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 at 31 March, 2025 on the audits completed since the previous update as at 31 January 2025 was presented for the committee’s consideration. The report also set out the current workload of Internal Audit and its priorities for the short to medium term going forward. Members of the committee were provided under separate cover with copies of the assurance reports finalised in the period in relation to Destination – Maritime Team: Income Processes (First Follow Up) (Reasonable Assurance), Payment Card Industry Data Security Standards (Reasonable Assurance), Early Education and Childcare Grant Programmes (Reasonable Assurance), Management of the Council’s Physical Assets (YM14) (Reasonable Assurance), Disabled Facilities Grants (First Follow Up) (Limited Assurance) and Recovery Of Council Tax, Non-Domestic Rates and Sundry Debts (Second Follow Up) (Limited Assurance).

The Head of Audit and Risk provided an overview of the four audit reports completed during the period which offered reasonable assurance. In response to a query, she clarified that the internal audit approach focuses on raising issues and risks rather than making recommendations, with management agreeing on actions plans to address identified concerns. Regarding the two limited assurance audit reviews, she reported that while progress has been made in the Disabled Facilities Grant first follow up review, several weaknesses remain which require further action to ensure a robust and accountable DFG process. A further formal follow up review will be undertaken in October 2025 to ensure that the remaining issues have been addressed and to assess the effectiveness of improvements. On the Recovery of Council Tax, Non Domestic Rates and Sundry Debts second follow up review, she highlighted that the service had made further progress since the original 2023 review including system enhancements, increased management oversight and regular Council Tax and NDR debt assessment. However, substantial older debts remain unresolved which will be difficult to address without additional resources. A full review of the revised recovery process will be included in the Internal Audit Strategy and Plan for 2025/26.

The committee considered the two limited assurance review reports and the following matters were raised –

·      Concerns were expressed about the effectiveness of the DFG process, particularly the prolonged timeline for delivering agreed housing adaptation works. A specific case was cited which highlighted that it took nearly two years to confirm the necessity of housing adaptations and approve the grant, followed by more than a year to complete the agreed works. The extended delay significantly impacted the quality of life of the affected client. Assurances was sought that steps are being taken to improve delivery timeframes.

The Head of Audit and Risk explained that the audit review identifies the need to align  the Council’s current DFG key performance indicators with Welsh Government’s Housing Adaptations Service Standards expected timeframes. These define three key stages in the adaptations process - initial contact, confirmation of adaptation as necessary, and  installation providing a full end to end review. The Council’s current KPI only captures the average time taken in the final installation stage. The Head of Housing Services noted that alongside challenges with contractor availability the Housing Adaptations Team has reduced from five to one member of staff over recent years due to efficiency measures. While additional support has helped advance the DFG process, further improvements are necessary. He expressed confidence that these improvements would be achieved with the limited assurance opinion serving as motivation for continued progress.

·      Whether the issues/risks identified in the DFG audit follow up review stem from systemic shortcomings or non-compliance with established processes. Reference was made to missing legal safeguards relating to the recording of grants to owner occupiers on the local land charges register or as a restriction on the Land Registry potentially leading to  financial losses.

The Head of Audit and Risk clarified that, specifically regarding the legal safeguards, the review found that the proper processes are in place but are not being followed, contributing to the risk.

·      Whether the DFG adaptation process has overarching project management to expedite delivery within the set timeframes and ensure efficient capital spend.

The Head of Housing Services clarified that one officer is responsible for assessing whether each grant application is reasonable and appropriate, while the Gofal a Thrwsio  agency oversees the management of individual adaptation installation projects.

The Director of Function (Resources)/Section 151 Officer responding to the limited assurance second follow up review of the Recovery of Council Tax, Non Domestic Rates and Sundry Debts said that most efforts since the original review in 2023 have focused on improving processes to ensure prompt debt handling and to prevent the long-term accumulation of debts. However, without addressing the backlog of older debts it remains difficult to determine the success of these improvements. In order to tackle this issue, the Executive has approved an additional resource to assess recovery options. The Section 151 Officer outlined the different processes for recovering sundry debts and Council Tax debts and he clarified that while the council collects non-domestic rates, these are pooled centrally meaning that any losses from non-payment are absorbed by the pool rather than the council. Additionally, with Welsh Government’s removal of committal powers for Council Tax arrears, the council will explore all available enforcement methods before writing off debts. The Section 151 Officer advised the committee that although progress has been made tangible results will take time. In response to a query about the timeframe, he noted that the authority’s council tax collection performance compares well with that of other local councils. Council tax  arrears are a widespread issue, exacerbated by factors such as the cost of living crisis. He confirmed that the impact of the additional resource will be evaluated in six months with a report presented in twelve months.

·      The committee queried whether councils in Wales should be making representations to Welsh Government to reconsider the removal of committal powers given the significant impact of unpaid council tax on council budgets.

The Director of Function (Resources)/Section 151 Officer advised that Welsh councils did raise concerns when the policy was changed and while Welsh Government promised a review along with additional powers for councils these have yet to materialise. However, a further consultation is in the offing. The Section 151 Officer assured the committee that writing off debt is a last resort and that the council actively pursues alternative recovery methods. Currently, the council successfully collects over 99% of Council Tax annually. In response to queries about bad debt provision and whether recovery efforts should target the three service areas with the highest accumulated debts, the Section 151 Officer outlined the Council’s approach to bad debt management and detailed the nature of debts within these services along with the challenges in recovering them.

In reviewing the remaining assurance reports presented, the committee raised concerns  on the audit review of Childcare and Welsh Medium Education Provision, specifically regarding the Council’s failure to enable all non-maintained settings to claim Early Education funding and Flying Start funding. The Director of Education, Skills and Young People assured the committee that the action plan agreed with Internal Audit would be implemented promptly and practices reviewed under the direction of the Primary Education Sector Manager to ensure that the Council meets all necessary requirements. The committee will receive an update in due course.

It was resolved to note the outcome of Internal Audit’s work, the assurance provided and priorities going forward.