The Chief Internal Auditor made the following points by way of introduction:-
1. The Audit Plan had been re-assessed to reflect changing circumstances within the Council and within the team.
2. 47% of completed Audit reviews had concluded limited / no level of assurance, compared to 50% at the same stage in 2017/18;
3. The recommendation implementation rate was currently at 86% implemented or partially implemented, compared to 88% in 2017/18;4. 20 grants with a total value of £22.2m had been certified to date in 2018/19;
5. The Audit Plan was still behind schedule in the short term and temporary auditors had been employed to assist delivery;
6. A review of the advertisement for qualified auditors had been undertaken. It was believed that the level of salary was a contributing factor to the numbers who had seen the advertisement. This would need to remedied in the medium term;
7. Additionally, revised plan delivery was based upon permanent recruitment for existing vacancies. The Chief Internal Auditor stated that given that the next report to Committee would be in March 2019 the Committee would be kept informed of resource position on a regular basis;
8. Table 1 showed the changes to the plan and the number of audits had been reduced with the rationale. It was highlighted that the Original Plan had been deliberately ambitious;
9. The report highlighted concerns relating to the level of assurances from Internal Audit coverage as illustrated graphically, with a continued declining trend on the control framework since 2014/15. The Chief Internal Auditor stated that this had been raised with the Head of Paid Service and the Corporate Leadership Board;
10. In respect of the Recommendations Implementation analysis, the number of partially implemented audit review recommendations needed to be addressed by management. Follow up reviews required further resource thus impacting on the number of planned reviews the service could undertake;
11. Grant Certification posed particular challenges on the service due to the short timescale requiring auditors to set aside other work so that the Council did not lose money;
12. The Chief Internal Auditor provided commentary on the summaries of completed audits contained within the paper. This included The School Places Planning and Allocation Process audit, for which there had had been presented particular challenges with respect to the IT system and had therefore been treated with urgency;
13. An example where Internal Audit had played a “critical friend” role was highlighted in respect of project advice to the new Housing system. This had included ensuring issues relating to the management of risks prior to implementation being escalated to CLB;
14. Privileged Access Management to IT accounts heightened risk and therefore a Limited Assurance review was carried out and privacy access was restricted. A number of recommendations had been made as a result of the review of processes;
At this point Councillor Brain left. The following points arose from discussion:-
1. The Committee could help the audit service by reiterating to senior management the importance of implementing all audit review recommendations;
2. Councillor Negus, being mindful of the Bundred report and complaints about this Committee, noted that any audit review was always a risk as it could not cover unknown matters. The Chief Internal Auditor replied that the areas of planned coverage were kept under regular review in light of changing circumstances and emerging risks. The Plan was flexible so that it could accommodate any new significant areas.
3. Councillor Negus referred to the Appendix 1, Page 77 regarding School Places Planning & Allocation Process. He noted the requirement to have environmental issues at the heart of decision making and yet car journeys involved in attending preferred schools due to the education system’s use of catchment areas meant that the Council had no influence on this environmental issue.
The Director – Finance advised that this matter could fall within OSMB’s remit ie. how the Council delivered on strategic objectives;
6. Councillor Stevens asked whether the cost of auditing grants was built into grant expenditure and was informed that this was an area of work that had been progressed this year in order to manage Internal Audit costs.
7. The Director – Finance added that some grant permissions did not allow this. A strategy was currently being developed to indicate areas where activities were chargeable and time was built in for that activity;
The Committee was reminded of the recommendation and it was:-
Resolved – That the Audit Committee the internal Audit Activity Report for 1 April to 31 October 2018.
At this point Councillor Eddy left the meeting.
The Chair agreed to vary the order of the agenda so that Item 14 was considered next.