Agenda item

To provide the Audit and Risk Management Committee with an overview of the work undertaken by Internal Audit during 2024/25. To provide the Head of Internal Audit’s annual opinion on the system of internal control and to consider the effectiveness of Internal Audit. 

Members considered the Internal Audit Annual Report and Opinion presented by Deborah Moss, Internal Audit Manager.

Members made comments, asked questions and received responses as follows:

·         Councillor Booth stated that the report mainly relates to last year and the opinion has been provided with regards to the effectiveness of the audit function. He added that at a previous meeting the subject of resourcing was discussed, and he asked for an update on that issue and what impact that is going to have looking forward. Deborah Moss explained that she can give the committee a partial update although there is still no definitive conclusion at the present time. She explained that an officer from the Transformation Team has moved across to Internal Audit on a part time basis although the position is a full-time post. She added that as a result there is still the residue of that resource and consideration is being given to that issue and is being discussed by the Management Team as to whether it is going to be advertised as a 0.4 or higher.

·         Peter Catchpole explained that resourcing is under constant review and the committee are all aware that over the last few years there have been expensive interim officers filling posts within the team which has proved costly, and it is not something that the Council wishes to continue with. He added that the Council have been fortunate to recruit Deborah Moss as the Head of Internal Audit and currently she is the only full-time employee within the Audit Team. Peter Catchpole added that the intention is to try and get more and more risk based on the audits and also considering Local Government Reorganisation which is also on the horizon as well so different options are being explored, and consideration is being given to a possible shared resource or a specialist resource coming in to do certain things. He explained that there has been a focus on cyber security over the past few months and the 0.4 post is still under review as some of that budget could be used to bring in one or two specialists to undertake audits on what is high risk. Peter Catchpole expressed the opinion that the committee should be provided with an up-to-date status later in the year with an up-to-date audit plan to match the resource. He added that the key point for him is the ability to be able to deliver the audit opinion and the resourcing is still under review but as long as the audit plan is robust that enables at the end of the year to deliver an opinion then the objective has been achieved.

·         Councillor Booth stated that at page 95 it makes reference to the Asset Management Plan and the fact that the Management Team have decided that it is no longer required. He asked Deborah Moss to clarify how much resistance is received from recommendations made in audit reports and whilst he appreciates that no Audit Team will be perfect and nor will they have a perfect understanding of everything, in his view, it is healthy to actually have challenge on some of the recommendations. Councillor Booth stated that he believes it is the first time he has ever seen that in a report where an action has been cancelled. Deboarh Moss explained that she has used the word cancelled due to the fact that it had been accepted originally rather than rejected at the reporting stage. She added that with the onset of Local Government Reorganization, it appears that elements are being reconsidered which is perfectly acceptable. Deborah Moss added that there are a number of actions which have been postponed due to the proposed reorganisation and that could be down to the time aspect or just because people are considering the importance of tasks including whether there is a better way of doing things or whether there is a more joined up way of working. She stated that she would hope that there is not a significant impact on the agreed actions and that they will still be pursued and moved forward.

·         Councillor Booth stated that he would like to know how much push back is received on audit actions from management and is there much discussion. He added that normally a draft report will be produced and then feedback is received but he questioned whether there is appropriate push back or whether the actions are just accepted without any sort of challenge. Deborah Moss explained that the discussion and agreement takes place at the closing meeting and at that time there is a discussion of findings and then agreeing any required actions which is why the terminology has changed from recommendations to agreed actions and if they are not agreed then they are not included within the report. She added that if there was an element which Internal Audit wanted to be implemented and if it was not agreed by management then it would be reported to the committee if it was deemed necessary and dependent on the risk and the control. Councillor Booth made the point that it is important to have that healthy discussion and debate because on many occasions an audit recommendation is received, and it is just accepted even if it is felt that it is not the right recommendation.

·         Peter Catchpole stated that Deborah Moss is given plenty of scope to raise issues and he meets regularly with her. He added that a Corporate Governance Group has been set up which includes Deborah Moss and Amy Brown, along with himself so that any issues where it is a felt that there is a clash or a disagreement can be discussed. Peter Catchpole added that any concerns are also raised at Management Team in front of the Chief Executive and any areas of real dispute or disagreement would come to the committee. He stated that  Asset Management Plans can be in place for 30 years and it does not mean that the Council does not have actions in place to manage its assets but a 30 year asset plan would normally look at improvements or enhancements and at the current time the scenario is to consider what is in place at the moment rather than looking at anything larger.

Members AGREED

·         the outturn for Internal Audit for 2024-25, which highlights the audits that were completed and their associated assurance ratings and also the additional assurances gained from other sources of work completed in-house and externally to support the Annual Audit Opinion; and

·         the Head of Internal Audit’s opinion on the adequacy and effectiveness of governance, risk and internal control processes.