Agenda item

To consider the annual audit report for the year ended 31 March 2020.

Ms Tracy Greenhalgh, Head of Audit and Risk presented a report setting out the individual and collective outcomes of the audit reviews undertaken over the financial year ending 31 March 2020. It addition the report provided an audit opinion on the control environment based on the audit work undertaken. Within her report, Ms Greenhalgh set out the proposed programme for Heads of Service to report progress against audit recommendations to the Audit Committee based on a random sample of audits.

Ms Greenhalgh reminded the Committee that as the Head of Audit and Risk she was responsible for the delivery of an annual audit opinion and report that could be used by the Council to inform its Annual Governance Statement. The annual opinion concluded on the overall adequacy and effectiveness of the organisation’s framework of governance, risk management and control. In giving this opinion, assurance could never be absolute and therefore only reasonable assurance that there were no major weaknesses in the processes reviewed could be provided but she assured Committee Members that where high risk areas had been identified as part of audit reviews these would be subject to a follow-up process to ensure that effective controls were implemented. 

Ms Greenhalgh reported that she was satisfied that sufficient assurance work had been carried out to allow the provision of a reasonable conclusion on the adequacy and effectiveness of the Council’s internal control environment and that the overall control environment of the Council was adequate, however she recognised that there were significant issues faced by Children’s Services as identified in the Ofsted report and ongoing overspends which needed to be addressed. The Covid-19 pandemic had also impacted on the control environment in March 2020 and this would continue to be monitored during 2020/2021 and steps taken to manage risk as effectively as possible given the challenging circumstances. Where weaknesses had been identified through internal audit work the team had worked with management to agree appropriate remedial actions and a timescale for improvement. This was particularly relevant in high risk areas where innovative solutions were being implemented to support future sustainability.

Within the report Ms Greenhalgh had identified four areas where planned internal audit work for 2019/2020 had not been undertaken and which included Homelessness; the Conference Centre; Children’s Legal Services and Fostering. Councillor Mitchell, as Chair of the ongoing scrutiny review of Housing and Homelessness queried the lack of liaison between internal audit and the scrutiny working group and suggested that internal audit’s input would be appreciated. Ms Greenhalgh confirmed that internal audit’s support could be offered to the working group if any areas of risk were identified during its review.

The Committee queried the decision to defer the audit of the Conference Centre, stating that as a one-off occurrence if the construction process was not audited there would be no future opportunity to undertake this review. Ms Greenhalgh clarified that a full audit of the Conference Centre would be undertaken at a future date and that she had been involved throughout the project to ensure an overview of the adequate handling of risks.

With regards to the remaining deferred items of Children’s Legal Services and Fostering, Ms Greenhalgh reported that these areas would both undergo an element of peer review or external scrutiny and internal audit would be made aware should any significant areas of risk or control be identified. The suggestion was made that the review of Fostering could benefit from involvement from the Children and Young People’s Scrutiny Committee.

The Committee agreed: That involvement in the Fostering review be considered for inclusion within the Children and Young People’s Scrutiny Committee’s work plan.