To consider the attached report.
Contact Officer: Kate Mulhearn (01296) 585724
The Head of Internal Audit (Corporate Governance Manager) was required to provide a written annual report to those charged with governance, timed to support the Annual Governance Statement (AGS), and which should be presented to Members and considered separately from the AGS and the formal accounts.
The Committee received a report detailing the Corporate Governance Manager’s opinion on risk management, control and governance and their effectiveness in achieving the Council’s agreed objectives for 2018-19. The report also incorporated a summary of the work undertaken to support the opinion and a statement on conformance with the Public Sector Internal Audit Standards. Based on this work, the Corporate Governance Manager had provided the following opinion:-
“Generally satisfactory with some improvements required to specific systems and processes.
Governance, risk management and control in relation to business critical areas was generally satisfactory. However, there were some weaknesses which potentially put the achievement of the Council’s objectives at risk.
Improvements were required in those areas to enhance the adequacy and effectiveness of governance, risk management and control.”
In forming this opinion the Corporate Governance Manager had confirmed that internal audit activity throughout 2018-19 had been independent from the rest of the organisation and had not been subject to interference in the level or scope of the audit work completed.
Thekeyfactorsthat contributedto the opinion weresummarisedas follows:-
· The majority of weaknesses in control design and operating effectiveness identified had been mediumorlowrisk.
· Two high risk findings had been identified in the areas of Commercial Waste and General Ledger Reconciliations.
· Good progress had been made during the year on implementing actions identified during internal audit reviews to strengthen the overall control environment.
A total of 8 assurance reviews had been completed in 2018/19 of which 1 had been classified as “high” risk, 5 as “medium” risk and 2 as “low” risk. This had resulted in the identification of 2 high, 12 medium and 25 low risk findings relating to weaknesses in the design and operating effectiveness of controls. This compared to 9 assurance reviews (6 high, 16 medium and 20 low risk recommendations) in 2017/18, although a direct comparison could not be made.
A summary of the reviews undertaken and the opinion given was detailed at Section 3 of the Corporate Governance Manager’s report.
A number of weaknesses had been identified that needed to be reported in the Annual Governance Statement, and which related to the “high risk” findings identified in the reviews of the General Ledger and Commercial Waste. A summary of these high risks was also detailed in Section 3 of the Corporate Governance Manager’s report.
Other internal audit work undertaken during the year had included:-
· reviewing the Council’s governance arrangements over its investment in Aylesbury Vale Broadband.
· conducting an advisory review in March 2019 to evaluate the effectiveness of the Council’s governance of its investment in Aylesbury Vale Estates LLP (AVE), based on the expectations set out in the “Guide to creation and working with companies in which AVDC has a financial interest”.
· conducting an advisory review in March 2019 to evaluate the arrangements for measuring and reporting benefits arising from the Connected Knowledge Programme.
· regularly reviewing and reporting of the corporate risk register to the Strategic Board, Audit Committee and to Cabinet.
All agreed actions arising from audit reports were kept under review by Internal Audit and regular reports on overdue actions were provided to the Audit Committee. A total of 113 audit actions had been completed during the year and progress had been made to address all outstanding actions. There were no significant issues to report regarding the follow up of any audit recommendations.
Members were informed that significant progress had been made in Housing Benefits and Management Information to address previously identified weaknesses in these areas.
The Committee was informed that to remain relevant, the annual internal audit plan needed to be flexible to respond to emerging or changing risks. With budget restraints there was a need to ensure prioritisation was given to work that would achieve the greatest value to the organisation. Since the internal audit plan had been initially approved in June 2018 changes had been made in the reviews of Accounts Payable, Payroll, Tech One, Waste and Recycling – contracts, and Section 106 agreements.
The Corporate Governance Manager explained that the individual pieces of internal audit work were delivered under a contract with BDO LLP under a co-source arrangement. All organisations providing Internal Audit Services had to be subject to an independent external assessment every 5 years. In 2015, BDO had been subject to an external examination assessment of compliance to the Public Sector Internal Audit Standards (PSIAS) and been found to be compliant across all 58 assessable areas. The Corporate Governance Manager had considered the requirements of the PSIAS and had found that there were no areas of concern to indicate that the current arrangements were not fully compliant with the Standards.
Members asked whether there was any evidence of increased fly tipping as a result of the introduction by the County Council of charges for the deposit of certain categories of waste, particularly DIY waste, at household recycling sites. It was indicated that there was at present no analytical information available.
Members expressed their thanks to Officers for the good quality of the audit work undertaken during 2018/19.
That the content of the Corporate Governance Manager’s annual report for 2018-19 be noted.