Agenda item

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

The report of the Head of Audit and Risk setting out the audits completed since the last update as at 20 July, 2021, the current workload of Internal Audit and its priorities for the short to medium term was presented for the Committee’s consideration.

The Head of Audit and Risk summarised progress to date as follows –

·         That two reports have been finalised in the period both of which resulted in a Reasonable Assurance rating, the one relating to Housing Allocations for which 3 major and 3 moderate issues/risk were raised and the other in relation to  Leavers Process First Follow up for which 3 moderate issues were raised.

·         The review of Housing Allocations was undertaken at the request of the Executive after it received a report of poor performance regarding the time taken to re-let void properties. Whilst the review of this performance measure concluded that the Council does have adequate arrangements in place for managing and re-letting empty properties, it found that the performance measure which focuses solely on the how quickly empty properties are turned around does not align with recent housing policy and approach which seeks to improve community cohesion, increase sustainability of tenancies and consequently reduce the overall number of void properties, and that this misalignment had contributed to poor performance in this area. Also highlighted was the absence of a performance measure to reflect the Council’s ambitious target for purchasing, renovating and letting former Council properties. While the six issues/risks raised pose a risk to the service’s ability to meet its performance targets in this area, Internal Audit is satisfied that they are containable at service level and do not pose significant risks to the Council’s overall achievement of its objectives hence the Reasonable assurance opinion.

·         The follow up review of the Leavers Process was undertaken in May, 2021 to determine progress in addressing the four issues/risks raised by the original review report in September, 2020 one of which was designated as “major” due to the potential impact of the risk. The follow-up concluded that management had addressed the risk classified as major and is making progress to address the remaining three risks.

·         That 5 audits are currently in progress as summarised in the table at paragraph 14 of the report which updates the status of the work in progress. The Internal Audit team is also currently involved in three complex investigations.

·         The first tranche of the National Fraud Initiative 2020/21 matches were released in January, 2021. Matches highlight potential fraud and error in the Council’s systems. Internal Audit is currently working on investigating matches in the five areas listed in paragraph 18 of the report.

·         There are currently no overdue actions. Details of outstanding actions are reported separately.

·         Despite staff returning from redeployment and the additional responsibilities due to the pandemic having reduced, the team is still not at full capacity. The recruitment proposal to fill the Senior Audit vacancy has been approved by the SLT and it is currently being advertised with a closing date of 20 September, 2021. Filling this post will mean that the team will almost be up to full strength with only half a full time equivalent post remaining vacant due to flexible working. However, a further member of the team’s secondment to Accountancy has recently been extended to the end of March, 2021. Whilst this means the team will be operating at reduced capacity until the end of the year, the savings from these posts are being used to fund the IT audit programme and some contracts for specific pieces of work.

·         Internal Audit’s immediate priority remains to review the new red and amber residual risks (6 risks) on the Corporate Risk Register followed by the risks that have not been reviewed in over two years (6 risks). In the longer term, a review of the management of fraud identified a number of actions as outlined in paragraph 29 of the report which will be addressed before the end of the year.

In considering the report, the Committee raised the following matters –

·         With regard to Internal Audit’s review of Housing Allocations, the Committee noted that the review had identified shortcomings in the Housing Service’s Orchard housing management system, specifically its inability to perform some aspects of the void process which has resulted in the service adopting and operating separate processes and systems concurrently causing inefficiency and duplication. The Committee sought clarification of the position with regard to the Orchard system and whether the Housing Service would be able to upgrade the system to address the issues identified.

The Head of Housing Services confirmed that the service has over the course of the preceding few months made significant investment in upgrading the Orchard system with the introduction of Acuserrve software which will provide additional capability with regard to specifically managing the void process and that this will be effective as from October, 2021.

·         The Committee wanted to know on what basis had the review of Housing Allocations which raises 3 major risks attracted the same Reasonable assurance rating as the follow-up review of the Leavers Process which raises no major issues.

The Head of Audit and Risk clarified that had Internal Audit deemed that the issues/risk raised by the review of Housing Allocations necessitated a referral to the SLT or had their impact not been confined to the Housing Service alone in terms of its ability to meet its performance targets in the areas reviewed, then the review would have carried a Limited assurance rating. She advised that the assurance rating which Internal Audit provides is based on a qualitative rather than a quantitative assessment of the issues/risks identified.

It was resolved to accept the report and to note Internal Audit’s assurance provision and priorities going forward.