Agenda item

FSD19048

The Head of Audit explained that the annual report was for Member information, its aim being to assist the Council in meeting the requirements of the Accounts and Audit Regulations 2015, which required the Council to undertake an effective internal audit to evaluate the effectiveness of its risk management, control and governance procedures.

The Head of Internal Audit and Assurance stated that Internal Audit had ensured that controls were operating in an efficient and effective manner, statutory and management requirements were being complied with, and records were completed and were accurate. He briefed Members on the number of audit days that had been allocated to each Department as well as the total number of planned tasks which was 55. He pointed out that in addition to the planned tasks for the year; some audit work had been carried forward from the previous year and completed. In addition, some unplanned anti-fraud work had also been undertaken. 

Members heard that the number of actual audit days for 2017/2018 was 824, this compared with 874 for 2018/2019. In consideration of 45 internal audit reviews for 2018/2019, 28 had been given a rating of ‘Substantial Assurance’ and 14 had been given a rating of ‘Limited Assurance’. In three cases, enough evidence was available to support grant claims requiring Internal Audit verification. Seventeen priority 1 recommendations had been implemented and 17 had been carried forward. Members were informed that there had been a total of 271 fraud referrals with 85 successful prosecutions.

A Member brought up the matter of Risk Registers and the need for training on Risk Management to be provided to new Councillors. Another Member commented that individual Members should be asked if they required the training or not. 

Members noted that Internal Audit was subject to a Quality Assurance and Improvement Programme that covered all aspects of internal audit activity. This consisted of an annual self-assessment of the service, and its compliance with the UK Public Sector Internal Audit Standards.

Under the requirements of the Public Sector Internal Audit Standards (PSIAS) there was a need for an external quality assessment of the service every 5 years. A peer review was carried out in March 2016 and concluded that the section generally conformed to the required standards.

Members were pleased to note that Internal Audit still generally conformed to the PSIAS.  There were no significant findings from Internal Audit’s Quality Assurance and Improvement Programme that required reporting to the Audit Sub-Committee or referred to in the Annual Governance Statement.

The Head of Audit and Assurance summarised the Annual Audit opinion. He stated that from the work undertaken during 2018/19, reasonable assurance was provided that there existed a sound system of internal control; this was designed to meet the Council’s objectives—the controls were applied consistently.  If weaknesses were identified, these were monitored by the Corporate Leadership Team and the Audit Sub Committee until any recommendations were implemented or discharged. Members noted that assurance could never be absolute.

There would now be a need to focus on the financial challenges that were looming for 2020-2021. A need had been identified to strengthen the Health and Safety Management systems and processes across the Council as well as the need to strengthen control arrangements and effectiveness around Contract Management.

A Member commented that the final audit report for St Olave’s School had a ‘Limited’ assurance rating. He was not comfortable that a ‘final’ report should have a limited rating and suggested that a follow up report would be required. 

RESOLVED that Members note the report and the Head of Audit’s opinion on the soundness of the internal control environment within the London Borough of Bromley.