The report of the Head of Audit is attached.

Contact:  Ceri Pilawski 01743 257739

The Committee received the report of the Head of Audit – copy attached to the signed Minutes – which summarised Internal Audit’s work to date in 2022/23. The Head of Audit explained that delivery had been impacted due to resourcing challenges which were currently being recruited to and supported by contractors. Lower assurances from reviews were highlighted, providing members with an opportunity to challenge further.

The Head of Audit drew attention to the summary of planned audits, set out at Paragraph 8.2 of the report, along with the planned verses actual Audit days across all Directorates, at paragraph 8.3.  The table set out in paragraph 8.4, set out the assurance ratings of all 12 completed audits, broken down by service area.  The Head of Audit reported that there was one area that had been assessed as unsatisfactory and that was the Payroll 2021/22 audit and Members therefore requested a management report for the November meeting.  The table at 8.5 showed the spread of audit assurances whilst table 8.6 showed the recommendations.

The Head of Audit highlighted the areas where Audit had added value with external clients and unplanned, project or advisory work, set out at paragraph 8.14 of the report.  In conclusion, the Head of Audit reported that it was too early to draw any sound conclusions as to the overall assurance framework.

In relation to the unsatisfactory assurance level for Payroll, the Head of Audit explained that improvements were not just in the power of payroll staff however she had no reason to believe that other stakeholders would not engage.  The Committee expressed their concern if any stakeholders were unable to comply.

In response to a query as to how the unsatisfactory assurance level had come about, the Executive Director of Resources (Section 151 Officer) explained that fundamentally there had been a shift from a dedicated payroll system to a module in the ERP.  When they brought in the new ERP system, it was a case of getting that implemented and in place within the right timescales and ensuring that the fundamental principles of staff were paid and staff were paid the right amount.  So that part was achieved however, as it was not a system dedicated to payroll, whenever there were any changes whatsoever to any terms of conditions, or requirements, or national changes in legislation etc, whereas other dedicated systems the supplier would automatically update them, with the system that we have we have to wait for those to be input by our supplier who are supplying across a wider ERP system. 

He went on to say that there were also specific arrangements within Shropshire that then had to be built into that system so therefore there were processes that enabled those to happen which were not as slick or simple as we would like them to be and require constant testing and updating to make sure they are working.  On top of that, there was a complete change in relation to the way in which the system was managed by Managers.  For example, the travel claim system was something that was input into the process, which was not working as fully as required from the time it was implemented and therefore it required some movement in relation to what Members did as well as some movement in relation to what the system could do.  He informed the Committee that another module was to be brought into the system to enable weekly travel claims to be made, to help people travelling long distances and having to wait a month before they claim it back and which would have to be tested.

So it is not something that has deteriorated over a period of time, but a new system that was still being worked through in terms of its implementation and on that basis there were expected to be a number of recommendations and improvements and limited and fundamental recommendations on the back of that.

The Head of Audit agreed for Managers to send Members a virtual update along with Managers’ assurance after the December deadline in between Committee meetings.  Members could then make a decision whether they wished to call a meeting or invite someone to the February meeting.

RESOLVED:

1.  To note the performance to date against the 2022/23 Audit Plan.

2.  To request a management report for the November meeting in relation to the unsatisfactory assurance level given to Payroll 2021/22 and any stakeholders unable to comply be requested to attend the meeting to explain why.