(Chief Internal Auditor) To consider the attached report (AGC-002-2019/20).
The Chief Internal Auditor presented the Annual Report of the Chief Internal Auditor for 2018/19, which was required to provide the Council with a statement on the adequacy and effectiveness of the organisation’s risk management, control and governance processes.
The Chief Internal Auditor reminded the Committee that, in giving an opinion, it should be noted that assurance could never be absolute; the most the internal audit service could provide to the organisation was a reasonable assurance that there were no major weaknesses in the Council’s risk management, control and governance processes. In assessing the level of assurance to be given, the following had been taken into account:
- all 25 audits undertaken during the year;
- any follow-up action taken in respect of audits from previous periods;
- high priority recommendations not accepted by management or acted upon (there were none) and the consequent risks;
- the effects of any significant changes in the Council’s objectives, activities or systems;
- matters arising from previous reports to the Audit and Governance Committee;
- any limitations which might have been placed on the scope of Internal Audit (there had not been any);
- whether there had been any resource constraints imposed on the Chief Internal Auditor's ability to meet the full audit needs of the Council (there had been none); and
- the results of work performed by other assurance providers, including the work of the external auditors.
The Chief Internal Auditor was satisfied that sufficient internal audit work had been undertaken, and based on the results of this work it was the Chief Internal Auditor’s overall opinion that the Council had adequate and effective governance, risk management arrangements and control processes. The exception to this was Business Continuity, but the Council was already addressing the weaknesses identified in this area.
Mr T Jarvis was concerned that the report was optimistic in the light of recent events, and he had misgivings about the way financial matters were administered within the Council. The Chairman pointed out that the Chief Internal Auditor’s report had been written before the External Auditor’s report had been received by the Council, and perhaps the Committee needed a third recommendation to the report to reflect this. The Chief Internal Auditor reminded the Committee that her report covered the last financial year and the External Auditor’s report would be considered later in the meeting.
The Chairman raised a concern of planning applications granted planning permission not proceeding to the construction phase, due to issues with agreeing the recompense under the Habitats Regulations Assessment with Natural England. The Chairman pointed out that planning permissions, when granted, only lasted for a period of three years from the date of decision, and suggested the Internal Auditors should examine this issue in the near future as it represented a risk to the Council’s prospective tax revenues. The Interim Strategic Director reassured the Chairman that the Council was examining all issues which could affect the budget for 2020/21 and the future growth of the tax base; the Council was currently under its Council Tax yield due to a number of different factors. The Chairman also suggested the Cabinet should consider this issue as well, and the Leader of Council stated that the Cabinet was aware of this problem, was working to address it, and the Leader hoped to provide the Committee with an update at its next meeting in November.
The Chairman suggested that the Committee agree a third recommendation to note that the report of the Chief Internal Auditor was specific to the year ended 31 March 2019, and the Committee assented.
(1) That the Annual Report of the Chief Internal Auditor for 2018/19 and the Assurance Level given be noted;
(2) That, for the twelve-month period ending 31 March 2019, the confirmation by the Chief Internal Auditor that the Council had operated adequate and effective governance, risk management arrangements and control processes, with the exception of business continuity where the weaknesses identified were being addressed be agreed; and
(3) That the report was specific to the year ended 31 March 2019 be noted.