(ITEM )

Sally Hendrick

Head of Audit and Risk Management

Sally.hendrick@bracknell-forest.gov.uk

01344 352092

1.1 The Council is required under the Accounts and Audit (Amendment) (England) Regulations to “maintain an adequate and effective system of internal audit of its accounting records and of its systems of internal control in accordance with the proper practices in relation to internal control.” This report summarises the activities of Internal Audit for the period April to December 2021 drawing together progress on the Annual Internal Audit Plan, risk management and other activities carried out by Internal Audit.

2.1 The basic approach adopted by Internal Audit falls broadly into four types of audit:

· System reviews provide assurance that the system of control in all activities undertaken by the Council is appropriate and adequately protects the Council’s interests.

· Regularity (financial) checking helps ensure that the accounts maintained by the Council accurately reflect the business transacted during the year. It also contributes directly towards the external auditor’s audit of the annual accounts.

· Computer/IT audits, carried out by specialist audit staff, provide assurance that an adequate level of control exists over the provision and use of computing facilities

· Certification as required by relevant Government departments that grant monies have been spent in accordance with grant terms and conditions.

2.2 Recommendations are made after individual audits, leading to an overall assurance opinion for the system or establishment under review and building into an overall annual assurance opinion on the Council’s operations called the Head of Internal Audit Annual Opinion. The different categories of recommendation and assurance opinions are set out in the following tables.

2.3 Since 1^st April 2019 we have been categorising our audit opinions according to our assessment of the controls in place and the level of compliance with these controls as follows::

	Good - There is a sound system of internal control designed to achieve the objectives of the system/process and manage the risks to the achievement of objectives and this is being complied with. Recommendations will only be of low priority.
	Adequate - there is basically a sound system of control but there are some areas of minor weakness and/or some areas of non- compliance which put the system/process objectives at risk. Recommendations will only be low or moderate in priority.
	Partial - there are areas of weakness and/or non- compliance with control which put the system/process objectives at risk and undermine the system’s overall integrity. Recommendations may include major recommendations but could only include critical priority recommendations if mitigated by significant strengths elsewhere.
	Inadequate - controls are weak across a number areas of the control environment and/or not complied with putting the system/process objectives at significant risk. Recommendations will include major and/or critical recommendations
	None - There is no control framework in place and management is inadequate leaving the system open to risk of significant error or fraud.

2.4 We categorise our recommendations according to their level of priority as set out below:

	Critical - Critical and urgent in that failure to address the risk could lead to factors such as significant financial loss, significant fraud, serious safeguarding breach, critical loss of service, critical information loss, failure of major projects, intense political or media scrutiny. Remedial action must be taken immediately.
	Major - failure to address issues identified by the audit could have significant impact such as high financial loss, safeguarding breach, significant disruption to services, major information loss, significant reputational damage or adverse scrutiny by external agencies. Remedial action to be taken urgently.
	Moderate - failure to address issues identified by the audit could lead to moderate risk factors materialising such as medium financial loss, fraud, short term disruption to non-core activities, scrutiny by internal committees, limited reputational damage from unfavourable media coverage. Prompt specific remedial should be taken.
	Low - failure to address issues identified by the audit could lead to low level risks materialising such as minor errors in system operations or processes, minor delays without impact on service or small financial loss. Remedial action is required.

3.1 The Annual Internal Audit Plan for 2021/22 was considered and approved by the Governance and Audit Committee on 24th March 2021. The delivery of the individual audits during 2021/22 is being undertaken by

· TIAA Ltd who will undertake IT audit;

· Farsight Consulting who will audit schools,

· Wokingham Council’s Business Assurance team delivering internal audit services under a S113 agreement;

· Temporary senior auditors; and

· two permanent in-house senior auditors who joined us in the summer of 2021.

