Agenda item

To receive a report from the Director of Finance and Corporate Services outlining the Internal Audit Service Annual Report 2023/24

By means of a report by the Director of Finance and Corporate Resources (a copy of which is appended in the Minute Book) the Committee were presented with details of the work that had been undertaken by Internal Audit during the year ending 31 March 2024. The report referred to the evidence that provided reasonable assurance over the adequacy and effectiveness of the Council’s overall internal control environment during the financial year 2023/2024.

In introducing the report, the Director of Finance and Corporate Resources informed Members that the Annual Governance Statement required an annual opinion from the Head of Internal Audit on the Control Environment. The opinion should be provided by a suitably qualified and independent person. This opinion had been provided by Jonathan Tully, Head of Shared Internal Audit for Cambridge City and South Cambridgeshire District Councils. The opinion had been based on the outcome of eight audit reviews and six reviews of key financial systems.

Members’ attention was drawn to a number of areas covered in the report. The audit had found that the Social Value in Procurement Policy and Framework adopted in 2019 had not been implemented, key aspects were not complied with and the approach had not been amended to reflect a number of economic changes. Furthermore, a formal contract management process was not in place and staff were not trained in social value. Therefore, additional resources had been recruited to review and implement the Social Value in Procurement Policy, to adopt the new Procurement Regulations in October 2024 and to assist budget managers with contract management.

Regarding the implementation of audit actions, there remained a significant number of actions that had become overdue. It was understood that capacity had inhibited progress. It was important that services proposed realistic implementation dates. Internal Audit would therefore discuss this at each audit closure.

Assurance work in relation to the Development Management Service and General Data Protection Regulation had not been undertaken because service provision was not fully in place. The services had therefore agreed to prepare and follow improvement plans and the intention was for Internal Audit to review progress against these under the 2024/25 Audit Plan.

The Internal Audit Manager would continue to report functionally to the Committee and maintained organisational independence. There were no constraints placed upon the Manager to determine overall audit coverage, audit methodology, the delivery of the Audit Plan or proposing actions for improvement or forming opinions on individual audit reports.

In response to a question by Councillor Hodgson-Jones, it was stated that the report was ordered by the action reference number rather than by importance or date. Following discussion on the format of the report, it was suggested that it should include the date on which each action had been entered with the date on which the relevant report was finalised and issued, a summary table of the timeline for each action to provide the required auditing and assurance standards and a visual representation of the of the audit actions’ direction, priorities and progress over time. In response it was pointed out that the Council faced significant challenges in securing an Internal Audit Team that was able to identify what improvements were required and in ensuring that these were actioned effectively and delivered value for money.

It was reported that to support preparation for the Procurement Act 2023, the Council would produce a staff training plan covering all aspects of the new regime, including contract management and procurement. This would mean the Council achieved better value for money and ensure the Council received the services it paid for. Accordingly, it was

RESOLVED

a)  that the report be received and noted, and

b)  the Audit Assurance Opinion be taken into account when considering the Annual Governance Statement for 2023/24.