information is being retained from December 2013.

Unsafe vehicles on the roads.

Public safety at risk.

Essential

Enforcement of Vehicle Safety Test Requirements

1. Results from the “Stop and Search” operations will be further investigated in line with the MKC Enforcement Policy.

2. Action will be taken to pro-actively address offending.

Agreed.

We do more operations and more tests than other Local Authorities. Major and minor defects found and notices issued are clarified to vehicles licensed by MKC and out of area. These operations are the only way to test out-of-area vehicles. Drivers know when an operation commences and word gets round.*

The use of a new and improved database, Civica Authority Public Protection database (APP), which is being implemented will assist with the intelligence and offender tracking so enforcement decisions will be better informed. * Text has been removed from the published report due to its sensitive nature.

Regulatory Investigations Manager

Actions 1 & 2

28/02/2013 and ongoing.



Ref. Findings

Risk


Comments

Manager Responsible & (Target Date)

1 c’d

Risk, Monitoring and Enforcement – Vehicles (continued)

MKC uses taxis to provide “Home to School transport”. Internal Audit was informed that there has not been any liaising or sharing of information between Taxi Licensing and the “Home to School Transport” department or other MKC services using taxis: the other departments are not made aware of the outcomes from operations or other routine activities.

MKC customers’ safety at risk.

Essential

Enforcement of Vehicle Safety Test Requirements (continued)

3. Liaise with Home to School Transport and all other MKC services using taxis for MKC customers to ensure they have access to information as required.

Links will be established with the contract managers for Home to School and Adult Social Care transport to ensure contract terms can be enforced using our enforcement data. Furthermore, information will be sought from these areas to ensure we know who the contracts are with and how best to target our resources.

Regulatory Compliance

Manager

Action 3

28/02/2013 and ongoing.



Ref. Findings

Risk


Comments


2

Records, Monitoring and Enforcement – Drivers and Operators

Taxi drivers’ licences are valid for a maximum of 3 years, when they are renewed they also need to apply for a new Criminal Records Bureau (CRB) check. Records on Taxi Live showed that:

• 2 drivers (0.2%) had no CRB recorded (this was a data entry error, confirmation was found on the hard copy files) and

• 23 CRB renewals (2%) were recorded as being overdue (drivers can legally work while their licence is being renewed and some data had not been updated).

Applicants are required to undertake a medical examination before they can be licensed to drive taxis. The certificates are sent directly to MKC Taxi Licensing by the Medical Centres.

Drivers are also required to take a medical examination at 45 years of age and every 5 years thereafter. At 65 years of age and above licences are granted for duration of one year only and an annual medical examination is required. Records on Taxi Live showed that:

• 7 drivers (0.6%) had no medical date recorded and

• 42 drivers’ medicals were overdue (10% drivers over 45 years of age).

Audit testing confirmed that drivers had not been required to undertake medicals at the stated intervals.

Private Hire vehicles must work through an Operator and the Operators are required to renew the licences annually. Records on Taxi Live showed that:

• 13 operators’ renewals were overdue (19% operators).

Passengers may be at risk of harm.

Driver may not be fit to drive a taxi.

Essential

Monitoring and Enforcement of Licensing Requirements – Drivers and Operators

1. When the data has been transferred to the Civica Authority Public Protection database (APP) database monthly reports will be run.

2. The reports will be reviewed and action will be taken to ensure CRB and medical checks and other Taxi Licensing requirements are undertaken in a timely manner and that records are updated in a timely manner.

Agreed.

Target date to transfer records to APP is end of February 2013.

The implementation of the APP system has been delayed due to a lack of resources but a working group has now started to finalise: a. The migration to APP b. The transition period c. The relevant templates d. The relevant reports/queries for reporting purposes.

When the software is set up, regular reports can be pulled off and data quality checked.

Regulatory Advice and

Licensing Team Leader

Actions 1 & 2

28/02/2013



Ref. Findings

Risk


Comments


3

Records – database

The Taxi Live database is known to be inappropriate and the service is currently in the process of changing to use the APP database, which is used by other Council services and is considered more robust.

