The report of the Head of Policy and Governance is attached.

Contact:  Barry Hanson 07990 086409

The Committee received the report of the Head of Policy & Governance which summarised Internal Audit’s 2025/26 work to date.  Lower audit assurance levels were highlighted, providing members with an opportunity to challenge.

The Head of Policy and Governance reported that seven final internal audit reports had been issued since the last committee meeting, as set out in paragraph 8. 4 of the report, with four draft reports awaiting management responses which would be included within the next performance report.  There were 5 good or reasonable assurances (71%) which represented a significant increase in the higher levels of assurance compared to the same reporting period of 2024/25 (33%) and the previous years’ outturn of 58%.  This was offset by a corresponding decrease in the number of limited and unsatisfactory assurance levels (29% compared to 67% in 2024/25.  He drew attention to paragraph 8.14 which considered the year-to-date trend in assurance opinions which showed that the number of lower assurances to date was 58% which was higher than the outturn for 2024/25 (42%) and continued to be of concern.

A total of 54 recommendations were made within the seven final reports (detailed at paragraph 8.4 of the report and broken down by service area).  It was confirmed that two fundamental recommendations had been made (set out at paragraph 8.11 of the report) related to key supply contracts and the adult social care outturn position.  Unplanned projects and advisory work had been undertaken in the period including an internal audit of the Adult Social Care outturn 2024/25 at the request of the former Chief Executive with a further management update being presented to the Committee later in the Agenda.

Positive progress was reported in updating management responses and implementation dates for recommendations, with oversight from the Interim Chief Executive and Statutory Officers’ Group. Members were asked whether they wished to seek any further assurances from managers on the limited and unsatisfactory assurance levels detailed in Appendix A.

The Head of Policy & Governance informed the Committee that recruitment to the vacant internal audit posts had been successful, with three qualified and experienced senior auditors having been appointed, with two already in post and one starting in December.

According to the direction of travel table (paragraph 8.14), it was noted that for the past six years, good and reasonable assurance levels had remained consistently around 60%. However, this figure had declined to approximately 40% in the current year, prompting an inquiry into the underlying causes.  The Head of Policy & Governance explained that it was too early to pinpoint specific causes for this year's trend, and more clarity was expected by the next meeting in February and the quarter 4 work at the end of the financial year.  It was noted that the higher proportion of limited and unsatisfactory assurances was a concern.

Members requested updates on key supply contracts and the Shirehall disposal for the next meeting and thanked the internal audit team for their work.

RESOLVED:

a)   To endorse the performance of Internal Audit against the 2025/26 Audit Plan.

b)  In response to the low assurance levels and fundamental recommendations, Members requested updates to the next meeting in relation to Key Supply Contracts and Shirehall Disposal.