Agenda item

The Head of Internal Audit presented the Internal Audit Annual Report for 2023-24. The Accounts and Audit Regulations and the Public Sector Internal Audit Standards (the Standards) required the Head of Internal Audit to provide an annual Internal Audit Opinion and report that could be used by the organisation to inform its Annual Governance Statement.

The report showed that a reasonable standard of assurance had been reached overall, which was the second of the four available ratings. All ten of the audit assignments during the year had achieved at least a reasonable rating of assurance. In addition, the team had carried out one critical friend review of key controls on transactions and balances on the general ledger, validity of accounts receivable transactions and the extent to which TechOne was being used by budget managers to forecast their budget outturns. This review had largely positive outcomes but there were some recommendations for improvement, in particular for reconciliations, which managers had already been aware of. A full internal audit of this would be carried out later in the current financial year.

Further to section 4 of the report, Quality Assurance and Compliance with Professional Standards, the Head of Internal Audit reported that the team had just had an independent external quality assessment. The results of this were positive and the service was awarded the highest of the three grades. He planned to bring the full report and action plan arising from the assessment to the next meeting of the Committee.

During consideration of the report the main points discussed were:

·       Section 7 – summary of Internal Audit Findings – a member asked for details about the finding that investment limits had been potentially exceeded between Bromsgrove and Redditch Authorities in one case. The Assistant Director Finance and Customer Services reported that Bromsgrove and Redditch Councils sometimes loaned funds to each other, but this arrangement was not formally recognised in the Treasury Management Strategy. It was planned to update the Strategy to address this when it was reviewed in February 2025.

·       Arising from reference in the report to cyber security, a member asked what actions the Council could take with regard to the potential risk relating to ‘deep fake’. It was noted that the Council balanced the need for transparency in its business with security and when meetings were broadcast this was paused whenever exempt information was discussed.

·       The view was expressed that assessment of ‘reasonable’ for the audit of project management did not reflect concerns about potential non delivery of projects. It was noted that the audit had reviewed processes rather than outcomes, but this aspect could be picked up when the issue was revisited by Internal Audit.

·       It was noted that a review of ICT Cyber Security had identified the authority as an exemplar in proactively monitoring its defence to a cyber-attack as the ICT service conducted weekly health checks when it was only required to conduct a penetration health check annually. Members expressed the view that this positive assessment should be recognised and promoted.

·       A member asked whether the recruitment to vacancies in the audit team had been achieved. The Head of Internal Audit reported that the senior posts had been filled and he was currently recruiting to an auditor vacancy. In the meantime, the work was being covered by agency employees. He would report progress with the work programme to the next meeting, but indications were that the team was achieving 50% more work in the first quarter of this financial year compared to last.

·       A member challenged the findings of the debt management audit in relation to the payment for garden waste collections, and the Assistant Director Finance and Customer Services explained the timing of billing for the service.

·       In relation to the audit of the Lifeline service, a member queried the approach to debts write off and asked how the service was currently advertised and whether more could be done to promote it.  The Assistant Director Finance and Customer Services reported that debt recovery in this area was behind schedule currently due to other pressures, but she outlined the process behind a decision to write off debt. This included understanding an individual’s circumstances and ability to pay. In view of comments about the value of the service and concerns about effective promotion, the Chairman undertook to write to the Cabinet Member for Health and Wellbeing and Strategic Housing about the views expressed by Committee members and ask that it be considered at a Member Advisory Group.

RESOLVED that the Internal Audit Annual Report and Audit Opinion 2023/24 be noted.