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Agenda item

Internal Audit Annual Report 2020/21

To consider the limitation of scope regarding independent assurance from internal audit on the adequacy of the Council’s governance, risk management and control environment for 2020/21; and to consider the proposed recovery of the internal audit function during 2021/22.

Minutes:

16.1          Attention was drawn to the report of the Head of Corporate Services, circulated at Pages No. 141-147, which provided Members with a summary of the internal audit work undertaken in 2020/21.  Members were asked to consider the limitation of scope regarding independent assurance from internal audit on the adequacy of the Council’s governance, risk management and control environment for 2020/21 and the proposed recovery of the internal audit function during 2021/22.

16.2          The Head of Corporate Services explained that, as Members were aware, the Internal Audit team had been redeployed to the business cell to support the administration and payment of business grants with effect from April 2020.  Page No. 143, Paragraphs 2.1-2.3 of the report, set out the impact of COVID-19 on the ambitions of internal audit.  Nevertheless, internal audit should still demonstrate compliance with Public Sector Internal Audit Standards (PSIAS) and, as there had been no internal audit activity, this was not possible.  Page No. 144, Paragraph 3.0 of the report, outlined why the Internal Audit team had been identified for redeployment to the business cell and the nature of the role they had undertaken.  Members were advised that, due to the significant risk of the grant schemes being abused and fraudulent claims made, a robust internal process was required to ensure the public purse was being protected and internal audit was best placed to design, deliver and monitor that process.  It was noted that over £30m grants had been paid out with over 6,000 individual payments made.  Taking calls with the business community had been rewarding but also challenging for the staff who had to learn to adapt.  Consideration had been given to removing the Internal Audit team from the business cell but there had been concern this would negatively impact the businesses that were benefiting from the scheme; therefore, a decision had been made to retain the team for the full financial year. One Member of the team remained in the business cell. 

16.3           As there had been no internal audit work, it was not possible to provide the Committee with any independent assurance as to whether the Council’s governance and risk management controls were effective.  Page No. 145, Paragraph 4.4 of the report, set out the consequences of the redeployment of the team and Members were advised that the Council would need to highlight the limitation of scope in its Annual Governance Statement which would be taken to the Committee in September.  In addition, there was a reputational impact on the Council and the authority did not comply with PSIAS as things currently stood.  Notwithstanding this, the Head of Corporate Services felt that the support which had been given to the business cell and the business community outweighed the fact there had been no internal audit function during the year.  Pages No. 145-146, Paragraph 5.0 of the report, gave a high level overview of the plan for internal audit recovery which was reflected in the Council’s Corporate Recovery Plan; the actions within the recovery plan related to the production of a new six month audit plan and review of the whole suite of internal audit recommendations to determine whether they remained relevant and if the timescales were feasible.  It was noted that, the Corporate Leadership Team had committed £35,000 from new burdens funding to support the team’s recovery and it was intended to bring in additional resource from September until the end of the financial year.  Furthermore, as part of the budget setting process for the current financial year, an allocation of £10,000 was approved for undertaking ICT audit work and that resource would be brought in after the summer.

16.4          The Chair understood the position in terms of internal audit and accepted the priority during the pandemic had been supporting the business community.  He asked that thanks be passed on to the internal audit team on behalf of the Committee to show Members’ appreciation for the work they had done and continued to do.  It was

RESOLVED          That the limitation of scope regarding independent assurance from internal audit on the adequacy of the Council’s governance, risk management and control environment for 2020/21, and the proposed recovery of the internal audit function during 2021/22, be NOTED.

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