Agenda item

(Chief Internal Auditor) To consider the attached report (AGC-017-2016/17).

The Senior Internal Auditor presented the Internal Audit Monitoring Report for the period November 2016 to February 2017.

The Senior Internal Auditor advised the Committee that three reports had been issued since the previous meeting – Treasury Management, Housing Health & Safety (Gas Safety), and Waste Management – all of which had been awarded substantial assurance. In addition, the Committee was requested to approve the deferral of seven audits in the 2016/17 Audit Plan to 2017/18, but it was emphasised that there would be sufficient coverage through the remaining audits for the Chief Internal Auditor to give their annual opinion for 2016/17.

The Senior Internal Auditor reported that the Recommendation Tracker contained five recommendations which had passed their target dates. Four were of medium priority and related to the audit reports issued for Grounds Maintenance, Email, Internet & Telephone Usage, Sundry Debtors, and Off Street Car Park Income; and one was of low priority and related to the audit report issued for the HR Sickness Absence Performance Indicator. The high priority recommendation relating to Health & Safety issues at Townmead Depot had now been completed.

The Senior Internal Auditor highlighted that the Corporate Fraud Team was continuing to focus on Right-to-Buy applications received by the Council, and a further six applications had been stopped or withdrawn; another four properties had been recovered as a result of fraud intervention. The Team was currently engaged in a number of criminal investigations, including a money laundering case on behalf of Broxbourne Borough Council. Finally, the third Eastern Corporate Fraud Group meeting took place last month and was hosted by the Corporate Fraud Team.

The Senior Internal Auditor added that the Service continued to be represented on a number of business groups and project teams, including: Programme & Project Management; Corporate & Business Planning; Electronic Invoicing; and Information Management.

The Senior Internal Auditor informed the Committee that the Internal Audit Charter was reviewed on an annual basis to ensure it remained current and relevant, and the last review was presented to the Committee in November 2015. It had been previously agreed to defer the review in 2016 until after the External Quality Assessment had been undertaken. This had now been completed, and the Internal Audit Charter was reviewed as part of this exercise where no deficiencies or enhancements were identified by the Assessor. Therefore, it was proposed for the Committee to approve the Charter unchanged – save for the date on the front.

The Senior Internal Auditor reminded the Committee it had agreed at the last meeting that it would be beneficial for the Committee to evaluate its overall knowledge and skills, which in turn could be used to guide Member training. A proposed template for collating this information had been attached as an Appendix to the report, and made a clear distinction between the core areas of knowledge for all members of the Committee and other specialisms that could add value to the Committee. It was suggested that the Chief Internal Auditor would circulate the checklist to the members of the Committee, collate the responses, and present a summary to the Committee at its next meeting.

Cllr J M Whitehouse expressed concern about the audit of the Asset Management Strategy being deferred to the Audit Plan for 2017/18. The Chief Internal Auditor agreed that this was an important area but the audit had been stalled for a number of reasons, including the need to concentrate resources on the Local Plan, staff absences, and restructuring within the Planning Policy and Economic Development sections. The Committee were assured that this audit would be in the Audit Plan for 2017/18.

The Chief Internal Auditor explained that the factors behind the request to defer a number of audits to 2017/18 included staff sickness, audits taking longer than expected, and being called to investigate other areas that were not in the original Audit Plan for 2016/17. However, it was reiterated that enough audits had been performed for the Chief Internal Auditor to give her annual opinion.

The Committee was concerned that some of the audit report recommendations were not being implemented in a timely fashion; there was one recommendation still outstanding from an audit performed in December 2015. The Chief Internal Auditor stated that the managers concerned owned the risk and drove the change; the Corporate Governance Group was very good at monitoring the implementation of audit report recommendations. The Committee was still perturbed about the audit recommendation still outstanding for the Grounds Maintenance audit report published in December 2015, and it was agreed that if this particular recommendation was not implemented by the next meeting then the manager concerned should be requested to attend the next meeting of the Committee and provide an explanation.

In respect of the knowledge and skills analysis for members of the Audit & Governance Committee, the Chairman requested that an explanation be provided for the ‘Confident’, ‘Aware’ and ‘Development Appreciated’ columns on the pro forma, and Officers agreed to provide this.

Resolved:

(1)        That the progress made both against the 2016/17 Internal Audit Plan and by the Corporate Fraud Team be noted;

(2)        That the following audits in the Audit Plan for 2016/17 be deferred until 2017/18:

            (a)        Asset Management Strategy;

            (b)        Energy Management;

            (c)        Equality & Diversity;

            (d)        IT Helpdesk;

            (e)        Anti-Social Behaviour;

            (f)         Mutual Exchanges; and

            (g)        Performance Management;

(3)        That, following the review of the Internal Audit Charter as part of the External Quality Assessment of the Internal Audit shared service which found that no changes were required, the Internal Audit Charter be approved without amendment;

(4)        That a knowledge and skills analysis of the Audit & Governance Committee’s members be undertaken and the results submitted to the meeting scheduled for 26 June 2017 for consideration; and

(5)        That the Assistant Director of Neighbourhoods (Technical Services) be requested to attend the next scheduled meeting of the Committee on 27 March 2017 to provide an explanation if the outstanding audit recommendation to provide adequate staff resilience for the Finance Officer had not been completed/implemented.