Agenda item

The Head of Regional Internal Audit Service presented the report to Members. The report set out the Head of Internal Audit’s annual opinion on the Council’s control environment in relation to governance, risk management and internal control, and to inform the Governance and Audit Committee of the work and performance of Internal Audit for the financial year 2021/22.

In accordance with the Public Sector Internal Audit Standards, the Head of Internal Audit is required to develop a risk-based annual audit plan which considers the Council’s risk management framework. Within the Standards there is also a requirement for the Head of Audit to review and adjust the plan, as necessary, in response to the changes in the Council’s business, risks, operations, programmes, systems, controls and resources. The Head of Internal Audit must ensure that Internal Audit resources are appropriate, sufficient, and effectively deployed to achieve the approved plan.

The Head of Regional Internal Audit Service informed Members of the approved draft Internal Audit plan for 2021/22 which was presented to the Governance and Audit Committee on the 12^th July 2021. The approved plan was flexible in order to respond to changing circumstances and events that may occur during the year as a result of the pandemic and remote working.

The Head of Regional Internal Audit Service directed Members to Appendix A of the report which summarised the reviews undertaken during 2021/22, the recommendations made, and any control issues identified. It was noted that a total of 42 reviews were completed with an audit opinion, 1 audit assignment was undertaken on a consultancy basis, and a further 10 pieces of work have been completed where no audit opinion was required; in total 148 recommendations have been made. Members were informed that a detailed breakdown is included in Annex 1 of the report.

The Head of Regional Internal Audit Service directed Members to Annex 2 of the report that set out the final position against the 2021/22 approved plan and illustrated that many planned audit reviews had been undertaken during the year despite the continuing impact of the Covid-19 pandemic on services. Members were reassured that where planned work has not been undertaken, assurance has been gained where possible from other sources such as previous work and coverage in other audits. Members were advised that some planned reviews were not undertaken during the year due to requests from services that were under intense pressure; these will be considered in the 2022/23 planning process and 14 audits from the draft 2022/23 internal audit plan are already in progress and will be completed during 2022/23.

The Head of Regional Internal Audit Service continued by advising Members that based on the testing of the effectiveness of the internal control environment, 25 reviews (60%) received a ‘substantial assurance’ audit opinion, 14 reviews (33%) a ‘reasonable assurance’ audit opinion and 3 reviews (7%) a ‘limited assurance’ audit opinion. Members were informed that whilst there is a slightly higher number of limited assurance audit opinions compared to the previous year there does not appear to be any indication of any particular reasons or connection from these reviews or wider underlying concerns.

The Head of Regional Internal Audit Service concluded by informing Members that based on the results of the internal audit reviews completed during 2021/22, the recommendations made and consideration of other sources of assurance, the opinion drawn of the effectiveness of the Council’s framework of governance, risk management and internal control for 2021/22 is ‘reasonable assurance’.

The Chair thanked the Head of Regional Internal Audit Service for the detailed report; he then referred to Members for any questions.

A Member requested reassurance that there is no risk involved relating to fostering and adoption payments and that the service is operating effectively.

The Audit Manager advised that when this area was examined, the need for formal agreements to be reviewed on a regular basis was recommended, recognising the challenges that could be prevalent where collaborative arrangements are in place. The Audit Manager reassured Members that Management had agreed to implement all recommendations made following the audit and it was advised that a follow up audit review will be undertaken in 2022/23 and feedback will be reported to Members in due course.  The Audit Manager added that Management have provided assurance that a number of recommendations were implemented at the time of the review and the remaining recommendations will be followed up to provide assurance that the required controls are in place and there are no risks of payments not being made.

Mr M Jehu raised a query in relation to the controls made relating to Park Lane Special School and Ty Gwyn Pupil Referral Unit. Mr M Jehu reminded Members of the recommendations made and high priority areas identified in relation to both establishments. The Member requested reassurance that the high priority areas identified will be subject to high priority timescales and will be monitored.

The Audit Manager advised that in respect of Park Lane Special School, the audit is currently in progress and no draft report has been issued as the field work is still on-going. In respect of Ty Gwyn Pupil Referral Unit, the audit will be undertaken in September. The Audit Manager added that in respect of the follow up review relating to Adoption Support and Foster Carer Payments, it would be necessary to look at the implementation dates prior to any follow up review being undertaken to ensure progress can be measured.

Following discussion, the Governance and Audit Committee RESOLVED to:

-       Note the content of the report.

-       Consider the Annual Internal Audit Report for the financial year 2021/22 including the Head of Internal Audit’s Annual Opinion on the adequacy and effectiveness of the Council’s framework of governance, risk management and internal control.