Agenda item

The report of the Chief Officer Financial Services provides a source of assurance that the internal control environment is operating as intended through a summary of the Internal Audit activity for the period from September to December 2022.

The report of the Chief Officer Financial Services provided a source of assurance that the internal control environment is operating as intended through a summary of the Internal Audit activity for the period from September to December 2022.

The Principal Audit Manager attended for this item and provided the following information:

·  This report covered the period 1^st September to end of December 2023.

·  Included in the report was the Data Analytical Strategy which outlines the vision, aims and key areas of focus for data analytics to assist in the delivery of the internal audit plan. It was noted that this was in draft as it requires approval from Internal Audit Leadership Team, but it had been brought to Committee for Members to have sight of it prior to approval.

·  Appendix A provided information in relation to movements in the internal audit plan which reflects the Council’s risk profile changes during the year.

·  It was noted in terms of limited opinions two reviews had been undertaken at two primary schools. These had resulted in a limited opinion for compliance with controls, the main weaknesses were around compliance with procedures for creditor payments and the management of the school voluntary fund and in one school there were weaknesses in payroll procedures. It was noted that the head teachers at both schools were implementing the actions for the procedures and these would be subject to a follow up review in 2023/24.

·  There had been no follow ups during the period September to December.

·  Work is continuing with Directorates to embed the recommendation tracking process, feedback from this is being used in its development.

·  Currently in the process of building an internal audit plan for 2023/24. This is to be brought before the Committee in March. Members were requested to email the Head of Internal Audit if they wished to see any specific areas for consideration.

In response to questions from Members the Committee were provided with the following information:

·  Members wished to know if the audits of the two primary schools had raised concerns and if any other schools needed to be reviewed and the organisational impact from the two reviews undertaken. It was noted that information from all reviews does feed into the internal audit plan. Audit look at trends and this is fed into the internal audit plan. It was acknowledged that the table presented in the report in relation to these two audits could be confusing. It was noted that the table showed organisational impact for the Council not for the schools. It would be made clearer in future reporting. Members noted that schools were part of a rolling programme and are reviewed each year. Members were advised that for schools this size there was no risk to the Council, however, there was potential risk to reputation.

·  Members acknowledged that Highways had been taken out of the internal audit plan as they were undertaking work themselves, Members asked if it would be better to have an auditor working alongside Highways during the review. Members were advised there were different approaches to audit work these included sitting alongside or being a member of a board, assist on projects, sometimes retrospective reviews are undertaken. For this particular one in Highways, it thought the best approach was a retrospective review.

·  In relation to external residential providers the Committee noted that a review was due to commence this week and it was hoped it would be reported in the update report and included in the Annual Audit Report.

·  Members were provided with an explanation of how pro rata days were calculated in relation to the figures set out in the bar chart on page 79 of the agenda pack.

·  Table on page 59 of the agenda pack set out attendance at various Boards. The committee requested more information as to what audit were doing whilst at the Board.

·  The Committee asked if there were any directorates who raised concerns in relation to Recommendation Tracking presented in the table on page 66 of the agenda pack. The Head of Audit has spoken with the Chair of the Committee and requested an email be sent to the Chief Executive to encourage officers to respond to the requests for recommendation tracking to be updated. The Chair confirmed to the Committee the email had been sent and the Chief Executive had confirmed it would be cascaded to senior officers.

·  In relation to Appendix B, it was noted that assurance mapping was undertaken. Members were advised Leeds was asked to contribute to a CIPFA working group around assurance mapping, however, this has not commenced nationally. Therefore, there has been a hold up in doing assurance mapping as it was the view this should conform with the professional body. Work has now started on assurance mapping and should be ready to be presented later in the year. The KPI’s will be reported as part of the Annual Plan.

·  Members were provided with an explanation of abbreviations used in relation to General Exception (GE) and Special Urgency (SU) in relation to decision making. It was noted that further information on these would be provided in the Decision Making Update Report.

·  It was acknowledged that Leeds uses Data Analytics which can be used as an effective tool to track fraud. The Committee were advised that Leeds is one of the leading public authorities using this tool. With regards to target dates of October 2025, it was the view these were achievable. A briefing note was requested on how quickly this might be achievable. Members welcomed this approach in using data analytics and wanted to see this used more going forward. 

RESOLVED – To

a) receive the Internal Audit Update Report covering the period from September to December 2022 and note the work undertaken by Internal Audit during the period covered by the report.

b) note that there have been no limitations in scope and nothing has arisen to compromise the independence of Internal Audit during the reporting period.

c) receive the report providing information relating to the Monitoring of Urgent Decisions covering the period September to December 2022.

d) receive the Internal Audit Data Analytics Strategy 2022/25.