Agenda item

That the report be noted.                          

The Internal Audit Manager presented the report to update Members on the progress of the Internal Audit department.  He detailed the background to the report and explained that transition to a new software package had resulted in a number of audit reviews which had exceeded their budgeted time.  The delays would become less as the team became more familiar with the system and this would be closely monitored to ensure that the pace of completion was picked up for the remainder of the year.  In the first five months, 55% of the annual budgeted time for work on a number of investigations and National Fraud Initiative work had taken place.  The implementation of the integrated audit software was continuing and recommendation tracking through the system would commence shortly. 

                        All reports finalised since the last committee meeting were shown in Appendix C and in referring to the ‘red’ assurance on the Schools Thematic Review, the Internal Audit Manager provided details of the schools that had been visited and the high and medium level recommendations made.  Concerns about Payroll had been raised earlier as part of the discussions on the Statement of Accounts but the Payroll review undertaken by the Internal Audit team had looked at the overall control of the section.  A number of issues had been raised by both the team and the Wales Audit Office (WAO) and a follow-up report on the work of the Group identified earlier by the Chief Executive would be considered by the Committee at its meeting in January 2016. 

Appendix D showed the responses that had been received when tracking recommendations.  For recommendations that had not been implemented on time, the relevant Chief Officer was required to confirm that the reason and the new date were both acceptable to them.  It was also necessary to report on how the risk was being managed before the recommendation was implemented.  The status of outstanding recommendations that were more than two years old were reported and these related to Procurement, Main Accounting, Enforcement and Capital Programme.  The recommendations were still being actioned but had required long-term solutions and most of the long-standing recommendations would be addressed by the end of the year.  The Internal Audit performance indicators were reported on page 42 and the return of client satisfaction questionnaires had improved from 14% at quarter 4 to 53% at quarter 1.  Appendix F provided details of new referrals that had been received, investigations that were still ongoing and investigations that had been completed.   

The Internal Audit Manager commented on the Whistleblowing policies in schools and the concerns that had been expressed by the Committee over the adoption of the policies.  All schools had been contacted to confirm whether they held a policy and to provide a copy for review and the results would be passed to the Chief Officer (Education and Youth) for his team to follow up as necessary. 

Councillor Bernie Attridge raised significant concern about the number of days taken for departments to return draft reports.  In response, the Internal Audit Manager commented on the introduction of a new template and the procedures in place which had been redesigned to ensure a prompt response as the department was advised that it would be assumed that the report was an accurate record of the debrief meeting if it was not returned within the prescribed deadline.  Councillor Attridge felt that the three day target had been set for a reason and queried what was in place to ensure that officers complied with the deadline and whether the same department or officer were always responsible for the late return of draft reports.  The Chief Executive acknowledged the comments made and spoke of the reductions in bureaucracy but added that there may be a need to review the three day target for a response as it was an ambitious one.  The Internal Audit Manager said that he did not have the details with him about individual officers or departments but added that the target for the total days from the end of the fieldwork to issuing the final report had been achieved. 

In response to a query from Councillor Haydn Bateman on one of the investigations that had been completed, the Chief Executive advised that an update report on Housing control was to be submitted to a future meeting of the Community & Enterprise Overview & Scrutiny Committee.  He also commented on the work of the Internal Audit Team on the serious case.  The Internal Audit Manager confirmed that additional processes and controls had been put in place but added that it was an isolated case.  Councillor Alison Halford indicated that she had not been aware of this case and in response, Councillor Bernie Attridge indicated that it was not always appropriate to advise Members of individual investigations; the Chairman advised that the incident had been raised with him.  The Chief Executive reiterated that the report to the Community & Enterprise Overview & Scrutiny Committee would provide assurance that this was a one-off case and that allocations were being controlled according to policy.  Councillor Halford felt that the delay had cost the authority because WAO had had to wait for some reports on the long standing issue and spoke of the reliance on senior officers and suggested that the Chairman of the Community & Enterprise Overview & Scrutiny Committee should have been made aware of the issue.  The Internal Audit Manager indicated that the incident had been brought to the attention of the Internal Audit Team in June 2015 and this had been the first opportunity to submit it to this Committee.  The Chief Executive advised that such cases were not routinely brought to the Audit Committee.  He acknowledged the need for earlier briefings on such issues, which may affect confidence in services, with the Chair and Vice-Chair of the appropriate Overview & Scrutiny Committee. 

Councillor Arnold Woolley felt that any delays from departments on report turnaround and actioning were unsatisfactory and suggested that officers should be asked to attend Audit Committee to explain why any delays were continuing.  He also felt that sanctions should be in place and that the Audit Committee was not undertaking its duty if Members did not exercise the right to request attendance at meetings by officers. 

In response, the Internal Audit Manager confirmed that no officers had been asked to explain delays to the Audit Committee but added that there had been an improvement in the returning of draft reports from quarter 4 to quarter 1.  Issues were being addressed before they reached the stage of needing to be called before the Committee but if the concerns were significant and did not improve then this suggestion would be enforced.  Mr. Williams endorsed the comments of Councillor Woolley and welcomed the assurances that had been provided by Chief Executive and the Internal Audit Manager. 

Mr. Williams referred to the last bullet point on the section about Contingent Liabilities in the Statement of Accounts, asked if Internal Audit had been involved and sought clarification on how much had been set aside in preparation for the outcome from the High Court.  The Chief Officer (Governance) indicated that Counsel had advised that the case was misconceived and over valued.  As yet the Audit Committee had not been informed of this case because there was (in light of Counsels advice) no indication that the Council’s procedures were flawed.  If the case was lost in the High Court, it was expected that Internal Audit would need to undertake an investigation.  The Portfolio Holder had been made aware of the case. 

RESOLVED:

That the report be noted.