Agenda item

Progress report on internal audit activity

To update members on the progress of internal audit work and to bring to their attention any key internal control issues arising from work recently completed.  To enable the committee to monitor performance of the internal audit team against the approved plan.  To assure the committee that action is being taken on risk related issues identified by internal audit.


It was noted that, in addition to the papers in the main agenda pack, a supplement had been published which updated the committee on progress with the key findings and agreed actions in relation to the ‘Public Health Grant Process: Final Report – November 2022’.


The Assistant Director for South West Audit Partnership (SWAP) presented the report on internal audit activity for quarter 3 2022, with attention drawn to the following:


i.             28 audits were complete, 2 were in draft and 15 were in progress; 11 were planned for quarter 4.  It was noted that there was work continuing on grant certifications and other activity but assurance work had increased over the second half of the year, with 78% of assignments providing an assurance opinion.  It was reported that internal audit work was on track to deliver the programme and to provide an annual opinion.


ii.            Internal audit was aligned to corporate risks but could not cover every aspect.


iii.          The planning process for 2022/23 had commenced and the pipeline would be reviewed, with engagement with the corporate leadership team.


iv.          There were no high corporate risks identified in the quarter.


v.           The table of audits by status illustrated the current position.


vi.          The indicative opinion was of reasonable assurance, with a sound system of governance, risk management and control in place.


vii.         There was limited assurance opinion in relation to ‘Public Health Grant Process: Final Report – November 2022’ and the five Priority 2 and five Priority 3 findings were outlined.


The Director of Public Health provided a summary of the purpose and conditions of the public health ring-fenced grant allocated to the council by the government; this amounted to £9.7m per annum currently.


The committee discussed the report, the principal points included:


1.           A committee member commented on the need for robust monitoring of funding which was passed to third parties to deliver public health services.


2.           In response to a concern expressed by the Chairperson about the public health grant process findings, the Director of Resources and Assurance commented that this was not where the council wanted to be, thanked SWAP for the work undertaken to highlight these matters, noted that there was a clear plan to address the shortcomings, and anticipated that the issue would be referenced in the Annual Governance Statement.


3.           In response to a question from the Chairperson, the Director of Resources and Assurance advised that concerns had not been raised by the Department for Health and Social Care (DHSC) but there was an ongoing dialogue to ensure that public health outcomes were achieved; adding that the council spent more on public health than was received in government grant.


The Chairperson, on behalf of the committee, hoped that the DHSC would be reassured by the fact that internal audit work had been carried out and that areas for improvement had been identified.


4.           In response to questions from the Vice-Chairperson, the Director of Public Health explained the intention to revisit the agreements with those service areas in receipt of public health funding annually to ensure that money was being spent on public health outcomes and there was alignment with the Joint Strategic Needs Assessment, and confirmed that any allocations that were unused within those service areas were retained for public health.


5.           In response to questions from committee members: the Director for Resources and Assurance reported that any unspent public health grant went into an earmarked reserve; the Director of Public Health commented that the length of contracts with third parties varied and a piece of work had been undertaken to assess the state of the voluntary, community and social enterprise sector; the Director of Resources and Assurance confirmed that lists were published of the current contracts held with the council (link to 'Contracts register') and council expenditure over £500 (link to 'Council expenditure over £500').


6.           The Vice-Chairperson commented that the wording in the management response to finding number 7 (supplement page 6/7) could be clearer.


7.           In response to comments from a committee member about the visibility of public health funding allocated to third parties, the Chairperson noted that: this committee was focused on the adequacy of processes; informed by the published information, councillors could submit questions to relevant meetings or directly to the service concerned; and directors could utilise contract management or internal audit to examine any areas of concern to management function.  The Director of Public Health said that he was fairly assured that robust contract management arrangements were in place and would be keen to explore this further with internal audit.  It was noted that directors of public health were responsible for confirming that the grant had been spent on delivering public health outcomes.


8.           In response to questions from the Chairperson, the Director of Public Health reported that: the public health team was relatively small, with seven full-time equivalent positions; there was not an embedded finance lead but there was a good working relationship with the finance team; changes in personnel had had an impact on continuity and oversight; and staff consultation would commence shortly on a potential new service structure.


Resolved: That the committee has:


(a)     noted the internal audit plan and pipeline of future work to ensure there is sufficient coverage and delivery to give an annual opinion;


(b)     reviewed the areas of activity and concern and is satisfied that necessary improvements have been outlined and are being delivered; and


(c)     considered the assurances provided and the recommendations which the report makes, and has commented on its content as necessary.


[Note: There was a short adjournment before the next item.]

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