The report of the Head of Audit is attached.

Contact: Ceri Pilawski (01743) 257739

10.1  Members received the report of the Head of Audit, (copy attached to the signed minutes) which provided details of the work undertaken by Internal Audit for the year ended 31 March 2021.   The Head of Audit confirmed that she could offer ‘limited assurance’ on the Council’s framework for governance, risk and internal control in her end of year opinion.

10.2 The Head of Audit reported that there were an increasing number of areas of high and medium risk along with areas where business resources had been redirected due to Covid-19 which had led to less improvements being delivered.  She drew attention to paragraph 8 of the report and the limited and unsatisfactory assurances since the last report in March 2021.

10.3  The Head of Audit advised members that 57% of the opinions delivered had been good or reasonable, a 7% decrease on the previous year.  This was offset by a 7% increase in limited and unsatisfactory opinions.  A total of 547 recommendations had been made in the 53 reports issued in the year. 

10.4  Turning to Paragraph 8.11, the Head of Audit reported that the number of significant and fundamental recommendations had increased from 40% to 49% compared to the previous year.  Finally, the Head of Audit advised members that she was satisfied that the delivery target of 90% for 2020/21 planned audits had been achieved, in compliance with the Public Sector Internal Audit Standards (PSIAS).

10.5  The Chairman understood the effects of Covid-19 but was concerned that in the future Covid-19 should not be accepted as a reason why assurance levels were compromised.  In response to a query about the six members of audit staff who had been redeployed to respond to Covid-19 matters, the Head of Audit explained that whilst most had returned to Audit, one member of staff was still involved with business grants.

10.6  In response to a query in relation to the process undertaken for unsatisfactory areas, the Head of Audit explained that a further audit would be timetabled in for the next financial year in order to allow time for improvements to be made and become imbedded.  However, the Committee may wish to seek assurance from the Manager that improvements were indeed being undertaken prior to it being re-audited.

10.7  A brief discussion ensued in relation to repeat offenders and the Head of Audit explained the process employed including escalation to the Executive Director and Chief Executive.  The Head of Audit explained that a self-assessment was used for unsatisfactory and limited assurances which asked whether any improvements had been made – if the answer was no, there was no point re-auditing.  If however improvements had been made, due diligence was undertaken but as the improvements had not been tested it would not change her audit opinion.

10.8  A query was raised about some of the areas which had attracted limited and unsatisfactory assurances appearing more than once and it was felt that the Committee should concentrate on these areas and invite the managers to Committee in order to seek assurances from them.  The Head of Audit explained that these areas would be re- audited and the direction of travel reported.  She confirmed that a number of these areas were coming up on the Committee’s work plan.

10.9  In response to a query the Head of Audit explained that due to capacity issues audits were undertaken of the more risky areas rather then those areas which were low risk to the business but could be changed to add value.  In response to a further query, the Head of Audit explained the training provision for staff in order that they remain equipped with appropriate skills to undertake their role.

10.    RESOLVED:

a)     That performance against the Audit Plan for the year ended 31 March 2021 be noted.

b)     To note that Internal Audit have evaluated the effectiveness of the Council’s risk management, control and governance processes, taking into account public sector internal auditing standards or guidance, the results of which can be used when considering the internal control environment and the Annual Governance Statement for 2020/21.

c)     To note and support the Head of Audit’s limited assurance, year-end opinion, that the Council’s framework for governance, risk management and internal control is sound and working effectively for 2020/21 based on the work undertaken and management responses received.