Agenda item

1.     The item was presented by Audit Managers Mr Russell Smith and Ms Debbie Chisman. Mr Smith confirmed that the report captured all the work undertaken by Internal Audit and Counter Fraud colleagues. Mr Smith provided a brief overview of the audit detailed in the report and highlighted key points for Members’ attention.

2.     By way of an update since publication of the report; in section 3 of the report – Resources for the Internal Audit Service – in relation to the two recruitment exercises which had taken place, Mr Smith confirmed that the position of Trainee Auditor was successfully recruited as was the position for a new Audit Manager, who would be joining the service in September 2025.

3.     Ms Chisman provided an overview of the audits undertaken. The report was taken as read and Ms Chisman highlighted the key points for Members’ attention. 

4.     Ms Chisman confirmed that 55% of the Internal Audit Plan had been delivered and 20 Audits (45%) were in progress.  Outstanding level audits had commenced with progress being made.  It was expected that a further update would be provided to the Committee at the next meeting in September 2025. 

5.     Internal Audit had conducted 4 Advisory items of work, 2 of which would be discussed in the exempt section of the meeting.  These were: CyberSecurity Assurance Map and the KCC Website Review. Other Advisory items included the Oracle Cloud Programme and the business readiness.

6.     Ms Chisman drew Members’ attention specific audits which included:

        a)     Education and Alternative Provision Pupil Referral Units.  This audit was assigned adequate assurance; several strengths had been raised in relation to policies, procures, guidance and training, 4 medium issues were raised.

        b)     The Basic Needs and High Needs Allocation Capital Program was assigned Adequate.  Ms Chisman confirmed that the audit evaluated the governance framework, the funding allocation process and the monitoring and reporting mechanisms.

        c)     Public Health Transformation Programme was an adequate insurance piece of work.  Areas of strength included alignment of strategic statements, the approval process, robust governance arrangements and benefits had been defined at service level and aligned with the programme aims

7.     It was confirmed that no audits within the reporting period of January 2025

        to June 2025 had been assigned limited or no assurance and three full

        follow up reviews had been completed. These included:

·       The Sundry Debt - recovery and the cancellation of invoices

·       Procurement

·       Loans to Schools

8.     Ms Chisman confirmed that the Team had audited and certified 11 Government grants with a value £60.2 million. Members were referred to the report which contained a list of the grants.

9.     In answer to Member questions, the following was said:

        a)     The Corporate Director for Children, Young People and Education, Ms Sarah Hammond clarified that pupil referral units had KPIs (Key Performance Indicators) and confirmed they were overseen by OFSTEAD in the same way as all schools were. It was explained that the KPIs were reported to the Cabinet Committee and that the audit focused on the management of the Committees around the pupil referral units.

        b)     Ms Hammond confirmed that there was plan in place for specific area improvement, following the audit however some of the pupil referral units were independent bodies of the Council and were not all KCC provisions. For those which were maintained and run by management committees, it was confirmed that there was a plan for the committee members (Governors) to be more robust in taking up the training.

        c)     Mr Watts explained that when the new Oracle Programme was implemented, the workflow would direct involvement from all relevant professionals, from an early informative stage.  This would be inclusive of finance.

        d)     Mr Smith explained that there would be no impact on the progress against the plan affecting 2025 / 2026.  He acknowledged there had been longstanding issues with the audit relating to Imprest accounts  but this was due to complications with one particular action. Mr Betts confirmed the existence of an operational issue which also caused complications however due to the financial nature of the matter, it was more appropriate to discuss in a private session.

        e)     In relation to a question on the audit for Pupil Referral Units, Ms Hammond confirmed that the focus of this was the take up of non-mandatory training offered by The Education People by the Committees and how to encourage engagement.  Ms Chisman confirmed that it had been included in a Management Action Plan with an implementation date of September (start of a new term) the training would be included as mandatory in service level agreements.

10.   RESOLVED the Committed noted the Internal Audit Progress Report

        the period January to June 2025.