Taxi Live indicates that a significant number of drivers and vehicles do not currently meet the licensing requirements, e.g.

• 81 CRB and 61 medical certificates are overdue,

• 168 MOT and 182 insurances are out of date.

Taxi Live also has a significant number of incomplete and incorrect records, e.g.

• 32 HC and 34 PH driver licences expiry dates were incorrect and 4 had no issue or expiry date entered,

• 483 PH drivers with no operator listed,

• 54 vehicles licence expiry dates were incorrect, indicating that they had been given additional time.

Audit testing showed that these are generally data entry errors and omissions rather than an indication that drivers, operators and vehicles are contravening licensing requirements or any attempt to undermine the licensing processes. Errors were identified when the paper licences were authorised and they were corrected on the licence, but not on the database.

The completeness, accuracy and timely update of the database is important because it needs to be used to monitor the taxi drivers and vehicles, to ensure they are checked when appropriate and to inform the enforcement process; ultimately to ensure public safety which is the purpose of the service.

Public safety may be at risk from vehicles or drivers that have not had recent safety checks.

Unable to rely on database information to monitor licensed drivers, vehicles and operators.

Important

Data Cleansing

Internal Audit has provided the service with full details of the discrepancies identified as a starting point for investigations.

1. Taxi Live data will be checked to hard copy files to determine the accuracy of the information held on it.

2. Taxi Live will be cleansed prior to downloading onto the APP system.

3. Data input will be more accurate and will be entered onto the database in a timely manner.

4. Any corrections or alterations made to paper licences, badges and plates will be recorded on the database.

Agreed.

Business Support Team Manager: The Taxi Live data does not correlate with the paper files which are up to date.

SDM BS: A member of staff has been tasked with reviewing the administration process and making recommendations.

The new systems will be adhered to by support staff. People will be clear about what to do and how to do it, the reasons for the requirements for the records. There will be increased controls and performance monitoring.

Regulatory Compliance Manager: The implementation of the APP system had been delayed due to a lack of resources. This group includes staff from MKSP.

Business Support Team

Manager

Actions 1, 2 & 3

31/01/2013



Ref. Findings

Risk


Comments


4

Records and Legislation - Register

It is the duty of the council (Local Government (Miscellaneous Provisions) Act 1976 s51) to keep a register of Private Hire drivers available at its principal offices for inspection by members of the public free of charge. The register must include name, date and period of licence and the serial number. It should also record Hackney Carriage drivers and any offences committed by them, proprietors or others (Town Police Clauses Act 1847 s42).

At present the Taxi Live database records the drivers’ details. Internal Audit was informed that if requested, a list would be produced from TaxiLive and provided free of charge at Bleak Hall.

Lack of compliance with legislation.

Public may not be aware of availability of information about licenced drivers.

Important

Provision of a Public Register

1. Determine how an appropriate register may be extracted from APP and made available for public inspection at Civic Offices.

2. Consider the potential for improving public awareness and public safety through promoting public use of the register.

3. Consider cost and benefit for making the register available on the Internet.

Agreed.

It has been established that it would be an infringement of data protection rules if the whole register is made available for public viewing so it will be publicised on our web pages that the public can make a request to see the register and a viewing will be arranged.

Action 1 has been completed.



Action 1

Immediately

Actions 2 & 3

31/03/2013



Ref. Findings

Risk


Comments


5

Records and Monitoring

When a licence is not renewed the record is deleted from the Taxi Live database and the hard copy file is archived. At the time of audit testing 13% drivers’ licences, 10% vehicle licences and 19% operators’ licences on the Taxi Live database had expired.

There is no follow-up activity to determine whether the driver, operator or vehicle licence should have been renewed.

The vehicle licence plate displays an expiry date. The service manager and staff informed Internal Audit that the Police, the public and/or other taxi drivers will report any vehicles that are continuing to be used as taxis after the expiry date.

