Agenda item

To present the report of the Head of Audit and Risk.

The Annual Report of the Internal Audit Service for 2018/19 was presented for the Committee’s consideration. The report outlined the Internal Audit work carried out during the year ended 31 March, 2019 based on which the Head of Audit and Risk gave her overall opinion on the adequacy and effectiveness of the Council’s framework of governance, risk management and control during the year which will inform the Council’s Annual Governance Statement.

The Head of Audit and Risk reported that for the 12 months ended 31 March, 2019, the Isle of Anglesey’s Head of Audit and Risk’s opinion is that the organisation has an adequate and effective framework for risk management, governance and internal control. While the Head of Audit and Risk does not consider there to be any areas of significant concern, some areas require the introduction or improvement of internal controls to ensure the achievement of objectives, and these are the subject of monitoring. There are no qualifications to this opinion.

The Officer said that the opinion above has been reached by considering the work and activities undertaken by the Internal Audit Service during the year which is summarised in Appendix A to the report and specifically, the following considerations –

•           During 2018/19, the Internal Audit Service has found senior management at the Council to be supportive and responsive to the issues raised by Internal Audit.

•           Where Internal Audit has identified issues/risks, Management has accepted them all

•           Management has addressed all the outstanding “Red” issues/risks, which confirms that Management is responsive to Internal Audit’s work

•           No “Red” issues/risks were raised during the year

•           There are no issues which are of a significantly high risk or impact that warrant inclusion in the Annual Governance Statement

With regard to the performance of the Internal Audit Service, the Service has performed well against its targets during the year with 4 out of 7 indicators meeting or surpassing their targets. An external assessment of the Council’s Internal Audit Service in March 2017 provided assurance that the Service “generally conforms” with the Public Sector Internal Audit Standards which is the top assessment available to the assessor. Although the Internal Audit Team is in a good position to deliver its Strategy for 2019/20, having gained experience from implementing the new audit methodology; the addition of two new members of staff; new risk management software and upgraded action tracking software, there remain challenges going forwards specifically resource pressures due to absence which has affected the Service’s overall level of productivity in 2018/19.

The Committee in considering the report and in noting that the Head of Audit and Risk is satisfied as to the adequacy and effectiveness of governance, risk management and control at the Council, raised the issue of the Committee’s own effectiveness and whether it could be regarded as being sufficiently proactive in its practices to ensure effective oversight of all the areas for which it has responsibility. One view expressed was that the Committee’s approach is overly reactive in mainly responding to Internal Audit reports and findings and that it should be looking at ways it can actively add value and insight in those areas.

The Head of Audit and Risk said that the Audit and Governance’s Annual Report to Council provides an assessment to the Committee’s performance against its Terms of Reference on an annual basis. The Officer said that with the addition of governance documentation for specific areas e.g. insurance activity which has now been incorporated into the Committee’s Work Programme, the Committee is not too far away from fulfilling the expectations of it.

The Head of Function (Resources)/Section 151 Officer suggested that the self-assessment questionnaire referred to previously which the Committee’s members will be asked to complete and which will cover  members’ skills and competencies both individually and collectively as a committee will help identify strengths and weaknesses thereby providing a basis for a programme of further development as appropriate.

It was resolved to accept the Internal Audit Annual Report for 2018/19 and to note that the Head of Audit and Risk is satisfied with the adequacy and effectiveness of the Council’s overall arrangements for risk management, governance and internal control subject to introducing and/or improving internal controls in some areas.

NO ADDITONAL ACTION WAS PROPOSED