Agenda item

To consider the Q2 Internal Audit report 2020/2021.

The meeting reconvened at 11.40am.

The Chairman invited David Hill, SWAP to present the Q2 Internal Audit Report.

Mr Hill highlighted page 216 of the agenda and that there were no significant risks to report from the Q2 period. Attention was also drawn to the change in Audit assurance options and definitions, as recommended by CIPFA, which were being adopted by SWAP. Performance figures were acceptable, it was stated that the plan may need to be flexible in order to react to events as a result of COVID-19.

Outstanding recommendations were detailed on page 219 of the agenda. It was noted that there was a typing error in the report. The total outstanding recommendations should read 78 and greater than 120 days should read 68. A lot of work was being undertaken to chase outstanding recommendations. Charlotte Wilson, SWAP was now attending quarterly meetings with CLT to discuss outstanding recommendations.

Outstanding recommendations in relation to schools numbered 178 in September but was now 52. Non school recommendations would hopefully be cleared or superseded. Appendix B of the report on page 223 was highlighted. Follow up work had been completed and services had worked hard to implement all recommendations. Appendix C (page 227) gave detailed updates and recommendations.

In response to questions it was clarified that appendix C was based on the originally agreed target date for recommendations. The Chairman stated he was concerned by the number of recommendations where the target date had been revised, sometimes to over a year later. Mr Hill explained that the table at appendix C was by Audit. It was stated that the new dashboard and technology which would be discussed later in the meeting would make this clearer to understand. The management updates, which were new in the report, would also help to explain reasons for the revised deadlines.

Andy Brown, Interim Corporate Director for Resources, explained that management had to be realistic in regards to what could be achieved, however it was important that SWAP had a view in terms of the internal audit plan. A flow needed to be developed and focus given to outstanding recommendations as part of performance management. Internal Audit was a tool which could be used to help achieve this. The Extended Leadership Team (ELT) would be meeting to discuss outstanding recommendations in order to try to move things forward. It was stated that many of the high priority recommendations had been addressed, however there were a sizeable number of actions that needed to be discussed honestly with management as to whether these would continue or not.

The Chairman was encouraged by this. Some Members felt that continually revising dates back did not reflect well on the Audit and Governance Committee so they were pleased that an honest discussion was to be had as to whether low priority recommendations could be actioned or not. It was stated that it would be useful to the committee to have a summary of recommendations that were to be removed and the reasoning behind this, so that they did not just disappear.

Officer Andy Brown also felt that there may be a recommendation that the committee wished to make in terms of focusing on the outstanding actions.

David Hill, SWAP stated that recommendations made by SWAP should not be minor recommendations, but should help to improve the control environments, mitigate risk and allow services to function, so there may be training for some of the SWAP team required as well. It was agreed that a degree of pragmatism may be required.

Officer Andy Brown suggested the following wording for a recommendation:

‘That management undertake a review of the outstanding management actions with a further update report on any proposed changes to come back to the next Audit & Governance Committee meeting’.

After discussion by the committee on the wording of a recommendation to management in terms of outstanding actions it was;

Resolved

·       To note the Q2 Internal Audit Report.

·       To delegate to the Chairman, working with SWAP and the section 151 officer, to draft a recommendation to management to review outstanding internal audit recommendations and report back on these to the Audit and Governance Committee, with the draft recommendation to be circulated to committee members for approval.

After circulating to members for approval the recommendation to management that was adopted was:

Recommendation:

In view of the lengthy, and growing, list of unimplemented SWAP internal audit recommendations the Audit and Governance Committee recommends that management should reconsider those recommendations as follows:

1.    Has the passage of time since the recommendation was first made changed the priority of that recommendation (up or down)?

2.    Is the outstanding recommendation still valid or relevant in view of the organisational, systems and procedural changes which may have happened since it was first made?

3.    Taking a realistic and pragmatic view, how likely is it that long-outstanding recommendations will ever be implemented?

The results of such reconsideration should be agreed with SWAP.

A report should then come to the Audit and Governance Committee showing:

·       Any agreed changes to the priority given to any recommendation.

·       Those outstanding recommendations which are to be abandoned and the reasons: no longer relevant, overtaken by organisational changes, and a ‘let’s be honest’ recognition of the likelihood of the lower priority recommendations ever being implemented.

·       A renewed commitment to implement those recommendations which remain on the list thereafter.