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 30 June, 2025 on the audits completed since the previous update as at 31 March 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 Adult Social Care Finance: Financial Assessments – Residential and Nursing Care (Limited Assurance), Council Tax Base (Reasonable Assurance), IT Audit: IT Service Desk Management (Reasonable Assurance), and IT Audit: IT Supplier Management  (First Follow Up) (Limited Assurance).

The Head of Audit and Risk provided an overview of the two audit reports completed during the period which offered reasonable assurance. Regarding the two limited assurance audit reviews, she reported that while the review of Adult Social Care financial assessments  concluded that although the Council has taken steps to improve the charging and recovery of residential care home fees, the benefits from these changes have yet to be fully realised and key challenges remain particularly around case backlogs and process inefficiencies. An action plan is in place aiming for resolution by March 2026 and a follow up review will be undertaken in August 2025. With regard to the IT Supplier Management First Follow Up, while notable improvements have been implemented, most actions remain in progress under the wider Procurement Improvement Programme and it remains too early to evaluate their impact. A further follow up review is scheduled for December 2025 to assess ongoing progress and the effectiveness of the measures implemented.

The committee’s discussion focused on the two limited assurance review reports and the following matters were raised –

·      The committee noted that additional investment had been made in Adult Services in previous years to address rising demand. They questioned whether this funding had been used effectively. Regarding the identified process inefficiencies, the committee asked   whether these were due to a lack of individual accountability, insufficient management oversight or the absence of systems to flag potential failings.

The Head of Adult Services explained that obtaining clients’ financial information and securing payments often occurs during difficult periods in their lives. This information is not always readily available, may take time to obtain and individuals are sometimes unsure about what they can share. The process is further complicated by the number of clients with dementia. To address these challenges, the service will reinstate client visits to collect necessary financial information promptly to enable the timely completion of  assessments. The team although small, manages complicated and individualised cases. Processes have been strengthened to improve the accuracy and completeness of information from the outset, and policies and documentation have been revised accordingly. While the team received additional resources this year, it had previously experienced staff losses the impact of which is still being felt. The Covid pandemic further hindered information gathering and some of the outstanding debt stems from that period. Despite these challenges and at times ambiguity around payment responsibilities and payment avoidance, the service remains committed to ongoing improvements.

The Director of Function (Resources)/Section 151 Officer reported that following audit reviews, the Debt Collection and Recovery Team has been supplemented by two temporary posts focused on clearing the backlog of unpaid residential and nursing care fees. As part of the recovery process, the reasons for uncollected payments are being examined to refine procedures and reduce the amount of debt written off. These debts are among the largest faced by the Council and are particularly challenging to recover due to the sensitive nature of cases, client vulnerability and complex circumstances.

In response to a committee question about confidence in meeting the action plan’s  deadlines, the Head of Adult Services stated that the goal is to resolve issues early to avoid future delays. The service is confident that, with staff stability, meaningful progress   can be made. Improvements already implemented, including revised policy documentation have made arrangements more robust. However, ongoing changes present new challenges such as the digitisation of information, which can make access more difficult than paper records. Additionally, shorter client stays in residential care reduce the window for resolving issues.

The Director of Function (Resources)/Section 151 Officer further noted while projections in Quarter 3 anticipated a break-even position for the Adult Services’ budget, the year ended with a significant underspend. This was partly due to additional income from  invoices raised after processing some of the backlog of client assessments, and reflects progress made. 

·      The Chief Digital Officer provided an update on progress following the IT Supplier Management First Follow Up, noting that  improvements have been made in structuring the approach towards identifying digital project needs and embedding assessment processes into the way the service operates. These developments will integrate with the proposed procurement review board which will oversee procurement proposals and ensure that appropriate risk assessments are undertaken prior to project expenditure. In response to a committee question about the adequacy of resources, he explained that the issue is primarily one of balancing workloads. While the service has received additional resources over recent years which are being effectively utilised, it continues to work through a significant backlog of projects. Prioritisation is therefore essential.  Although further resources would be beneficial, the approach is to focus on identifying and progressing the most strategically valuable digital projects.

When questioned by the committee whether the procurement improvement programme will help resolve the issues with IT supplier management, the Section 151 Officer responded that it is ultimately for the Executive to decide whether the Procurement Service should be prioritised for additional resources. The Interim Procurement Manager is currently reviewing procurement processes and structures with the main recommendation being that procurement should be involved earlier in projects. This would allow the procurement service to better plan and direct resources where they are most needed particularly for one-off projects and those led by individuals less familiar with procurement practices. A case will be made for additional resources to support the corporate procurement team in meeting the demands of the new procurement legislation and investing in systems upgrades to enhance functionality. The Section 151 Officer also outlined the differences between procuring works and services and the importance of achieving value for money and incorporating social value considerations.

·      The committee queried whether the action plan is designed to bring procurement to the level the Council aspires to internally or to the level when benchmarked against other public bodies.

The Head of Audit and Risk clarified that most management actions stem mostly from the Star Procurement Improvement programme which was meant to prepare the Council for the new Procurement Act. The original audit of IT supplier management recognised that the issues could not be addressed in isolation from the Council’s wider procurement framework. Consequently, actions are being prioritised based on what is required for compliance with the new legislation. However the actions noted have to be deliverable which can mean mitigating rather than eliminating risk according to capacity and resources.

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