The report of the Head of Audit and Internal Risk is attached.

In accordance with Public Sector Internal Audit Standard 2450, the Committee considered the report of the Head of Audit and Risk Management which presented the annual internal audit opinion on adequacy, effectiveness and delivery of the programme of audit work designed to raise standards of governance, risk management and internal control across the Council over the last year. This included a summary outturn of the work of the Internal Audit Section for the 12 months April 2020 to March 2021.

The report outlined a discussion within the sector regarding the ability within the sector to undertake sufficient internal audit work and produce a reliable independent assurance assessment under current circumstances. As a result, revised guidance had been issued by Chartered Institute of Public Finance and Accountancy (CIPFA) on the form the opinion may take. The report explained that whilst an opinion on the adequacy and effectiveness of the organisation’s framework of governance, risk management and control had been issued for 2020/21, the impact of the Covid19 pandemic on public services over this period had been considerable and had resulted in significant change to planned priorities in order to focus resources on those critical activities essential to the pandemic response and recovery. As a result, the Head of Audit and Risk Management’s approach had been to obtain sufficient assurance to support the annual opinion, considering both internal audit work and other sources of assurance which were outlined in the report.

The Head of Audit and Risk Management provided an opinion of reasonable assurance that the Council’s governance, risk and control framework was generally sound and operated reasonably consistently in the year. This was an equivalent opinion to that issued in the previous four years and reflected that overall governance, financial management arrangements and core systems and processes within the Council remained effective despite the myriad of challenges presented by the pandemic. The strength of core governance, risk and control systems and the capability, commitment and agility of the workforce and leadership had been a key factor in enabling deviation from standard ways of working and in providing an effective response and recovery approach during the year. However, risks and issues remained in light of the ongoing pandemic and financial challenges to planned delivery of organisational priorities and strategies as well as backlogs in some core business processes Those risks would be recognised in recovery and transformation priorities including the Future Shape Programme; as well as in budgets and business plans.

The Chair invited questions and comments from members of the Committee.

The Committee welcomed the issue of an opinion in the current climate. A Member commented that it was good to see that emergency contingency planning had been effective and asked whether any of those revised working practices would be carried forward to influence future practice. The Head of Audit and Risk Management spoke about the strong foundation of work done in previous years and the pace, speed and agility required to work within the principles of good governance and the legal framework. This, he explained, had been reflected on as an organisation and had led to a changed focus on delivery involving greater collaboration across directorate and partnership working. He also said that use of virtual technology had been an important factor in maintaining the pace of delivery outcomes.

A Member sought assurance on the delivery of post payments of additional government grants and support schemes to businesses (including audit assurance). The Head of Audit and Risk Management expressed confidence in this due to the significant amount upfront activity that had taken place as part of mandatory requirements which lowered the error rate in the validation of payments.

With regard to the placement of Looked After Children, a Member welcomed the ongoing improvements towards greater efficiency and streamlining of core processes for Children’s Placement Findings.

Turning to outstanding audit recommendations in respect of Transitions and Mental Health Casework, a Member sought assurance that progress had been made in these areas. It was reported that this matter was in hand and would soon be reported back to a future meeting of the committee.

A Member asked about the current impact and future implications of recent events on audit activity. The Head of Audit and Risk Management said that approximately 25% of formal audit days had been completed with the remainder spent on business grants and other pieces of assurance work. He said that there had been a year end evaluation of what had not been delivered together with an assessment of the associated risk /priority with some refocused activity rolled forward for completion this municipal year.

A Member asked for information on the establishment, composition and remit of the Commercial Board. Officers agreed to bring detailed information on delegations and lines of accountability to a future meeting of the committee.

With regard to the Civic Quarter Heat Network (CQHN) project and the forthcoming completion of the construction phase, a Member noted that recommendations for improvements in governance arrangements had been shared with the Commercial Board and asked if those recommendations could be shared with the Committee. The Head of Audit and Risk Management agreed to this.

Decisions

1.    To note the issue of the Head of Audit and Risk Management Annual Assurance Opinion in challenging circumstances.

2.   To request that an overview of the function, role and remit of the Commercial Board (Procurement, Contracts and Commissioning) is circulated to Audit Committee members for information.