Agenda item

To consider the Internal Audit Annual Report 2016/17 and the assurance from the work undertaken during the year on the level of internal control within the systems audited.

12.1           Attention was drawn to the report of the Head of Corporate Services, circulated at Pages No. 66-72, which provided Members with a summary of the internal audit work undertaken in 2016/17, together with an opinion on the overall adequacy and effectiveness of the organisation’s control environment.  Members were asked to consider the report and the assurance that, overall, there was a satisfactory level of assurance in relation to the effectiveness of the Council’s framework of governance, risk management and control.

12.2           Members were advised that the Public Sector Internal Audit Standards (PSIAS) required the Council to produce an annual internal audit opinion and report which could be used by the organisation to inform its Annual Governance Statement.  Page No. 68, Paragraph 2.2 of the report, gave an overview of the audits undertaken during the year.  One audit was outstanding from the 2016/17 Audit Plan in relation to an allocation of days for a further ICT audit and days had been allocated within the 2017/18 Plan to undertake that work.  As well as internal work, the team had provided an internal audit service to Tewkesbury Town Council during the course of the year; however, as reported to the last meeting of the Committee, notification had been received from the Town Council of the decision to terminate the contract and, as such, there were 20 days within the Audit Plan which could now be allocated to Tewkesbury Borough Council work.  Paragraph 2.3 of the report set out the corporate improvement work which had been carried out and it was noted that the team was also represented on key corporate groups such as the Corporate Governance Group and the ‘Keep Safe, Stay Healthy’ Group.

12.3           Members were advised that 59 audit opinions had been issued during the year, as set out at Paragraph 3.2 of the report.  There were eight ‘limited’ or ‘unsatisfactory’ opinions which had been brought to the Committee during the year e.g. tree inspections, bulky waste, Ubico client monitoring.  The Head of Corporate Services stressed that it was not unexpected to find areas of limited or unsatisfactory assurance given the variety and complexity of systems, procedures and services operated by the Council; the important thing was that the audit recommendations were accepted and acted upon by management.

12.4           Management of internal audit was overseen by the Head of Corporate Services and delivery of the annual Audit Plan was carried out by two full-time employees. During the course of the year, one employee was on maternity leave and this position had been covered by a secondment from another service area.  The team comprised one full-time, and two part-time, employees with one taking a senior role.  As defined in the Internal Audit Charter, the team had remained organisationally dependent during the year and the Head of Corporate Services had regular briefings with the Chair and Vice-Chair of the Audit Committee which would continue going forward.  A ‘Meet the Internal Audit Team’ session had been held for Members of the Audit Committee and a seminar had taken place prior to today’s meeting on the role of the Committee. 

12.5           It was noted that there had been no reported incidents of fraud, theft, corruption or whistleblowing during the financial year and the updated Anti-Fraud and Corruption and Whistleblowing Policies had been presented to the Audit Committee following review.  The performance monitoring information for achievement against the Audit Plan was based on the number of completed audits vs. the number of planned audits and Members were advised that the outturn for the 12 month period was 93%. Based upon the work undertaken during the year, Internal Audit could provide reasonable assurance that, overall, there was a satisfactory level of control in relation to the effectiveness of the Council’s governance, risk management and control environment.  The team had now started work on the 2017/18 Audit Plan which had been approved by the Audit Committee in March and included key areas of work such as absence management; GDPR; Ubico client monitoring; key finance systems; vehicle contract; and project management of the public services centre refurbishment.  As discussed at previous Audit Committee meetings, it was a requirement of PSIAS that the internal audit function be subject to independent assessment at least every five years.  Through networking with other Councils that had been through the assessment process, a preferred assessor had been identified and approved in consultation with the Head of Finance and Asset Management and the Chair of the Audit Committee.  A date for the review had not yet been confirmed but it would be in the third quarter of the financial year and the outcome would be reported back to the Audit Committee.

12.6           A Member noted that a ‘limited’ opinion had been issued in relation to the tree inspections audit during 2016/17.  He indicated that, at a recent Flood Risk Management Group meeting, it had come to light that there was no programme for the inspection of ditches which were not on Council-owned land and he questioned whether this could be incorporated into the tree inspections programme.  The Head of Finance and Asset Management explained that tree inspections were carried out by the Ubico grounds maintenance team and he would need to check if there was sufficient capacity to take on any additional work; if there was the capacity and will, there was no reason why the same software could not be used.  The Deputy Chief Executive undertook to raise this with the Head of Community Services who was in the process of carrying out a piece of work on grounds maintenance.

12.7           It was

RESOLVED          That the internal audit annual report be NOTED.