Agenda item

Consideration was given to a report presented by Marc Bicknell, Chief Auditor, which provided a summary of Internal Audit work and performance for the nine months ending 31st December 2014.

Progress on the Plan remained slightly below target for a variety of reasons including the loss of one member of staff through Voluntary Severance and another on maternity leave.  The extended scope of some pieces of work had had an impact together with examination of issues highlighted within the Jay Report which had included specific work on the Council’s Home to School Transport contracts, Risky Business project and the ‘Key Players’ Group.

By prioritisation of the audit activity, careful management of resources and the utilisation of additional temporary staff, it was the expectation to have a sufficient body of audit evidence to form an opinion on the Council’s control environment.

The Corporate Governance Inspection had highlighted a number of fundamental weaknesses in the Council’s governance arrangements.  These were being assessed from an audit perspective and it should be noted that the likelihood of some of the matters being referenced in the annual audit opinion.

Appendix A of the report submitted showed the audit reports issued during the first nine months of the year.  Audit findings in most areas indicated that satisfactory control arrangements were in place and testing confirmed that the controls were operating effectively during the period under review.  Notwithstanding this, the work showed that there were opportunities to strengthen arrangements in some of the areas and implementation of Internal Audit’s recommendations for improvement would reduce the Council’s exposure to risks.

Three areas had required reporting as ‘inadequate’:-

-          CYPS – Contract for School Improvement Activity

-          EDS – Highways Final Accounts Arrangements

-          EDS – Blue Badge Scheme

Discussion ensued on the report with the following issues raised:-

·           The significant upsurge in responsive work since the publication of the Alex Jay and Louise Casey reports.  There was a risk that if the Internal Audit Team were constantly diverted onto special investigations and reviews that the 85% audit plan delivery target may not be achieved

·           There were currently 7.8 FTE plus a temporary contractor working in Internal Audit. It was the smallest and lowest cost Local Authority Internal Audit function in South Yorkshire and West Yorkshire by a significant margin

·           The Casey report made reference to the Audit function

·           Ongoing work as a result of the 2 independent inspections including understanding how the Records Management System worked

·           Unknown risks that could not be quantified as yet – there would be a complete refresh of the Risk Register

·           As part of the Transformation work the Terms of Reference and Constitution of the Audit Committee would be reviewed

Resolved:-  (1)  That the performance of the Internal Audit Service during the period be noted.

(2)  That the key issues arising from the work done in the period be noted.

(3)  That the likelihood of matters raised in the Corporate Governance Inspection report being referred in the annual audit opinion on the Council’s control environment be noted.

(4)  That the Internal Audit Service be congratulated for their work and resilience in dealing with the substantial increased workload.