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 committee considered the head of internal audit’s annual report and opinion.

Jacqui Gooding, internal audit manager for South West Audit Partnership (SWAP), presented the report and, drawing attention to the ‘Internal Audit Annual Opinion Report 2020/21’ included at appendix A, summarised the key points of the ‘Executive Summary’, ‘Internal Audit Annual Opinion 2020/21’, and ‘Plan Performance 2020/21’ sections.  It was reported that, having considered the balance of the 2020/21 audit work, a ‘reasonable assurance’ opinion was offered in respect of the areas reviewed during the year.

Questions and comments were invited from committee members and responses were provided, the principal points included:

1.         The vice-chairperson welcomed reference to the introduction of a ‘new one-page audit report, that summarises all the key messages of the audit’ (agenda page 282) but noted that these had not yet been received at a committee level, and felt that these could provide committee members with a better understanding of the scope and work involved.

In response to a question about the ‘Summary of Internal Audit Work 2020/21’ section and the ‘reasonable’ opinion in relation to ‘Capital Programme / Capital Projects’ (agenda page 285), Jacqui Gooding emphasised that this report would reflect a point in time, adding that internal audit had recently been asked to undertake additional work on the Hereford City Centre Transport Package (HCCTP).  In response to a further question, it was commented that a lot of work had been undertaken to establish controls for capital programme / capital projects but this had not been fully implemented or embedded yet across the council.

2.         A member in attendance, noting that there were no priority 1 actions and 12% of audit opinions were ‘limited’, questioned how Herefordshire compared to other local authorities.  Jacqui Gooding said that information could be provided to committee members and briefly outlined how the audit opinions for 2020/21 compared to 2019/20.

3.         With reference made to the comment ‘As a result of the additional work arising from the COVID-19 pandemic, it has been agreed to defer some of the less urgent audit work to 2021/22’ (agenda page 275) and in response to a question, Jacqui Gooding confirmed that a report had been provided to the audit committee outlining the work that had been deferred and quarterly planning meetings were being held with relevant officers to identify those deferred audits which should be included in the 2021/22 plan.  It was noted that the position would be made clear in the progress report due to be received at the next committee meeting.

4.         A committee member commented on potential risks associated with mental health and the long-term effects of Covid on the council’s resources.

5.         The chairperson said it would be helpful to understand the date on which any elected member of the council had been informed about the overspend on the HCCTP.  Jacqui Gooding advised that a new piece of work that had been commissioned which would include a review of what was reported and at what time during the process.

6.         In response to a question from a member in attendance, the interim head of legal services advised that Schedule 12A (access to information: exempt information) of the Local Government Act 1972 set out various categories of confidential information and agreed to circulate related guidance.

The cabinet member - finance, corporate services and planning commented that: the ‘Hereford City centre Transport Package – Governance Review’ (referenced on agenda page 287) related to an advisory report undertaken in 2020, and this had resulted in an internal investigation report (a summary was appended to the report ‘Major contract performance update’ considered by cabinet on 29 July 2021); a new piece of work had been commissioned by the chief executive recently; and a question to cabinet was received and responded to in relation to member awareness of the overspend which was on the public record.

Resolved:  That:

a)      The committee noted the assurance provided by the annual opinion report 2020-2021, at appendix A to the report; and

b)      the following actions be recorded:

i.          SWAP be asked to provide a comparison of how audit opinions for Herefordshire Council compared to other local authorities;

ii.         the next progress report on the internal audit plan makes clear the audit work that had been deferred or removed from the plan; and

iii.        information about Schedule 12A (access to information: exempt information) of the Local Government Act 1972 be circulated to committee members.