The report of the Audit Service Manager is attached, marked 12.

Contact:  Ceri Pilawski (01743) 252027

64.1The Committee received the report of the Audit Service Manager – copy attached to the signed Minutes – which provided Members with an update of the work undertaken by Internal Audit in the two months since the last report in September 2015 and summarised the progress against the Internal Audit Plan.

64.2The Audit Service Manager informed the meeting that 58% of the revised plan had been completed which was in line with the target of 90% by year end.  She reported that twelve good and reasonable assurance opinions had been issued together with eleven limited and one unsatisfactory assurance opinion.  She went on to say that twenty four final reports had been issued which contained 335 recommendations, none of which were fundamental.

64.3The Audit Service Manager explained that the original plan had provided a total of 2,068 days however this had been revised down to 1,939 days due to the resignation of a member of staff and a planned maternity leave from March 2016.  Also, there were changes to the planned activity to include a number of transformation and advisory work projects which were unknown at the time.  She then drew attention to the lower assurance levels in Children’s Services which were considered to be of low risk and would not affect the overall year end opinion and Customer Involvement where the overall assurance and direction of travel remained a concern given the systems’ impact on delivering the Council’s objectives. 

64.4Turning to the Council’s internal control direction of travel, the Audit Service Manager reported that comparison of assurance levels since 2013/14 demonstrated a falling level of overall control (30% good assurance in 2013/14 compared to 8% in 2015/16 to date; and 15% limited assurances in 2013/14 compared to 41% in 2015/16 to date).

64.5The Chairman raised concerns in relation to the Council’s internal control direction of travel, which although not unexpected, he was nonetheless concerned whether other Members of the Council were generally aware that the required standards of control were lower/not being met and he wished for all Members to be made aware that the level of operational assurances were falling.

64.6In response to a query about what was being done about the falling level of assurances, the Audit Service Manager informed the Committee that she had raised this issue with the Directors who recognised it was a consequence of redesign and reducing resources, whilst they were aware and concerned about the direction of travel they felt realistically with the known continuing financial pressures, that the direction of travel may not improve over the short to medium term.

64.7The Section 151 Officer explained that the Directors were concerned about the Direction of Travel and had made a commitment that those areas highlighted as having limited and unsatisfactory assurance levels would be dealt with and additional resources allocated where necessary.  The processes were still effective but the Council was in a period of change and it was felt that things would continue in this vein for the foreseeable future. 

64.8The Chairman queried the action that could be taken to draw attention to the current situation.  It was agreed for the Section 151 Officer and the Chairman to ensure that the Portfolio Holder was fully apprised of the situation and the content of the report and be requested to consider whether he would like to address Cabinet.  The Committee also requested that the Portfolio Holder be invited to attend the next meeting of the Audit Committee in order to discuss the way forward and that the Audit Service Manager be requested to present a report highlighting the issues raised in the various audit areas for the next meeting.

64.9Concern was also raised about the detrimental effect on staff morale arising from the reduction in manpower across the authority.

64.10RESOLVED:

a)    That performance to date against the 2015/16 Audit Plan as set out in the report be noted;

b)    That the adjustments required to the 2015/16 plan to take account of changing priorities, as set out in Appendix B of the report, be endorsed; and

c)     That the concerns of the Committee in relation to the deteriorating levels of assurance and the downwards Direction of Travel be drawn to the attention of the Portfolio Holder, and that he be requested to attend the next meeting of the Audit Committee in order to discuss the way forward.