3.2 There has been some delay in progressing the 21/22 Audit Plan as a backlog of 20/21 audits deferred to late qtr 4 or early qtr 1 of 21/22 at management request had first to be cleared, schools scheduled to be audited were not prepared to have audits undertaken until the autumn. Good progress has now been made on school audits. The two new senior auditors were not able to join us until July and August and one has now resigned for health reasons. This is putting additional pressure on delivery and hence some further audits have now been deferred to 22/23. One new temporary senior had already been appointed to address backlog and a further temp is now being recruited.

3.3 Between April to December 2021, 7 grant audits and 20 reports/memos were finalised, 3 reports/memos were issued in draft awaiting management responses, 4 were issued for discussion, 3 reports were at quality review stage and 10 audits were work in progress.

3.4 Details on the status and outcome of all audits are attached at Appendix A. A summary of the outcome of finalised and audits with reports issued in draft are set out below.

2021/22 ASSURANCE LEVELS	NUMBER OF AUDITS TO DATE	2020/21 ASSURANCE LEVELS	NUMBER OF AUDITS
Good	2	Good	4
Adequate	10	Adequate	15
Partial	5	Partial	10
Inadequate	2	Inadequate	0
No assurance	0	No assurance	0
Total for Audits with an Opinion	19	Total for Audits with an Opinion	29
Memos and reports with Major Recommendation and no Opinion	3	Memos and reports with Major Recommendation and no Opinion	4
Other Follow Up Memos/ Reports with no Opinion	2	Other Follow Up Memos/ Reports with no Opinion	3
Total Audits	24	Total Audits	36
Grant Certifications/Submissions	7	Grant Certifications	7
Overall Total	31	Overall Total	43

Identified High Priority Control Issues

3.5 Audits which have identified high priority recommendations will generally be revisited in 2022/23, to ensure successful implementation of agreed recommendations. The audits where major and critical recommendations have been raised are set out below:

AUDITS WHERE HIGH PRIORITY ISSUES HAVE BEEN IDENTIFIED SINCE THE LAST UPDATE IN THE INTERNAL AUDIT 20/21 ANNUAL REPORT IN SEPTEMBER 2021
· parenting assessments (20/21 AUDIT)	The audit was requested by the Assistant Director: Children’s Social Care to establish if there was any validity in concerns that she had that procedures may not be being consistently applied. Three major recommendations were raised relating to non-compliance with key steps in the processes, the lack of performance & quality checks and the gaps in knowledge within the service. A new management team is now in place which will address weaknesses in compliance and supervisory oversight and address gaps in knowledge and understanding of processes.	ASSURANCE OPINION: INADEQUATE
· GREEN HOMES GRANTS	This audit was requested by the Executive Director: Delivery as it was a significant expenditure stream that had been transferred from another Directorate and there had been gaps at manager level during the period that the grants were being given which could potentially have increased risk. The audit established that there were weaknesses in controls. Eight major recommendations were raised on resourcing, the promotion of the scheme, procurement processes, lack of independence in the assessment process, weaknesses in the process for agreeing quotes with contractors, weak control over payments for works, GDPR weaknesses and concerns around records maintained and reporting on grant spend. There is now a robust management structure in place, action will be taken to ensure that appropriate administrative support would be put in place for any future tranches of grant funding, clarification has been sought on procurement requirements and guidance has been provided on expenditure controls.	ASSURANCE OPINION: INADEQUATE
· COMPLAINTS PROCESS	Four major recommendations were raised in respect of resourcing complex complaints; completeness of records, monitoring of complaints and actions for improvement and corporate reporting. An action plan has been developed by senior managers which includes creating a new Complaints Officer post to provide specialist support. Actions are already progressing and will be overseen by the Corporate Management Team.	ASSURANCE OPINION: PARTIAL
· E+ cARD	Two major recommendations were raised relating to the absence of both a Data Protection Impact Assessment and data flow mapping for the interface systems.	ASSURANCE OPINION: PARTIAL
· LARCHWOOD	Three major recommendations were raised on pre-employment checks for agency workers, expenditure controls and imprest reconciliations.	ASSURANCE OPINION: PARTIAL
· PERMANENCY PLANNING	Permanency Planning processes assess the most effective and viable options for a permanency plan for a child or young person. This was an advisory review requested by the Assistant Director: Children’s Social Care to establish if there was any validity in concerns that she had that these processes may not be being consistently applied. Two major observations were raised by Internal Audit in relation to meetings records and management information on compliance with statutory timeframes for meetings that will be taken forward by the management team.	ADVISORY REVIEW WITH NO AUDIT OPINION BUT MAJOR RECOMMENDATION RAISED
· SERVICES TO SCHOOLS	Three major recommendations have been raised. These relate to costing of services and overheads to ensure accurate recharging and assess viability, systems integration procedures and resourcing of systems support and systems finance administration support.	ASSURANCE OPINION: PARTIAL