The expiry date is on the back of the driver’s badges and therefore not visible to passengers.

Unsafe vehicles may be being used as taxis.

Drivers may continue to drive taxis after their CRB or medical certificates have expired.


Important

Monitoring of Expired Licences

1. Re-design of the drivers’ badge, is being investigated, to display the expiry date on the front

2. Issue of temporary drivers’ licences is being considered, awaiting National guidance. These will be issued for the period when a licence renewal is being processed, e.g. pending response from CRB.

3. A risk assessment should be undertaken to determine what action should be taken when licences are not renewed. The outcome should be recorded together with triggers for re-assessment.

Agreed.

Business Support Team Manager: Drivers that do not renew are identified by collating the letters for drivers that did not attend a renewal appointment.

Regulatory Compliance Manager: 1. A meeting has taken place with the supplier and they are sending proofs through with expiry date on both sides of the badge. The information displayed, including expiry dates, will provide customers with information and also allow the team to link badges to drivers and cars, provide a method for knowing about spoiled or lost badges etc 2. Temporary licences will be produced and issued. 3. A risk assessment will be produced.



Actions 1, 2 & 3

31/03/2013



Ref. Findings

Risk


Comments


6

Records and Monitoring – Drivers

Letters are sent to drivers, operators and vehicle owners before the expiry date to remind them to renew their licences. The letters are manually generated and put into envelopes.

Higher costs, best value not achieved.

Standard

Licence Renewals

1. Consider opportunities, costs and benefits of using text messages and other automatic electronic method to issue reminder notices.

Agreed.

The proposal will be investigated as part of the implementation of the new APP database which has already been linked to CCP (the new public access finance system).



30/06/2013

7

Records, Monitoring and Enforcement – Vehicles

Vehicles over 3 years are required to pass an annual MOT test. Records on Taxi Live showed that:

• 18% vehicles’ MOT records are out of date.

Taxi owners are also required to submit the Insurance certificates to MKC. Records on Taxi Live showed that:

• 19% vehicles’ insurance records are out of date.

However, Taxi owners are required to submit the MOT and insurance certificates to MKC when they attend for licence renewal. Audit testing showed that this was the reason for some records being out of date, others were data entry errors.

The Internal Audit Report issued in November 2005 required periodic checks on all vehicles to ensure they are fully insured and this was implemented by the time of the audit follow-up in May 2006. Lack of evidence of continuous insurance was also highlighted in the Internal Audit Report issued in May 2010 and was again addressed by the time of the audit follow-up in December 2010.


Vehicles may not be roadworthy, safe or insured.

Important

Monitoring and Enforcement of Licensing Requirements - Vehicles

1. When the data has been transferred to the APP database monthly reports will be run.

2. The reports will be reviewed and action will be taken to ensure MOT and Insurance certificates are checked at the appropriate times and records are updated in a timely manner.

3. MOTs should be verified via the national database rather than by owner’s documentation, this can be actioned in a more timely manner.

Agreed.

Regulatory Advice and Licensing Team Leader: The vehicle safety checks are enhanced MOT tests, therefore road worthiness and safety is not the highest risk, but lack of current MOT certificate will affect the vehicle insurance.

Regulatory Compliance Manager: 1. APP database will resolve this with regular reporting 2. With APP these checks can be more readily achieved 3. With reports from APP the verification can be achieved in a more timely manner. We do not have access to the national database.



Actions 1 & 2

28/02/2013



Ref. Findings

Risk


Comments


8

Records and Risks – Vehicle testing

It is not possible to reconcile the Taxi Live database records of vehicle tests to vehicles tested by the workshop. *

Failure certificates are sequentially numbered, list the items tested and whether each item passed or failed. But the pass certificates are not numbered and do not show the items tested, furthermore. *

The Internal Audit Report issued in November 2005 highlighted this issue and checklists were being completed at audit follow-up in May 2006.


Potential for certificates to be used illicitly.

