Agenda item

To consider the Internal Audit Annual Report 2017/18 and the assurance from the work undertaken during the year that, overall, the Council’s governance, risk management and control environment is generally effective and, where areas of concern have been identified, there has been a positive management response.

14.1          Attention was drawn to the report of the Head of Corporate Services, circulated at Pages No. 169-176, which provided Members with a summary of the internal audit work undertaken in 2017/18, 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, the Council’s framework of governance, risk management and control was generally effective and, where concerns had been identified there has been a positive management response.

14.2          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. 170, Paragraph 2.2 of the report, gave an overview of the audits undertaken during the year and Paragraph 2.3 set out the corporate improvement work that had been carried out.  It was noted that the team was also represented on key corporate groups such as the ‘Keep Safe, Stay Healthy’ Group.

14.3          A summary of the audit opinions reported throughout the year was set out at Page No. 172, Paragraph 3.2 of the report, and it was pleasing to note there had been no ‘unsatisfactory’ opinions.  Two ‘limited’ opinions had been issued, both in relation to the licensing function, and the key areas for improvement were outlined within the report.  There had been a positive response to these findings and the Head of Community Services had attended the Audit Committee meeting in December 2017 where he had explained that he had discussed the audit with the Chair of the Licensing Committee and they had worked together on an action plan which was being monitored by that Committee.  These recommendations would be followed-up via the internal audit process and the outcomes would be presented as part of the quarterly monitoring report.  It was noted that 27 recommendations had been made overall and 10 of the audits had resulted in no recommendations.

14.4           The structure of the Internal Audit team was outlined at Page No. 173, Paragraph 4.0 of the report, and Members were informed that one member of staff’s absence had been covered by a secondment from another service area during the course of the year.  With regard to the independence of the Head of Corporate Services, it was not uncommon for the internal audit strategic lead to also have operational responsibility for service areas.  The Head of Corporate Services explained that he had a wide managerial remit including ICT, Customer Services, Human Resources and Policy and Communications.  In cases where an audit was undertaken in any of those areas, he could give assurance that all audit opinions were exercised objectively and with integrity so that the opinions issued were open, transparent and accurate.  Moving forward to 2018/19, and in response to a recommendation made in the peer review, additional safeguards had been put in place to maintain his independence in this role.  Members were reminded that an independent assessment of internal audit activity had been undertaken in November 2017 as required by PSIAS and the outcome of the review had been formally reported at the last Audit Committee meeting.  A small number of recommendations had been made and these had been added to the existing quality assurance and improvement programme so there was one overall action plan for internal audit activity.  A workshop had been held for Audit Committee Members in May to go through the content of the report and progress would be reported at least annually to the Audit Committee.

14.5           It was

RESOLVED          That the internal audit annual report be NOTED.