(Chief Internal Auditor) To consider the attached report (AGC-013-2019/20).
The Chief Internal Auditor presented the Internal Audit Monitoring report for the period November 2019 to January 2020.
The Chief Internal Auditor reported that four reports had been issued since the Committee’s last meeting on 25 November 2019. The three reports on Recycling Management & Income, Invoices Payments, and Housing Register and Allocations had been issued with substantial assurance, whilst the report on Business Support Reconciliations had been issued with limited assurance. For Business Support Reconciliations, it had been identified that the Building Control, Legal Fees and Industrial & Commercial Rents reconciliations were not being carried out and therefore there was limited assurance that all such transactions had been recorded in the Council’s accounts. Weaknesses in the reconciliations that were being performed by Business Support had also been identified. Under the new Business Support arrangement, roles and responsibilities should be clearly defined and clear procedural guidance to ensure controls operated effectively.
The Chief Internal Auditor stated that good progress had been made with the Internal Audit Plan for 2019/20; the deferral of the audit of the Infrastructure Delivery Plan to 2020/21 was being considered, as the Local Plan had not yet been adopted.
The Audit Recommendation Tracker was showing that the number of overdue audit recommendations had increased with 17 currently past their due date in comparison to 13 at the Committee’s previous meeting. The overdue High Priority recommendation related to the Business Continuity Planning project; the Service Director for Commercial & Regulatory Services reported that Business Continuity Planning for all Directorates was now complete, and an exercise would be undertaken on 19 February 2020 to test the Business Continuity Plans.
Cllr R Jennings highlighted the use of the word ‘should’ throughout the report, was concerned by the number of overdue audit recommendations, and enquired if this situation would be rectified for the next meeting of the Committee in March? The Chief Internal Auditor took this on board. The Chairman was also concerned that the number of overdue medium priority audit recommendations had doubled since August 2019, and proposed that every Officer responsible for an overdue audit recommendation should be summoned to the next meeting of the Committee to explain why the deadline had not been met; the Committee agreed the proposal.
The Chief Internal Auditor informed the Committee that the Internal Audit Charter had been reviewed to ensure that it was fully compliant with the Public Sector Internal Audit Standards. The primary revision had been to ensure the division between assurance and consultancy work was clearly defined. The annual review of the Local Code of Corporate Governance had also been completed, and the only changes required were to reflect the Council’s management restructure and current policies.
The Chief Internal Auditor highlighted the following achievements by the Corporate Fraud Team, since the previous meeting of the Committee:
(i) two Right-to-Buy applications had been stopped resulting in a discount saving of £166,000 and potential rent revenue streams of £105,000;
(ii) one ongoing Right-to-Buy investigation had identified safeguarding issues relating to suspected financial abuse of an elderly person;
(iii) an investigation into the suspected illegal sub-letting of a Council property had now reached the stage where legal options were being explored; and
(iv) International Fraud Awareness Week had been well received, and had made a number of teams within the Council more fraud aware.
Finally, the Chief Internal Auditor outlined the progress that had been made with the issues identified for improvement during the current municipal year in the Annual Governance Statement.
Cllr S Heap felt that there was no mechanism for oversight of current fraud investigations, and the Committee needed to have some degree of control over this. The Chief Internal Auditor stated that public pronouncements could not be made during the investigation, but the result of major investigations were always reported to the Committee when they were completed. Cllr S Heap stated that some of the investigations were lengthy, and the Committee would not know of its progress or even if it was actually happening. Cllr S Heap felt that there should be a small group of Councillors who should be trusted for the reporting of ongoing fraud investigations. The Chief Internal Auditor undertook to consider this matter further and would discuss this with the Chairman.
The Chairman was pleased that Officers were now accountable to the Committee and would have to provide an explanation if they failed to meet the agreed deadlines for actioning audit recommendations. However, the Councillor was unsure as to the timescale for actioning the audit recommendations for the limited assurance report issued for the Business Support Reconciliations? The Chief Internal Auditor stated that this would normally form part of the audit recommendation tracker process, which listed all overdue audit recommendations and all outstanding high priority audit recommendations, regardless of whether they were overdue or not. This particular high priority audit recommendation was listed on the audit recommendation tracker, but the Chief Internal Auditor agreed that additional detail should have been included in the report to give the Committee that assurance as well. The Senior Auditor added that an action plan was always agreed with the relevant Officer after every audit undertaken, and additional detail regarding the actioning of high priority audit recommendations would be included in the Committee report in the future.
(1) That the progress made against the 2019/20 Internal Audit Plan and the summary of the work of Internal Audit and the Corporate Fraud Team for the period November 2019 to January 2020 be noted;
(2) That the revised Internal Audit Charter be approved;
(3) That the revised Local Code of Corporate Governance be approved; and
(4) That the responsible Officers for all overdue Audit Recommendations at the next meeting of the Committee be invited to attend that meeting to explain to the Committee the circumstances for the deadline not being met.