Agenda item

The Head of Internal Audit to submit a report to satisfy the Accounts and Audit Regulations by providing Members with the opportunity to consider a report from the Head of the Council’s Internal Audit function on the performance of Internal Audit during the year and the ‘Internal Audit Opinion’ on the Council’s system of internal control and its arrangements for risk management and governance.

Rachel Ashley-Caunt, Head of Internal Audit introduced the report, the purpose of which was to provide Members with the opportunity to consider a report from the Head of the Council’s Internal Audit function on the performance of Internal Audit during the year and the ‘Internal Audit Opinion’ on the Council’s system of internal control and its arrangements for risk management and governance.

Ms. Ashley-Caunt highlighted that Appendix A of the report detailed Internal Audit’s Annual Report.  Internal Audit had issued an overall opinion of satisfactory assurance and a summary this opinion was detailed at section 2 of Appendix A.  The opinion reflected that there were no areas of major organisational risk but there were some areas for improvement and recommendations to improve controls had been made.

Ms. Ashley-Caunt advised that the opinion was informed by the work of Internal Audit and the outcome of audit assignments.  Other sources of assurance were also considered (confirmation that the Council had valid public sector network compliance certification, which provided some assurance over IT security, consideration of the work undertaken on the Financial Management Code and self-assessment, the materiality of findings and action taken by Senior Management Team to strengthen areas of weakness etc.)

Ms. Ashley-Caunt highlighted:

·         Table 1 of Appendix A provided a summary of the audit opinions issued for 2020/21 and this showed an improvement on previous years, with a reduced number of areas receiving limited assurance opinions and an increase in the number of substantial assurance opinions.

·         Much of the audit work delivered had been reported to the Committee during the year, as part of progress reporting.  This work and the audit opinions issued (including audit assignments completed since the last Committee meeting (on 9 March 2021) were detailed at Table 3 and Appendix 1.

·         The financial system key controls report was not finalised when drafting this report.  It had since been finalised and key findings would be reported to the Committee at its next meeting (on 28 September).

·         No major organisational risk had been identified during Internal Audit’s work.  Moderate organisational risk was identified for 3 areas and all had action plans in place and would be monitored and the Committee updated on progress made.

·         A review of the implementation of audit recommendations over the year was detailed at Table 4.  3 recommendations were overdue for implementation (1 was medium priority and 2 were low priority).

·         Table 5 provided a summary of all overdue recommendations, including those from previous years as well as from 2020/21.

·         Internal Audit’s performance on delivery of the Audit Plan against Key Performance Indicators was detailed at section 4 of Appendix A.

During discussion the following points were noted:

·         Members noted that performance reviews with the Cattle Market should be resumed and queried the position regarding the receipt of financial records or income information form the Cattle Market.  The Director for Corporate Services advised that an update would be sought from officers and circulated to Members outside this meeting.

·         Members referred to the Summary of Internal Audit Work 2020/21 as detailed at Appendix 1 of Appendix A, noting the basis for assurance opinion for the Housing Repairs audit assignment, particularly in relation to the impact of Covid-19 and lack of management continuity.  Internal Audit would monitor the implementation of recommendations and update the Committee on progress made.

·         The Director for Corporate Services and the Assistant Director for Governance and Democracy had worked with the Procurement Team to develop standard terms and conditions for contracts, improve the way decisions were made (decisions now recorded when contracts were awarded) and the Contracts Register was updated automatically in real time.  The Contracts Register was available on the Council's website.

Audit and Standards Committee received and NOTED the Internal Audit Annual Report and Assurance Opinion for 2020/21.