Agenda item

To receive the 2022/23 Internal Audit and Investigation Plan - Quarter 1 Progress Update (to 30 June 2022) and In-Year Review of 2022/23 Internal Audit and Investigation Plan (September 2022)

The Committee considered the 2022/23 Internal Audit and Investigation Plan – Quarter 1 Progress Update (to 30June 2022) and In Year Review of 2022/23 Internal Audit and Investigation Plan (September 2022).

During the discussion of this item, the following points were made:

·       The Debtors audit had received a Category 3 level of assurance.

·       The report detailed the follow up action being under taken by the Internal Audit team

·       The format of the report would be improved for future meetings, to provide more detail, particularly around any High recommendations.

·       The Committee was asked to approve an in year change to the Internal Audit Plan.  It was proposed that some audits move to the next financial year, and that for others assurance was provided via another mechanism.  The Assistant Director Governance took the Committee through the proposed changes. 

Ø  Treasury management – proposed deferral.  Internal Audit had recently looked at Treasury Management.

Ø  Corporate governance.

Ø  Climate emergency – an audit had been conducted.  It was suggested that the more detailed audit be deferred.

Ø  High Needs Block – assurance via Safety Valve work and inspections.

Ø  Public Health – proposed that audit be deferred.

Ø  Asylum seeking children – assurance provided via other means.

Ø  Risk management – audit proposed to be deferred as assurance provided via other means following the Local Government Association Peer Challenge.

·       The proposed changes to the Plan would generate a modest saving.

·       Councillor Davies was of the view that the reasons for the proposed amendments to the Plan were comprehensive.

·       It was confirmed that the full-time post vacancy would not be filled at that time.

·       In response to a Member question, the Assistant Director Governance explained the following up of actions following an audit.

·       Councillor Maher queried when the consultancy/management requests for internal audit work that had been requested in Quarter 2, had been agreed.  The Assistant Director Governance explained that within the Internal Audit Plan there had been provision for management to request ad hoc pieces of Internal Audit work. 

·       Councillor Maher queried whether the Internal Audit team carried out value for money audits.  He was informed that value for money was considered as part of the scope of every audit.  The Assistant Director Governance confirmed that this was not quantified but he would discuss with the Head of Internal Audit and Investigations, how this could be done in the future.

·       Councillor Smith questioned whether a higher work load was necessary if some items could be deferred.  The Assistant Director Governance commented that the Internal Audit Plan needed to be considered over a longer period than a year.  Given the short period of time and one off nature of the request, he was satisfied with the proposal to amend the Plan. 

·       Councillor Smith questioned whether deferring the external assessment of the Internal Audit team to quarter 4 would be too late.  The Assistant Director Governance commented that a high rating had been received following the previous assessment, and that each year the team also undertook a self-assessment.  He was not aware of any areas of slippage against the standard.

·       Councillor Gee expressed concern regarding the proposed deferral of the treasury management audit, given the volatile financial situation and the awaited outcome of the consultation around the Minimum Revenue Provision.  Councillor Burgess commented that an audit in this area had been recently carried out and the Committee received the Treasury Management Outturn reports.  Discussions could be had with the Head of Internal Audit and Investigations regarding the timing of the audit.

·       Councillor Kaiser requested the debtors audit report.  The Committee was reminded that Officers could be invited to provide Members with more detail if required.  Councillor Burgess agreed that the Committee needed more visibility of the reports of those audits which received a 3 of 4 rating. 

·       The Assistant Director Finance provided more detail on the debtors report and some of the actions being taken.  The high risk areas included how the debtors team worked with other services, information raised was cleared, and queries dealt with quickly.  Another area of concern highlighted had related to alternative collection methods in cases where debtors were not paying.  Members were informed that a review of the structure of the team and the processes had begun, and relationships had improved.  A trial using different collection agencies had begun.  It was noted that the collection overall had actually increased.

·       In response to a question from Councillor Kaiser, the Assistant Director Finance clarified that the debtors were sundry debtors.

·       Mike Drake stated that typically Internal Audit would have some audits which were carried out every three years, and more high risk audits were carried out on an annual basis.  He queried the deferral of the Treasury Management audit.

·       Further detail was provided regarding the Investigations investigation mechanism.

RESOLVED:  That

1)    the 2022/23 Internal Audit and Investigation Quarter 1 Progress Report (activity to 30 June 2022) be noted.

2)    the proposals for an in-year review of the 2022/23 Internal Audit and Investigation Plan be considered and approved, but the Committee agreed that an additional discussion would take place with the Internal Auditors with regards to Treasury Management, and a reassessment of exposure in the light of economic volatility and the implications for treasury strategy, including the Minimum Revenue Provision.