Meeting documents

To be presented by Ms M Gibb, Chief Auditor

Ms M Gibb, Head of Business Assurance and Chief Auditor introduced the Annual Report and provided an overview of the content.   The report set out the Chief Auditor’s opinion on the Council’s system of internal control, based on the internal audits undertaken, and other available assurance mechanisms.  This also would feed into the Annual Governance Statement.

Ms Gibb highlighted the following points:

• There were 7 limited assurance reports rather than 9 as stated in the report
• Against the Public Sector Internal Audit Standards there are two areas of non-conformance that had been identified’

o   One of which was that Ms Gibb had operational responsibility of risk management therefore it was not wholly independent. The risk of conflict was managed by reporting regularly to the Risk Management Group and as part of that the effectiveness of risk management reporting was regularly reviewed. 

o   The other area of non-conformance was that there was not a Quality Assurance and Improvement Programme implemented across the internal audit service, but Ms Gibb confirmed the County Council had engaged with another Local Authority to carry out an independent compliance assessment, this would take place later on this year

Ms Gibb gave an overview of how the Chief Internal Auditor Opinion is formed as set out in the detail of the opinion as below:

"In my conclusion based on the evidence from the internal audits undertaken, and the assurance work facilitated by the Business Assurance Team my opinion on whether the Council’s overall system of internal control facilitates the effective exercise of the Council’s functions and provides a reasonable assurance regarding the effective, efficient and economic exercise of the Council’s functions is unqualified for 2016/17.

The Chief Internal Auditor opinion for 2015/16 was qualified, so there has been a positive direction of travel and clear improvements to the internal control environment during 206/17. However, a number of significant weaknesses have been identified which require clear action to address, in particular the robustness of the Council’s Contract Management arrangements is in doubt following the failure of the Buckinghamshire Care Contract. A review of all Alternative Delivery Vehicles was commissioned following this failure, and recommendations are being presented to Cabinet in July.

There is no doubt that the Senior Officers in the organisation take governance and internal control very seriously, the Corporate Management Team reviews all limited assurance audits and monitors the progress of implementation of actions. The development of an assurance framework, with clearly defined three lines of assurance, has been further embedded and provides evidence of management oversight and monitoring which is essential in maintaining good governance."

Ms Gibb stated that the unqualified opinion was a positive direction from last year. Some weaknesses had been identified during the year in particular around key financial systems and the majority of those had been addressed during this year.  During the year there had also been some significant weaknesses around Contract Management of Alternative Delivery Vehicles (AVDs).  A review of these had been commissioned with lessons learnt and an action plan report being taken to Cabinet. 

Ms Gibb made reference to the changes in the overall opinion in relation to the review of Key Financial Systems.  The review of seven financial systems identified areas that required improvement, specifically in the operation of key controls in place.  Ms Gibb updated the Committee on the direction of travel for the review of those systems

The committee raised and discussed the following points:

• Even though areas of improvement were identified, the opinion was not only  based on key areas but the totality of the work, therefore Ms Gibb was comfortable with her assessment
• Risk management of Academies were discussed and how the Council had assurances that risks were being managed.  Ms Gibb stated that currently the Council do not provide any internal audit service to academies however they were looking to creating an offering this year for internal audits and risk management.  Mr Ambrose added that the Council still had responsibility for safeguarding and would also carry out a financial review of all academies
• The Committee discussed data assets and the quality of these.  Ms Gibb confirmed that Risk Management Group on 3 August 2017 would  focus on Technology Services risk management in its entirety
• Ms Gibb clarified the risk vs compliance ratio and the relationship between that and the rating given.  Ms Gibb agreed to circulate the meaning of different terms used within the documents and also mentioned that further training throughout the year would be provided for Members

ACTION: Ms Gibb

• Ms Gibb also advised the corporate management team were on board and there would be a review of the corporate escalation process

Ms Gibb highlighted the summary of audits which had been presented to the Committee throughout the year and made reference to appendix 2, outlining the summary of management actions. An update of this would be presented at the Corporate Management Team meeting in August, with a further update being provided to the Committee in September.

ACTION: Ms Gibb

RESOLVED:  The Committee NOTED the report