Agenda item
Head of Internal Audit Annual Opinion
- Meeting of Audit Committee, Tuesday, 21st July, 2020 5.30 p.m. (Item 5.2)
- View the background to item 5.2
Minutes:
Mr Paul Rock, Head of Internal Audit, Fraud and Risk presented his Internal Audit Annual Opinion report. He said the report was in accordance with the requirements of the Public Sector Internal Audit Standards and was based on the evidence of work of the Internal Audit function as well as other matters which he considered relevant. Mr Rock said the opinion was based using the new scaled opinion range as per page 76 of the agenda, with ‘no assurance’ being the lower score and ‘substantial’ being the higher scoring. Mr Rock said he had concluded the Council had achieved ‘Limited’ assurance due to the significant issues relating to the closure of the Council’s 2018/19 Accounts and the issues associated with the accounting procedures that had emerged throughout 2019/20. Mr Rock continued stating the breaches of law in relation to Pensions Administration was another factor which led him to conclude the authority does not have adequate systems of governance, risk management and internal control.
Mr Rock explained his reasons for the opinion given and outlined the areas the authority would need to improve, over the coming year, in particular the processes and procedures relating to the production of the Annual Accounts and the remedial action to be taken for Pensions Administration.
In response to questions from Members the following was noted:
- Ms Charlotte Webster, Independent Person commented the implementation of agreed management actions was onerous for the Internal Audit Team and questioned how this was possible given the limited resources within the team. She said a clear escalation process was required, so actions and owners of the actions resolved issues quickly. She suggested these be escalated to the Mayor and Chief Executive if necessary. Mr Rock agreed a robust escalation process was required and said the value of an internal audit assessment diminishes over time, if not acted upon in a timely fashion.
- The Chair asked what the Audit Committee could do to assist in escalating the management responses to outstanding Internal Audit reports. Mr Rock said he would welcome the Chair to be enquire about long outstanding management responses by writing to the relevant Corporate Directors and asking them to respond to her personally.
- Councillor Edgar suggested lead Cabinet Members be made aware of outstanding internal audit reports, so to ensure the momentum was not lost in obtaining a response. Mr Rock said he was hesitant of sharing draft reports too early, as he wanted to give Officers time to respond and agree actions. Councillor Edgar acknowledged this was essential however suggested the timeline for a response be shared with the lead Cabinet Member, so they were aware when a response is due for outstanding reports.
- ACTION: Lead Cabinet Members to be informed of the timeline for outstanding management responses to Internal Audit reports.
- The Mayor John Biggs welcomed the report and the opinion given by Mr Rock. He said whilst progress had been made to improve governance, the financial controls and responses to audit reports, this was an area that required further attention. He said senior managers needed to take ownership of the actions and said outstanding reports and actions should be brought to the attention of Cabinet Members. The Mayor said he was minded to attend future meetings of the Audit Committee, so to ensure there was a reference point and/or a Senior Members of the Corporate Leadership Team to be present.
- The Mayor also noted the concerns raised regarding the recruitment and retention of staff within the Internal Audit Team and hoped vacancies could be filled soon.
The Audit Committee RESOLVED to:
- Note the content and opinion of the Head of Internal Audit as outlined within the Head of Internal Audit Annual Report which includes a summary of the work undertaken during 2019/20.
Supporting documents:
- Head of Internal Audit Annual Opinion, item 5.2 PDF 234 KB
- Enc. 1 for Head of Internal Audit Annual Opinion, item 5.2 PDF 568 KB