(Chief Internal Auditor) To consider the attached report (AGC-003-2020/21).
The Chief Internal Auditor presented the revised Audit Plan for 2020/21 for approval by the Committee.
The Chief Internal Auditor explained that the Internal Audit Plan for 2020/21 had been revised due to the Covid-19 pandemic. It was based on a risk assessment of internal and external factors, including those related to the pandemic, which could affect the Council in achieving its objectives. It was important that sufficient work was undertaken by the Internal Audit Service for the Chief Internal Auditor to be able to give their annual opinion on the Council’s internal control, risk management and governance arrangements.
The Chief Internal Auditor added that the initial focus of the revised Audit Plan would be the core financial controls, including Accounts Payable, Payroll and Treasury Management, and any lessons to be learnt from the Covid-19 pandemic would be captured to improve the Council’s Business Continuity Planning in the future. It was explained that a number of audits were excluded if it was felt that they could be deferred until 2021/22, and it was emphasised that the Plan was not fixed and could be amended or revised if circumstances demanded.
Cllr R Jennings expressed some concerns and asked if the Chief Internal Auditor had sufficient qualified staff to undertake the proposed Plan and complete it? The Councillor did not want a repeat of the position of previous years where the Audit Plan was not completed. The Chief Internal Auditor explained that the Audit Plan was compiled on a needs assessment using staff availability and days, and it was also necessary to have a broad range of audits planned. The Audit Plan for 2019/20 would have been completed but for the Covid-19 pandemic, and the Chief Internal Auditor assured the Committee that the 2020/21 Audit Plan would be delivered.
The Chairman enquired what the effect of homeworking had been on the Internal Audit Service? The Chief Internal Auditor responded that the Service had been working flexibly anyway as it covered three distinct Councils. It had been impossible to undertake any physical testing during the pandemic, and some Officers had not been available as they had been busy dealing with Covid-19 related matters. However, now that the Council was entering the recovery phase, it was intended to engage more with Officers.
The Chief Internal Auditor informed the Committee that the governance audit of Qualis needed to be completed before any operational ones. The audit of Qualis Commercial would depend on how quickly their transactions started, but it would be undertaken at the appropriate time. In respect of the priority of the planned audits, the Chief Internal Auditor stated that there would be consultation with the Section 151 Officer and the views of the Committee would also be considered but it was necessary to perform the key financial audits followed by the Qualis Governance audit. However, the Plan was designed to be flexible and other audits could take priority later in the year. The Committee agreed that Qualis should be given a chance to start trading before it was audited.
Cllr S Heap enquired whether a small group of Councillors could have oversight of any fraud allegations against staff, to open up this aspect of work to proper scrutiny and to identify any trends. The Chief Internal Auditor reminded the Committee that the Internal Audit Service was independent of the Council, and the Corporate Fraud Team would investigate all incidents of staff fraud and if anything significant arose then there would be a conversation with the Chairman of this Committee. Similar arrangements were also in operation at Broxbourne Borough and Harlow District Councils, and there was also the ‘Whistle Blowing’ policy and the Fraud hotline. The Chief Internal Auditor was cautious of starting any perceived witch hunts against staff. Cllr S Heap clarified that he was thinking in terms of another level of oversight, not the whole Committee but perhaps a small group of three Councillors from the Audit & Governance Committee. The Section 151 Officer suggested that it might be preferable to bring the matter to the attention of the Chairman first and then to the wider attention of the Committee. The Chief Internal Auditor felt that the current process could be reconsidered when a new case arose.
(1) That the revised Internal Audit Plan for 2020/21 be approved.