Agenda item

To approve the updated internal audit plan and resources for the year; to consider and note the activity and performance of the Internal Audit function, and to consider the implementation of audit actions.

Deborah Moss presented the report.

Members asked the following questions:

·       Councillor Benney stated that he notes from the report that there is a report concerning port management still to be completed, with over the past few months there have been several incidents concerning vessels, including collisions, two ships getting stuck on the sandbar and in the River Nene. He added that as the Council is the Statutory Harbour Authority, there are a very high number of incidents which are happening the port and made the point that it is listed in the Audit Plan as a high risk but, in his view, the port has the highest risk to the Council for anything that it does. Councillor Benney added that a great deal of the operation of the port side of the Harbour Authority the Council has no control over and once the Pilot steps onto a boat then that makes them responsible for that ship which costs millions of pounds. He made the point that when considering the number of incidents that have taken place over a comparatively short time, he would be interested to see what the report states and, in his opinion, the Statutory Harbour Authority is nothing but a drain on the Council but it is a legal obligation which the Council must fulfil. Councillor Benney added that there appears to be several incidents taking place when manoeuvring the ships in and out and it could be something that could potentially be a big risk to the Council. He asked whether that is something that will be reviewed as part of the audit plan? Deborah Moss stated that the reason it was added to the audit plan was at the suggestion of the Corporate Director as it was felt that there should be more compliance auditing undertaken in that area to get a general assurance of how things are operating due to the staff turnover, issues and incidents. She added that she can consider adjusting the terms of reference to incorporate health and safety, resourcing and training.

·       Councillor Benney stated that he is aware that there is a new Harbour Master in post and the Pilots who are responsible for the ships once they board them. He added that it is the biggest risk to a Council because it is not their business, but he feels that it is something that needs to be looked at to ensure processes are in place to make them as safe as possible.

·       Councillor Booth expressed the opinion that the harbour appears to be a very specialist area and he questioned whether the Audit Team have the skills to undertake an audit or whether it is an area where the Council should be looking for somebody with some external expertise to help in undertaking a review. He added that the compliance can be carried out with regards to the legislation but, in his view, it is more of the operational day to day review where an external specialist maybe required. Deborah Moss expressed the opinion that it is a very valid point and something that needs to be considered as officers do need to be confident to carry out an audit which can be undertaken up to a certain point. She added that it was her understanding that an independent report was carried out on the port each year, but she will clarify that.

·       Councillor Benney stated that when he was the Portfolio Holder responsible for that area, when there was the need for specialist advice then the Maritime and Marine Organisation would be contacted for guidance as their speciality is marine processes. He added that he agrees with the point made by Councillor Booth, and he also feels that some specialist advice would be beneficial as, in his view, the number of incidents which have taken place over such a comparatively short time needs to be looked at.

·       Councillor Christy stated that as he is the current Portfolio Holder for the Port, he agrees with Deborah Moss that the entry on the Audit Plan is very much to do with the management and governance of the organisation. He added that, with the incidents that have taken place, they would come under the risk assessments from an operational perspective, and those risk assessments are being assessed, updated and agreed. Councillor Christy added that following the recent incidents there are reports which are being produced which will outline what changes could be made to improve the situation.

·       Councillor Mrs French stated that she has received correspondence from the Port of Sutton Bridge which she has passed to the Portfolio Holder and the Chief Executive. She added that due to the number of incidents which are taking place, she is fearful that it could end up costing the Council a great deal of money due to lack of business caused by ships being stuck out in the wash and ships unable to enter to unload their cargo.

·       Councillor Christy asked for confirmation as to when the topic of cyber security may be coming to the committee as he has concerns due to the recent number of security cyber incidents taking place including some impacting local authorities. Deborah Moss explained that she has confirmed with the auditor that all of the testing has been completed and it is going to be awarded reasonable assurance. She added that there are still some outstanding items from the last audit which were not fully completed but in the Auditors opinion everything is well controlled, and it will form part of the agenda at the next committee meeting.

·       Councillor Mrs French stated that the Audit Plan has overtime listed on it and is marked as high and not started and she asked for clarity regarding concerns that the Audit Team has. Deborah Moss explained that this was highlighted as a corporate issue which has been raised by the management team as they were trying to cut the expenditure on overtime and there is a report being formalised for the Corporate Management Team to discuss the overtime options and how overtime can be reduced and controlled. She added that she hopes that it will be an audit of value if it is back ended to the end of the year in order to see that those actions which have been introduced prove to be effective. Deborah Moss explained that previously it was the intention for the audit to be a brief compliance audit of the overtime worked against the overtime policy but now the audit will be widened slightly because of any options and any approvals which come forward.

·       Councillor Booth asked why the entry concerning overtime is listed as high as, in his view, it sounds as though it is more an issue concerning the management of overtime. He stated that it does not necessarily mean it is a high-risk item and whilst there may be a high amount of overtime it could be to do with the control of overtime. Deborah Moss explained that it is listed as high due to the inherent risk and an unacceptable level of expenditure against it. She added that it has been raised as an issue and that is why it appears on the audit plan. Councillor Booth expressed the view that would be the quantum as opposed to what the controls are, and it does not necessarily make it a high-risk item in his opinion. Deborah Moss stated due to some of the discussions that have taken place it has been listed as high just because it has been raised due to other issues and not just to do with the spend.

·       Councillor Mrs French stated that is the overtime issue for refuse collections or events which the Council runs and she added that most people work set hours and has concerns where the issue is with regards to overtime. Deborah Moss stated that until the audit is undertaken, she cannot provide that information, but she believes it is across several services and not one.

·       Councillor Miss French stated that earlier Deborah Moss had asked whether the committee were content with the format of how outstanding audits are being presented and she asked the committee for their feedback.

·       Councillor Booth stated that the tables which show the results from the individual audits are the best that have ever been presented. He added that they show the high-level summaries and what the actions are and he has been asking for this type of format over numerous years. Councillor Booth stated that the part concerning outstanding actions is slightly confusing as the information is for detail which covers multiple years, but he appreciates that a summary is provided. Deborah Moss stated that is a valid point and she agrees and hopes that going forward the audits shown will be those which are timelier and more recent.

·       Councillor Booth stated that the focus should be on the high risk and medium items as the committee would not be so worried about the low-risk entries as the concentration needs to be on those which have the most impact to the Council.

Members AGREED to note the activity and performance of the Internal Audit function.

(Councillor Christy declared that he is the Chairman of FACT)