Important

Vehicle Test Certificates

1. The current pass and fail certificates will no longer be used.

2. A new certificate will be designed, based on the fail certificate; it will record the checks implemented, those passed and failed, the tester’s comments and the overall pass or fail result.

3. The new vehicle test certificates will be numbered and will be used sequentially.

4. Vehicle test certificates will be controlled: numbers obtained, stocks and usage will be recorded and the certificates will be stored securely.

Agreed.

Records and monitoring of all certificates, badges etc will become controlled and numbered. Once APP is implemented the history of drivers and cars can be held.

Current certificates etc are now being more securely stored and stock takes carried out.




Actions 1, 2 & 3

31/03/2013


Manager

Action 4

Immediately



Ref. Findings

Risk


Comments


9



Important


Agreed.

Sequentially numbered items are required together with processes for destruction/lost items.

Supplier has confirmed this is possible and they are creating an estimate of costs for us.

A Senior Practitioner has now been moved to assist with the processes across taxi licensing.

Stock takes have been completed and will be done monthly.

Actions 1 & 2 have been completed.



Actions 1 & 2

Immediately

Action 3

31/03/2013



Ref. Findings

Risk


Comments


10

Budget – Monitoring and Management of full costs

The budget on SAP relates only to income and expenditure. Following the restructure of regulatory services all staffing costs are now recorded on separate budget codes.

In April 2012 additional costs were calculated to respond to a Freedom of Information (FOI) request (see the table at paragraph 4.7 in the background section of this report). Estimates were made to apportion management, staffing and committee costs. Costs to provide taxi stands were not included.

The process to respond to the FOI request highlighted problems with the current budget set up on SAP.

Potential for over or under spend, i.e. additional cost to MKC or overcharging of fees.

Important

Budget Reports

1. The full costs of the service should be monitored on a quarterly basis.

2. A “Trading Account” is to be set up for the ring-fenced Taxi Licensing budget, covering full costs of the service including committee costs etc..

3. A full, auditable, time-monitoring process is to be established so the “Trading Account” can be accurately recharged.

4. Costs to be included and apportionment of costs should be reviewed with regard to appropriate legislation etc. e.g. to include staffing management, enforcement activities, relevant committees and provision of taxi stands.

Agreed.

1. Agreed.

2. The trading account has been requested via finance.

3 & 4. Time recording system is being set up.



Actions 1 & 2

31/03/2013

Regulatory Investigations

Manager

Actions 3 & 4

31/03/2013



Ref. Findings

Risk


Comments


11


Financial loss.

Manual records may allow high rate of errors.

Important

Cash Handling

Introduction of financial controls that meet minimum standards:

1. The current float should be banked and recorded as income.

2. Any cash advance, e.g. till or petty cash float, should be formally requested and approved and recorded in SAP.

3. All cash floats should be maintained on an “Imprest” basis, i.e. it should always remain at the same level.

4. Consider the potential costs, benefits and disadvantages for introducing a cash till and take appropriate action.

5. Minimise cash income by encouraging payment by card or cheque.

6. *

7. *

N.B. The relevance of these actions is reliant on the outcome of the current feasibility study which includes introduction of internet payments.


Agreed.

Business Support Team Manager: We are in the process of obtaining advice from finance to obtain imprest floats. There has never been a till facility at Bleak Hall. *

Regulatory Compliance Manager: 1. Yes. 2. Yes. 3. Yes 4. A till is being sourced 5. This will be encouraged. 6. Contact has been made with the Head of Risk & Insurance. 7. As above. * Text has been removed from the published report due to its sensitive nature.

Regulatory Advice and Licensing Team Leader

and

Business Support Team Manager

Actions 1, 2, 3, 5, 6 & 7

Immediately

Business Support Team Manager

Action 4

28/02/2013



Ref. Findings

Risk


Comments


12

Budget – Card Payment Receipts

Two “chip & pin” machines are used in the reception area. The Merchant’s copy of the “chip & pin” receipts have the full card number printed on them. These receipts are prime finance documents and therefore need to be retained for 6 years after the current financial year, they are currently held in the large safe.

