Agenda item

Report of the Shared Internal Audit Service (SIAS) which provides details on the progress made by SIAS in delivering the Council’s Annual Audit Plan for 2021/22 as at 14 January 2022.

Report of the Shared Internal Audit Service (SIAS) in delivering the Council’s Annual Audit Plan for 2021/22 as at 14 January 2022. Proposed amendments to the 2021/22 Annual Audit Plan report were highlighted, as were the implementation status of previously agreed audit recommendations.  An update on performance management information was also provided.

Members noted that the 2021/22 Annual Audit Plan was approved by the Audit Committee at its meeting on 17 March 2021.

The following points were raised and discussed:

• SIAS had completed 5 audits with positive assurance outcomes and only two medium priority recommendations raised. It was noted that the table at 2.2 under assurance level were classified as ‘not assessed’, this was because it was a follow up audit and an assurance opinion was not re-issued. SIAS stated that they did follow up on the recommendations that were made in the previous audits that were undertaken.
• The paragraph at 2.4 captured amendments to the audit plan. This was essentially allocating additional time for contingencies to projects that were slightly larger than originally budgeted for. It was noted that the salary budgeting and monitoring project changed to look at financial regulations. This was in response to changes to the financial regulations and a desire to get some assurance on the implementations and applications of the changes, rather than look at salary budgeting which was deemed a lower priority.
• SIAS had added an additional advisory note to look at the ongoing management of the Mears contract with reference to changes made to contract management.   The Community Infrastructure Levy (CIL) had been removed due to the outcomes of the Local Plan, which meant the value of an audit in this area at this time was reduced.
• At paragraph 2.7, the remaining high priority recommendations resulted in building services asset management audit on corporate property. It was noted that it had been implemented to a satisfactory level. Many of the medium priority recommendations had now been implemented, although there were two medium priority recommendations where revised target dates had been added.
• It was noted that the table at 2.11 had been updated since the report had been written. The planned days had increased to 58%. It was noted that SIAS felt it may be challenging to reach 95% this year as there had been many disruptions, such as organisational change and restructure which resulted in 4 redundancies within the team. They will strive to reach as close to 95% as possible but the focus for the rest of the year was to ensure that they had completed enough work to be able to provide an annual opinion at the end of the year.
• It was noted that SIAS were required to have an external quality assessment every 5 years. This was with an independent assessor and took place in June 2021.The result of the assessment was a rating of ‘partially conforms’. This was mainly around the clarity of SIAS’s audit charter which was applicable across all partners. To rectify this, SIAS had updated the audit charter and the assessor indicated they could self-assess as ‘generally conforms’.  The assessor did note that SIAS was a well-regarded internal audit partnership delivering professional and quality services to its partners with high performance.

• Members asked if SIAS were confident that they would reach 95% at the end of the year and whether the annual opinion could be delivered if less than 95%.  SIAS stated that they were confident that they would reach between 90% and 95%. Most of the projects in the plan this year would have been started and all the work that was not completed by the 31 March 2022 will be continued into April, which would feed into the annual report. It was noted they were looking at projects in the current quarter and quarter 4 and risk assessing projects on whether assurance was required to be provided by the end of the year or where there was flexibility to defer.
• Members asked if they could have next year’s plans and reports in advance so they can view and comment on them. SIAS stated that they were currently in planning for next year and had met with 60% of heads of service.  The intention was to bring a draft plan to the March meeting. It was noted that SIAS were looking into their approach to audit planning as some of the feedback they received was that their consistency across their partners could be improved and the transparency on how certain projects go into the plan could be improved. SIAS was looking to adopt a risk management type scoring system for the audit plan.
• Members queried why Climate Emergency was only in quarter 4. SIAS stated that the climate emergency may not get completed this year. The reason for this was because SIAS did a sustainability audit last year so they had some assurance in that area already. If it was not completed by the end of this year, SIAS will look to finalise the Climate Emergency audit at the beginning of next year.
• Members asked how the Council could improve their auditing or selection of areas to audit to ensure the Council does not behave illegally. SIAS stated that some of the changes that they had put in place for audit planning would hopefully pick up any issues that might get missed. SIAS had standardised the areas that they look at prior to meeting with heads of service.
• Members asked if there was a Council whistleblowing policy in place and whether it was designed for internal or external whistleblowing? It was confirmed that there was a policy and it was published on the Council website and it covered both employees and the public. It was also noted that there was training on whistleblowing to make employees aware of certain polices. Officers stated they would ensure it is picked up as part of employee inductions if this was not already in place.
• Members asked if the redundancies at SIAS were made to save money and if the restructure will help to increase the percentages in the long term? SIAS stated that the restructure was as a result of most partners reducing their planned days at the start of 2021/22. The reduction at Welwyn Hatfield was minor (5 days).  It was noted that the reason SIAS was impacted by the organisational changes was because of the uncertainty it caused within the team.
• Members suggested that there may be merit in the audit committee to look into the Housing audit in more detail as Members needed assurance in this area. The Chair advised that a specific and separate meeting would not be required as the matter was discussed at other committees as well as at Council. The Executive Member for Resources stated that the Council needed to identify how internal audit could be improved so that it could detect such incidences, and that it was the role of the Cabinet Housing Panel to consider progress against the plan.  

RESOLVED

(unanimous)

(1)  Note the Internal Audit Progress Report for the period to 14 January 2022.

(2)Note the implementation status of internal audit recommendations and the management update.

(3)  Approve the revised SIAS Internal Audit Charter.