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Agenda item

Interim Internal Audit & Assurance Report

Minutes:

The Head of Audit Partnership introduced his report updating Members on progress against the 2017/18 Internal Audit and Assurance Plan.  The report also met the requirement in accordance with the Public Sector Internal Audit Standard 2060 to report to Members on:

 

The Audit Charter;

The independence of Internal Audit;

Audit Plan changes and progress against the Plan;

Resource needs of the Audit Service;

Results of audit work so far;

Conformance with the Standards and Code of Ethics; and

Details of risks taken by management that, in the Head of Audit Partnership’s judgement, might be unacceptable to the Authority.

 

The Head of Audit Partnership advised the Committee that:

 

·  Good progress had been made against the Plan so far although the continuing absence of a member of the Internal Audit Team due to sickness might result in an under-delivery at year end.  By continuing to adjust its plans according to the Council’s risk profile, the Team remained confident of delivering a robust audit opinion by the end of the year.

 

·  It was a requirement of Audit Standard 2060 that the Internal Audit Team report to Members any risks accepted by management that in its view might be unacceptable to the organisation.  For example, this might include audit recommendations that management refuse to address.  No risks had been identified through Internal Audit work that the Team believed management had unreasonably accepted.

 

·  So far in 2017/18 Internal Audit had delivered positive assurance ratings on all reviews completed and could report improving levels of delivery on the part of Officers acting to address audit recommendations.  It was anticipated that the report on the review of Contract Management would be issued in March 2018.  The responsible Officers were on track to implement the recommendations arising from the review of the Hazlitt Theatre.

 

·  The Council’s Whistleblowing Policy named Internal Audit as one route through which Members and Officers could safely raise concerns on inappropriate or criminal behaviour.  Two matters had been raised with Internal Audit for review during 2017/18.  Both matters had been resolved to the complainants’ satisfaction, and there were no details that needed to be brought to the Committee’s attention.

 

·  In terms of other audit and advice work, the Internal Audit Team had undertaken an Independent Management Report for the Kent and Medway Safeguarding Adults Board.  That review followed a referral by the Council after the death in late 2016 of a vulnerable adult in the Borough.  It was concluded that there were no alternative courses of action the Council should have taken in accordance with its policies and that it had acted appropriately in dealing with the incident as it unfolded.

 

·  The collaboration agreement between the four partner authorities required the Internal Audit Service to undergo a mid-term review before January 2018.  The overall picture that emerged of Mid-Kent Audit was of a service working well and delivering above expectations.  The final question of a survey sent to over one hundred Members and Officers as part of the review invited participants to score on a scale of 0-100 how likely they would be, if asked, to recommend Mid-Kent Audit to another Authority.  The results showed a strong positive response to the Internal Audit Service remaining consistent across Members, Officers and Authorities.

 

·  The Internal Audit Team had received Swale Borough Council’s Team of the Year award.  Integrated working meant that almost the entire Team had spent some time at Swale and so contributed to the achievement.

 

On behalf of the Committee, the Chairman congratulated the Internal Audit Team on its success.

 

In response to questions, the Head of Audit Partnership/Audit Manager explained that:

 

·  In terms of 2016/17 assurance projects completed after 1 April 2017, there had been no assurance rating in respect of the Corporate Governance Transparency Review as the Internal Audit Team had been asked to provide feedback on a tick list.

 

·  Planned 2017/18 assurance projects in progress included a review of Payroll which, so far, had taken four days longer than planned.  This was because complications had arisen about who could or could not sign off HMRC returns.  This was largely an issue at Swale Borough Council, but because this was a joint review as the Payroll service was shared, the budget, in days, covered both Authorities.

 

·  Planned 2017/18 assurance projects yet to begin included a review of Animal Welfare Control.  The Council did have some role in this area, and whilst it was not high on the risk list, it did form part of the Audit Universe and was examined periodically.  The list of projects yet to begin was not driven wholly by priority, more by way of the order they were sequenced to be completed throughout the year.

 

·  Planned 2017/18 assurance projects yet to begin included a review of Homelessness.  This did not include a review of Temporary Accommodation as a review of that had been carried out a few years ago, and that area would be looked at again in due course.  The Internal Audit Team was in discussion with the Head of Housing and Community Services regarding the exact scope of the Homelessness review, but broadly speaking it would cover compliance with the relevant legislation and the Council’s Homelessness Strategy and the process for determining a person’s eligibility for homelessness.  Fifteen plan days had been allocated for the review based on a risk assessment, but this could be amended when scoping the work.

 

·  With regard to risk management, a comprehensive exercise to identify operational risks had resulted in an increase in the total recorded in the comprehensive risk register from 187 in September 2016 to 246 in August 2017.  Risks were assessed for impact and likelihood.  Six impact areas had been defined to inform the assessment of risks on the comprehensive risk register and scoring.  Consideration would be given as to how information could be presented in the quarterly risk report aggregating risks into the different impact areas and the numbers in each category, to provide assurance.

 

A Member expressed concern that the audit review of the Accounts Payable system had found appropriate separation of duties between departments raising orders and the payment of invoices by the Finance Team, but the current responsibilities and processes over the payment run, meant that an Officer (within Finance) could set up a supplier and make a payment without the details being checked.  The Head of Audit Partnership undertook to provide further details to allay concerns about the risks seemingly posed by this finding.

 

The Chairman thanked the Head of Audit Partnership for a comprehensive and professionally produced report.

 

RESOLVED:  That, subject to the points raised in the discussion, the progress against the 2017/18 Internal Audit and Assurance Plan and the findings so far be noted.

 

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