Agenda item

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

The report of the Head of Audit and Risk in relation to the current arrangements for ensuring the Head of Audit and Risk will have sufficient assurance to support the Internal Audit Annual Opinion for 2020/21 to ensure no limitation of scope was presented for the Committee’s consideration and approval.

The Head of Audit and Risk reported that the impact of dealing with Covid-19 on all public services has been considerable and for internal auditors it has raised the question of whether they will be able to undertake sufficient internal audit work to gain assurance during 2020/21 this being a key consideration to fulfil the requirement of the Public Sector Internal Audit Standards (PSIAS) where the Head of Audit and Risk is required to issue an annual opinion on the overall adequacy and effectiveness of the Council’s framework of governance, risk management and control.

In recognition of the considerable challenges under which local government bodies are currently operating in having to make difficult decisions about the best use of their available staff and financial resources to meet critical needs whilst the professional and regulatory expectations to ensure that internal audit arrangements conform with PSIAS have not changed, CIPFA has prepared guidance for internal auditors working in or for local government in the UK. The guidance details six key requirements for local government bodies that heads of internal audit or the chief audit executive, leadership teams and audit committees should follow; these are set out in paragraph 5 of the report. The Head of Audit and Risk has therefore revised and agreed the Internal Audit Team’s priorities to cover the new risks and changes from the impact of Covid-19 with the Senior Leadership Team (SLT) to ensure that there will be no limitation of scope and that Internal Audit will have sufficient assurance to support the annual opinion. The key pieces of work that will contribute to the assurance are Corporate Risk register audits; Review of Covid-19 Emergency response (Self-Assessment) and Follow-up completed between April and June, 2020 and Emergency Management Assurance (First-line assurance) currently at fieldwork stage. As the risks continue to change and the risk registers are reviewed and updated by the SLT, Internal Audit will revise its priorities accordingly.

When delivering the risk-based audit strategy, the Head of Audit and Risk supported by the SLT has made every effort to make best use of available internal audit resources during the pandemic including by implementing the measures detailed in paragraph 10 of the report.

The Committee sought clarity on how limitation of scope is defined and applied. The Head of Audit and Risk clarified that a limitation of scope should be considered if it is deemed not enough work has been carried out to provide assurance in the three key areas relating to   the Council’s governance, risk management and internal control processes. Whilst the amount of work required to provide a full assurance opinion is left to professional judgement within each organisation, the CIPFA guidance is clear that efforts should not be made to provide assurance in circumstances where resources have been so limited that such assurance cannot be supported.  The CIPFA guidance also suggests the possible wording to be used depending on the type of limitation and the area in which the limitation arises. However, it is the Head of Audit’s view that having undertaken significant critical work during the year as well having prioritised the areas of greatest risk, a full assurance opinion can be provided and there will be no limitation of scope.

It was resolved –

•           To approve the arrangements for ensuring the Head of Audit and Risk will have sufficient assurance to support the Internal Audit Annual Opinion for 2020/21, and

•           To note that there will be no limitation of scope.

NO PROPOSAL FOR ADDITONAL ACTION WAS MADE