Debtors
Source: data.gov.uk (2018-10-29)

CYC Internal Audit Reports 2017. These reports are presented to the Audit and Governance Committee for consideration, and are also included with the agenda papers for the [relevant meetings](http://democracy.york.gov.uk/ieListMeetings.aspx?CommitteeId=437). 

Reports are also grouped together by calendar year and published at this York Open Data platform. Reports for other years are available at the [__CYC Internal Audit Reports__](https://data.yorkopendata.org/dataset?q=internal+audit&sort=score+desc%2C+metadata_modified+desc) datasets.

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Debtors  
City of York Council 
Internal Audit Report 2016/17 
 
 
 
 
 
 
Business Unit: Customer & Corporate Services  
Responsible Officer: Director of Customer & Corporate Services 
Service Manager: Head of Customer, Resident & Exchequer Services 
Date Issued: 20/01/2017 
Status: Final 
Reference: 10190/007 
 
Overall Audit Opinion 
Substantial Assurance 
Actions 
0 
0 
P3 
P2 
P1 
1 

 
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Summary and Overall Conclusions 
 
Introduction 
The Debtors team sits within the Directorate of Customer and Business Support Services, and is responsible for:  
 
 Issuing invoices to customers for services provided by the council; 
 Taking recovery action to ensure invoices are paid. 
 Ensuring payments received are correctly recorded in the debtors system on Authority Financials.  
 
This is a fundamental financial system, and the high value and number of transactions means that it is inherently a high risk system, and as such, 
should be audited every year. In the last financial year, there were approximately 45,000 invoices issued, with a total value of approximately 
£76,000,000.  
 
Objectives and Scope of the Audit 
The purpose of this audit was to provide assurance to management that procedures and controls within the system will ensure that: 
 
 Systems comply with the council's financial regulations, relevant legislation, and other appropriate guidance; 
 Accounts are raised promptly and accurately to notify customers of any amounts due; 
 Income is correctly credited to customers' accounts; 
 Appropriate action, including write off of debts, is undertaken to recover debts where invoices are not paid within specified timescales; 
 Performance is monitored and effectively managed. 
 
During the 2016/17 financial year, the council will be collecting monies on behalf of the Business Improvement District, using the council's debtor 
invoice system. The Business Improvement District is an initiative to collect a levy from all businesses within the city centre, to improve the 
aesthetic value of the area and to help attract custom. The audit confirmed that the procedures involved in raising these invoices are adequate 
and appropriate.  
 
Housing benefit payments and council tax collection was not covered by this audit, as they are covered in detail in other audit engagements. 
 
Key Findings 
Overall, the management of the debtors system is good. Accounts are raised promptly and accurately with income being correctly credited to 
customer accounts. There were no issues found with recovery and write-off of outstanding arrears.  
 

 
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The only issue identified during the audit was the performance management of the section was still being developed. Outstanding arrears reports 
are being created from FMS to analyse all outstanding invoices on a monthly basis, which should help identify problematical debtors who need 
specific attention. 
 
One other point to note was that, at the time of testing, the current Income and Corporate Debt policies were not available on the intranet. The 
version on the intranet was published in 2011. This has been brought to the attention of the service area and the issue is in the process of being 
rectified.   
 
The process for collecting monies on behalf of the Business Improvement District was reviewed but given that this was the first year the scheme 
was being run it was too early to comment on whether there were any system weaknesses that need to be rectified. The system for collecting 
monies from city centre businesses will be reviewed in next year’s audit once it has been running for a complete year so that the recovery 
process for collecting outstanding arrears can be audited in full.  
Overall Conclusions 
The arrangements for managing risk were good with few weaknesses identified. An effective control environment is in operation, but there is 
scope for further improvement in the areas identified. Our overall opinion of the controls within the system at the time of the audit was that they 
provided Substantial Assurance. 
 
  
 

 
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1 Performance Analysis 
Issue/Control Weakness 
Risk 
Performance analysis is not comprehensive enough resulting in debtors with 
long term, high value arrears not being identified. 
Without analysis of aged debt, council services could be 
provided to debtors with large and long-term arrears which 
would result in the council accruing more debt that may not 
get paid. 
Findings 
Current performance monitoring consists of analysing the value of invoices raised and the value of payments each month. However, these 
figures do not match as the payments might relate to invoices raised during previous months and therefore doesn’t show the proportion of each 
month’s invoices that have been paid. There is no analysis of specific aged debts, and therefore no way for the debtors team to inform service 
areas of debtors with large arrears for long periods of time, that could benefit from having their provision of services suspended until they have 
paid their outstanding arrears.  
Agreed Action 1.1 
An aged debtor report is now run using FMS. This shows each outstanding debtor and the 
amount they owe, stratified by the time period the debt has been outstanding. This report 
will be run once a month in order to identify specific debts that need attention. This will 
enable appropriate action on high priority debts.  
Priority 
2 
Responsible Officer 
Income Services 
Operations Manager 
Timescale 
1st March 2017 
 
 
 
 
 
 
 

 
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Annex 1 
Audit Opinions and Priorities for Actions 
Audit Opinions 
Audit work is based on sampling transactions to test the operation of systems. It cannot guarantee the elimination of fraud or 
error. Our opinion is based on the risks we identify at the time of the audit. 
 
Our overall audit opinion is based on 5 grades of opinion, as set out below. 
 
Opinion 
Assessment of internal control 
High Assurance 
Overall, very good management of risk. An effective control environment appears to be in operation. 
Substantial 
Assurance 
Overall, good management of risk with few weaknesses identified.  An effective control environment is in 
operation but there is scope for further improvement in the areas identified. 
Reasonable 
Assurance 
Overall, satisfactory management of risk with a number of weaknesses identified.  An acceptable control 
environment is in operation but there are a number of improvements that could be made. 
Limited Assurance 
Overall, poor management of risk with significant control weaknesses in key areas and major 
improvements required before an effective control environment will be in operation. 
No Assurance 
Overall, there is a fundamental failure in control and risks are not being effectively managed.  A number of 
key areas require substantial improvement to protect the system from error and abuse. 
 
Priorities for Actions 
Priority 1 
A fundamental system weakness, which presents unacceptable risk to the system objectives and requires urgent 
attention by management. 
Priority 2 
A significant system weakness, whose impact or frequency presents risks to the system objectives, which needs to 
be addressed by management. 
Priority 3 
The system objectives are not exposed to significant risk, but the issue merits attention by management. 
 

 
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