Agenda item

To consider progress against the Internal Audit Plan for the 2^nd  year half.

The Committee received the South West Audit Partnership (SWAP) Report of Internal Audit Activity – Plan Progress report for 2019/20. This update report covered the quarter 3 information that was due to be discussed at the March meeting and had been updated to cover the period up to the end of the financial year.  SWAP’S ongoing audit opinion within this report was limited to 31 March 2020 and whilst SWAP would normally provide a quarter 1 update at this time, due to the unprecedented circumstances day to day activity around audit assurance work was only just being resumed.  Members noted that SWAP’s opinion for 2019-20 would be based on almost a whole year’s work and would be provided to the committee in the annual report in September, however the annual opinion for 2020-21 would not be based on a whole year’s assurance work.

The Chairman thanked SWAP and the rest of the team for all their support during the pandemic, stepping away from their usual audit work to assist the Council in responding to the pandemic.

The Vice-Chairman highlighted the area of Pupil Premium Plus.  He noted that a lot had happened since April.  Whilst he felt reassured that steps had been taken to address the particular concern that had been identified it was not clear to him if controls had been put in place to stop it happening again and this should be a serious concern to all. The Assistant Director, SWAP assured members that this would continue to be followed up and that the recommendations were being taken forward.  He undertook to bring an update for members to the September meeting.

In respect of Whistleblowing, the Service Manager for Assurance advised that an action plan was now in place to move forward the recommendations.  The key outstanding areas related to communications of the fraud related policies and this was in the process of being addressed.  It was proposed that an Annual Report of Fraud and Whistleblowing should be presented to the September meeting, and that this would incorporate an update on outstanding actions. 

Following a question from a member about the Purbeck bank reconciliations the Corporate Director for Finance and Commercial explained to members the issues arose due to LGR and staff handover issues but that the bank reconciliation process was now up to date.  The external auditors were now undertaking their annual audit and there was a plan to switch off the old legacy systems shortly.

The representative from Deloitte advised members that as part of their work they would look at suspense accounts and the process of reconciliations and year end work.

In a response to a request for assurance around the bank reconciliations for the former district council, the Executive Director for Corporate Development advised that Purbeck District council had ceased to exist and that the accounts were closed last year and the external audit identified no issues. The Assistant Director, SWAP added that he was happy to work alongside Deloitte and/or the Corporate Director for Finance and Commercial to provide an internal audit follow up on this to provide the necessary assurance that these areas had been addressed.

In respect of the deferred audit of Achievements of Savings Plans, the Executive Director Corporate Development advised that due to the pandemic implementation of previous transformation plans had been postponed.  However, in the light of the pandemic there was a real need to review the financial situation, identifying new savings targets and plans, the scale of which was not yet known.  The Executive Director indicated that an audit review of the implementation of these savings plans would be welcome in the 2020-21 financial year.

One member asked what the effect of the pandemic had been on internal controls and the segregation of duties.  The Executive Director advised that the current arrangements was that around 2,500 members of staff were working at home across the whole organisation but confirmed that finance staff were able to continue to undertake their duties including the payment of business grants effectively. Officers were confident about IT security, the controls in place to detect cyber attacks were very vigilant around this.

A member raised a concern the Blueprint for Change was cited as the resolution to issues around social care, the Assistant Director, SWAP advised that any audit review that received a partial assurance opinion would be followed up as a matter of course to ensure that the recommendations made had been effectively implemented.  The Monitoring Officer added that if members had concerns regarding the Blueprint for Change programme these could be raised with the People Overview and Scrutiny Committee.

An update from Deloitte, the external auditors, was given to members.  The Audit and Financial Statement was well under way as was the testing in all areas.  They were starting to see some areas with legacy systems and had regular calls with officers of the Council. The valuation work had been a huge piece of work.

Following a question regarding contracts for hotels in the Weymouth area that were used to house homeless people and whether Deloitte would be looking at the internal control system used, the representative advised that they would not look at them specifically and that a sample test might not select them but undertook to liaise with the Corporate Director Finance and Commercial and look at it along with the value for money work.

 Decision

1. That an update on Pupil Premium Plus be included for members at their meeting in September and that the relevant officers be invited to attend.

2. That an item regarding whistlebowing and anti-fraud corruption be added to the Forward Plan for September.