In addition, some major recommendations have been raised at a number of audits such as climate change which though considered significant for management did not prevent us from concluding that controls were adequate. A major recommendation was raised at all school audits undertaken to date in respect to medium term budget forecasts predicting deficits over the next 3 years. Whilst this has not resulted in itself in a partial or inadequate opinion this is something governing bodies should continue to monitor.

Update of Previous Audits with High Priority Recommendations

3.6 Since April 2021, we have followed up one audit from 2020/21 where significant weaknesses had been identified (reactive maintenance). The Head of Audit and Risk Management can report that issues previously identified have been addressed.

External Quality Assessment and Quality Assurance and Improvement Programme

3.7 Under mandatory Public Sector Internal Audit Standards our internal audit service has to be externally assessed every 5 years. This is now due and is being undertaken by CIPFA in April 2022.

3.8 As shown below, to date all completed client questionnaires received for 2021/22 have shown the auditees to be satisfied with the service. In 77%f cases internal audit delivered the first draft report within 15 days of the exit meeting.

	Client Questionnaires		Draft Report /Memo Produced within 15 Days of Exit meeting
	Received	Satisfactory	Draft Report /Memo Produced within 15 Days of Exit meeting
1^st April to 31^st August 2021	6	100%	77%
2020/21	9	89%	60%

4.1 It is still too early in the financial year to make a reliable assessment on the direction of travel of the control environment. Progress to improve the control environment will be monitored quarterly based on the outcome of the audits undertaken and in particular identifying whether agreed management actions for areas previously found to have significant control weaknesses have been implemented as this has been a key factor in the Head of Audit and Risk Management’s annual opinion on the control environment for the last 3 years.

5.1 The Strategic Risk Register has already been reviewed three times by the Strategic Risk Management Group (SRMG) and once by the Corporate Management Team. Directorate risk registers continue to be updated quarterly.

APPENDIX 1

2020/21 INTERNAL AUDIT PLAN OUTCOMES NOT PREVIOUSLY REPORTED

*Key indicator- Draft report issued within 15 days of exit meeting

“D”- deferred at management request from 20/21 to 21/22

AUDIT	Start Date	Date of Draft Report	*Key Indicator Met	Assurance Level				Recommendation Priority				Status
				Good	Adequate	Partial	Inadequate	Critical	Major	Moderate	Low
Security camera controls	2/3/21	20/8/21	P			P				3	2	Finalised
Parenting Assessments	11/1/21	9/6/21	P				P			3	3	Finalised
Foster Panels Compliance	May 2021	26/6/21	P		P					4	2	Finalised
Continuing Health Care	17/3/21	2/7/21	P		P					4	1	Finalised

