Agenda item

To receive a report from Gemma Young, Head of Internal Audit and Risk Management.

This was introduced by Gemma Young, Head of Internal Audit and Risk Management

NOTED

1.    This is the Internal Audit Annual Report 2020/21 under the Public Sector Internal Audit Standards (PSIAS).

2.    The Head of Internal Audit must update the Committee on the work of internal audit and to provide an Internal audit opinion on the overall adequacy and effectiveness of the organisation’s framework of governance, risk management and internal controls. For 2020/21 the opinion is that there is reasonable assurance over that.

3.    It is also a requirement of the PSIAS that an external assessment be carried out of the head of Internal Audit’s function every 5 years. An internal self-assessment had been carried out and there is a quality assurance improvement plan annexed to the report showing the section is largely compliant to PSIAS standards but have actions to address where they are not fully compliant.

4.    As detailed at paragraph 12 (page 133 of the report).

5.    As detailed at paragraph 13 (page 133 of the report).

6.    As detailed at paragraph 14 (page 133 of the report) – In 2020/21 49 audits were carried out compared to 59in 2019/20 of which 27 received an assurance rating (46 in 2019/20). A smaller audit programme due to Covid restrictions but better outcomes in terms of action implementation as detailed at paragraph 17 (page 133 of the report).

7.    As detailed at paragraph 16 (page 133 of the report).

Questions, comments and queries:

·         In response to queries on the Meridian Water Procurement Strategy (MW), Cleaning Service and Pre-Paid & Purchase Cards Limited assurances. Officers advised that one of the key findings of the pre-paid and purchase cards audit was that a significant number of managers across the organisation were not authorising P cards. So, there is spend on the cards not authorised but must be paid. This is an opportunity for fraud. However, robust action has been taken by the exchequer team informing managers that if they did not authorise spend P cards would be withdrawn.

The MW audit had a few medium risks including items not being entered onto the portal, incomplete contract spreadsheets and some terms of reference (TOR) for certain boards were not consistent.  There have been actions to remedy this and the Head of Internal Audit would make enquiries for someone from Place Department to attend the Committee to speak about this. The Head of Internal Audit would be providing an update on the MW audit at the 4 August 2021 Committee meeting and would also ask the MW Programme Director (Peter George) to attend that meeting to answer any questions. As the timeframe for actions to implement is usually 6 months, members were concerned that there would be further MW procurement within that time which should be audited and reported to Committee.

In response to Members request for more detailed information regarding follow up’s on actions to implement into audit reports, the Head of Internal audit clarified that a lot more detailed information is given to the Assurance Board which is why audits are only summarised at Committee meetings. Officers are also called to the Assurance Board to be questioned about why and when actions are to be implemented. The usual Audit & Risk Management Progress (ARMS) report does include high and medium risk actions. The Head of ARMS suggested summarising these to send to committee members for comments to establish priorities.

AGREED to note the Internal Audit Annual Report 2020/21.