Payments by driver applicants are also made in the “interview room” which is also the Regulatory Advice and Licensing Team Leader’s office. Payments in this room are made via webstaff

Data protection issues.

Potential for mis-use or fraud.

Potential storage problems.

Important

Card Payment Receipts

1. Ensure secure storage of card payment records. N.B. It will be necessary to identify larger facilities as the volume of records grows, especially with the hoped-for increase in card payments.

Agreed.

The scanning and linking of receipts is being considered, otherwise more secure storage will be provided.


Manager

31/03/2013



Ref. Findings

Risk


Comments


13

Budget – VIP System

The VIP system is used for making Vehicle Licence plates, Driver Licence badges and Hackney Carriage driver plaques.

Consumables are purchased from VIP.

Internal Audit was informed there are no procurement records and no contract available for review.

Payments to VIP total £70,460 since beginning of 2009 (4 years). Expenditure has increased year on year, in 2012/13 up to the end of October 2012 it was £16,852, which is more than the whole of 2011/12.

MKC Contract Procedure Rules require a minimum of three written quotations to be obtained for estimated total costs between £5,000 and £100,000; a formal process including 4 tenders is required for higher value spending. N.B. Prior to the new contract regulations agreed earlier this year the rules required tender if the value exceeded £25,000.

Best value may not be obtained.

MKC Contract Procedure Rules may have been contravened.

Important

Procurement of Plate and Badge Making System

1. Continued procurement of supplies from VIP will be reviewed: appropriateness of the system for MKC requirements, potential spend over next few years, support provided by the supplier and other related issues.

2. The market will be investigated to determine availability of suppliers and potential for competitive tendering.

3. Contract Procedure Rules will be applied.

Agreed.

We will follow MKC Contract Procedure Rules and ensure a fit for purpose contract is awarded.



Actions 1, 2 & 3

31/03/2013



Ref. Findings

Risk


Comments


14

Budgets – Budget Management and Procurement of Staff

A member of Mouchel staff was seconded to MKC to undertake related work that was not part of the Mouchel Service Level Agreement. For at least two years the individual has been working in Taxi Licensing Enforcement but the costs have been met from the Licensing budget. The Taxi Licensing budget is “ring fenced” to ensure that costs can be funded by the fee income received.

This arrangement started during the time when the previous Assistant Director was in post. Current members of service staff were unable to provide any information about the procurement process and why recruitment was not used in preference.

MKC may be incurring costs that should be funded by Taxi licensing income.

Unable to demonstrate Best Value processes.

Standard

Budget Management and Procurement of Staff

1. The costs for the relevant member of staff should be re-allocated to the correct budget code.

2. Any further costs related to the current agreement should be coded to the correct budget.

3. When obtaining staff in future, consideration should be given to the various options available (e.g. recruitment, agencies, temporary contracts) and quotes should be obtained.

4. All additional spend with MKSP should be undertaken in accordance with MKC Financial Regulations and Finance Procedure Rules.

Agreed.

1 and 2 completed.

3. This will be considered.

4. This process is followed.



Actions 1 & 2

31/01/2013

Actions 3 & 4

Immediately



Ref. Findings

Risk


Comments


15

Budgets – Procurement of Staff

A further member of staff has been procured from Mouchel. An Additional Spend Request Form for a Business Support Assistant for six months from September 2012 has been approved.

The description of expenditure states part time but the financial calculation on the form is for 37 hours per week.

The Team Leader and Mouchel have informed Internal Audit that before the partnership agreement started there were three full-time members of staff, but that funding for only two posts transferred to the partner. Furthermore, that volumes of work have increased. Despite requests evidence to support this view has not been provided.

Unable to demonstrate Best Value processes.

MKC may be incurring higher costs than necessary.

Lack of transparency.

Standard

Procurement of Staff

1. When obtaining staff, consideration should be given to the various options available (e.g. recruitment, agencies, temporary contracts) and quotes should be obtained.