2021/22 INTERNAL AUDIT PLAN

1.GOVERNANCE

AUDIT	Start Date	Date of Draft Report	Key Indicator Met*	Assurance Level					Recommendation Priority				Status
				Good	Adequate	Partial		inadequate	Critical	Major	Moderate	Low
~~Data indicators~~													Deferred to Qtr 1 of 22/23
~~Project management of O&S reviews and subsequent action plan implementation~~													Deferred to 22/23
~~Business Continuity~~													“D” Audit deferred to qtr 1 of 22/23 as Business continuity project delayed due to COVID
Complaints Process	August 21	14/9/21	P			P				4	5		Finalised
~~Corporate Governance infrastructure –People only~~													Deferred to 22/23
E+ card- general control, IT controls and information governance arrangements with contractors	14/9/21	3/12/21	X			P				2	6	3	Revised draft report issued
Grant Reviews and Certifications Bus Service Operator	21/9/21	21/9/21	P	N/A – Grant certification									Certified
Troubled Families	24/6/21	30/6/21	P	N/A – Memo to support PBR grant submission									Finalised
Troubled Families	27/9/21	30/9/21	P	N/A – Memo to support PBR grant submission							1		Finalised
Troubled Families- March 2022 submission													Qtr 4 audit
Green Homes Grants compliance audit	26/7/21	31/8/21	P				P			8			Finalised
COVID Restart grants	August 21		P	N/A- no opinion. Observations raised rather than recommendations						3	2	1	Finalised
COVID Additional Restrictions grants	August 21	01/12/21	P	N/A- no opinion. Observations raised rather than recommendations						3	2	2	Finalised
Pot Hole Fund	6/9/21	21/9/21	P	N/A – Grant certification									Certified
Local transport capital block funding (integrated transport and highways maintenance)	6/9/21	21/9/21	P	N/A – Grant certification									Certified
Emergency Active Travel Fund	13/9/21	21/9/21	P	N/A – Grant certification									Certified
Active Travel Fund Tranche 2	13/9/21	21/9/21	P	N/A – Grant certification									Certified

2. COUNCIL WIDE

AUDIT	Start Date	Date of Draft Report	Key Indicator Met*	Assurance Level				Recommendation Priority				Status
				Good	Adequate	Partial	Inadequate	Critical	Major	Moderate	Low
~~Amazon account~~												Asked to defer to 22/23 after the new Head of Procurement comes into post
Climate Change	July 2021	5/8/21	P		P				1	2		Finalised
Debt management												Qtr 4 audit

3. CORE FINANCIAL SYSTEMS

AUDIT	Start Date	Date of Draft Report	Key Indicator Met*	Assurance Level				Recommendation Priority				Status
		Date of Draft Report	Key Indicator Met*	Good	Adequate	Partial	Inadequate	Critical	Major	Moderate	Low
Reconciliations												Qtr 4 audit
Staff establishment costs (Joint HR and Finance audit budgeted under OD, Transformation and HR)	1/12/21											Work in progress
Banking -advisory audit												Deferred to 22/23t
Council Tax and Business Rates	1/12/21											Work in progress
Creditors												Qtr 4 audit
Housing Benefit and Council Tax Reduction												Qtr 4 audit

4. IT AUDIT

IT AUDIT	Start Date	Date of Draft Report	Key Indicator Me*	Assurance Level								Status
		Date of Draft Report	Key Indicator Me*	Good	Adequate	Partial	Inadequate	Critical	Major	Moderate	Low
Transport routing	August 2021	27/10/21	X		P					2	2	Draft issued
Emergency Duty Service System												Deferred to qtr 4
Forestcare IT systems including telephony												Deferred to qtr 4 due to delays on the new system
Heath and Social Care ICT Care Systems Integration (Dependent upon Digital Strategy)	1/9/21											Work in progress
~~CORE waste management system~~												Cancelled
~~Agresso advisory review and support for upgrade and movement to the Cloud~~												Cancelled as not required by service area
Agresso (Follow up- major recommendations raised in 2019/20 and 2020/21)	1/12/21											Work in progress
~~Cyber Security – Incident Management and Resilience~~												Cancelled
Cyber liability (Follow up- partial assurance 2020/21)												Qtr 4 audit
DSPT NEW AUDIT												Qtr 4 audit

