Agenda item

To consider the Internal Audit work undertaken and the assurance given on the adequacy of internal controls operating in the systems audited.

26.1           The report of the Head of Corporate Services, circulated at Pages No. 207-223, provided an update report of internal audit activity for 2017/18 which detailed the findings and opinions given by Internal Audit for completed audits within the audit plan. The Committee was asked to consider the internal audit findings and opinions on the work completed in the period and the assurances given on the adequacy of internal controls operating in the systems audited.

26.2           The Head of Corporate Services explained that Appendix 1 to the report summarised the work of Internal Audit for the period and Appendix 2 provided the status of all audits. The audit recommendations due to be followed up in quarter two of 2017/18 had also been included in this monitoring report. He explained that a ‘split’ opinion could be provided – this meant an individual opinion could be given for different parts of the system being audited. This approach enabled internal audit to identify to management any specific areas of control that were operating or not. Assurance opinions were categorised as ‘good’, ‘satisfactory’, ‘limited’ and ‘unsatisfactory’. With regard to the opinions issued for the period, all had a positive audit opinion. The list of audit recommendations, and their status, was attached at Appendix 3 to the report; of the 16 recommendations, seven had been implemented, two had been partially implemented and seven had yet to be implemented. Of those not implemented, the bulk related to the Ubico client monitoring audit.

26.3           In terms of the audits completed, Members were advised that the Freedom of Information management system had gone live in November 2015. In 2016/17, 321 requests had been received with only 14 responses sent late which equated to almost 96% being processed in line with the Freedom of Information Act; that type of information had not been available through the old system so there were no real comparisons that could be made. However, it was felt that the new system, and the introduction of monitoring by the Corporate Services Officer, had meant the responses to Freedom of Information requests were now much more efficient. During the Information Governance Audit, it was noted that handling procedures required updating and that they should be expanded to include reference to the handling of Freedom of Information complaints or “internal reviews”. In addition, it had been recommended that a training programme be established and appended to the Information Governance Policy which included training for dealing with Freedom of Information requests. The assurance level on the audit had been satisfactory. In respect of Disabled Facilities Grants, there was a satisfactory level of assurance that grants were being approved within the legislative timeframe of six months and monitoring was now being supported through the use of reports generated through the ‘Uniform’ system. Testing had confirmed that grant payments were processed promptly and in accordance with the terms of the grant. The current monitoring process gave consideration to approved grants; however, in view of the current funding arrangements with the county being based on approved and paid grants only, it had been recommended that a quarterly review of paid, approved and estimated eligible grants against the funding allocated be undertaken to assist in identifying shortfalls against county allocated funding promptly. The Environmental Health and Land Charges sections worked cooperatively to ensure that land charges were applied when necessary for the allotted length of time and testing had confirmed that money had been repaid and the charge was removed as appropriate; that assurance level had been identified as ‘good’.

26.4           The Council had an Absence Management Policy and accompanying procedures which could be accessed through the intranet. It was noted that the absence process flow chart needed to be updated to reflect the policy in respect of the number of absences in a rolling period. Audit testing had confirmed that the handling and recording of absences had been dealt with in accordance with this Policy, although there was not a consistent approach in the recording of past absences within the return to work forms even though HR maintained a spreadsheet which listed all absences within a 12 month rolling period. This was a function of the new HR administration system. In addition, absence details had been transferred to payroll correctly. The reporting values entered by the authority within the National Non-Domestic Rate (NNDR3) had been found to be fairly stated and evidence was retained to support those values. A sample of business rate accounts, which included the reliefs and exemptions that had been applied, confirmed that they had been accurately calculated and appropriately applied to the accounts. Follow-up on previous recommendations confirmed that a review into the ‘mini review’ procedure for discretionary relief had been completed with amendments to the Policy taken to Members for approval at the end of August 2017. The recommendation to amend the Council’s discretionary relief policy to give consideration to the Localism Act was yet to be completed, however, discussions were ongoing; it was agreed that that recommendation be deferred for a further six months whilst an exercise was completed to identify the financial implications and the feasibility of the discretionary relief. In terms of discretionary housing payments, the government had allocated the Council £92,900 in funding to be used to award discretionary housing payments to support those affected by welfare reforms. The Council was required to complete a return to identify where there had been any over or underspend. A review of the 2016/17 return confirmed that the cells required had been completed in accordance with the guidance provided. In addition, the return had been appropriately signed off by the Section 151 Officer, and lodged within the stated deadline. The return value had been understated by £510.24 but this was not material since the Council was not gaining any financial advantage by this error as the Council’s spending exceeded the government contribution by £6,000. Testing of 20 awards found that all had been approved or refused in line with the Council’s policy and that the amounts awarded were arithmetically correct; on discussion with the Council’s Benefits Team Leader it had been identified that discretionary housing payment overpayments were not actively recovered and therefore it was recommended that recovery processes be put into place in line with the Council’s policy.

26.5           There followed a discussion about the rating of audits and the Chair considered that there would be an argument for the Freedom of Information audit outcome to be ‘good’ rather than ‘satisfactory’. In response, the Head of Corporate Services advised that the next item on the Agenda looked at assurance levels. He offered reassurance that ‘satisfactory’ could be a good thing. The Member also felt that it would be helpful for Internal Audit to be able to offer a steer on how an audit outcome could be improved from ‘satisfactory’ to ‘good’. The Grant Thornton Engagement Lead advised that there was a certain amount of flexibility in auditing but it would always be the case that some would be easier to move from ‘satisfactory’ to ‘good’ than others. Sometimes there would be a cost to improvement and that would need to be considered on a case by case basis as this may be prohibitive in some circumstances.

26.6           Accordingly, it was

                  RESOLVED          That the internal audit findings and opinions on the work                                      completed in the period, and the assurance given on the                                          adequacy of internal controls operating in the system audited,                                     be NOTED.