Agenda item

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

The report of the Head of Audit and Risk providing an update as of 1 April, 2022 on the audits completed since the previous update to the Committee in February, 2022 was presented for the Committee’s consideration. The report also outlined the current workload of Internal Audit and its priorities for the short to medium term going forward.

In presenting the update the Head of Audit and Risk highlighted –

·         That three pieces of work had been finalised in the period and one report issued – First Follow-Up of Payments – Supplier Maintenance and Identification of Duplicate Invoices and Recovery of Duplicate invoices which resulted in a Limited Assurance rating. The first review of Payments – Supplier Maintenance and Payments in January, 2021 led to further work being undertaken in this area and a report of Duplicate Invoices and Recovery if Duplicate Payments was issued in May, 2021. Both reports resulted in Limited Assurance ratings with separate action plans agreed to address the risks identified. As several of the risks and subsequent agreed actions are linked a combined follow up review was conducted between January and March, 2022. The follow-up review concludes that while the Finance and Payments teams have carried out some work to address the risks raised during the original audit, the majority of agreed actions remain outstanding. Due to the number of issues/risks remaining and the lack of progress in key areas, Internal Audit is unable to increase the assurance rating from Limited at this time. A further follow-up review will be conducted in November, 2022.

·         The progress made on addressing the risks identified in a review of “Recovering Council Debts and the Impact of Covid 19”, a Limited Assurance report on which was presented to the December Governance and Audit Committee meeting. In response to the original report, the Director of Function (Resources)/Section 151 Officer commissioned consultancy firm CIWB to work with the Service to address the issues/ risks raised. Internal Audit is satisfied with progress to date and will undertake formal follow up testing in October 2022 to establish whether all the issues/risks raised have been fully mitigated.

·         Work in progress as per the table at paragraph 18 of the report where seven audits are at fieldwork stage, three of which are highlighted as Red residual risk in the Strategic Risk Register and are being prioritised accordingly.

·         Outstanding actions comprising of 3 Moderate actions connected with the Leavers’ Process audit within the Resources Service.

·         Capacity and short/medium term and longer term priorities of the Internal Audit section.

In response to questions by the Committee the Director of Function (Resources)/Section 151 Officer clarified the position with regard to Payments and referred to on-going staffing and recruitment issues, workload pressures, a protracted restructure and extra work created by Services failing to follow correct purchasing processes as factors having contributed to the Limited Assurance review as well as the time being taken to fully address the issues/risks identified. The creation of a Business Manager post will provide additional resource to review/simplify system processes and to facilitate performance improvements across the Resources function; the recruitment of a Trainee Payroll and Payments Officer as part of the Council’s Môn Future Programme will also be an added resource. On appointment the Business Manager will be tasked with assisting the Payments team in addressing the outstanding issues/risk in this area. The Director of Function (Resources/Section 151 Officer provided assurance that the outstanding issues/risks – specifically the two Major issues/risks will be addressed ahead of the revised completion date where possible but that appointment to the Business Manager post is key to expediting the work and achieving the target date.  The Director of Function (Resources)/ Section 151 Officer further confirmed that the systems review will encompass the Leavers process where there are three overdue actions related to the audit of this area. As regards any issues raised by External Audit with regard to this matter, the Section 151 Officer explained that in conducting its audit of the 2020/21 accounts External Audit would have taken assurance from Internal Audit’s work in this area; given that in the region of £130m is paid through the Creditor system annually the level of duplicate payments identified is less than 1% of the payments made and as such may fall below the level of materiality set by External Audit.

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