Agenda item

The Head of Audit and Assurance One West (Finance) presented the report.  Firstly, he stated the report provided an update on 2023-24 audit work.  Since the last meeting in November there was need for further assessment, 4 audits had been merged into 2 and 6 audits had been postponed.  These changes were due to a reduction in resources, unplanned work including an investigation into Homes for Ukraine and requests for audit reviews on public health grant budget management and cash handling in resource centres.  He stressed the audit plan must be responsive.

Secondly internal audit planning methodology was based on the reasonable assurance model.  The plan must deliver sufficient work to allow the independent assessment of the control framework of the Council and give a reasonable assurance opinion.  The model considered 3 areas of organisation context, high level and detailed assessment.  Consultation had taken took place with senior management and statutory officers and views of the Committee are now sought.

During Members’ questions the following issues were clarified:

·  audits had been postponed due to capacity and unplanned work.  Some audits changed to a more appropriate time.  Difficulty in recruitment over an extended period was having an impact at a senior level (Councillor Malcolm Treby);

·  the in-year financial position of the Council was difficult with a forecast overspend of £1-2 million at end of Q3 and therefore stringent cost control was necessary (Jeff Wring Director of One West);

·  during the pandemic staffing levels were maintained at a satisfactory level as job security was critical for many officers but there had been a lot of movement since then and the service was now in a less favourable position than April last year.  The recruitment freeze did allow for some selected exemptions and certain sectors were protected like care services and statutory functions such as waste and recycling but this did not cover Internal Audit (Councillor Lucy Hodge);

·  it was noted that staff had left the authority as there was a competitive market place on pay and other sector salaries were increasing more (Councillor Sam Ross);

·  BANES had already entered into partnership options with other local authorities on a push/pull basis to flex resources but there were clearly cost implications (Jeff Wring);

·  the impact of all these circumstances impacted on audits being rescheduled. Committee was concerned that audits on areas such as Climate Change were key and this could create long-term issues if they persisted (Councillor David Biddleston);

·  it was important to ensure the Council delivered value for money and audit was an important element in forming an independent view on assurance in this area (Councillor Malcolm Treby);

·  long term specific issues could impact on the external auditors’ view of the internal control framework if there were ongoing problems with resources (John Barker Independent Member);

·  Committee asked whether the recruitment freeze be relaxed for internal audit to allay concerns/risks of audits not being completed due to capacity issues (Councillor Malcolm Treby);

·  the staffing capacity issue and the impact on the audit plan could be raised as a question to full Council or Cabinet;

·  Director of One West advised that the issues presented in this report were difficult but not systemic and in the main caused by long term forces in the recruitment marketplace. Budgeted resources had not reduced and all the audits were simply being rescheduled but it was important to be transparent with the committee on the rationale for this.  He committed to keep this area under review in relation to the recruitment freeze;

·  adult social care was a large part of the Council’s budget and in the 2024-25 plan staff were very busy with the HCRG handover working closely with colleagues (Councillor George Leach);

·  Head of Audit stated that appendix 3 gave a feel for the planned areas for 2024/25. Some were thematic such as IT audits and these would need to be built into the detail of the plan;

·  Committee raised risks as regards capital expenditure, an example of a specific project was funding the move of the Fashion Museum to the Bath Post Office (Councillor Malcolm Treby);

·  further comments were raised around the allocation of resources to third sector providers which were reducing and had been for some time (Councillor Lucy Hodge) and it was queried how BANES compared to other local authorities;

·  many of the third sector providers were valuable (Councillor David Biddleston) it would be useful to look at the figures from different directorates/services and see how funds were allocated, could these areas be considered within the plan;

·  this was supported by the Committee, as an example the money spent on wellness and medical needs was not equitable, if more money was spent on wellness in the long-term it would reduce the money needed on medical (Councillor Sam Ross).

On a motion from Councillor Malcolm Treby, seconded by Councillor Sam Ross it was

RESOLVED

1)  that the Corporate Audit Committee note the progress in delivery of the ‘core’ audit reviews in 2023/24 Annual Audit Assurance Plan and approves the additional amendments to the Audit Plan 2023/24;

2)  that the Corporate Audit Committee agree to the proposal that the Internal Audit Core Work Plan (list of internal audit reviews) be presented to the 1st May 2024 Audit Committee; will be subject to ongoing review and updating by the Head of Audit & Assurance; and, reports on the maintenance of the Core Work Plan and audit reviews carried out will be presented at least every six months to the Committee;

3)  that the Corporate Audit Committee note any activity areas or themes that members of the Committee would like to be considered for inclusion in the list of audit reviews which will form the core work of the Internal Audit function for the financial year 2024/25 onwards; and

4)  that the Corporate Audit Committee consider that if resource issues persist with regard to Internal Audit and significantly impact on delivery of key assurances to management and the Council, that further discussions with the Cabinet should take place on resourcing.