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 and Governance which provided Members with an update of work undertaken by Internal Audit in the first four and half months of the approved internal audit plan for 2024/25.

The Head of Policy and Governance informed the meeting that delivery was in line with previous years however given the limited data available no strong patterns of lower levels of assurance were emerging.  He reported that in the period up to 25 August 2024, 20 reports had been issued providing good or reasonable assurances (83%) which represented an increase in the higher levels of assurance than the previous year (60%), offset by a corresponding decrease in the number of limited and unsatisfactory assurance levels (17%) (40% last year).  However, this could change significantly throughout the year. 

He also informed Members that there were nine draft reports awaiting management responses and these would be included within the next performance report.  Of these, six were limited and two were unsatisfactory.  A total of 131 recommendations were made within 24 final reports (detailed at paragraph 8.9 of the report and broken down by service area).  It was confirmed that no fundamental recommendations had been made.

The Head of Policy and Governance explained that revisions had been made to the 2024/25 Internal Audit Plan, as set out in the report, resulting in an increase of 211 days to 1,347 days following the successful recruitment of two new internal auditors who had now taken up post.  The revisions were however targeted to provide enough activity to inform his year-end opinion and would be held in an unplanned contingency and allocated on a needs basis throughout the year to allow for flexibility to respond to the changing risk environment that the Council was currently operating in.

The Head of Policy and Governance drew Members’ attention to the pressures within the organisation to address the financial sustainability of the Council (set out at paragraph 8.4) which had resulted in competing priorities for service areas, however, the impact on Internal Audit was not yet clear.  Concern was raised that the audit function was not taken seriously enough by certain managers and the Chairman requested that any concerns be raised with him and the Committee, as they would take failure to cooperate very seriously.

In response to a query about reasons behind the improvement in assurance levels, the Head of Policy and Governance explained that given the small number of audits that had been issued to date, it was very difficult to draw any conclusions, plus, the draft reports were of lower-level assurances and so would skew the results.  It was therefore important to look at the opinions coming through but obviously the picture would change throughout the year.

Members were please to note the improved direction of travel and congratulated the Internal Audit team for getting back on track as previously Members had been concerned that there were not enough audit days to ensure that internal audit functioned properly. 

A query was raised around the limited assurance level for Section 17 Payments - Children’s Services which had been audited back in 2015/16.  In response, the Internal Audit Manager explained that they had looked at the overall assurances and where those lower levels of assurances were, and they had slightly changed their approach to follow up audits.  If they had enough resources, they would revisit every limited as well as every unsatisfactory audit in a really prompt timescale however in order to target their resources, they will always follow up an unsatisfactory audit or one with a fundamental recommendation in the following year or when the recommendations become due.  The limited resources however had to be prioritised and, as the level of assurance in this particular area was limited, it had not been followed up more promptly.

RESOLVED:

To endorse the performance of Internal Audit against the 2024/25 Audit Plan.