Agenda item

The Head of Audit and Assurance briefed the Committee on how Covid 19 had impacted on the Audit Plan, together with the risk profile of the Council in a short space of time. Internal Audit had to look at the services currently being implemented as well as new services and processes being delivered as a result of the pandemic. Some controls had been relaxed because of working from home, for example. The Council had to ensure that suppliers were supported through the pandemic and so processes and rules had been changed. However, fraud risks were existent for all councils. The Audit Plan had to be flexible and agile to deal with multiple demands.

The Audit of the Care Act (Information, Advice and Guidance) had been completed and the level of assurance was ‘Reasonable’. 

The audit of contracts coming to an end had been completed and the level of assurance was ‘Substantial.’

Members heard that the audit of Looked after Children had resulted in a Priority 1 recommendation (for children moving into the 18 plus age group).

It was found that a number of cases did not have a valid contract in place with the provider, so the Contract Procedure Rules and the Financial Regulations were not being followed. The service was working through a backlog of existing placements. The level of audit assurance was ‘Limited’.

The Committee heard that the audit of ‘More Homes Bromley’ had been a complex piece of work. It was an innovative scheme and 360 properties had been delivered in a short timeframe against a target of 400--this had been a steep learning curve and many lessons had been learned. Recommendations had been made to improve the control environment. Short and long term operational risks needed to be identified as well as priorities. KPI data was required. The Head of Audit and Assurance felt that the business plan, business accounts, and financial model all required updating. The Council’s Insurance Board needed to satisfy themselves that all properties were covered by relevant insurance. The final accounts had not been formally approved before being filed at Companies House.

Although it was the case that there had been many recommendations, the project had been very successful in that it was delivering much needed housing stock for  the Council and was also of significant benefit to the public in terms of providing housing.  The Chairman was pleased to note that there were no Priority 1 recommendations.

A discussion took place regarding the Council’s Board Members for the More Homes Bromley Scheme, and how could the Committee be satisfied that the correct insurances were in place if the Board members were not insurance experts. The Head of Audit and Assurance informed Members that this was indeed an issue that should not be overlooked and it would be reviewed at the next Board meeting. The Board was encouraged to take expert independent advice if required.

A discussion took place as to how the audit opinion of reasonable assurance had been given (in respect of More Homes Bromley) as the project had been subject to numerous recommendations from Internal Audit. The Head of Audit and Assurance explained that given the size of the project, and what it was delivering and achieving in operational terms--on balance a rating of limited assurance would have been unfair. He expressed the view that the two senior officers who had been allocated to Board duties in addition to their normal roles, had done excellent work, given the fact that the additional roles were quite a pull on their time considering the project size— he felt that the project would benefit from a dedicated project lead.

The Pensions Administration audit showed that for the most part, systems were working well, but one area of concern was that it did not appear that the pension accounts from the general ledger and their reconciliation with IT systems were being reviewed or signed off. The audit opinion for pension administration was ‘Reasonable’.

The Head of Audit and Assurance informed Members that the audit of the Registrars department had gone well, and that generally speaking the systems and financial control procedures were satisfactory. The audit opinion was therefore ‘Substantial’. 

A Member expressed concern about the small size and cutbacks to the Finance Team as he felt that this constituted an operational risk. The Head of Audit and Assurance, together with the Committee, agreed that there was leanness in the Finance Section that needed to be monitored. 

Members were provided with an update on St Olave’s. A number of recommendations were made. The Priority 1 recommendation that had previously been issued, was in relation to project management and financial processes. There had been non-compliance with financial regulations in some areas. The budget had not been signed off by the Chair of Governors and the balance sheet showed a deficit at one point. The audit had resulted in 2 Priority 1 recommendations and 7 Priority 2 recommendations and so the level of audit assurance was ‘Limited’.

The Troubled Families claim had been signed off and the Head of Audit and Assurance updated the Committee regarding the Priority 1 follow ups. The usual follow up procedures had not been initiated as a result of the Covid 19 pandemic. However, if officers wished to feedback with any updates to internal audit, then these would be noted. The Heath and Safety recommendations had been signed off, along with the Domiciliary Care Contract Management recommendations. With respect to the Highways Maintenance Contract recommendations, a number of changes had been put in place, but they needed to be embedded before being audited. The Head of Audit and Assurance commended the work of the IT Service Department and also the Work of LBB’s Business Continuity and Resilience Lead in their response to the Covid pandemic.  

RESOLVED that the Internal Audit Progress Report is noted and that the Committee note the Internal Audit reports that had been published on the Council’s website.