Agenda item

The report was presented to the Committee by the Chief Internal Auditor.

This report was carried over from the previous meeting. This was a regular report to this Committee to give assurance to Members on the adequacy of the internal control environment operated within the Council by providing the audit opinions on work undertaken at the end of Q3.

Main Points:

·       The Audit Team reported opinions issued from the audit work undertaken on a regular basis. Members were also informed on the performance of the team and that the team were progressing against the plan as expected. 

·       The appendices showed that the Quarter 3 report was on a quarter-by-quarter basis and a year-by-year comparison where the annual year report was on an annual basis.

·       Appendix A showed that 42% of the original audit plan has been achieved so far which is below the target of 50% mainly due to lack of resources in the team.

·       The promptness of issuing draft reports averaged at 6 days, well within the target time of 10 days.

·       The promptness of report finalisation averaged at 3 days which was within the target time of 5 days.

·       In terms of assurances at the end of the 3^rd Quarter this was shown in Appendix B where there were 6 x Good Opinions issued, 11 x Reasonable, 1 x Unsatisfactory. There were no Unsound audit opinions. In addition, 5 grant claim audits were undertaken during the year: all resulting with an Unqualified opinion.

·       Non opinion work where financial advice was provided to the organisation and financial regulations training was also delivered. The Annual Governance Statement was covered within this non opinion work.

·       The definitions of Opinions were in the report as well as a definition as to what Qualified and Unqualified meant.

Questions:

Dr Barry referred to paragraph 16 where it stated 13 out of the 14 audit reviews in draft,21 were finalised and wondered why the others had not been finalised.

The Chief Internal Auditor stated that there was a process undertaken to issue draft reports and explained that there was no exact cut off at the year end. As of the 31^st  March 2021 it was hoped that most of those reports in draft would be finalised by the first Quarter. There were one or two reports that took longer, and negotiations were held with Service Managers who could provide additional info to finalise reports. An update would be provided at the next Committee.

The Chair referred to Appendix A where only 42% of the Audit plan was completed due to sickness and asked whether the team was able to catch up or would they be pushed into the next financial year.

The Chief Internal Auditor confirmed that the team would try to catch up as there was a rigorous planning process at the start of the financial year and all uncompleted jobs would be considered and they would be risk assessed with a discussion with the corporate management team to see which jobs would be prioritised going forward.

The Chair commented on Appendix B page 114 on City Services- Housing Benefitswhich had an Unsatisfactory Opinion. The Chair wanted an explanation on what the process was and whether recommendations came out of the report and how soon was the service area reinspected. 

The Chief Internal Auditor confirmed that an audit report was issued based on strengths and weaknesses and if more strengths were found then there was a more favourable audit opinion. The team worked with service managers to identify and put together an action plan formed with management actions which created ownership in the service area. The team oversee the actions and if the team felt the actions did not address the issues, then audit comments were put in the action plan and a reasonable timescale was given depending on the weakness identified. This could be easily achievable or more difficult, so managers were given a reasonable timescale. The Audit team would then return to audit the Unsatisfactory Audit Opinion within a 12-month period to make sure the actions were implemented. If there was no improvement and there was a second consecutive Unfavourable Opinion, then this would be brought to the Committee and the advice would be to call in the Head of Service so improvements can be assured to Committee.

Councillor Cocks commented that 12 months was a long time for the recipients of Housing Benefit and could actions be implemented on a prompter scale.

The Chief Internal Auditor stated that it would be favourable if actions were taken immediately but sometimes the service area needed extra resources or new systems to improve the control environment. It was explained that the draft report was discussed with the Service Manager and then the finalised report was sent to the Head of Service to be made aware of the agreed action plan and actions were prioritised as Red, Amber, or Green. The Red risks were flagged to the Head of Service. The reporting back did take time as resources were needed to follow up on actions.

The Chair asked was it possible to recommend that a review be completed on Housing Benefits after 3 months or 6 months as if there was a delay in benefit payments this had a huge impact on residents and taking into account increased inflation, could the Governance and Audit Committee request an update after a certain time.

The Chief Internal Auditor confirmed that this review could be requested and assured Members that Housing Benefits review was in two parts- the issuing of the Housing Benefits Monies and the Housing Needs element which was the most concern.

Agreed:

The Governance and Audit Committee noted and endorsed the report.