The purpose of this report is to enable the committee to provide independent assurance on the adequacy of the risk management framework together with the internal control of the financial reporting and annual governance processes by considering the head of internal audit’s annual report and opinion, and the level of assurance it gives over the council’s corporate governance arrangements.

The Assistant Director (AD) for South West Audit Partnership (SWAP) presented the report on Internal Audit Annual Opinion 2022/23. The purpose of the annual report was outlined; attention was drawn to Appendix A - Internal Audit Annual Opinion 2022/23.  The following key areas were highlighted:

Activity and outcomes during the year

1.          47 reviews were delivered as part of the 2022/23 rolling Internal Audit Plan.

2.          80% of internal audit reports gave a substantial or reasonable assurance opinion.

3.          6 out of 8 strategic risks had good or ‘some’ audit coverage, the opinion was there had been effective audit coverage throughout the year.

4.          There were no areas of significant corporate risk reported.

5.          Five themes were highlighted to the committee:

            I.                   Financial controls and budgetary management

It was highlighted that, although generally the Council operated effectively with commitment accounting and validating payments, there were a few isolated cases within some service teams where this was not the case and SWAP would be offering awareness training to those departments.

          II.               Grant Administration

The lack of consistent practices and knowledge of Grant Administration were highlighted. Cases were isolated to some service areas and not widespread.   SWAP would support the Council by offering training to those departments.

        III.               Oversight of regulator actions

Whilst the actions identified by key regulators were picked up and the council monitored those effectively, it was reported that some actions from smaller regulators had slipped through the net.

Internal Audit would look to promote assurance mapping across the Council. SWAP was currently engaging with the Council’s Performance Team to support the real time tracking of known actions through its audit management system.

        IV.              Counter Fraud and Risk Management

The overall opinion was that these were working effectively and outstanding actions had generally been implemented although it was highlighted that some improvement was needed around some of the long-term actions.  

         V.              Prevention and detection of fraud

The Council had demonstrated effective control and had been able to protect public funds from fraud.

Taking into account the five themes highlighted, it was the AD’s overall opinion for the year that generally the Council had sound systems of governance, risk management and internal controls however there was some scope for improvement in some areas.

In response to committee questions, it was noted:

1.          The AD said that it was difficult to put an indicator about the level of internal control but indicated that it was in line with the previous performance and similar to that of other authorities.

2.          In a query raised around external regulatory assessment, it was explained that these related to recommendations from regulators at a service level. An example was given with regard to the Registration Services report which identified a failure to address a number of recommendations made in an inspection by the General Register Office and where there had been no particular oversight or tracking from a managerial point of view and therefore no oversight as to if these recommendations had been implemented.

3.          It was confirmed that the Council and SWAP had their own individual counter fraud teams that worked in unison.  It was highlighted the Council’s counter fraud team were working very successfully in preventing and detecting fraud.

4.          The fraud baseline assessment demonstrated that the council was performing well but it was acknowledged that measuring the impact of fraud was difficult where there were issues around the lack of records. It was important to note that the council was actively rectifying the issues and making sure controls were put in place to ensure protection from fraud. The Section 151 Officer informed the committee that a report on Anti-Fraud, Bribery and Corruption Policy would be included on their agenda for the October 2023 meeting and this would look at the overall position of the council working with SWAP and a range of other partners.

5.          Training had started with those service areas where it had been identified that there was a lack of grant knowledge. The training set out the expectations of SWAP in terms of the gold standard for grant administration. SWAP welcomed feedback from those sessions and hoped that the training would improve the process. In response to a question whether committee members could undertake this training, it was highlighted that this was training specifically directed as those dealing with grant administration, but offered to provide feedback that was received out of the training and provide committee members with assurance that any issues were being addressed.

6.          Indication that training had been effective would be the receipt of effective grant submissions.

7.          In most cases grants had been successful however there had been a few occasions where grants had been returned.

Resolved

That the report and the assurance provided by the annual opinion report be noted.

Action(s)

2023/24-003    SWAP be invited to provide the committee with an overview of the training provided and to provide assurance of the effectiveness of that training.