Agenda item

This report was presented to the Committee by the Chief Internal Auditor and was to inform Members of the Council’s Governance and Audit Committee of the Internal Audit Section’s Draft Operational Audit Plan for 2022/23.

Main Points:

·       The report sets out the work of the Internal Audit Team to provide assurance of an adequacy in terms of the control environment, governance and risk.

·       The plan contained a long list of what could potentially be audited which was prioritised and risk assessed to a more workable list. This was then taken to CMT to see whether there were any areas senior management wanted to focus on and prioritise.

·       A few factors were considered such as when was the area last audited, which issues had been picked up and whether these issues were corporate or wider and whether there were any topical issues from internal audit received UK wide. Any significant changes to the systems or personnel were also considered. A list of jobs to be undertaken was then provided.

·       Any jobs not undertaken in the previous financial year were then re-risk assessed to see if they fell into the following years audit work.

·       The list of jobs then needed to be balanced with the team resources and within the team there were 7.5 full time equivalent staff which was currently running at 5.5 due to vacancies and long-term sickness.

·       The total net days available was 1400 days less non-productive days leaves the team with 998 available days to undertake the audit work.

·       Each service area is covered in the year as set out in the Appendix, audit work discussions with Heads of Service was also taken into account.

·       Special investigation time was also taken into account which is outside of the audit plan. 

·       The Chief Internal Auditor stated that the .5 equivalent referred to him as he explained that he was also the Chief Internal Auditor for Monmouthshire Council.

·       The team need to demonstrate that they are independent in their work and there was a paragraph on how this was demonstrated.

·       Definitions of the Audit Opinions used were set out, where opinions ranged from good through to unsound.

·       In 2022- 2023 there were 62 audit opinion jobs, 22 non opinion jobs and 5 grant claims.

·       The team itself was composed of mainly professional staff who were either qualified or part qualified.

·       Training was provided across the organisation and training was also coordinated for other audit teams across South Wales where the team looked to bring in specialist knowledge.

·       In terms of the plan this was set out in Appendix 1 where there was a summary of where the audit days would be spent and was based on the old Service Structure:  once the new structure was confirmed the Audit Plan would be amended accordingly and brought back to the Committee.

·       At the moment the team was over planned and under resourced by 149 days, so the plan needed to be refined.

·       The Draft Internal Audit Plan was set out in Appendix 2 which gave Members an idea of the work to be covered. The right-hand column contained the number of days for the jobs to be covered in 2022/2023.

Questions:

Mr Reed commented on the special investigations and asked whether the number of days allocated were typical or did it vary.

The Chief Internal Auditor confirmed it was the allocation used in previous years, but it did vary but it was slightly less than the last 2 or 3 years.

Dr Barry commented that on paragraph 32 it stated that following discussions with the Head of Service it was clear that there were not enough resources and that this was a risk to the Authority and how was it assessed.

The Chief Internal Auditor confirmed that in the past the team have brought in additional audit resource by liaising with external internal audit companies and for the last 2 years the team have engaged with an Audit company and for this particular year have bought in additional days to supplement the plan.

Dr Barry asked were additional resources to be brought in for this year which was sufficient for all the at-risk areas.

The Chief Internal Auditor confirmed that it did need further refinement, but they would be brought in for this year.

The Chair asked that if the Authority was bringing in resources was this value for money in reality or would it be easier to employ a member of staff internally. If there was a gap in service provision was there an opportunity to bring other funding in internally.

The Chief Internal Auditor confirmed that the post had been advertised several times but was not successful in recruiting and in terms of any additional internal funding this was not considered but conversations were ongoing with Finance about the plan and the resources available.

The Head of Finance stated that external help was bought in to fill in existing vacancies rather than additional work so the funding for those was already in the budgets. It did cost more to bring in external resources instead of recruitment, but it was a struggle to recruit.

There was a funded level of resource for the Internal Audit function and therefore the plan needed to be fitted to the available resources. It was noted by the Head of Finance that the Chief Internal Auditor gave an independent assessment each year of the state of the control environment which gave him sufficient coverage to give a view. This was the minimum that was needed which was achieved.

The Chair stated that if there was a view by this Governance and Audit Committee that there was not sufficient resource put in and it was a risk to the Council would this be taken back to the Chief Executive and senior officers.

The Head of Finance agreed and stated that if there were monitoring reports received from the Chief Internal Auditor showing a lot of unsound and unsatisfactory audits and alarm bells were ringing then this should be flagged up but there would need to be a strong reason for that.

The Chair commented on the Housing Benefits issue which was not flagged in this report on page 195 with no days allocated to it and the Chair asked whether any days could be allocated to that.

The Chief Internal Auditor stated that there had been a change in the audit plan due to the service area restructure and that Housing Benefits was on page 189 and there were 12 days allocated for this. Housing Benefits now came under Finance where previously it had been under City Services. 

The Chair asked about functions here in the organisation that have never been audited and noted the 21^st Century School Capital Programme which had never been audited and the School Organisation Programme had not been audited. The Chair commented that he felt they should be perhaps audited together.

The Chair also noted that some areas have come into being in 2004/2005 which had never been audited such as funding areas in social services such as Supported Living Provider Payments and wondered about the rationale of this, were there any issues in those areas.

The Chief Internal Auditor stated what jobs to be audited came through the Risk Assessment process and if there were no issues and no concerns raised corporately then it went through the cycle and therefore there were some areas that were not audited.

Agreed:

The Governance and Audit Committee noted and endorsed the report.