Agenda item

The Head of Internal Audit and Corporate Fraud will submit a report presenting a comprehensive overview of the key activities and findings of Internal Audit based on the Division’s work to the end of June, 2016 being the first quarter of the 2016/17 audit year.

Mrs J Winham, Audit Manager, presented a report of the Head of Internal Audit and Corporate Anti-Fraud presenting a comprehensive overview of the key activities and findings of Internal Audit based based on the Division’s work to the end of June, 2016 being the first quarter of the 2016/17 audit year.

The report covered:

·         The issues arising from the completed Internal Audit work undertaken within the quarter

·         Matters that had required investigation

·         An opinion on the ongoing overall assurance Internal Audit was able to provide based on the work undertaken regarding the adequacy and effectiveness of the Authority’s internal control environment

·         Progress on the delivery of the Internal Audit Plan for the period to the end of the fourth quarter of 2016/17

·         Details of Internal Audit’s performance for the quarter utilising performance indicators

Reports issued and the Internal Audit work completed during the quarter had raised one fundamental recommendation relating to an information governance issue regarding the monitoring and control of system access.

Internal control assurance opinion overall remained adequate based upon the results of the work undertaken during the quarter.

Of the 6 recommendations followed up, 17% had been implemented by the original target date and a further 83% had not been implemented and had received a revised implementation date by management. 

In relation to the Audit Plan, actual days delivered was broadly in line with the profiled days at the end of the first quarter.

Overall, Divisional performance remained satisfactory with only the chargeable time performance indicator being slightly less than target due to the profile of annual leave taken in the first quarter. 

In the ensuing discussion, and in response to detailed questioning, the following matters were highlighted:

·         There was a discussion of the savings target likely to be applied to the Internal Audit Function as part of the 2017/18 savings proposals and whether or not, in the light of any staffing reductions, the Internal Audit function could be maintained.  Arising out of the discussion reference was also made to the recent recruitment exercise to fill the vacant positions (one of which had now been filled) and the decision to consider the vacant position within the context of the savings exercise for 2017/18.  It was noted, however, that no firm proposals had yet been brought forward and an assurance was given that any restructure would still ensure that the Internal Audit function could be maintained and that appropriate assurance and coverage could be provided at all times

·         Arising out of the above discussion and in response to detailed questioning, the Director of Finance, Assets and Information Services outlined the process that the Council followed when recruiting to vacant posts

·         The rationale for the addition/removal of audits from the Audit plan and the discussions that were held with management in this respect were outlined

·         Reference was made to the one fundamental recommendation relating to Information Governance and to the action being taken in this respect.  Arising out of this discussion reference was made to the ongoing work being taken in relation to:

o     Access to the Council network/SAP

o     the actions taken to ensure that access permissions were removed once an individual left the employment of the authority

·         the facilitation of a Workshop of key stakeholders to identify key factors impacting on the delay incurred in the securing of legal agreements with M1 J36 business park developers.  It was noted that a number of actions had been identified to take forward as key ‘learning’ points

RESOLVED:

(i)      that the issues arising from the completed Internal audit work for the first quarter along with the responses received from management be noted;

(ii)     that the assurance opinion on the adequacy and effectiveness of the Authority’s Internal Control Framework based on the work of Internal Audit in the period to the end of June 2016 of the 2016/17 audit year be noted;

(iii)    that the progress against the Internal Audit Plan for 2016/17 for the period to the end of June 2016 be noted; and

(iv)    that the performance of the Internal Audit Division for the first quarter be noted.