Agenda item

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

The report of the Head of Audit and Risk which provided an update on Internal Audit’s latest progress with regard to service delivery, assurance provision, and reviews completed was presented for the Committee’s consideration.

The Principal Auditor highlighted the main points as follows –

•           That two reports were finalised during the period (copies of which were made available to the Committee) – Managing the Risks of Brexit and Business Continuity Planning both of which resulted in a Reasonable Assurance opinion. No issues/risks were raised on the former whilst four issues/risks for management attention were raised on the latter three of which are classed as “Major” due to the potential impact of the risk in this area. Notwithstanding, the outcome of the Internal Audit review is mainly positive and an action plan to address the issues raised has been agreed with Management and will be monitored through Internal Audit’s action tracking system.  

•           Four follow-up reviews have been finalised in the period - Direct Payments (first follow-up – Reasonable Assurance); Schools Information Governance Health Check (first follow-up – Reasonable Assurance); Governance Review at Ysgol Kingsland (first follow-up – Substantial Assurance) and Primary Schools Income Collection (first follow-up – Limited Assurance). With regard to the latter although much work has been undertaken and progress made in addressing the issues/risks originally raised, in many cases it has been insufficient to address the issue/risk. Unrealistic timescales coupled with staffing issues across a number of departments have meant that a number of actions are still outstanding. In addition the Primary Senior Manager post will need to approve the new process and this post is yet to be filled. The follow up review also found that some of the management actions originally proposed even if fully implemented would not wholly address the issue/risk raised. Further actions have therefore been discussed and agreed with Management. Consequently the assurance rating has remained Limited; the action plan will be revisited by Internal Audit in September, 2020.

The Director of Education, Skills and Young People provided the Committee with an update on progress confirming that although the second follow-up is not scheduled until September, 2020 the Service will in the meantime be actively addressing the issues raised. Steps have and continue to be taken to respond to the Internal Audit review in order to improve  the assurance rating. In response to questions about the vacant Primary Senior Manager post hampering progress and whether to avoid delay, the next Officer in line would then be expected to undertake the necessary actions, the Director of Education as well as confirming that an appointment to the post has now been made, clarified that in the period since his own appointment he had sought to build a team with a particular focus on sharing a leadership mind-set so as to avoid “putting all the Service’s eggs in one basket” and to ensure therefore that there is joint approach to different elements of the service. Three new senior lead positions have been established covering the primary and secondary sectors and wellbeing and safeguarding elements. Information is shared and support provided so that in the event of Officer absence service continuity can be maintained. In addition, the Service rather than taking a top down approach, is working in tandem with schools to develop and implement policy and it is also reviewing the way it engages with school governing bodies. In the strategic forums, schools through the Head teachers are now better placed to understand the reasons for policies and procedures and the consequences of not following them thereby helping schools’ buy into the changes.  He was confident that the Service is now in a stronger position in terms of knowing what its objectives are in this respect and having a plan in place to achieve them. 

The Director of Function (Resources)/Section 151 Officer confirmed that the ongoing work with regard to income collection policy has been focused on clarifying schools’ responsibilities particularly when they would be expected to transfer debt to the central finance team to pursue.

•           No follow-ups of reports with a Limited Assurance rating are currently in progress. Three follow-ups are scheduled for the next financial year – System Controls (Logical Access and Segregation of Duties (Fourth follow-up/Limited Assurance); Sundry Debtors (Third follow-up/Reasonable Assurance) and Primary Schools Income Collection (Second follow-up/Limited Assurance). These may be added to dependent on the assurance provided for reviews conducted throughout the year.

•           No High or Red issues/risks are currently outstanding and the performance of the Council in addressing outstanding issues/risks continues to improve. The overall implementation percentage for High/Red/Amber issues/risks was 94% as at December, 2019.

•           Progress with implementing the new and upgraded version of the action tracking system is now moving on at pace following the resolution of an IT compatibility issue. It is anticipated that Internal Audit will be in a position to issue the first report from the new system to the Committee at its next meeting in April, 2020.

•           That work is currently in progress on five audits from the Operational Plan for 2019/20 as listed in Paragraph 34 of the report. Progress with concluding audits has been hampered by the loss of two members of the team effectively reducing the resource by 118 days. The plan has been amended accordingly and a recruitment process is currently underway.

In discussing the report, the Committee further raised the following matters –

•           In light of the Internal Audit review with regard to managing the risks of Brexit which found that Members’ input in connection with Brexit preparations had been limited hitherto, the Committee requested that the EU Transition Co-ordinator be invited to a Full Council briefing session to provide an update on preparations and progress to date.

•           Notwithstanding the Internal Audit review of the Council’s overall business continuity framework found that in the main it is managing the risk in this area very well and has a number of effective controls in place to ensure the continuity of critical services following a major event or emergency, the Committee questioned whether the nature of the issues/risks raised – 3 Major and 1 Moderate and the gaps identified - would be more appropriately covered by a Limited assurance rating. The Principal Auditor confirmed that the review found that the key business continuity plans and processes were in place and available; furthermore, a joint exercise with Flintshire County Council facilitated by the North Wales Councils Regional Emergency Planning Service in which those plans were tested, was successful.

•           With reference to the First Follow-up of the Schools Governance Information Health Check the Committee questioned whether it was appropriate to be issuing a Reasonable assurance opinion when the work is still currently in progress. The Principal Auditor confirmed that progress will still be monitored via the 4 action tracking system until such point as all actions have been completed to the satisfaction of Internal Audit.

•           The Committee sought assurance regarding the prospects for fulfilling the Internal Audit Operational Plan for 2019/20 given the current productivity rate and the vacancies in the Service. The Principal Auditor confirmed that the Plan has been adjusted to reflect the reduced resource available and low priority reviews have been deleted. The focus will remain on completing the reviews that correlate with Red/Amber risks on the Corporate Risk Register.

Having considered the report and the further clarifications and assurances provided by the Officers at the meeting, the Committee resolved to note Internal Audit’s latest progress in terms of service delivery, assurance provision, reviews completed, performance and effectiveness in driving improvements.

ADDITIONAL ACTION: EU Transition Co-ordinator to be invited to a Full Council briefing session to provide Members with an update on Brexit preparations with an invitation to attend to be extended also to the Committee’s two Lay Members.