Agenda item

-        Marc Bicknell, Chief Auditor, to present

Consideration was given to a report presented by Marc Bicknell, Chief Auditor, which provided a summary of Internal Audit work and performance for the seven months ending 31st October, 2015.

Significant resources had been focussed on the audit planning process during the first part of the quarter.  This was to ensure that the 2015/16 Audit Plan was compliant with the requirements of the UK Public Sector Internal Audit Standards as well as ensuring that Internal Audit was able to maximise the value and assurance provided to the Council’s Executive/Commissioners together with fulfilling the statutory obligation to review and report on the Council’s internal control environment.

Internal Audit provided an ‘opinion’ on the control environment for all systems or services which were subject to audit review which were taken into consideration when forming an overall opinion on the Council’s control environment.  An ‘inadequate’ opinion was given in any area under examination where 1 or more concerns of a fundamental nature were identified in the area.

Summary conclusions in all significant audit work concluded during the first seven months of the 2015/16 financial year were set out in Appendix 1 of the report submitted together with the audits that were at draft report stage. 

Eight areas had been concluded as ‘inadequate’:-

-          CYPS – Fostering and Adoption: Extensions and Adaptations

-          CYPS – Clifton Community School

-          EDS – Taxi Licensing Administration

-          EDS – Integrated Housing Management System

-          Public Health – Contract Compliance – GPs and Pharmacies

-          Council Wide – Business Continuity Management

-          CYPS – Abbey School

-          EDS – Voluntary Organisation Grant Claim

Allegations of fraud, corruption or other irregularity were also investigated with details of significant investigations completed in the period set out in Appendix B.

As at 31^st October, 2015, taking account of final reports and a prudent assessment of work in progress, Internal Audit had completed 40% of the 2015/16 Audit Plan.  On this basis it was anticipated that 72% would be completed by the end of the financial year.  Actions were being put into place to use interim resources to ensure that at least 90% of the Audit Plan could be delivered by the year end.

A further key area of concern was the Indicator relating to “Audits completed within planned time” which was also significantly behind target partially as a result of a number of complex and sensitive pieces of work taking longer than anticipated.  It also highlighted an urgent need to improve the performance of the Internal Audit Team in delivering audit work within budget and elapsed time targets.

The Interim Strategic Director of Finance and Corporate Service had instructed that all audits must be completed within the days allocated other than in exceptional cases where issues were discovered during an audit that required further investigation.  In such circumstances, any additional budget days must be authorised by the Chief Internal Auditor and Assistant Director of Audit, ICT and Procurement.  This, together with a general strengthening of performance management and resource prioritisation, was already having a positive impact.

Discussion ensued with the following issues raised/clarified:-

-          Performance was measured internally on a weekly basis together with monthly meetings with the Interim Strategic Director and Assistant Director of Audit, ICT and Procurement

-          Reporting process for those areas rated ‘inadequate’

-          The need to strengthen assurance arrangements where the Authority commissioned services with GPs and pharmacies

-          Significant progress had been made with regard to business continuity management arrangements

-          Anticipated outcome of the PwC review of Internal Audit

Resolved:-  (1)  That the performance of the Internal Audit Service during the seven months ending 31st October, 2015, in particular the management actions taken to improve delivery of the Audit Plan and ensuring that sufficient work was completed to provide the statutory opinion on the adequacy of the Council’s control environment, be noted.

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