Agenda item

To consider the internal audit annual opinion and the assurance from the work undertaken during the year that, overall, the Council’s governance, risk management and control environment for the areas audited is generally effective.

16.1           Attention was drawn to the report of the Chief Audit Executive (Head of Corporate Services), circulated at Pages No. 176-181, in relation to internal audit 2022/23.  Members were asked to consider the internal audit annual opinion and assurance from the work undertaken during the year that, overall, the Council’s governance, risk management and control environment for 2021/22 for the areas audited was generally effective.

16.2           The Director: Corporate Resources explained that the Chief Audit Executive must deliver an annual internal audit opinion and report on the Council’s risk environment that could be used to inform the Annual Governance Statement which would be brought to the Committee in September.  It was positive that the Internal Audit team was up and running having been redeployed for the last two years as set out at Page No. 178, Paragraph 1.6 of the report.  Work undertaken during the year was summarised at Paragraph 2.0 of the report and it was noted that the team had also undertaken a variety of corporate improvement work initiatives, follow-up audits and been represented on key corporate groups such as the Corporate Governance Group and Keep Safe Stay Healthy Group.  Page No. 179, Paragraph 3.0 of the report outlined the team structure and that it had remained organisationally independent.  The internal audit plan was delivered by two full-time equivalents which was deemed to be an appropriate level of resource.  As Chief Audit Executive, he reported directly to the Chief Executive so had free and unfettered access when required and, during the year he also had access to the Chair of the Audit and Governance Committee and the relevant Lead Member.  In terms of his independence, it was not uncommon within a small district authority for the internal audit strategic lead to also have operational responsibility for service areas and, during 2022/23, he held a wide managerial remit including ICT, Customer Services, Human Resources and Communications.  It was noted that PSIAS required the purpose, authority and responsibility for the internal audit activity to be formally defined in an Internal Audit Charter which was reviewed every three years with the last review in November 2022.

16.3           Looking forward, a new post of Head of Service: Audit and Governance had been created as part of the recent management restructure which provided additional resource to ensure the internal audit plan was delivered and, as set out in the report, the Head of Service had overseen the Quality Assurance and Improvement Programme which included a service programme for 2023/24.  In terms of the opinion on the overall adequacy of the control environment, as set out at Page No. 180, Paragraph 6.1 of the report, 59 separate audit opinions were issued during the year and the bulk were either ‘substantial’ or ‘reasonable’ with only four limited reports and zero ‘no assurance’ opinions.  On that basis, it was considered that the work of internal audit complied with the PSIAS and assurance could be given to all relevant parties that the work of internal audit could be relied upon.  Due to the complexities of the Council’s control environment there would always be areas identified by internal audit that needed improvement but the opinions issued during the year demonstrated that, overall, the Council’s governance, risk management and control environment was generally sound.  Where areas of concern had been identified, there had been a positive management response and all recommendations were subject to follow-up by internal audit.  This opinion would be reflected in the Annual Governance Statement.

16.5           It was

RESOLVED          That the internal audit annual report 2022/23 be NOTED.