Mr Paul Rock, Head of Internal Audit, Fraud and Risk stated the report provided members with an update on the progress made against the delivery of the 2021/22 Annual Audit Plan and highlighted any significant issues since the last report to the Audit Committee in October 2021. An update on anti-fraud activity was also included in the report.

Mr Rock said progress had been slower this quarter largely due to the resources available. He said he hoped to have a new member of staff start in the New Year but in the meantime would be using BDO – their external auditor partner to undertake some of the audits as per the audit plan. Mr Rock said he was ‘on course’ to deliver 30 audits this year, as he had done for the past two years and that this would provide enough evidence from him to base his annual opinion on.

In respect to management responses to reports these had been slow and as such Mr Rock had raised this with the Corporate Leadership Team. He said the fully implemented, higher priority actions were at 35% and whilst the overall percentage is 80-85%, if the partially implemented high priority areas are also included, this figure needed to improve.

He said the Fraud outcomes continued to be on a positive trajectory, with a further conviction secured for housing fraud. Mr Rock also referred members to paragraph 3.27 and said changes had been implemented in respect to how information is managed from informants. In respect to the second action relating to how information is shared, Mr Rock said he would report back in March 2022 once he has discussed and formed a view on this.

In response to questions and comments from members the following was noted:

• The Chair Councillor Whitehead said it was disappointing the actions agreed with management were at 35%. She said as these were agreed actions, she would expect management to actively look to implement them as soon as possible.
• In relation to the NFI, and data matches the Chair asked if this related to the resources issue, within the team? Mr Rock said his team co-ordinated the NFI matches on behalf of the Council. However, it was for individual officers/managers to best manage the risk, within the resources they have. Mr Rock said there was no doubt there was a resourcing challenge when it came to reviewing over 11,000 matches.
• Referring to the Audit Plan 2021/22, page 105 and the audit relating to ‘Climate Change’, the Chair requested this audit be pushed back to the ‘green’ list as it was an important topic to audit and scrutinise. Councillors Perry and Khan agreed with this. Councillor Khan added that an equalities impact assessment on how Climate Change affects BAME communities should also be included.

• Mr Rock agreed to adding the ‘Climate Change’ audit back on the plan and said the information provided in the workplan was a high-level outline for the audit. He said the audit would be scoped and rationalised, taking into account any Equalities Impact Assessments that have been undertaken in relation to any policies or procedures adopted by the Council.

• ACTION: The Climate Change Audit be added back to the list of audits to be undertaken this year 2021/22.

• Mr Rock confirmed the audits relating to the Adult Safeguarding Board, page 109 and Empty Properties page 108, were going ahead and said these would be reported to the Committee once they had been finalised.  
• In reference to the NNDR report – non-domestic rates, Ms Webster asked what the cause of the delay had been in getting a management response? Mr Rock said this was due to the untimely death of an officer and as such there had been delays. He said they were working with the team to get the information required.
• In respect to how CLT would track late responses to actions, Mr Rock said the Chief Executive had made it very clear to managers his expectation on delivering on agreed actions. Mr Rock said the data on agreed actions was presented to CLT as well as the audit reports which had missed implementation dates. He said this was reported to CLT before it was presented to the Committee.

• ACTION: Ms Webster asked if a list of outstanding audits with agreed actions could be provided to the Committee, showing their age and the Directorates they belong to. She said this would help members understand where the issues are.

• Ms Webster asked which audit would drop off the plan, if the ‘Climate Change’ audit was taken on? Mr Rock said this was a good challenge. He said he would have to justify whatever is taken off the plan. He said he will need to reflect on this and possibly consider giving this to BDO to undertake.

The Chair thanked Mr Rock for his report before inviting the Officers present for the Asset Management ‘limited’ assurance report to address the Committee.

Asset Management

Ms Vicky Clark, Director of Integrated Growth and Development and Mr Stephen Shapiro, Interim Head of Asset Management said the ‘limited’ assurance report had assisted in uncovering the issues identified. Ms Clark said they helped to pinpoint the areas that needed focus. For example, having an up-to-date asset management strategy. Ms Clark said work on this would begin early next year. She said the asset management team was also working with the legal team to expediate transactions as this was a much-needed source of income to the council. She said they were working through the recommendations made by the Internal Audit team.

Mr Shapiro added that the audit had assisted in strengthening the team. He said they had been working on the number of outstanding rent and lease renewals and bringing these up to date.

In response to questions and comments made by members the following was noted:

• Councillor Edgar said he had commented on asset management for a long time and better communication between asset managers, lawyers and tenants was needed. He said he often received complaints from small businesses about rent review delays. He said delays had financial consequences, especially if the current tenant had wanted to assign the tenancy to a new business.
• Councillor Edgar said information about the outstanding amount should be provided to clients in a way they can understand rather than pages of the account ledger. Ms Clark said they were reviewing the approach to rent reviews and said they have agreed as far as possible that when doing reviews, they would document at ‘passing’ the rent and hold the rent at the date of the review rather than back date it, phase and manage the rent increases.

The Audit Committee RESOLVED to:

1. Note the contents of this report and the overall progress and assurance provided, as well as the findings/assurance of individual reports.
2. Approve the updated annual internal audit plan for 2021/2022.