5. PLACE, PLANNING, AND REGENERATION

AUDIT	Start Date	Date of Draft Report	Key Indicator met	Assurance Level				Recommendation priority				Status
	Start Date	Date of Draft Report	Key Indicator met	Good	Adequate	Partial	Inadequate	Critical	Major	Moderate	Low
SANGs	May 2021	16/7/21	P	N/A – Advisory memo							1	“D” Finalised
S106 – Use of the monies in compliance with development in the relevant geographic area		11/8/21	P	P							6	“D” Finalised
Tree service	1/9/21											Received for review
Street lighting follow up (partial assurance opinion 2019/20)												Qtr 4 audit
Development Control	23/8/21	6/12/21	P		P					9	1	Draft issued
Building Control and land charges	29/9/21	29/11/21	P		P					6	1	Finalised
~~Public Health~~												Deferred to Qtr 1 of 22/23

6. CHIEF EXECUTIVE’S OFFICEcosts advisory review

AUDIT	Start Date	Date of Draft Report	Key Indicator met*	Assurance Level				Recommendation Priority				Status
		Date of Draft Report	Key Indicator met*	Good	Adequate	Partial	Inadequate	Critical	Major	Moderate	Low
~~Transformation support costs advisory review~~ w												Deferred to Qtr 1 of 22/23

7. DELIVERY

AUDIT	Start Date	Date of Draft Report	Key Indicator met*	Assurance level				Recommendation Priority				Status
		Date of Draft Report	Key Indicator met*	Good	Adequate	Partial	Inadequate	Critical	Major	Moderate	Low
Public Protection Partnership (Follow up- partial assurance 2020/21)												Qtr 4 audit
Reactive Maintenance (Follow up- partial assurance 2020/21)	August 2021	27/8/21	P	N/A- Follow up memo. All recommendations addressed								Finalised
~~Commercial property (Follow up- partial assurance 2020/21)~~												Deferred to Qtr 1 of 22/23 as completion of actions expected June 22
Cemetery and Crematorium	12/7/21	15/9/21	X		P					10	1	“D” Finalised
Everyone Active Covid support		30/6/21	P	P								Finalised

8. PEOPLE

AUDIT	Start Date	Date of Draft Report	Key Indicator Met*	Assurance levels				Recommendation Priority				Status
		Date of Draft Report	Key Indicator Met*	Good	Adequate	Partial	Inadequate	Critical	Major	Moderate	Low
~~Transport in CTPLD- advisory review~~												“D” Unable to progress planning due to staff sickness therefore defer to 22/23
Financial assessments	November 21											Received for review
~~Preparation for new Liberty Safeguard regulations – advisory piece~~												Audit deferred to 22/23 as new national guidance has still not been issued
Deputyships and appointees												Qtr 4 audit
~~Commissioning due diligence checks~~												These 2 audits have been deferred to 22/23 to free up resource to audit SEND
~~Children’s placements~~
Supervision- advisory review covering ASC and Mental Health	October 21											Work in progress
SEND targeted areas- NEW ADDITIONAL AUDIT	December 21											Work in progress
Breakthough (Follow up- partial assurance 2020/21)												Qtr 4 audit
~~Group supervision and Motivational interviews~~												Audit cancelled at request of service area
~~Equality, diversity and fair access to children’s social service~~												Deferred to 22/23
Permanency planning	August 2021	21/9/21		N/A memo issued on advisory with no opinion					2	1		Final memo issued
~~Post leaving Care~~												Deferred to 22/23
Larchwood	26/7/21	27/10/21	X			P			3	4	1	Draft report issued
Glenfield- mental health supported living	August 2021	8/10/21	P		P					3		“D” Final report issued
~~Youth Offending service~~												Cancelled by service area
Forestcare	November 21											Work in progress
~~Disabled Facilities Grants-~~												Deferred to Qtr 1 of 22/23
Homelessness procurement advisory piece	12/10/21											Received for client-side review
~~Housing Management follow up~~												Deferred to Qtr 1 of 22/23
~~COVID Test and trace grants~~												Defer to 22/23 after grant programme has closed
Open Learning Centre												Deferred to late qtr 4 at service area request
Nursery provider support payments												Deferred to late qtr 4 at service area request

