Agenda item

To consider a summary of the work completed by Audit and Risk Services in quarter two of the 2022/23 financial year.

Ms Tracy Greenhalgh, Head of Audit and Risk, presented the Audit and Risk Services Quarter Two report. She reported that during quarter two the Audit team had been reduced by three officers to eight auditors which would affect the ability of the team to deliver against the Audit Plan and that any major changes would be reported back to the Committee as part of the quarter three reporting.

Details of work to update to the Council’s departmental risk registers were reported with 59% having been completed. In respect of Children’s Services it was highlighted that this figure was at 66% completed. Ms Greenhalgh explained that each directorate had a number of risk registers and that the audit team would be chasing up the outstanding registers during quarter three.

The Committee noted that the report stated that the Audit Team had reduced in professional qualifications by 25% in quarter two with Ms Greenhalgh explaining that this figure represented the number of staff with professional qualifications and had been impacted by the reduction in members of the team. She added that the team had recruited a number of trainee auditors to support ongoing audit work, and that although it would take time, this new employees would be supported in gaining the necessary professional qualifications.

Mandatory fraud awareness training in Children’s Services was shown at 62% having been completed and the Committee expressed concern that this was lower than other directorates. Ms Greenhalgh replied that the Director of Children’s Services (DCS) had been informed of which members of staff not yet undertaken the training and would ensure that they did so in a timely manner. The Committee asked that progress to improve the number who had undertaken the fraud awareness training be highlighted in future reporting to allow ongoing monitoring.

Ms Greenhalgh also reported on the outcome of internal audit reports issued during quarter two and reported that in most adequate assurance had been found. In respect of the Children’s Service’s Financial Systems Development Audit, however inadequate assurance had been found. In response to this the DCS and set up a working group under the responsible Assistant Director to work toward improvement against the audit recommendations made. Mr Steve Thompson, Director of Resources, added that the working group’s establishment would provide assurance that the necessary work was taking place and have input from the audit and finance teams. Members therefore asked that a report on the progress of the working group’s work be provided to the Committee in six months time.

The Civil Claims Financial Data audit was also discussed with Ms Greenhalgh highlighting that split assurance had been given in this case. This was due to inadequate assurance being found in the handling of potential claims, with changes being made without consultation with the Risk and Resilience and Self Insurance Panel. The Committee was informed that there would therefore be discussions with the panel to determine a suitable approach to be taken to resolve this issue.

It was also queried the what the term “Hardening Markets” meant in respect of this audit, with Mr Thompson explaining that it referred to market conditions where it would be more difficult to place insurance with providers. He further noted that obtaining property insurance had become more difficult and presented a challenge for the Council going forward.

Members noted that in respect of the Adult Services Extra Support Service audit that there had been “minor lapses” in lapse in compliance and queried why therefore four priority two recommendations had been made. Ms Greenhalgh responded that some minor lapses could qualify as priority two recommendations depending on the issue and outcome of compliance testing.

Regarding details the outcomes of previous audits undertaken into Growth and Prosperity the Committee discussed recommendations that had not been actioned. Ms Greenhalgh reported that nine recommendations were outstanding and these had been highlighted to officers, but confirmed that all priority one recommendations had been actioned successfully. Progress to ensure that these recommendations were actioned would be included in future audit and risk reporting to provide ongoing assurance to the Committee.

The Committee also discussed BACS controls in respect of the Resources Direct Debits audit with Ms Greenhalgh informing members that in addition to monitoring undertaken by the Council’s Audit team, BACS also undertook their own monitoring and audits of Council services.

The Fraud and Risk Statistic 2022/2023 table provided in the report was raised by members of the Committee who queried what systems were in place to recover the money lost to fraud outlined, noting Council Tax was the biggest area of reported fraud. Ms Greenhalgh explained that each case was considered individually and in the first instance would be treated as an error, but if the Council would seek to prosecute instance of Council Tax fraud if it were ongoing. Instance of fraud were checked and escalated depending on the circumstances of the case and the cooperation of those involved.

Ms Greenhalgh further explained that the large number of fraud claims were managed by the Council’s legal team and would be referred to the Audit and Risk Team if fraud was identified.

Members also queried if fraud in respect of Covid support grants were included in the statistics. Ms Greenhalgh explained that this information was not yet included in the statistics provided to the Committee, but collection of the necessary information was taking place. She advised that instance of fraud in relation to Covid support grants were low and that audit was awaiting national data on this issue before including in future reporting.

Resolved:

1.     That the report be noted;

2.     That the number of Children Service’s officers who had undertaken the mandatory fraud awareness training be highlight in future reporting audit and risk services reporting to allow ongoing monitoring; and

3.     That a report on the progress of the work being undertaken by the Children’s Services Working Group in response to the Financial Systems Development Audit be provided to the April 2023 meeting of the Committee.