Agenda item

Newport City Council’s Internal Auditing was an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. It helped an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.

It objectively examined, evaluated and reported on the adequacy of internal control as a contribution to the proper, economic, effective and efficient use of the Council's resources.

The attached report was the Operational Internal Audit Plan for 2023/24 based on an assessment of risk and available audit resources for the 12 months of the financial year. The plan was based on delivering 862 audit days.

The Council's Section 151 Officer had the legal responsibility for the provision of Internal Audit.

Committee Member Comments:

§  D Reed referred Appendix 3 and asked if the risk column could also be included and in addition, of the same Appendix, there were 74 areas that had never been audited and 223 items that were not audited after 2019/20; how material was this.  The Acting Chief Internal Auditor explained that some areas were never audited but behind the audit plan was information and discussions in terms of how the audit ream arrived at the audit plan and it was based on the available days. Discussions take place with Heads of Services to see which areas were of priority and some areas do get bumped. Covid had an impact, and audit had struggled with vacancies, which had a knock-on effect.  Prioritising jobs was subjective, there was a continual balance. Discussions took place every year to arrive at this audit plan.

§  Councillor Cocks asked was it the Head of Service that decided the level of risk.  The Acting Chief Internal Auditor advised that the Head of Service had influence over the audit plan as well as the Corporate Risk Register, including other factors, such as the executive board and independent review before it was approved, including the Head of Finance. 

Councillor Cocks added that the council budget was to focus on delivering services to most vulnerable and wondered how this played into the plan for example the school meals contract was being audited but Councillor Cocks felt that there were other areas that could be audited in relation to vulnerable people, such as Children with ALN and out of county placements which would be of some concern regarding the financial restrictions.  The Acting Chief Internal Auditor mentioned that there were lots of influencing factors and Heads of Service had an opportunity to contribute to audit plan.  The key issues mentioned might not feature in the Audit Plan but could be other internal reviews of service areas taking place where duplication would be avoided such as ESTYN or Audit Wales, these issues were taken into account.

The Strategic Director also added that every year the Council ran a workshop with regulatory Bodies, ESTYN, Health Care Inspectorate Wales and Audit Wales and the audit team fit into the assurance work frame.  This could be noted for review however if the Chair agreed.  Councillor Cocks also added that auditing resources were being undertaken in auditing schools rather than other service areas. Was audit therefore reviewing the school budget and spending or other areas such as exclusion and ALN.  The Acting Chief Internal Auditor mentioned that there was a standard programme looking at budgets and purchasing, income, governance, banking and statutory policies.  A themed review into exclusions across the schools. Each audit had a different scope but there was a range of different areas covered in the school audit, not purely financial administration.  The Strategic Director added that part of function of central education service that covered Gwent was to give assurance around points that Councillor Cocks raised.

§  Dr Norma Barry commented that she did not recall the Audit Wales reports coming to Committee. The Acting Chief Internal Auditor confirmed that they did as part of the regulatory reports on a periodic basis. Dr Barry stated that it was important as a committee that the council was addressing the actions in those reports.

The Strategic Director stated that committee received the regulatory reports both as part of the Terms of Reference and part of the Committees statutory responsibility to monitor the Councils work against the recommendations that came out of the regulatory bodies.

The Chair stated that if the Committee received a report from Audit Wales and there were specific recommendations then the Committee needed to track them.  This was in case Estyn arranged an inspection and would be able to pick up on actions that were not followed-up.

The Strategic Director stated that the last report included a table which stated the regulatory body, the recommendations given, what actions were taken and what committees oversaw this. For example, educational items were discussed at the Scrutiny Committee for People, which meant the Governance and Audit Committee’s role would be to make sure there were mechanisms in place for delivery against that action rather than monitoring the delivery of the action.

§  Chair highlighted that there were 48 audits for 2023/24 and only 38 audit opinions were delivered last year and there were 27 non opinion jobs.  The Chair did not therefore want audit to bet set up to fail by over committing and under delivering.  The Acting Chief Internal Auditor explained that this was assuming that vacancies were filled in October and also buying in a resource for 80 days.  Chair asked were the jobs going out to advert and was there a salary saving.  The Head of Finance explained that he and The Acting Chief Internal Auditor were actively looking into recruitment process.

§  The Chair asked was it possible to prioritise the high-risk audits first and then carry out the medium risk audit.  The Acting Chief Internal Auditor said that it was possible but that the team was limited in resource as high-risk audits needed a principal auditor to undertake these.

§  D Reed requested as a committee could the rationale behind the table of information be provided in relation to the ‘nevers’ in Appendix 3.  The Chair considered that it might be a lot of work to complete. The Acting Chief Internal Auditor advised that the ‘never’ meant that it had never been audited under that specific job title, but that did not necessarily mean that there was no job coverage in that areas. There could have been a common theme audit or cross cutting review which was why that specific audit job was never audited.  The Chair suggested that it might be worthwhile indicating on the table that it may have been covered, by adding an asterisk to say it was covered under another a theme to give re-assurance. The Acting Chief Internal Auditor agreed that this could be looked into for the 2024/25 Plan.

Resolved:

The Internal Audit Annual Plan 2023/24 be noted and approved by the Council’s Governance and Audit Committee.