To be assured that the level and range of activity within the proposed revised annual internal audit plan is sufficient to provide assurance over the council’s corporate governance arrangements and provides appropriate coverage of key business activities, associated risks and risk management processes.

South West Audit Partnership presented the report and highlighted that since the internal audit plan 2020/21 had been approved by the committee there had been changes due to Covid-19.    Since the revised plan had been developed, there had been four further requests for additional reports and any changes to the plan will reported to the committee.  

During discussion of the item, the following points were raised:

·         There are a number of high priority internal audits due to commence throughout the financial year.

·         The plan will be kept under continual review and SWAP will try to maintain the higher priority audits in the plan.

·         There may be additional work due to Covid-19 and some audits will need to be deferred to next year.   

·         Details of timeframes should be included in the plan so that the committee could see if there was any slippage.  

·         Details of which quarters the internal audits were due to commence would be included in the progress report.

·         Audits which are replaced with additional work due to Covid-19 will provide details of the assurance given and that information feeds into the assurance statement at the end of the year.  

·         The prevention of fraud work was continuing.

·         The counter-fraud officer and team were continuing to work proactively with other agencies and the internals in this area.  

·         It was noted that the percentage of deferred audits was 35% which represented a 55% deferral rate for the children and families and adult and communities directorates.  

·         It was agreed that the chief finance officer would consider purchasing additional internal audit days as by the end of the year the percentage of deferred audits could be greater.

·         It was acknowledged that there would be reduced internal audit coverage in some areas but the additional Covid-19 audits may impact on those areas.    It was widely expected that nationally Covid-19 would impact on audit work.  

·         Further funding from the government was due to be announced on 19 October 2020.

·         The number of days purchased from SWAP was broadly comparable to other councils.

Cllr Yolande Watson joined the meeting at 11.06 am.

·         Funding had been received from the government in two streams.   The largest amount was in the form of unfenced funding and details were reported to Cabinet.   Funding was also received via a ring fenced grant to cover costs.   It was confirmed that there was sufficient funding to cover the additional audits.

·         It was noted that the budget was set for the core audit work and that decisions to undertake audits were based on need or a risk assessment.

·         It was confirmed that cost to the council of Covid-19 was being tracked as there would need to be an evaluation of the costs to the council and taxpayer.  It was further noted that there were would a lessons learnt exercise as well.

·         The Brexit preparedness internal audit planning work was due to commence shortly and it was confirmed that it should be completed before 31 December 2020.   The solicitor to the council confirmed that a referral into the general scrutiny committee had been made and it would be considered at the scrutiny work programming meeting.  It was further confirmed that Brexit was on the risk register.

·         It was noted that the effects on the yield of commercial investments would be unknown due to the Covid-19. 

·         Covid-19 had its own risk register which was considered by Cabinet and the committee.   Details of the impact on services could be included in the risk register.

·         It was noted that in terms of auditing commercial investments, the reason why the council had acquired the property in the first place would need to be taken into account.   The example of the City Walls was used as the council would not expect a return on that property.  

·         It was requested that the dilapidations of council owned properties be included in the commercial property audit.   

·         It was confirmed that the oral health needs assessment audit had been initially requested by the director of adults and communities.    If the department had moved to corporate services, then this would be reflected in the next update to the committee. 

·         The director of adults and communities had deferred many of the audits in that area due to the availability of staff in the directorate and that some of the processes due to be audited had not been progressed as quickly as anticipated so it was not the best time to undertaken an audit. 

RESOLVED that

a)    Details of when internal audits will be started to be detailed in the progress reports provided to committee.  The details will also include, if necessary, reasons for any slippage and the estimated date of completion.

b)    The chief finance officer to discuss with SWAP acquiring additional SWAP days to undertaken internal audit.

c)    SWAP to discuss with officers and chief finance officer about including the quality of management of the council owned buildings in the commercial property audit detailed on page 34 of the agenda pack

d)    Details of the impact of the Covid-19 risks on the services areas to be included within the next corporate risk register report to the committee.