2. Current service provision will be reviewed to consider bringing administration in-house, to include:

• Control

• Performance monitoring

• Dual role efficiencies between enforcement and administration, duties and understanding.

Agreed.

1. All MKC procedures will be followed and best value ensured.

2. Initial dialogue has taken place with MKSP to flag our requirements.



Manager

Action 1

Immediately

Action 2

31/03/2013



Ref. Findings

Risk


Comments


16

Timeliness and Risks

Vehicle and driver applications are processed during the appointment and, subject to satisfactory completion, the vehicle licence plate or driver licence badge/plaque is provided straight away. At the time of audit testing appointments for vehicle safety tests and drivers licence applications/renewals and drivers’ knowledge courses were available within a few days.

However, the number of vehicle test appointments available during the year is insufficient for the number of licensed vehicles; additional overtime appointments are created to meet demand.

Furthermore, with the current numbers and ages of drivers over 260 appointments are needed each year. There is only one room available for interviews, which is the manager’s office, theoretically this is manageable but it is not appropriate location; there are security issues for staff and documentation.

Vehicles may not be tested before their licence expires, this would be poor service delivery for MKC customers and may result in unsafe vehicles being used.

Personal safety of staff may be at risk.

Records may be accessed by members of the public in a private office.

Standard

Timeliness of Service Provision

1. Feasibility study to be undertaken to consider additional capacity and/or outsourcing.

2. Review of the current facilities to be undertaken to include the location of the interview room and appropriate action will be taken.

Agreed.

1. The feasibility study has been completed and the decision has been taken to remain at Bleak Hall and continue with in-house service delivery.

2. Review to be undertaken.



Action 1

30/06/2013


Manager

Action 2

30/06/2013



Ref. Findings

Risk


Comments


17

Risks

There was no evidence of any health and safety risk assessment being carried out on the new reception area at Bleak Hall. Whilst the reception is much more user-friendly, issues highlighted below illustrate the need for the Council to have demonstrable assurance from such an assessment.

*


Personal safety of staff may be at risk.

Important

Risk Assessment

1. Risk assessment of the Reception Area to be undertaken.

2. Risks to be mitigated as appropriate and action plan with target dates to be devised for any further action required.

3. Interview room to be built in the reception area or other site with suitable access and appropriate for staff security.

Agreed.

Business Support Team Manager:

1. This had already been identified and a risk assessment will be taking place on Monday 12

th November

2012 which was scheduled prior to the audit meetings taking place.

Regulatory Compliance Manager:

2. See 1 above.

3. We will revisit the plans for the reception area and undertake a review of the space required for the licensing and vehicle testing elements of work.

Service Delivery Manager - Business Support

Action 1

31/01/2013

Service Delivery Manager - Business Support

Action 2

31/01/2013


Manager

Action 3

30/06/13



E257/13 – LICENSING PREMISES, PEOPLE AND VEHICLES – TAXI

LICENSING

Final Report

Distribution List

Community Wellbeing Corporate Director

Assistant Director of Neighbourhood Services

Head of Regulatory Unit

Regulatory Compliance Manager

Regulatory Advice and Licensing Team Leader

Service Delivery Manager - Business Support (Mouchel/MKSP)

Business Support Team Manager (Mouchel/MKSP)

Duncan Wilkinson – Assistant Director Audit & Risk Management

Lynda Baker – Head of Internal Audit

Jackie Clarke – Senior Auditor

www.milton-keynes.gov.uk/internal-audit

Milton Keynes Council

Civic Offices

1Saxon Gate East

Central Milton Keynes

MK9 3EJ

T 01908 252753

F 01908 252238

E [email protected]

W www.milton-keynes.gov.uk/internal audit

Available in audio, large print, Braille and other languages

Tel 01908 252753

Documents

Milton Keynes Council...Services provided by partner organisations are appropriate and sufficient, performance is monitored and there is appropriate client side management. The audit