Agenda item

The Head of Internal Audit, Anti-Fraud and Assurance submitted his interim annual report on the adequacy and effectiveness of the Authority’s Internal Control Arrangements based on the work of Internal Audit for 2020/21 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, projects and work currently in progress, agreed management actions and the Financial Year End Performance Indicators 2020/21.

The report indicated that based on the overall results of Internal Audit work undertaken to date, together with the management’s implementation of recommendations, and despite the fact that the plan had changed significantly throughout the year because of the pandemic, the indicative opinion given was a reasonable (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.  

There was clearly a positive culture in the Council to explore where control and governance improvements could be made, and it was important that this culture remained and focused on maintaining an appropriate risk-based and effective framework of controls as the authority continued to respond to and recover from the Covid 19 pandemic and as it worked towards the Barnsley 2030 vision.

The key results from all completed audits had been reported previously within the Internal Audit progress reports and these were summarised in this report.  Throughout the year the Committee had also been made aware of progress in the implementation of audit report recommendations.

The current draft Audit Plan for 2021/22 focussed on supporting management to consider the approach to controls in the context of the impact of Covid 19.

In the ensuing discussion, the following matters were highlighted:

·         There was a discussion of whether or not the Council should be striving for substantial assurance rather than reasonable and this was placed within the context of affordability.  There were pockets of the Council that were very well controlled and got a substantial assurance.  The overall aim, however, was for Internal Audit to identify improvements and a less than substantial opinion might be given as areas for improvement had been identified.  The issue then was how management embraced those opportunities for improvement and judgements had to be made about the risks inherent with what was found versus the cost of the controls that could be implemented.  The External Auditor felt that it was important that management was encouraged to ask Internal Audit to look at areas where there was a potential issue and for a list of recommendations to be issued and a limited assurance grading given in an open and transparent culture rather than to detract from management not wanting to ask for such reviews.

·         Information was provided about the outcome of the two reports into Procurement Compliance and the action taken to ensure that practice and understanding required was embedded.  This provided a good example of where Internal Audit was brought in for advice and support to what was a known and existing problem.  It was noted that the issues identified had been addressed

·         Background information was provided about the lack of declaration of interests by NPS Barnsley Ltd and the issue around the blurring of client/contract arrangements.  This had not been a serious or irregular issue and had now been addressed.  The issue had contributed in part to the decision to end the previous arrangements

·         Reference was made to the increase in the number of reports issued during the year and to the significant increase in the number of reasonable assurances given particularly compared to the previous two years.  It was reported that the figures were skewed slightly because of the work undertaken on Covid which had increased the number of reports by 15.  The Committee had seen sight of these before and all had received a reasonable assurance.  There had been more pieces of work undertaken but this could vary year on year dependent upon the Audit Plan and the size and type of the work undertaken.  It was hoped that this was a trend going forward as it was hoped that more assurance reports would be undertaken in future

·         The had been no change in the methodology or criteria for the audit assessment that would impact on the ‘grading’ of the assurance opinion given

RESOLVED:-

(i)        that the assurance opinion provided by the Head of Internal Audit, Anti-Fraud and Assurance on the adequacy and effectiveness of the Authority’s framework of governance, risk management and control be noted; and

(ii)       that the key issues arising from the work of Internal Audit in the context of the Annual Governance Statement be noted.