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 assure the committee that action is being taken on risk related issues identified by internal audit. This is monitored through acceptance of agreed management actions and progress updates in implementing the action plans. In addition, occasions where audit actions not accepted by management are documented 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 Principal Auditor (PA), South West Audit Partnership (SWAP) introduced the report, the following principals point were noted;

·       No high organisational risks have been identified.

·       Three limited assurance audits had been identified, full reports were located on pages 183 to 185.

·       Fourteen priority two findings had been identified.

·       Since the last update, good progress had continued to be made with the audit plan. Eleven audits had been completed, 8 audits were in progress and one of those is at draft report stage.

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

In response to committee questions, it was noted;

1.     The PA advised the committee that she had, had discussions with the Director of Transformation, PMO and Corporate Support and she was keen to see audit work completed in the early stages of projects rather than the end and for there to be assurance around the project management office (PMO) processes. These would be built in to the rolling plan moving forward. 

2.     The PA explained that It was in agreement between the Director of Resources and Finance and SWAP that the audit on the sampling of Hereford Enterprise Zone (HEZ) sales receipts still be progressed with what had been provided to date rather than delay any audit findings being completed. SWAP had been asked to revisit this and undergo more testing to provide more assurance around the sales which would be reported back to the committee as supplementary report.

3.     The Service Director for Economy and Growth (SDEG) advised the committee that the HEZ board had not yet disbanded but it was going through a process of reconciling down the scale of the board as most of the work of the HEZ had been completed

4.     The specific roles and responsibilities undertaken by the HEZ and the Council were explained and the committee were advised that the HEZ Board was still currently in operation but likely to be scaled down in size and scope as most plots had now been sold.

5.     The SDEG explained that in general the approach and model used for the HEZ worked well and that they would look to replicate that with the Ross Enterprise Park development but to include a greater clarity around the terms of reference of the board with regards to roles and responsibilities at different stages.

6.     It was explained the locating of individual plot information and land sales had been difficult due to the change of processes and procedures over a ten year period.

7.     The SDEG emphasised SWAP’s findings with regards to the DBID and that the Council would look to improve co-ordination and that lessons would be learned from previous bids.

8.     The PA provided the committee with assurance surrounding the two large organisations that had been making national news, that she were confident through communications between the council officers, information sharing, risk registers, whistleblowing arrangements and having a strong fraud team that the Hereford Council would not find themselves in a similar position.

9.     The Director of Continuous Improvement (DCI) explained how and when an audit is triggered to in progression.

10.  The DCI explained that SWAP covers as many strategic risks that the council faces as possible, or at least those strategic risks that are documented and corporate priorities. He is keen to see the risk management refreshed and reinvigorated so those strategic risks are an accurate reflection of the top risks Hereford faces.

11.  The PA would provide context with regards to the scale of transactions made in relation to procurement cards and this would be provided on all reports moving forward. 

RESOLVED

That the committee:

a) reviews the areas of activity and concern and be satisfied that necessary improvements are outlined and delivered; and

b) note the report and consider the assurances provided and the recommendations which the report makes, commenting on its content as necessary.

Action(s)

2023/24 031 The Service Director for Economy and Growth to circulate the latest reports for the HEZ and DBID.

2023/24 032 SWAP to submit an amended report on HEZ once further work has been completed.