Agenda item

To consider the:

·       Internal Audit Annual Opinion Report 2020/21

·       Proposed Q3 Internal Audit Plan and Revised Internal Audit Charter (also includes Q2 IA Plan for information)

·       Internal Audit Activity – September 2021, including consolidated IA outstanding management actions report

At the Chairman’s invitation Rupert Bamberger, Director, SWAP, presented the reports.

Internal Audit Annual Opinion 2020/21 - It was explained that this annual report on the adequacy and effectiveness of the organisation’s governance, risk management and internal control environment was coming to the Committee later than usual due to the scheduling issues with the Committee this year where problems such as flooding at County Hall and COVID had caused meeting to be cancelled and re-arranged. Key messages were summarised on the first page of the report. The overall opinion was reasonable.

It was stated that 3 significant risks had been identified over the year, however SWAP were confident that actions were being taken to mitigate the risks. Assurance review opinions were set out in the report. It was highlighted that 2020/21 had not been a normal year with internal audit staff helping with the pandemic response.

Q2 Internal Audit Plan, Proposed Q3 Internal Audit Plan 2021/22 and Revised Internal Audit Charter – Mr Bamberger explained that the Q2 IA plan would have come to the Committee in July, so was included for reference. SWAP had proceeded with that plan and had set out the plans for Q3. The Internal Audit Charter came to the Committee annually. It had been revised slightly and the report was attached for consideration.

The sufficiency of internal audit resources was highlighted, and it was explained that SWAP was seeing higher than usual turnover, so they were working hard to fill vacancies and reduce risk.

A debate followed where Members questioned whether SWAP staff and officers working from home the majority of the time due to the pandemic had affected audit work and monitoring. Both SWAP and Wiltshire Council officers felt that the move to remote working had been seamless and had in fact bought benefits, as people could meet more easily remotely. This model would be continued even when staff returned to the workplace. It was acknowledged that coverage may have been an issue during the height of the pandemic when staff were redeployed to work on the pandemic response.

In response to questions regarding risk coverage and in particular the chart on page 70 of the agenda pack, the internal audit view was that coverage was building. More items had adequate coverage as the quarters progressed. Whilst there were some items which had no internal audit coverage to date, there were some assurance sources on these items. Andy Brown, Corporate Director Resources, deputy Chief Exec and s151, explained that whilst there were several items in Q3 with no internal audit coverage to date, there were management lines of defence that could be trusted. It was stated that the reality was that with the demand on resources there were gaps in coverage in Q3. It was stated that there was a discussion to be had regarding what audit was going to take place on the Salisbury Recovery and probably the wider economy. It may be that they needed to focus on different things.

In response to a Members question on whether a perspective on the next quarter could be included in the risk coverage chart it was stated that would be covered by the update report.

Mr Bamberger explained that the update report was a regular report which came to every Committee detailing the activity since the item was last reported at Committee. Page 85 of the agenda pack had the most up to date assessment. There had been a positive direction of travel with management actions and a detailed summary was included.

In response to a question on the Council Oversight of Maintained Schools – Limited Interim Assurance opinion detailed on page 89 of the agenda pack, the officer explained that School Governance was coming to the next meeting of the committee. Wiltshire Council needed to make sure that maintained schools delivered their responsibilities with regard to health and safety. This was why internal audit was important. A concern was raised which led to management actions which needed to be followed through and issues needed to be addressed. It was also important to clarify the lines of responsibility.

The Chairman highlighted page 92 of the agenda and that there were no outstanding priority 1 actions which was positive. However, due to the work undertaken on priority 1 actions, priority 2 and 3 actions may have built up, especially over the pandemic. Other Members applauded the efforts to undertake priority 1 actions but questioned the age of some of the outstanding priority 2 actions and requested clarity on why some actions were taking a long time to implement.

The officer explained that a review of audit had taken place and there had been a change in management, who were taking things in a different direction. Officers were aware of an outstanding action on Programme Management from 2019 which was on their radar but had not been put into effect yet. The senior management restructure that was underway would help to address this. The officer stated that it was important that the Committee see the true status of the actions and gave assurance that management still planned to address any actions.

Members of the Committee sought assurance from SWAP that the delays on management actions would not cause further issues. Mr Bamberger stated that the update report needed to be read in conjunction with the appendices showing the revised target dates and management updates. These showed that the actions were still being addressed and provided explanations. Appendix C gave assurance to the Committee on these matters. It was also stated that there needed to be a clear process for removing actions.

Members queried how Wiltshire Council dealt with all the varied risks it was facing, such as changes to government policy and the shortage of lower paid workers affecting service delivery. Some Members felt that the organisation was facing a variety of different crises and therefore was at its highest corporate risk for some time. The officer explained that internal audit was internally focused, and whilst it was affected by external factors internal audit concentrated on what it could control. Corporate risk was reviewed and updated accordingly. There were lines of defence to face issues, such as key financial controls and management controls, and SWAP were the second line of defence.

Members highlighted a limited assurance opinion detailed on page 87, Third Party Spend Purchase to Pay. Officers suggested that a report come to the next committee detailing actions and they were confident that the issues could be resolved in a reasonable period of time. In response to further questions from Members officers stated that there may have been an element of the correct procedures not being followed due to the pandemic, however there seemed to be a lack of organisational awareness as to the correct procedures that should be followed. Cllr Pauline Church, Cabinet Member for finance stated that this was a top priority for her; to ensure that the Council got value for money and that the correct processes were followed. 

Members stated that they were fortunate to have senior officers such as Andy Brown and Lizzie Watkin with Wiltshire Council on a permanent basis, rather than a succession of interim officers and felt that appropriate assurances had been given and appropriate actions were being taken. 

At the conclusion of the debate the Chairman proposed a motion, seconded by Cllr Grant and it was,

Resolved:

That the committee note:

·       The Internal Audit Annual Opinion Report 2020/21 and the Internal Audit Opinion given

·       The Proposed Q3 Internal Audit Plan and Revised Internal Audit Charter

·       The IA report 2021/22 – September 2021 and Outstanding Priority 1 & 2 Actions