To provide a periodic report on the Internal Audit function for the period June 2026 – September 2026, bi-annual update on Counter-Fraud arrangements and to provide an update on the Internal Audit Charter for approval by the Audit Committee as required by the professional standards.

The Committee considered a periodic report on the Internal Audit function for the period June to September 2026, the bi-annual update on Counter-Fraud arrangements and which provided an update on the Internal Audit Charter for approval by the Committee as required by the professional standards.

 

Internal Audit Progress 2026/27

 

It was reported that five audits had been completed since the last meeting Committee held in June 2026. All had received a satisfactory level of overall assurance of ‘Adequate Assurance’ or ‘Substantial Assurance’.

 

A further 10 audits from the 2026/27 Internal Audit Plan had been allocated and seven of those were currently at the fieldwork phase.

 

Members were made aware that Officers were currently undertaking the ‘Key Systems’ phase of the audit plan, which encompassed a review of the Council’s financial and core service systems and processes. Those established systems were fundamental to the effective delivery of the Council’s day-to-day operations. Although no significant issues were anticipated, given that those areas had historically been well managed, it remained essential to obtain regular assurance that the relevant systems and processes continued to operate effectively and were supported by appropriate controls.

 

It was noted that counter-fraud and compliance work was ongoing in this period along with GDPR priorities particularly relating to data sharing agreements, Freedom of Information Requests and Subject Access Requests.

 

Management Response to Internal Audit Findings

 

Members were aware that there were processes in place to track the actions taken regarding findings raised in Internal Audit reports and to seek assurance that appropriate corrective action had been taken. Where appropriate, follow up audits were 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	0
Overdue less than 3 months	1
Not yet due	1

 

The Committee recalled that it had requested more detail on the outstanding actions within the above table and on previous significant findings as a matter of context. Appendix B to the report (A.2) contained a summary of those findings and the 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 forwards.

 

Internal Audit Charter

 

Members were reminded that a requirement of the Global Internal Audit Standards (GIAS) was for the Audit Committee to review and approve the Internal Audit Charter on an annual basis. The Charter had been last updated and approved in September 2025.

 

The Committee was informed that there had been no changes to the Global Internal Audit Standards since the Charter had been last approved. Consequently, there was no requirement to amend the Internal Audit Charter at this time. The Internal Audit team continued to operate in accordance with the Charter by maintaining its independence and objectivity, delivering the approved risk-based audit plan, applying the required professional standards and reporting its activities, findings and assurance outcomes to senior management and the Audit Committee.

 

Members were reminded that compliance with the Charter was also monitored through the Quality Assurance and Improvement Programme and that it would be assessed in February 2027 when the External Quality Assessment of the internal audit function was undertaken by the Institute of Internal Audit.

 

Counter-Fraud & Compliance Bi-Annual Update

 

This update provides the Audit Committee with a summary of Counter-Fraud and Compliance activity undertaken between February and September 2026. During this period, the team continued to support services across the Council through proactive compliance visits, fraud prevention and detection work, property verification, debt recovery activity and multi-agency enforcement.

 

(1)     Compliance

 

The Committee was assured that the Compliance Team continued to support the Revenues and Benefits function by ensuring that members of the public received only the benefits and discounts they were entitled to in respect of Council Tax and Business Rates matters, Class D reviews (uninhabitable properties), tracing enquiries and any other verification work ensuring that the Council had an accurate database of tenants and properties in the District. The following areas were included within their inspections and scheduled work plans:-

 

·      compliance activity continued across the District’s principal new-build sites. This included regular reviews of the main developments and the issue of completion notices where appropriate. This work helped to ensure that new properties were identified and brought into Council Tax administration promptly.

 

·      the Compliance Team were also continuing work with the Revenues and Benefits department with debt recovery. The work had identified cases where residents might have been entitled to Government support, together with wider welfare concerns requiring referral to other Council services. It also secured information relevant to potential attachment of earnings and benefit deductions, supported the establishment of payment arrangements and provided opportunities to identify suspected fraud.

 

(2)     Counter-Fraud Activities

 

(i)       Tenancy fraud and property recovery

 

It was reported that counter-fraud activity contributed to the recovery of five propertiesbetween February and September 2026. Four of those had related to abandoned properties and one had related to an identified subletting case. A further two properties were subject to notice proceedings.

 

Recovering properties that were no longer being occupied in accordance with tenancy conditions helped to protect the Council’s housing stock and to make homes available for allocation to eligible applicants.

 

(ii)      Tenancy audit programme

 

A renewed programme of tenancy audit work had been now commenced at the date of the update. The intention was to progress this work at pace, providing additional assurance over the occupation and use of housing stock.

 

(iii)    Fraud awareness

 

The Counter-Fraud Team had continued to deliver fraud awareness input to new employees across the Council. This activity supported the wider development of an effective counter-fraud culture by helping staff understand fraud risks and their responsibilities for identifying and reporting potential concerns.

 

(iv)    Verification of new Council tenants

 

Counter-Fraud and Compliance officers had introduced verification work for new Council tenants to identify potentially fraudulent applications and help protect access to the Council’s housing stock. Compliance officers had also completed visits to non-secure tenants.

 

(v)     Commercial tenancy verification

 

The team had also undertaken verification work in support of Economic Growth for new commercial tenants. This provided an additional opportunity to validate information before commercial tenancy arrangements were completed.

 

(vi)    Wider collaborative work

 

Counter-Fraud and Compliance officers continued to work collaboratively with services across the Council and with external partners. This included identifying potential houses in multiple occupation, planning concerns and other compliance matters requiring coordinated action. The team maintained a proactive approach to identifying issues and referring or progressing them with the relevant services.

The Fraud Risk Register at Appendix D to the report (A.2) set out the key fraud risks faced by the Council and the high-level controls in place to manage those risks. Those controls were owned and managed by services and could be grouped into four broad areas:-

 

·      Preventative (Controls in place to prevent fraud entering the system in the first place)

·      Directive (Policy, Regulations, Procedures that rely mainly on trust and expectation to be followed)

·      Detective (Investigations to determine root cause of the fraud or error)

·      Corrective (Ensuring management action is taken to resolve the situation and we learn from mistakes)

 

It was moved by CouncillorMorrison, seconded by Councillor Fairley and:-

 

RESOLVED that -

 

(a)     the contents of the report be noted;

 

(b)     it be confirmed that the Committee has received appropriate assurance and updates internal audit and counter-fraud activities and workplans;

 

(c)     the Internal Audit Charter be approved;

 

(d)     a more in-depth review of the work of the Compliance Team and compliance activities across the Council’s services be carried out at the time of the next bi-annual update on the Council's counter-fraud arrangements;

 

(e)     subject to the outcome of the review referred to in resolution (d) above, the Committee is minded to request the Resources and Services Overview & Scrutiny Committee to consider including within its work programme for 2027/28 an enquiry into the work of the Council’s Compliance Team and corporate compliance activities.