The report of the Head of Audit and Risk Management.

The Committee considered a report of the Head of Audit and Risk Management which provided an update of progress on the agreed audit plan 2021/22; additional work assigned to the audit service and copies of the audit opinions issued in the period November 2021 to January 2022.

The report included information on:

• The Audit Programme of Delivery
• Resource and Planning Objectives
• Children’s Services and Education audit activity including, School Financial Health Checks, Foster Care payments
• Adults Services audit activity including, Client Financial Services (Appointeeships), Direct Payments, Technology Enabled Care, Better Outcomes Better Lives, Adults Management Oversight and Supervisions,
• Corporate Core audit activity including, Information Governance, Information and ICT, Core Systems
• Neighbourhoods; Growth and Strategic Development audit activity including Housing Operations – Governance Arrangements, Approach to Empty Homes and Voids, Victoria North (formerly Northern Gateway), Traffic Signals Maintenance Grant
• Audit activity relating to Procurement, Contracts and Commissioning (PCC) practices including Factory Project Assurance, a follow up review – Children’s Placements, Carbon Reduction in Procurement, Contract Management – Adult Social Care, Waivers and Contract Extensions
• Audit Activity relating to Counter-Fraud and Investigations including Proactive activity and Reactive Corporate Cases; and
• Other Investigations including Business Grants, Council Tax Reduction Scheme and Housing Tenancies
•  

Appended to the report were:

• The delivery status of the annual audit plan 2021/22
• Executive summaries November 2021 to January 2022; and
• The basis of Audit Assessments (Opinion/Priority/Impact)

The key lines of enquiry discussed in the meeting were in relation to:

• School Financial Health Checks, in respect of all final reports resulting in a limited assurance opinion
• The approach to Empty Homes and Voids,
• Adults Services: Client Financial Services (Appointeeships),
• Procurement, Contracts and Commissioning - Waivers and Contract Extensions

Members welcomed the proposals outlined in relation to Empty Homes and Voids noting that progress on addressing the matter had likely been impacted on by the global pandemic. The Head of Audit and Risk Management gave clarification that Internal Audit’s remit would be on the systems and processes in place to deliver an effective voids management system.  The Deputy Chief Executive and City Treasurer suggested that it would be helpful for members to receive a report to be scheduled for the new municipal year which outlines actions and progress in terms of the assimilation of Northwards into the Council’s Housing Operations Service.

With regard to Adult Social Care Waiver and Contract Extensions, The Head of Audit and Risk Management reported no concerns over compliance but indicated that coordinated work through the Commercial Board was needed to simplify constitutional wording in respect of contract authorisations as it had been deemed too constraining.

Members were informed that it was anticipated that the audit of contract management arrangements (Adults Services) would be complete with a final report issued by early May 2022.  Should that timescale be delayed delay, the Director would be asked to provide an explanation to the Committee at its request.

In light of the proposal to defer planned audit activity of Adult Services Directorate Direct Payments (Client Financial Services) until 2022/23 due to  arrangements being  in place for that work to be delivered by the relevant professional bodies, Members sought to explore the extent to which audit work was coordinated across Greater Manchester (GM) boroughs to prevent unnecessary duplication.  The Head of Audit and Risk Management described a well-established and positive relationship with colleagues in the GMCA citing good examples of coordinated work, though it was recognised that greater coordination may be possible in light of the presence of integrated care systems. 

In respect of the assurance opinions relating to School Financial Health Checks, the Committee sought to explore the underlying reasons in light of all of the schools named in the report having been ranked as ‘limited’.  Members highlighted this as a concern.  The Head of Audit and Risk Management gave assurance that this did not reflect the position across all schools and was confined to a targeted sample of schools where it was understood that focussed audit work was indicated. These were smaller establishments where segregation of duties was more likely to be impacted upon by changed processes and priorities resulting from the global pandemic.  He also indicated that this was, in part, a reflection of the criteria for selection of schools for inclusion in audit activity.  The Committee discussed the benefits of reciprocal arrangements between smaller schools where challenges around duty segregation were evident as well as the importance of contingency measures which could be achieved through cluster arrangements and / or traded business support functions for instances related to significant staff absence.  The Head of Audit and Risk Management agreed to reiterate the benefits of reciprocal arrangements as a possible way forward for schools facing challenges of this type.  The Deputy Chief Executive and City Treasurer made reference to the monitoring role of the Local Authority’s wider finance teams in terms of oversight and management of financial risk for maintained schools, which sit in parallel to the work of the internal audit function.  A report which outlines the broad scope of the Local Authority’s relationship with schools would be scheduled in the new municipal year to describe those relationships in a bid to address those concerns.

Discussions moved to Appointeeships for Client Financial Services – a member noted that two key actions that had been previously identified had not yet been implemented.  The Deputy Chief Executive and City Treasurer informed the Committee that the Service Manager had met with herself and the Head of Audit and Risk Management to discuss the audit findings and there was confidence that the right arrangements were in place.  A substantive response to outstanding actions were anticipated for early April 2022, adding that the service had recently been audited by the Office of the Public Guardian, the findings of which had been positive in respect of their audit of  records management and the associated processes that were in place.

With regard to delivery of the Audit Programme, Members sought assurance that there was sufficient capacity within the team to catch up on planned activity that had not yet started.  The Head of Audit and Risk Management gave assurance that the finalisation of the redesign remained on track in terms of planned implementation timescales.  The Deputy Chief Executive and City Treasurer suggested that the next assurance report would include specific reference to the impact of Business Rates /government grants work and the COVID relief fund in respect of impact on audit programming.  The Chair requested that the redesign of Human Resources and Organisational Development should also be included for discussion.

Decision

1.    To note the report.

2.    To schedule a report which describes the Local Authority’s education and finance colleagues’ relationship with the maintained schools’ sector, in terms of management of compliance, oversight and measures of internal control in the new municipal year.

3.  To request that the next scheduled assurance report includes information about Business Rates  /government grants assurance work, including the COVID relief fund legacy and the HROD redesign