To seek the approval of the Audit Committee for the 2022/2023 Internal Audit Plan.

The Committee considered a report of the Internal Audit Manager (report A.1) which sought its approval of the 2022/23 Internal Audit Plan, as required bythe Public Sector Internal Audit Standards. 

It was reported that the 2022/23 Internal Audit Plan had been developed using a risk based approach, taking account of the Council’s Corporate Objectives, Corporate Risks and Emerging Risks. The plan had been collated based on the information gained from liaising with Directors, Heads of Service and departments in order to target those areas that could benefit from an independent review of processes and procedures to determine potential efficiency gains and improved technology/software requirements or if the function had not been audited for a substantial period of time due to it being considered of lower risk historically.  .

Members were made aware that the establishment for the Internal Audit function was currently four full time equivalents (fte) as a recent restructure now meant there were four full time members of staff with the part time Audit Technician post having being changed to a full time post. That post was due to be advertised and, all being well, subsequently appointed to.  In response to questions, the Internal Audit Manager advised that he considered the total direct budget for the service for 2022/23 (in the sum of £178,930) was sufficient and that he hoped the vacancy referred to would be filled by the time of this Committee’s meeting in June 2022.

The level and range of coverage was considered sufficient for the Internal Audit Manager to be able to provide an annual opinion on the Council’s assurance framework.

The Committee was informed that the proposed plan had been developed based on the current resource available and the team’s adaptation to innovative and leaner ways of working. The number of audit days proposed was 450 which remained unchanged from the 2021/22 audit plan. The plan had been created with the following in mind:-

·      a leaner more practical audit plan had been developed using a risk based approach, knowledge of all operational processes within service areas, historical assurance opinions and an understanding of where procedural changes had occurred around the Council;

·      a hybrid structure of both internal and external resource would provide additional resilience within the team as well as provide different experience, skills transfer for more junior staff and access to a hub of audit resource; and

·      the impact of COVID-19 would be assessed within all auditable areas identified to ensure a consistent level of assurance could be provided.

A detailed breakdown of the proposed Audit Plan was included in Appendix A to the report. The plan provided an outline of the work currently proposed to be undertaken during the 2022/23 financial year. In order to continue to provide a proactive and flexible approach, the Plan was considered to be ‘indicative’ of the work currently intended. The Internal Audit Plan needed to be flexible in order to ensure that Internal Audit resources were directed where they were most needed, and to add as much value as possible to the organisation.

The plan would be kept under review during the year, in consultation with the Council’s senior management, and taking account of changes to the Council’s priorities, operations and risk. Changes to the plan would be brought to the attention of the Committee for its approval.

Therefore the Plan was considered to be, in effect, a rolling programme of work, rather than being specific to one year, whereby any audits scheduled, but incomplete at the end of any financial year would roll forward and be completed in the new financial year.  

In reviewing the allocation in the Internal Audit Plan to “Partnerships –External Health Funding”, the Assistant Director (Partnerships) advised the Committee that a number of Health Memoranda of Understanding (MOUs) had been agreed with the NHS North East Essex Clinical Commissioning Group (CCG) to support activity to address the wider determinants of health. Cabinet have given approval to enter into these MOUs. In summary, the following had been agreed:

£900K Healthy Housing

£750K Physical Activity

£200K Health Inequalities

£43K Community Safety

At this stage the acceptance of the above funding has been agreed and details of individual projects to be charged against those sums was still to be agreed with the CCG.

The Internal Audit Manager also advised that, from the range of internal audit work being undertaken, and which the impact of COVID on that service would form part of that audit, an overall report would be possible capturing the impact of COVID on the Council.  This was welcomed by Members of the Committee.  They also welcomed the opportunity for Internal Audit to consider the impact of changes in legislation on the Council and the assessment of risks; and how to militate those risks.

RESOLVED that –

(a)    the Internal Audit Plan for 2022/23 be approved; and

(b)    the existing arrangements for updating the Plan during the year, where necessary to reflect changing Authority activity and operational needs and to provide flexibility of service delivery, be continued, with any significant amendments reported to the Committee as part of the periodic Internal Audit reporting arrangements.