Agenda item

The Corporate Director Adult Social Care and Health; the Corporate Director Growth, Environment and Transport; the Director of Integrated Commissioning, Cabinet Member for Environment; the Cabinet Member for Highways and Transport; and the Deputy Cabinet Member for Adult Social Care and Public Health were in attendance for this item.

1. The Head of Internal Audit introduced the report which included 2 main elements:

·         The Annual Opinion with the analysis and evaluation which supports it and;

·         Internal Audit performance and compliance with professional standards.

It was emphasised that the coverage of the Internal Audit service is to support the effective delivery of the Council’s objectives including how well risks can be managed as well as possible.

2. The overall opinion for 2023-24 was one of Adequate Assurance on the Council’s systems of governance, risk management and internal control and this opinion is incorporated into the Annual Governance Statement.

3. Members were reminded of the challenging context within which the Council was operating in, and how this impacted the opinion for 2023-24. However, it was highlighted for pure assurance based work, there had that there had been a significant improvement and upward trajectory in the proportion of systems, processes or functions which were assigned an assurance level of “Substantial” or High” with 52% in 2023-24 compared to 26% in 2022-23. There was a decrease in the assigning of “Limited” assurance in 2023-24 to 13% from 35% in 2022-23.

4. For 2023-24, full implementation rates of agreed management actions had decreased to 34% in 2023-24 from 50% in 2022-23. There had been concerns regarding implementation rates for a number of years. Internal Audit commented that they would take additional action to assist in the monitoring and delivery of agreed management actions, will emphasise that the reports and actions aim to support the Council in managing risks to prevent things occurring that are not beneficial and work with senior management towards improving the culture towards these actions. Members were told that there was poor correlation between the prospects for improvement assigned at the end of an audit and the subsequent full implementation of actions.

5. The second part of the Annual Report related to the Internal Audit service itself and the following points were highlighted:

a)    The extensive work undertaken on grant certifications in 2023-24;

b)    The wide range of external clients that IA provide services to, which in 2023-24 has raised the highest level of income at £451k, which contributed towards a significant budget saving for the Council;

c)    Compliance with professional internal audit standards, with reference to the new Global Internal Audit Standards that are being addressed for 2025;

d)    The Quality Assurance and Improvement Programme (QAIP), which set out targeted improvements for 2024-25;

e)    The first full year of reporting an increased in outcome based metrics which were highly positive;

f)     Client surveys at the end of each audit which concluded 93% satisfaction;

g)    The Annual Perception survey to GAC members and CMT officers , which included positive responses and this year of the 11 questions asked, 7 had 100% strongly agreeing/ agreeing;

h)    An overview of the resources of the service, highlighting positive recruitment when required, in a challenging market; and

i)     That there had been no significant issues which impact upon the ability of the service to deliver in relation to independence and scope.

6. In response to questions and comments from Members it was said that:

a)    There were various reasons for which the full implementation of management actions had not been achieved, including optimism bias in setting deadlines, cross-directorate actions, and the Council’s current operating environment. It was anticipated that, further to the recent meetings between the Corporate Management Team (CMT) and the Internal Audit Team, there would be an improvement in the implementation rate. However, Members sought further assurance. A progress report from management on the implementation of the agreed actions would be presented at the next meeting.

b)    With regards to ‘RB19-2024 – Schools Financial Services (SFS) – Contract Management’, the Council’s governance in relation to wholly owned companies separated the powers between commissioning and Council-side activity. This was in line with best practice. Following a request for clarification regarding contract management, it was agreed that the a paper providing further information would be considered as part of the agenda setting process.

c)    Relating to ‘RB31-2024 – Helping Hand Support Scheme – Business Workstream Phase 1’, Members were assured by the Interim Corporate Director of Finance that there was no indication that the funding had been misused. Further clarification regarding the Internal Audit process in relation to advisory and follow-up audits would be provided to the Committee.

7. RESOLVED to note the report as a source of independent assurance regarding the risk, control and governance environment across the Council, noting the outcomes form 23-24 IA work and the resultant “Adequate” opinion to the AGS.