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. This is monitored by acceptance by management of audit recommendations and progress updates in implementing the agreed action plans. In addition, audit recommendations not accepted by management are reviewed and progress to an appropriate recommendation to cabinet if it is considered that the course of action proposed by management presents a risk in terms of the effectiveness of or compliance with the council’s control environment.

The Assistant Director (AD), South West Audit Partnership (SWAP) introduced the report. It was reported that the audit management system that had been introduced was working well and that this would enable internal audit to report to officers and members on areas of concern in real time.

The following five themes were highlighted:

·       Coverage – The coverage maps show a clear alignment with corporate goals. More coverage maps are on the horizon and the outputs will mature as the team further integrates the new audit management system.

·       Activity - 38 assignments are complete or in progress at the end of Quarter 2 and the internal audit work is on track to deliver an annual opinion.

·       Outcomes – 92% of the opinion related work found the control environment to be either substantial or reasonable assurance. There were no significant corporate risks to be reported.

·       Issues – 55% of the issues identified were associated with a root cause of the design of systems, policies and processes.

·       Quality – SWAP are quality assessed every three years independently by an external body. At the last assessment SWAP were conformant with the internal audit standards.

In conclusion for quarter 2, there was reasonable assurance, generally systems and processes are in place but there are some areas that require Improvement.

In response to committee questions it was noted:

1.     The AD confirmed that there was only 6 months’ worth of data that made up the customer satisfaction questionnaire statistics (page 220) but as the data matures the committee would be provided with a further updates. It was agreed that an extra column would be included to show the “percentage of responses”.

2.     The AD explained the process of allocating priorities when compiling their rolling audit plan and welcomed any feedback from members should they feel any items needed a higher level of focus in their audit work.

3.     With regards to the deferment of the “Proactive Fraud Work Tax Evasion” (page 229) the Head of Strategic Finance confirmed this was due to the HMRC undertaking a routine compliance check which the findings would be presented to SWAP and avoided a duplication of efforts.

4.     The AD confirmed that work had been conducted on planning in relation to Section 106 agreements which he would share with the committee.

5.     The Director of Resources and Assurance  (DRA) informed the committee that two papers had been taken to Cabinet with proposals to deal with the delivery of all Section 106 monies and future monies received and these would be circulated to the committee.

6.     The AD explained that Children’s Services was not a key area of work for Internal Audit at this time as they can take assurances from other providers who are inspecting and working on the improvement of the service. The AD did confirm that he was still meeting with the Director of Children’s and Families to ensure they align with his vision and the goals that he has.  

7.     The AD recognised the risks associated with phosphates and confirmed it was on Swaps top 10 risks across local authorities but currently it was not an area of activity he would consider looking at on this year’s plan.

8.     The AD confirmed the medium-term and long-term financial planning would be part of the of the internal audit process in future.

9.     The AD has no concerns with the processes of the Project Management Office (PMO) but suggested there could still be some improvement needed generally in some areas. As a support service, the PMO are not specified within the plan but do make up parts of other projects featured. The AD offered to provide the committee with specific issues or coverage which related to the PMO in order to provide the committee with more assurance.

A request was made that the “Waste Strategy Contract” and the “Planning Enforcement” have priorities be reassessed in SWAP’s rolling audit plan.

10.  With regards to concerns raised surrounding homelessness and the impacts on the councils budget position on future forecasts, the AD confirmed that this would be an item for the Scrutiny Management Board to consider.

Resolved:

The committee notes the Internal Audit Update Report Quarter 2 2023-24.

Action(s)

2023/24-012 The DRA to circulate the reports taken to cabinet on the proposal to deal with the delivery of all Section 106 monies and future monies.

2023/24-013 Concerns raised surrounding homelessness and the impacts on the councils budget position be highlighted to the Scrutiny Management Board to put on their work programme.

2023/24-014 The AD to reassess the priority of the “Waste Strategy Contract” and the “Planning Enforcement” on SWAP’s rolling audit plan.

2023/24-015 The AD would share the work Swap had conducted on planning in relation to Section 106 agreements with the committee.