Agenda item

The Committee will receive a report providing the Head of Internal Audit’s annual opinion on the adequacy and effectiveness of the Authority’s internal control arrangements based on the work of Internal Audit during 2015/16 and has been prepared in accordance with the Public Sector Internal Audit Standards.

Mrs J Winham, Audit Manager, presented a report of 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 (the internal control arrangements) based on the work of Internal Audit during 2015/16 which had been prepared in accordance with recommended practice contained within the Public Sector Internal Audit Standards.

The report contained:

(i)         An opinion on the overall adequacy and effectiveness of the Authority’s framework of governance, risk management and control

(ii)        A summary of the audit work undertaken to formulate the opinion

(iii)       Details of key control issues identified, particularly in the context of the Annual Governance Statement

(iv)       The extent to which the work of other review or audit bodies had been relied upon

The meeting noted that the Head of Internal Audit and Corporate Anti-Fraud was able to provide an adequate assurance opinion.  This opinion was based upon the completion of the annual programme of risk based audit coverage.

Key issues arising from all completed audits had been reported throughout the year within the quarterly Internal Audit reports and whilst overall opinion was positive, some issues arising from the Internal Audit work in the year required Senior Management consideration.  In general terms these related to the impact of Future Council and the implications of changed structures, new and changed systems and an increased workload for many managers which had impacted upon their ability to maintain reasonable and effective controls in some areas of activity.  It had been accepted, and previously reported to Committee, that there had to be a change in risk appetite and it was important that senior managers remained alert to and focussed on maintaining appropriate risk based and effective framework of controls.

The implementation of audit report recommendations remained an issue as only 35% of recommendations had been implemented by the date agreed by management.  In many instances this was largely as a result of the implications of embedding new operational and/or structural arrangements as part of Future Council.  The monitoring of report recommendations would continue to be a priority for the Service.

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

·         Information was provided on the major issues that had been identified throughout the year which had resulted in fundamental recommendations and the action which had been taken to address the issues raised

·         Members again raised their concerns at the number of report recommendations which were not being addressed within the agreed timescales.  In response, the Director of Finance, Assets and Information Services outlined the ways in which these concerns were being addressed via the Senior Management Team by the raising of the profile of audit report recommendations and by ensuring that Executive Directors were made aware of the due dates.  Arising out of this discussion, it was suggested that such information should be included within future reports.  It was also suggested that further consideration be given to ‘overdue’ responses at the next meeting and that, if required, Executive Directors be invited to future meetings to explain the action to be taken by their Service

·         In response to questioning, it was explained that appropriate press releases were issued to highlight successful prosecutions for fraud and indeed one individual employed by a public organisation had lost their job as a result of one such prosecution

RESOLVED:-

(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 on the context of the Annual Governance Statement be noted; and

(iii)      that the satisfactory performance of the Internal Audit functions for 2015/16 be noted.