The Head of Internal Audit presented the Annual Report, explaining that the Audit Plan is partly based on a rolling programme of audits across 3 years.  Known issues are identified throughout the year, and changes to systems are considered for including in the plan.

The report looks at areas of high risk, or those which have not been looked at for some time.

In 2021/22, Internal Audit provided 34 assurance opinions, 76% substantial assurance – the same level as last year. 

The Head of Internal highlighted the following points:

Priority rating 1 would normally result in a limited assurance audit outcome, and indicate a non-compliance with legislation or council policy, or there are control weaknesses that put the council at risk of fraud, such as if one person controlled the whole purchase process.

Priority 2 would be a substantial assurance audit recommending actions to improve/enhance the controls already in place.

Priority 3 recommendation is more advisory.

There were 19 outstanding priority 1 actions across 6 audit areas - this is higher than we would like at year end, but work has been impacted by a high turnover of staff. 

In response to questions, the Head of Internal Audit explained that payroll is covered every year, and pension administration is done annually through the shared service.  Key financials are covered if we are made aware of changes, for instance with the new banking system and mandate changes in accounts payable.  The team is not resourced to check everything every year.

Monthly duplicate payment checks are run to identify any errors.  The listed duplicate payments have either been paid back or are in the process of being paid back.

Priority 1 actions are higher in number than partner concils, but tht changes quite frequently.  Internal Audit approach owners of overdue actions when the due date arrives, and test them, in some cases the dates have been extended. Action owners could be called to this Committee to explain progress.

If follow up action was not satisfactory the Head of Internal Audit would qualify their opinion.

The National Fraud Initiative is a data matching exercise with other councils. Our data is submitted and compared with the data in other councils, and then matches are highlighted for further investigation.  327 cases are noted as fraud or error, and these will be followed up to establish why there is a match.

Approximately 6 school audits are conducted each year, rather than doing a full new audit where actions are identified, the team focus on the specific areas of concern.  There is work to look at schools that have not been seen for a while.  Academies are not included.  All schools should be visited over a course of five years, but some have been longer than five years since the last visit.

The DBS actions are now all complete. The Service is provided by Kingston, so where there had been a delay, it is all now caught up.

RESOLVED:  That the Committee reviewed and commented on the report.