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 on the status of outstanding issues, risks and opportunities raised by Internal Audit was presented for the committee’s consideration. A detailed status update of major rated issues, risks and opportunities was included at Appendix 1.

The Principal Auditor presented the report, noting that as of 31 March 2026, a total of 78 actions remained open. Of these, 6 are rated “major” (amber) and 72, “moderate” (yellow). None are rated “critical.” Overall, management has completed 77% of their agreed actions and Internal Audit has verified 76%. The remaining 1% yet to be formally verified relates to action from two audits – IT Supplier Management and Secondary Schools ICT Security. Follow up audits of these areas will be undertaken in the first quarter of 2026/27.

Three actions relating to the audit of Disabled Facilities Grants are overdue and are covered in greater detail within the Internal Audit Update report. Actions from several recently completed audits, as detailed in paragraph 16 of the report, have not yet reached their implementation date. There are no major rated issues, risks, opportunities dating back earlier than 2024/25, demonstrating that management is prioritising the resolution of higher risk issues.

The Principal Auditor referred to Appendix 1 which summarises progress on the six major outstanding issues and risks and noted that follow up reviews for several of these are currently in progress and are expected to be reported to the committee at its July 2026 meeting.

In considering the report, the committee noted the importance of management taking full  ownership of risks identified by Internal Audit. In this context, reference was made to the second follow up review of Disabled Facilities Grants (DFGs) discussed under the previous item which had received a limited assurance opinion due to slow progress in addressing the issues raised. Members asked whether Internal Audit considered that the Housing Service had sufficiently taken ownership of the actions arising from the audit, noting that it should not fall to Internal Audit to undertake a third follow-up. Members also queried what further steps the committee could take should progress remain insufficient at that stage.

The Head of Audit and Risk advised that the Head of Housing Service had acknowledged that progress had been slower than desired. She confirmed that, under the GIAS, Internal Audit is required to follow up and formally verify the completion of agreed actions. As the second follow up review resulted in a limited assurance opinion, the Head of Housing Services was required under the committee’s terms of reference to provide assurance to the committee in person. Should the outcome of the planned further follow up review in September require the Head of Service to provide additional assurance at the committee’s December meeting, it would be for the committee to determine any escalation it considers appropriate at that time.

Members also queried whether a lack of resources, particularly administrative support, was  a wider or recurring issue and what tools were available to management to reprioritise workloads.

The Head of Audit and Risk confirmed that efficiency savings over many years had reduced administrative capacity, and that resources and services across the Council were required to do more with less. It is for each Head of Service to determine how their service budget is prioritised. While she did not consider this an increasing trend, she noted that as a smaller authority, the Council has several single point of failure posts where the absence of one officer can impact performance and outcomes.

Given that the prospective third follow up of DFGs in September would not likely report to the committee until December 2026, members requested an update on progress at the committee’s September meeting. The committee was advised that the Internal Audit report on outstanding issues and risk is scheduled for September and could incorporate an update on DFG related actions if the formal follow up review has not concluded.

In light of the circumstances, members felt that a verbal update from the Head of Housing Service at the committee’s June and July meetings would also be helpful to establish progress in addressing the remaining actions. They requested that the Head of Service be invited to attend for this purpose.

It was resolved that the Governance and Audit Committee accepts the overall progress made in addressing outstanding Internal Audit issues, risks and opportunities as satisfactory, while noting its concern regarding the Disabled Facilities Grants second follow up review. The committee wishes to avoid a third follow up review and notes that the Head of Housing Services has been asked to provide progress updates on the completion of the remaining actions.

Action – Head of Internal Audit to ask the Head of Housing Services to update the committee’s June and July meetings on progress in completing the remaining DFG related actions.