Agenda item

To receive the internal audit updates from SWAP.

Becky Brook (SWAP) presented the internal audit update report. It was highlighted that 5 limited assurance internal audit opinions had been presented at the last ordinary meeting on 17 October 2024. SWAP were following up on these, with management assuring them that actions were either complete or being implemented. However, SWAP had not been able to fully validate this due to the festive period and the timing of the Committee. As such SWAP were offering a limited opinion for the key financial controls for Main Accounting, Accounts Payable and Accounts Receivable, however a reasonable opinion was offered for the remainder of the council’s control framework. A fuller update could be given on progress at the next ordinary meeting in April following full validation by SWAP.

SWAP had issued 1 limited assurance opinion on Direct Payments – Children’s, and 1 no assurance opinion on Early Years Extended Entitlement. Neither of these were deemed to be a significant organisational risk to the Council and presentations from the service areas involved were planned for later in the meeting.

Regarding previously identified significant organisational risks:

·       Landlord Compliance Fire Safety – General Fund Assets – good progress was being made on actions, however, full validation of these still needed to take place.

·       ICT Network Boundary Defences – the project remained on track, with 3 of 6 actions complete, and the other 3 underway. Completion was not due until April 2026, and it was suggested that the Committee may wish the Director of ICT to come to a future meeting to update.

Page 77 of the report detailed coverage against Strategic Risk. There was still a gap around Special Educational Needs and Disabilities (SEND), and SWAP were working closely with the S151 officer and the Director of Education and Skills regarding this. There was also still a gap in coverage on increasing vulnerability to climate impacts, and SWAP were working with officers to determine where they could add value. A new gap had been identified; the inability to withstand the impact of excessive inflation on suppliers, and SWAP would explore this with officers. 

Regarding the outstanding management actions detailed on page 80, quite a few had been closed since the papers were published. Once again, the timing of the agenda publication shortly after the Christmas break had delayed validation on these actions. There were no concerns to escalate due to overdue actions. 

Members asked a question in relation to the gap in coverage around SEND and requested further details on areas that would or would not be covered and their risk profiles. Lizzie Watkin (Corporate Director Resources, S151) highlighted that this was one of the largest financial risks faced by the council, and that the government Safety Valve Agreement was really important as it helped with the deficit. Discussions were held with SWAP about this risk; however they were still to determine what audit activity would be helpful. SWAP explained that they were talking to relevant officers regarding looking at high cost placements, post 16, transition and growth. It was also highlighted that all Committee Members had access to the Audit Board where they could look at SWAPs planning for internal audits which was now much more fluid.

Furthermore, the officer explained that there was a paper going to Cabinet on 21 January regarding the Safety Valve plan which Members may wish to look at. The statutory override was in place for the next financial year, however there was no indication whether this would be extended. There were discussions taking place around reform in SEN which had huge implications, however this needed to be managed and resolved through appropriate mechanisms, as otherwise there could be a deficit larger than our reserves in the following year. This was very concerning, but was a national issue, which had to be dealt with nationally. 

In terms of the gap in coverage in relation to the inability to withstand the impact of excessive inflation on suppliers, this was about the markets that services were commissioned from and not just related to standard inflation. It was also advised that the Committee look at the budget papers which would be published the following week.

Further questions were asked on the overdue management actions and additional details were given.

On the proposal of the Chairman, seconded by Cllr Martin Smith, it was,

Resolved:

To note the internal audit update report.