Agenda item

To provide the Committee with a periodic report on the Internal Audit function for the period June 2024 – August 2024, as required by the professional standards.

 

 

Minutes:

The Committee was provided with a periodic report on the Internal Audit function for the period June 2024 to August 2024. The Internal Audit Manager’s report also provided an update on the Internal Audit Charter for approval by the Audit Committee, as required by the professional standards.

 

That report was summarised as follows:-

 

·      Four audits had been completed since the last Audit Committee in July 2024. All four of the audits had received a satisfactory level of overall assurance of Adequate Assurance.

·      A further 13 audits from the 2023/24 Internal Audit Plan had been allocated and six were currently at the fieldwork phase.

·      The Internal Audit Charter needed to be reviewed and approved for the 2024/25 financial year. There had been no changes since the last update.

·      The Internal Audit Manager continued to oversee the Fraud, Compliance, Risk and Health and Safety services whilst the Assurance and Resilience Manager was on secondment.

·      Internal Audit were currently working with the Council’s IT department to modernise the way its Fraud and Compliance Team worked, by introducing technology that could map out the most efficient routes when out on inspections as well as using data analytics to target the cases the Council inspected, in order to be able to work smarter within limited resources.

·      Interviews for a new apprentice had been held and an appointment made.

 

INTERNAL AUDIT PROGRESS 2024/25

 

It was reported that, in relation to the Internal Audit Progress of 2024/25, four audits had been completed since the previous update to the Audit Committee in July 2024, all of which had received a satisfactory overall opinion of ‘Adequate Assurance’. No significant issues had been identified in this period. A further 13 audits from the 2023/24 Internal Audit Plan had been allocated and six audits were currently at the fieldwork phase.

 

Members were aware that the Internal Audit Manager and Executive Projects Manager (Governance) were currently undertaking a review of the Spendells Housing Project, as requested by Cabinet and the Chief Executive.

 

It was also reported that the Council’s Audit Team were currently in the ‘Key Systems’ phase of the audit plan where all financial and core service systems and processes were reviewed. Each area was tried and tested as they were very important to the Council’s day to day activities. It was not anticipated that any significant issues in this area would arise as historically they had been well managed. However, it was very important to ensure that those systems and processes continued to work as expected and remained well controlled.

 

Quality Assurance – The Internal Audit function issued satisfaction surveys for each audit completed. No unsatisfactory responses had been received in this period. 

 

Resourcing

 

The Committee was reminded that Internal Audit currently had an establishment of 4 full time equivalent posts with access to a third party provider of Internal Audit Services for specialist audit days as and when required. The Team currently had a vacant post for an Audit Technician.

 

Team members had recently interviewed a number of candidates for a new apprenticeship and an appointment had now been made.

 

Members were aware that the Internal Audit Manager continued to manage the Fraud and Compliance teams whilst the Assurance and Resilience Manager was on secondment. The current arrangements were expected to last until December 2024 unless in the meantime the secondment was extended.

 

Officers were currently working with the IT department to modernise the way the Fraud and Compliance Team worked by introducing technology that could map out the most efficient routes when out on inspections as well as using data analytics to target the cases Officers inspected in order to be able to work smarter with limited resources.

 

Outcomes of Internal Audit Work

 

The Committee was aware that the Public Sector Internal Audit Standards (PSIAS) required the reporting of significant risk exposures and control issues. Since the last report four audits had been completed and the final report issued. No significant issues had been identified within the period.

 

Assurance

Colour

Number this Period

Total for 2024/25Plan

 

Substantial

 

0

0

 

Adequate

 

4

4

 

Improvement Required

 

0

0

 

Significant Improvement Required

 

0

0

 

No Opinion Required

 

2

2

Two consultative engagements in 2024/25 to date

 

For the purpose of the colour coding approach, both the substantial and adequate opinions were shown in green as both were within the acceptable tolerances.

 

Management Response to Internal Audit Findings– Members recalled that there were processes in place to track the action taken regarding findings raised in Internal Audit reports and to seek assurance that appropriate corrective action had been taken. Where appropriate, follow up audits had been arranged to revisit significant issues identified after an appropriate time.

 

The number of high severity issues outstanding was as follows: -

 

Status

Number

Comments

Overdue more than 3 months

4

 

Overdue less than 3 months

 

0

 

Not yet due

2

 

 

The Audit Committee had previously requested more detail on the outstanding actions within the above table and on previous significant findings as a matter of context. Appendix B was to the Internal Audit Manager’s report offered a summary of those findings and agreed actions as well as including the service response and an internal audit status. This would become a regular appendix of the periodic progress reports going forward.

 

Update on previous significant issues reported

 

All previous significant issues were now provided within Appendix B of the aforementioned report.

 

INTERNAL AUDIT CHARTER

 

Members were aware that a requirement of the PSIAS was for this Committee to review and approve the Internal Audit Charter on an annual basis. The Charter had been last updated and approved in September 2023.

 

It had been previously reported that new Global Internal Audit Standards had been introduced in January 2024 with a view to becoming mandatory in January 2025. Officers had been awaiting CIPFA’s response with a view on their impact on the public sector.

 

It was reported that CIPFA had now stated that it would be producing a revised edition of the PSIAS, providing an overlay to support the adoption of the global standards specifically in the context of UK public sector organisations. It was anticipated that the revised PSIAS would be available in time to support adoption by 1 April 2025.

 

With this in mind, the Internal Audit Manager had decided to continue as planned to undertake a self-assessment of the Council’s internal audit provision and to include a review of the Internal Audit Charter within this. It was proposed to continue with the current audit charter until those assessments had been completed and CIPFA had published an updated version of the Public Sector Internal Audit Standards.

 

The Internal Audit Manager and the Corporate Director (Operations and Delivery) responded to the Committee’s questions on this report.

 

After discussion it was moved by Councillor Sudra, seconded by Councillor Morrison and unanimously:-

 

RESOLVED that –

 

(a)    the contents of the Internal Audit Manager’s report (A.1) be noted; and

 

(b)    the Internal Audit Charter be approved.

 

 

 

 

 

 

 

Supporting documents: