Agenda item

To consider a report by the Chief Officer Financial Services which presents the annual Internal Audit opinion and basis of the Internal Audit assurance for 2019/20.

(Report attached)

The Chief Officer Financial Services submitted a report which presented the Annual Internal Audit Opinion and review of the adequacy of the internal control environment for 2019/20

The report provided a summary the work undertaken by Internal Audit during the year and delivered an overall conclusion; that on the basis of the audit work undertaken during the 2019/20 financial year, the internal control environment (including the key financial systems, risk and governance) was well established and operating effectively in practice. A satisfactory overall opinion was provided for 2019/20, based on the audit work detailed within the submitted report.

The audit work undertaken to support this opinion had been conducted in accordance with an established methodology that promotes quality and conformance with the International Standards for the Professional Practice of Internal Auditing.

The Head of Audit confirmed that the Internal Audit team had recently undergone inspection against ISO 9001 and that no non-conformance had been identified.  Established working practice ensures that the team remains ‘inspection ready’ at all times.

Referring to the issue of Procurement and Commercial Services, Members noted the number of waivers processed across the authority had fallen over each of the last 3 years, with 79 waivers processed in 2019/20 as opposed to 153 in the previous year. Members queried the reasons for waiver of contracts and asked for a breakdown of the number of waivers both by proportion and value.

The Head of Audit noted that review work had been undertaken to look at the use of waivers and noted that there were a number of reasons for the waivers processed; audit reviews look to ensure that there is a satisfactory reason for the waiver, In some instances there is genuinely no competition, but it is noted that occasionally there was insufficient time to complete the procurement exercise. The Head of Audit undertook to provide further information in relation to themes for use of waivers to all Committee members after the meeting.

Members sought further details about assurance checks on grants paid to businesses as part of the Covid-19 measures and queried if there was any evidence of fraud.

The Head of Audit informed Members that assurance checks were undertaken on risk basis, using data analytics and matching exercises.  There was a need to ensure payments were made to businesses in an equitable and controlled way.  Checking revealed that occasionally there were mistakes in the information presented, but this was not characterised as fraud.

On the issue of fraud and corruption, Members sought further details on the prevention of three right to buy sales.

The Head of Audit said in such cases there were often questions about the eligibility of the people living in the property, an assurance was provided that specific details about the case(s) would be obtained and circulated to Members.

Referring to the Completed Audit Reviews, Members noted there were 5 reviews with limited assurance and requested if further narrative could be supplied.

The Head of Audit said the requested information had been included in the relevant update reports following conclusion of those audits and agreed that a summary would be circulated to all Members of the Committee.

Members noted the increasing use of data analytics within the authority and asked whether this was assisting.

The Head of Audit confirmed that extended use of dashboards and presentation of financial and other information to underpin quality decision making.  It was noted that this would be a medium term project, with the aspiration to achieve greater transparency of decision making.

The Chair thanked the Head of Audit and her Team for the work undertaken in this past year.

RESOLVED –

(i)  To receive the Annual Internal Audit Report and Opinion for 2019/20 and note the opinion given. In particular:

·  that on the basis of the audit work undertaken during the 2019/20 audit year, the internal control environment (including the key financial systems, risk and governance) is well established and operating effectively in practice

·  a satisfactory overall opinion is provided for 2019/20, based on the audit work detailed within this report

·  that the work undertaken to support the opinion has been conducted in accordance with an established methodology that promotes quality and conformance with the International Standards for the Professional Practice of Internal Auditing.

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

(iii)  That further information be circulated to Members in respect of the following:

·  Anti-fraud and corruption - The prevention of three right to buy sales

·  Completed audit reviews with limited assurance (Further narrative)