Agenda item

To receive the Internal Audit Report 2022-23 (copy enclosed).

The Lead Member for Finance, Performance and Strategic Assets introduced the Internal Audit Annual Report to the committee (previously circulated). She emphasised the real effort that had been made by the audit team under difficult circumstances over the last 12 months.

The Chief Internal Auditor guided members through the report. The annual report was an example of good practice under the adopted standard of the Public Sector Internal Audit Standards. Those standards required an annual report on Internal Audit to feed into the statutory Annual Governance Statement.

The report encompassed the work of the audit team for the previous year and provided details of the work carried out by the auditors. He apologised to members stating the overall opinion had not been included/ He explained his opinion was submitted as part of the Annual Governance Statement which was to be presented at the July committee meeting. Since the publication of the papers an amended report had been circulated to members highlighting the change. For clarity the Chief Internal Auditor read out his overall opinion as follows:

‘The Chief Internal Auditor’s opinion is that the council’s governance, risk management and internal control arrangements in the areas audited continue to operate satisfactorily. While the scope of assurance work was reduced due to the staff issues and three investigations, reasonable assurance can be given that there have been no major weaknesses noted in relation to the internal control systems operating within the Council.’

It was reiterated to members the team dynamics during the last 12 months. The team had been operating without a full complement for the majority of the year. He also stressed the work that had been involved in completing the three special investigations. It was unprecedented to have 3 in one year. Both these points had impacted on the amount of planned audits completed from the original plan presented to committee last year.

Members heard 43% of the proposed work had been completed. 74% of the work carried out received a high assurance, 26% received a medium assurance with no low or no assurance ratings being issued. 3 advisory pieces of work had been completed, all of which were satisfactory. 7 follow up pieces of work had been included on the programme of work, the team had completed 6 of the follow up reviews.

Fraud and the manner in which way it was managed by the authority continued to be reviewed. Fraud was managed by senior officers within the council and any concerns was initially investigated by the service and then internal audit for assistance. The service should then report back to internal audit with the findings. Over the last 12 months he confirmed he had not received any reports of fraud.

Every 2 years the authority was required to carry out a piece of work for the National Fraud Initiative, which looked at matching data. The most recent report conducted had been provided to members at the time of completion. Details of the procedure of matching data was provided.

The audit team had performance indicators which included the draft report being issued in 10 working days and the final report being produced 5 days following agreement of the draft report. 

An area the team had addressed that needed improving was the questionnaires following an audit being returned. The team had looked at the form to make easier to navigate and use. Hoping that would see an increase in returned questionnaires to the team.

The Chair thanked the Chief Internal Auditor for the detailed introduction. The following points were discussed further:

·         Whistleblowing complaints were received by the Monitoring Officer who in turn shared any information with the Chief Internal Auditor to decide the best way forward. At that point it was looked at what internal audit can and should do and what can be farm out.

·         A number of audits had been carried forward. If any of the risks are still noted or become a greater risk they will be get moved up the priority list. It was hoped this next year the majority of audits would be completed. It would be a combination of work carried over and those listed on 2023/4 programme of works. Audits in all services during the year are conducted, regular meetings with heads of service to prioritise the order of work took place.

·         The majority of the work in relation to the special investigation work had been completed in the office. Both special investigations resulting from whistleblowing, audits were conducted on site.

·         Audit had looked at the relationship arrangements between the authority and Betsi Cadwaladar University Health Board and were confident the relationship with the board was still effective. Once all investigations had been completed of the Health Board, internal audit could ensure it has the correct assurance. Officers of the authority had determined the risk associated to each area on the Corporate Risk register. Members stressed their concern that the assurance related to CRR00021 on the Corporate Risk register was green, High assurance. It was stressed the assurance was in relation to the communication between the two bodies not on the performance of the health board.

·         Members noted the no low or no assurance audits completed. It was stressed that based on the work that had been completed that was the case. Working process are in place for all audits, all reports are presented to the Chief Internal Auditor before completion.

·         In relation to some of the matching data fraud, it was often the case that other authorities completed the final work, depending if fraud was evident in a given authority.

·         Confirmation that the counter fraud strategy and fraud response plan were due to be reviewed in the next 12 months. Members asked that those findings be shared as part of the internal audit update. Members were pleased to hear working with other local authorities to review best practices was taking place.

RESOLVED that members note and comment on the Chief Internal Auditor’s annual report and overall opinion.