Agenda item

Report of the Director of Finance

The Committee considered a report of the Director of Finance concerning the draft Internal Audit Plan for 2020/21 to provide the Committee with the opportunity to express their views on the extent and nature of the planned coverage. A copy of the Plan was set out at an appendix to the report.

The draft Internal Audit Plan documented the outcome of the audit planning process for 2020/21 and provided a mechanism for allowing the Committee to discharge its responsibility to ‘consider the Head of Internal Audit’s Annual Report and Opinion and a summary of internal audit activities (actual and proposed) and the level of assurance given within the Annual Governance statement incorporated in the Annual Accounts’.  The report also enabled the Committee, as a key stakeholder of the Internal Audit Service, to comment on the content and scope of the proposed Internal Audit Plan.

The report set out the planning process for the plan. The draft plan was based on an allocation of priorities against the current level of audit resource available. The Committee were informed that the resources available for audit and corporate fraud work was 550 days which compared to 440 days in 2019-20.

Whilst there was an established methodology in place to determine the focus of audit resources, the Covid-19 pandemic had had a significant impact on both the audit planning process and determining audit priorities for 2020/20201. In summary, consultation on the audit plan for the forthcoming year would normally have commenced in March / April 2020. This was not achievable at this time given the Council’s need to focus on its initial response to the pandemic. Equally, from the perspective of Internal Audit, given the level of uncertainty arising from Covid-19, it was clearly difficult to undertake a formal risk assessment and identify meaningful priorities at this stage. As a result, a more flexible approach to audit planning had been adopted for 2020/2021. This had allowed the Service to respond more appropriately to the meets the needs of the Council at this time whilst still making some provision for “business as usual” audit work.

Whilst the Service had continued to respond flexibly during the year, it was now in a position to be clearer about the focus of audit priorities to both respond to new areas identified as a result of covid-19 and ensure that sufficient work was undertaken to inform the annual audit opinion. Where appropriate, an assessed risk level had been included in appendix one. Where the risk had been assessed as medium rather than high, this generally reflected the findings of previous audit reviews in the respective area / an initial assessment of the control environment. 

The Committee were informed that a significant amount of resource has been allocated to covid-19 related assurance work. This had been assessed as a key risk area for 2020-21 given the significant level of Government funding allocated to the local authority and the assurance requirements and the new systems and processes set up to administer the funding. The report detailed activities in this area.

Given the resource required to support the Council’s response to Covid-19, the Service had focused wider consultation with senior managers on those areas which underpinned corporate risks rather than service specific risks. In addition, the routine programme of school audit work would not be undertaken this year. Given the limited number of school audits carried out each year this was not viewed as having a significant impact and the Service would look to address this in 2021-22 with a wider programme of work. 

The report highlighted the other areas of planned work concerning: ICT; Council / Audit priorities; financial systems; and corporate governance.

As a result, it was believed that the draft Audit Plan for 2020-21 was sufficient for the work required to report on governance, the management of risks and controls in the year and to prepare the annual opinion and report.

Members sought clarification regarding the risks associated with home working and the implications of the costs of providing equipment to allow employees to work remotely.

RESOLVED that the content and scope of the draft Internal Audit Plan for 2020/21, attached as Appendix One to the report, be noted and the Plan be approved.