Agenda item

To receive a report noting  the Head of Audit and Risk Management’s Annual Report setting out the Head of Internal Audit’s Opinion for 2016/17.

Sally Hendrick, Head of Audit and Risk Management presented the Internal Audit Annual Assurance Report 2016/17.

The report, a requirement for Internal Audit, set out the Head of Internal Audit’s Opinion for 2016/17, summarised the results and conclusions of Internal Audit’s work for 2016/17 and provided statement on compliance with the PSIAS which would support the Annual Governance Statement.

In forming its opinion Internal Audit were required to comment on the quality of the internal control environment. During 2016/17 there were no Audits where no assurance was given but 22 were issued with a limited assurances.

There had been eight addition audits since January with limited assurance opinions, these were:

• College Town Junior
• Procurement in Schools
• Construction and Maintenance – 2 reports
• Creditors
• IT Equipment
• LED
• Bridgewell
• Adult Social Care Debt Management.

An update was provided on behalf of the Chief Officer; Property in regards to the Construction and Maintenance Audits:

• One priority one had been resolved so there were now only two priory 2 issues.
• The quality checks had been addressed with 100% checked during July – March 2017.
• Better information was being provided from the new contractor, who were also billing promptly and providing supporting documentation.
• Additional meetings had been held with the Construction and Maintenance Team to ensure that the correct resources were in place and processes were correctly adhered to.

The Declaration of Interest Audit report was still in draft form as more officers needed to be involved in finalising the report, in particular the Chief Officer: HR.

The Chair raised concerns surrounding the Construction and Maintenance audits as they had failed three audits in a row. It was requested that the Chief Officer; Property attend the next Governance and Audit Committee to update the committee what was being done to address the issues.

As a result of the Members’ questions and comments, the following points were made:

• Keir had been the provider since December 2015, they were more prompt with their billing and provided clearer information. The previous contactor, Grahams, had been slower to bill and generate invoices which caused a back log in quality checks.
• A further Construction and Maintenance audit was not intended as all issues had been flagged and it was now up to management to address these issues. A clear action plan had been set to implement the recommendations.
• The three areas of limited assurance in the Construction and Maintenance audit were all a variation on the same theme. These were not carrying out quality assurance checks, not checking rates and not checking the quality or completion of work.
• Disaster recovery and Back Up Audits had been brought to the Committee for discussion  in January 2017. A follow up audit would take place in Quarter two 17/18 and the position would be fed back to the Committee.
• It was requested that the Chief Officer; Property attend the next Governance and Audit Committee rather than the Director.
• The Councils Systems had been robust enough to hold up against the recent cyber attacks that had taken place with all software up to date. Disaster Recovery was a key part of the new ICT Strategy, robust testing would be taking place in Quarter two.
• It was up to the School’s Governing Body and Head Teacher to address the audit findings rather than the Local Authority. The issues were usually surrounding expenditure control, Purchase Order Processes and authorisation of invoices for payment. There was often a lack of understanding of financial control with the Bursar. Issues were usually addressed and taken on board by the schools, however there were ongoing issues with some who were struggling to get to grips with addressing the issues and didn’t seem to be improving.
• Schools had historically been audited by the Council to get an oversight of the school and check that they were operating properly. In March the Committee were updated that there was to be a new schools approach with themed audits being introduced on areas such as Pupil Premium and SEN.
• Academies were out of the Internal Auditors jurisdiction.

RESOLVED that the Governance and Audit Committee NOTE the Head of Audit and Risk Management’s Annual Report setting out the Head of Internal Audit’s Opinion for 2016/17.