Agenda item

The Committee received a report of the Corporate Director of Resources which provided the Chief Internal Auditor and Corporate Fraud Manager’s assurance opinion on the adequacy and effectiveness of the Council’s internal control environment, risk management and corporate governance arrangements and presented the Annual Internal Audit Report for 2022/23 (for copy see file of minutes).

Responding to a query from Councillor B Kellett regarding the overall assurance opinion, the Corporate Director of Resources referred to the four levels of assurance opinions that could have been issued and explained that the moderate assurance opinion showed that sound systems of internal control were in place and that this was considered to be a fair judgement in his view. A substantial rating would mean that there were no control weakness across all activities which was unrealistic for a large and complex authority. It was noted that the opinion was the professional independent opinion of the Chief Internal Auditor and Corporate Fraud Manager. It was viewed as a strong moderate assurance opinion, given that all key financial systems had been issued with substantial assurance opinions, which was a very strong and positive position to be in.

Mr C Robinson agreed that the assurance opinion was a fair representation in his opinion and that he thought it would be impossible to get a full compliance of internal controls in all areas with no weaknesses. Mr Robinson went on to say that he took assurance that the major key systems were provided with a substantial opinion and acknowledged that there were always new areas that were being development.

The Corporate Director of Resources advised that the Internal Audit Plan was over a five year period with some elements reviewed once every five years, however key systems reviews were undertaken annually. It was noted that in order to provide a substantial assurance, every aspect of council function would have to be given substantial assurance and would have to be reviewed every year, which was unrealistic.

Mr I Rudd noted there was duplication in relation to the Annual Review of the System of Internal Audit and the Annual Internal Audit Opinion and Internal Audit report and asked if there was a statutory requirement to have the reports separate. The Corporate Director of Resources advised that there was no statutory requirement to have separate reports, however there were two separate actions and it was clearer to keep the reports separate.

In response to a comment regarding Internal Audits services to external customers and the issues with recruitment and retention, the Corporate Director of Resources advised that the service had prioritised internal audit coverage for the Council and services to Town and Parish Councils had ceased from April 2023. Support had been provided to help Town and Parish Councils procure Audit services from private sector providers. It was noted that following the recent restructure and recruitment exercises that followed, it was expected that the Internal Audit and Fraud Teams would have a full complement of staff from July 2023 - for the first time in a number of years.

Resolved:

(i)         That the content of the Annual Internal Audit Report for 2022/2023 at Appendix 2 be noted;

(ii)       That the overall ‘moderate’ opinion provided on the adequacy and effectiveness of the Council’s governance, risk management and internal control environment for 2022/2023 be noted.