Agenda item

The Audit Manager presented the report. He drew attention to the Audit and Risk dashboard on agenda page 12. He reminded Members that a progress report had been presented at the 8 December 2015 meeting of the Committee. The current report forecasted performance for the year ending 31^st March 2016. This report showed the 94% of the plan substantially completed, compared with 40% reported in December. This improvement had been achieved by increasing the resources available and more efficient working, as detailed in paragraph 4.6 of the report. Two new staff had been recruited, who had required minimal training to bring them up to speed. 73% of audits had been completed in the assigned days. Customer satisfaction continued to be very good and excellent feedback continued to be received from accounting colleagues. The percentage of recommendations implemented was detailed in paragraph 4.16. The relevant Divisional Directors had been notified of critical/high risk recommendations not implemented, and they would assume responsibility for ensuring implementation. He reminded Members that two police investigation cases had been reported in in December. It was disappointing that the Police had decided not to prosecute after investigation. One further investigation case had arisen since December and was ongoing. The Property Compliance audit had been assigned an assurance rating of 1 ‘Poor Overall Control Framework’. This would be the subject of a presentation by the Property team. Three other audits had been allocated an assurance rating of 2 ‘Weak Control Framework’, as reported in paragraph 4.25.

A Member said he did not think that the use of percentages in the report very helpful, or give him the assurance he would like to have. The Head of Audit West said that presentation of this information would be reviewed.

The Head of Audit West commented on the joint working arrangements. He said that the whole team was now integrated in the new structure. Audit West had been awarded a 5-year contract. Total savings of £200,000 had been achieved and yet the audit plans for both Councils had been achieved.  Externally-offered services had been enhanced to generate new income, as detailed in paragraphs 4.40-4.41. He drew attention to his formal opinion on the Internal Control Framework given in paragraphs 4.44-4.48. In response to a question from the Chair he clarified that the £200,000 was a permanent reduction in resources; two thirds of the savings could be attributed to North Somerset. The £300,000 increase in recovered business rates (paragraph 4.42) was annual.

A Member asked how the amount of resources devoted to non-core services (paragraph 4.41) could be justified given the other pressures on Internal Audit, e.g. unplanned work. The Head of Audit West replied that a number of services were being offered externally on a trial basis at present. These provided useful additional income. There was a question as to the extent to which they could be commercialised on a long-term basis. A contingency provision for unplanned work was included in the plan, and the new joint working arrangements allowed staff to be deployed more flexibly.

A Member referred to the audit of Heritage services (paragraph 4.26) and asked whether the recommendations had been implemented. The Audit Manager confirmed that this was now the case. Another Member asked whether there were penalty clauses in the contract relating to the provision of the Heritage IT system. The Head of Audit West said that he did not know the specific details of the contract, but he thought that the implication was that the contract was not sufficiently robust to allow the Council to recover anything at this stage.

Officers from Property Services made a presentation on the findings of the audit of Property Compliance and their response. A copy of their PowerPoint slides is attached as an appendix to these minutes.

In reply to questions from Members the Property officers stated:

• The decision had been taken to gather and verify fresh data for input into the property database.

• There was a rolling program of asset surveys; this would prevent data becoming out of date as was the case previously; all assets would be surveyed every five years.

• Schools would be surveyed during the school holidays.

• The implementation of the audit recommendations would be an ongoing process in which Property Services would continue to work with Internal Audit.

• The database would allow management to check whether staff working on a property had checked the database before commencing work.

• Property Services provided help and advice to Academies; it would be possible to charge them for this.

The Divisional Director - Property & Project Management accepted the Chair’s invitation to attend the September meeting of the Committee to give an update.

RESOLVED to note the Internal Audit Annual Report 2015-16 and formal opinion on the internal control framework.