The Head of Internal Audit and Corporate Anti-Fraud will submit an interim Annual Report providing his opinion on the overall adequacy and effectiveness of the Authority’s framework of governance, risk management and control based on the work undertaken by Internal Audit.
The Head of Internal Audit and Corporate Anti-Fraud submitted his interim annual report providing his opinion on the adequacy and effectiveness of the Authority’s framework of governance, risk management and control arrangements based on the work of Internal Audit during 2018/19, which had been prepared in accordance with the Public Sector Internal Audit Standards.
In order to comply with these Standards the report provided:
· An opinion on the overall adequacy and effectiveness of the Authority’s framework of governance, risk management and control
· A summary of the audit work undertaken to formulate the opinion
· Details of key control issues identified which could be used to inform the Annual Governance Statement
· The extent to which the work of other review or audit bodies had been relied upon.
Appendices to the report provided a summary of Internal Audit reports for the year, details and outcome of other Audit Activities not producing a specific assurance opinion and projects and work currently in progress.
The report indicated that based on the overall results of Internal Audit work undertaken to date, together with the management’s implementation of recommendations, the indicative opinion given was adequate (positive) assurance. This was based on an agreed programme of risk based audit coverage that had enabled a valid indicative assurance opinion to be provided. An update would be given to the July meeting of the Committee to coincide with the consideration of the final Annual Governance Statement although it was not anticipated that there would be any change.
It was recognised that the Future Council approach had required a change in risk appetite and following the implementation of the new operational arrangements there was a need to ensure that these were embedded. This had been discussed with the Senior Management Team but Senior Managers would have to remain alert to and focussed on maintaining an appropriate risk based and effective framework of control.
It was noted that the key results of all completed audits reported throughout the year were summarised within this report and that the progress in the implementation of audit report recommendations had consistently improved during the year.
The current Audit Plan, therefore, focussed on supporting management to consider the approach to controls in the context of reduced resources.
In the ensuing discussion, the following matters were highlighted:
· It was noted that more audit days had been delivered to the Council than planned but a reduction in the number provided to external clients and the rationale for that and implications thereof was explained. The benefits of undertaking work for external clients was touched upon and arising out of this discussion reference was made to the income
· A restructure of the Internal Audit Team and an investment by the Authority had enabled the appointment of two additional internal auditors in the coming year to add capacity to the council’s audit coverage
· In relation to the completed pieces of work it was noted that 95 recommendations had been made during the year. One fundamental recommendation relating to school exclusions was outstanding but due for completion by 1st September, 2019
· Reference was made to the changing shift of audit work involving responding to requests for providing advice, support to services, innovation and initiatives, changes, projects and programmes and corporate change projects. Whilst such work might not result in specific reports it would, nevertheless contribute to the overall assurance opinion provided. This changing approach was particularly welcomed
· It was noted that the Annual Governance Statement would be submitted to the July Committee meeting
· It was noted that 15 reports had been issued to date for this year with another 4 ongoing in relation to the internal control framework. Arising out of this, there was a discussion of what might be considered an appropriate number of reports that should be produced in order to give adequate assurance. The Head of Internal Audit and Corporate Anti-Fraud accepted that statistically whilst this was not a lot of reports, however, some of the pieces of work had been significant involving 50 to 60 audit days. He was, nevertheless satisfied with the planning process and was confident that his Service would be able to identify significant issues.
· There was a discussion of the way in which the work of Internal Audit added value to the organisation and on how such information could be captured. Appendices to the report provided details of the key areas of activity and the Head of Internal Audit and Corporate Anti-Fraud stated that the final report would quantify days spent on each activity and how this was split across themes
· There was a detailed discussion of all aspects of Internal Audit involvement and assurances in place in relation to the Glassworks project and particularly as this related to governance arrangements
o It was noted that Internal Audit was involved in assisting the Council to ensure that appropriate contract management arrangements were in place in relation to Phase 2
o Members were informed of the raft of measures in place whereby the Committee could look for assurance. These included amongst other things an examination by the Overview and Scrutiny Committee and by Cabinet. Mr G Mills representing the Council’s External Auditor commented that this scheme would also be a key area of focus in the Value For Money opinion to be presented at the next meeting on the 22nd July, 2019
o Arising out of the discussion it was suggested that it would be useful to receive a summary sheet of interventions and issues dealt with as this would give the Committee additional assurance that all matters were being addressed appropriately
o Reference was made to a meeting of the Overview and Scrutiny Committee held on the 4th June, 2019 which had examined the Barnsley Town Centre Redevelopment including aspects of the Glassworks. This meeting had been attended by Mr P Johnson (Independent Member) in an observer capacity who commented on the quality of the scrutiny and the answers provided by officers
o The Head of Internal Audit and Corporate Anti-Fraud stated that his final report would be amended to take account of and address the points expressed
(i) that the assurance opinion provided by the Head of Internal Audit and Corporate Anti-Fraud on the adequacy and effectiveness of the Authority’s framework of governance, risk management and control be noted;
(ii) that the key issues arising from the work of Internal Audit in the context of the Annual Governance Statement be noted; and
(iii) that the report be amended and presented in its final version to the meeting of the Committee on the 22nd July, 2019.