(Chief Internal Auditor) To consider the attached report (AGC-002-2020/21).
The Chief Internal Auditor presented her Annual Report for the consideration of the Committee.
The Committee was reminded that the Accounts and Audit Regulations 2015 included a requirement for the Council to undertake an annual review of the effectiveness of its system of internal audit as part of a wider review of the effectiveness of the system of governance. This report supported the opinion of Internal Audit on the adequacy of the Council’s internal control environment and summarised the work undertaken during 2019/20.
The Committee noted that, based upon the results of work undertaken during the year, it was the Chief Internal Auditor’s overall opinion that the Council had adequate and effective governance, risk management arrangements and control processes. Where there had been significant issues, these had been accepted by Management and promptly corrected.
The Chief Internal Auditor explained that although only 12 assurance reviews were completed during 2019/20, in comparison to 25 in 2018/19, this was a result of Internal Audit undertaking more advisory work than previously and also completing assurance reviews in greater depth. The fact that only five of the twelve reviews attracted a ‘substantial’ assurance rating indicated that the right areas of the Council were being targeted for review. The performance indicators for the Internal Audit service in 2019/20 had been achieved or largely met throughout the year, although some management responses had taken longer than the target of ten days due to the complexity of the review. The Appendices of the report detailed the work carried out by the Internal Audit Service during the year, and listed the individual audit reports issued as part of the 2019/20 Audit Plan.
In respect of Business Continuity Planning, Cllr I Hadley asked if a recovery exercise had been undertaken involving setting up a centre away from the Civic Offices? The Chief Internal Auditor responded that this had not been done, and the Council would need to undertake this sort of exercise. There was some best practice available to share from Broxbourne Borough and Harlow District Councils. The Section 151 Officer added that the Covid-19 pandemic had tested the Council’s disaster recovery plan, and had proved that the Council could provide its services without using the Civic Offices building.
Cllr S Heap highlighted that fines for breaches of Health & Safety legislation could be unlimited, and this area should be monitored very carefully. In addition, there were now a smaller number of people making the decisions for Qualis – the Council’s newly established Group company – and the governance arrangements needed more openness and control.
Cllr I Hadley also emphasised the limited assurance for the Business Support Reconciliations audit, which would need to be improved in the future. The Chief Internal Auditor reassured the Committee that the audit report made recommendations which had been agreed and completed by Officers. The Committee also requested that metrics be used in future rather than descriptive words such as ‘largely’.
Cllr J M Whitehouse commented that the Council’s ability to continue to provide critical services during the Covid-19 pandemic reflected well on its business continuity arrangements. However, the Councillor also noted that a third of the audit reports were currently receiving a ‘limited assurance’ rating, which had increased from one to four during 2019/20, and wondered whether there were any common themes such no procedure notes being left behind when critical members of staff left the Council. The Committee agreed that the Council’s governance arrangements needed to be robust enough to cope if five members of staff left the Council in a short space of time. The Section 151 Officer stated that his role and remit was to bring robustness to the Council’s processes and address these issues.
(1) That the Annual Report of the Chief Internal Auditor for 2019/20 and the Assurance Level given be noted; and
(2) That, for the twelve month period ending 31 March 2020, the confirmation by the Chief Internal Auditor that the Council had operated adequate and effective governance, risk management arrangements and control processes be agreed.