9. SCHOOLS

AUDIT	Start Date	Date of Draft Report	Key Indicator Met	Good	Adequate	Partial	Inadequate	Critical	Major	Moderate	Low	Status

School census												Work in progress
Services to schools- Can Do	12/8/21	7/12/21	X			P			3	9		Draft report issued
Free school meals												Work in progress
Fox Hill (follow up -Ltd 2017/18 and 2018/19)												“D” Now deferred to qtr 4
The Pines	14/10/21	24/12/21	P									D” Draft report issued for discussion
Woodenhill (follow up -Ltd 2018/19)												“D” Qtr 4 audit
Ascot heath (reaudit-Ltd 2018/19)	1/11/21	24/12/21										“D” Work in progress
~~Sandhurst (follow up partial 19/20) Cancelled as becoming an academy~~												“D” cancelled
Kennel Lane follow up												“D” Qtr 3 audit
St Michael’s Easthampstead (follow up partial 19/20)												“D” Qtr 3 audit
Whitegrove	7/6/21	29/7/21	X		P				1	4		“D” Final issued
Binfield	22/11/21	17/12/21	P									“D” Draft report issued for discussion
St Michael’s Sandhurst	11/10/21	22/12/21	x		P				1	3	1	D” Draft report issued
Winkfield	4/10/21	20/12/21	X									D D” Draft report issued for discussion”
Owlsmoor	18/10/21		X									Draft report issued for discussion

2020/21 AUDITS IDENTIFYING SIGNIFICANT ISSUES
AUDIT	RATING	CURRENT AUDIT STATUS
· Debt Management	PARTIAL	To be re-audited in Qtr 4
· Management of Essential Car User Allowances and Mileage	PARTIAL	To be re-audited in Qtr 1 of 22/23
· Public Protection Partnership	PARTIAL	To be followed up in Qtr 4
· Management of Commercial Properties	PARTIAL	To be followed up in Qtr 3
· Reactive Maintenance	PARTIAL	Followed up and all significant issues raised have been addressed
· Cyber	PARTIAL	To be followed up in Qtr 4
· Agresso IT System Follow Up	FOLLOW UP HENCE NO OPINION BUT MAJOR RECOMMENDATIONS RAISED	Re-audit in progress
· Creditors	PARTIAL	To be re-audited in Qtr 4
· Business Rates · Council Tax and council tax	BOTH PARTIAL	Re-audit in progress
· Domiciliary Care Follow up	FOLLOW UP HENCE NO OPINION BUT MAJOR RECOMMENDATION STILL OUTSTANDING	To be re-audited in Qtr 1 of 22/23
· Breakthrough	PARTIAL	To be followed up in Qtr 4

OTHER AUDITS AREAS WHERE SIGNIFICANT ISSUES IDENTIFIED PRE 20/21 WERE STILL OUSTANING AT 31/3/21	CURRENT AUDIT STATUS
· Forestcare (Follow Up Memo. 2019/20 Also limited in 2017/18)	Re-audit in progress
· Adult Social Care Pathway (Qtr 4 2017/18 Audit)	To be followed up in Qtr 1 of 21/22
· Loans for Housing Rents and Deposits	To be followed up as part of the debt management audit in Qtr 4 of 21/22
· Public Health	To be re-audited in Qtr 4
· Disabled Facilities Grants	To be re-audited in Qtr 4
· ICT Continuity Management	To be re-audited as part of business continuity in Qtr 1 of 22/23