Agenda item

To note the work completed by the Internal Audit and Counter Fraud teams during the period 1 April 2023 to 31 March 2024 and the key themes and outcomes arising from this work.

Marion Cameron, Deputy Head of Internal Audit & Risk Management, presented the 2023/24 report, which provides a 'reasonable' assurance over the arrangements for governance, risk management, and internal control in the London Borough of Enfield. This rating is consistent with previous years. The implementation rate of audit recommendations remains robust, with approximately 80% of actions successfully executed.

An external assessment will be conducted towards the end of this financial year to ensure compliance with internal audit standards, which are reviewed every five years. In the meantime, an annual self-assessment will be carried out, incorporating the new global internal audit standards set to become mandatory in January 2025.

The counter fraud team detected and prevented approximately £2.9 million in fraud last year. The team also participated in a pilot project with the National Fraud Initiative, focusing on temporary accommodation and secondary employment, which has already seen some early successes. To enhance fraud awareness across the council, the team has implemented various fraud prevention activities. Notably, their apprentice won the "Apprentice of the Year" award at the Public Sector Counter Fraud Awards, a significant achievement for the team.

Members’ Inquiries and Officer responses:

·       Members raised concerns about the detection of £90,500 in fraudulent purchase card transactions, questioning the effectiveness of the oversight mechanisms in place and whether the cardholders involved are still employed by the council. Officers acknowledged a lapse in oversight, which has since been rectified. Improvements have been made to the payment review and approval process, making it easier for managers to monitor transactions. The individuals involved are no longer with the council.

·       Concerns were also expressed about whether the presence of two whistleblowers might indicate a broader cultural issue within the organisation. Officers clarified that both whistleblowers were linked to a single incident involving breaches of the staff code of conduct. This matter was thoroughly investigated, and those responsible are no longer employed by the council. Additionally, a restructuring process is underway in that department to address and improve the organisational culture.

·       Members questioned the appropriateness of the 'reasonable' assurance rating, particularly given a decline in substantial assurance reports from 17% to 8%. Concerns were also raised about areas with limited assurance, particularly in housing conditions and repairs, which included three high-importance issues and 14 issues in total. Officers responded that the 'reasonable' assurance rating is still considered appropriate despite the decline. While acknowledging that some areas have limited assurance, the majority of audits were deemed reasonable. The high implementation rate of audit actions—approximately 80%—reflects the council’s commitment to addressing these issues, with the Assurance Board providing rigorous oversight.

·       Members questioned why Key Performance Indicators (KPIs) are not consistently met by their target dates. Marion Cameron acknowledged the delays and expressed dissatisfaction. While the timelines are tight, she assured members that efforts will be made to improve compliance going forward.

·       Finally, members inquired why ongoing issues, such as housing disrepair, are frequently reported with limited assurance and show little improvement. Officers explained that many of these issues have not been audited recently, as the internal audit team does not review the same areas annually. This may contribute to the recurring limited assurance ratings in certain areas.

Action: Members are invited to email any further questions to the Governance team.

The report was NOTED.