Agenda item

Report of the Chief Operating Officer (Section 151 Officer)

The Audit and Procurement Committee considered a report of the Chief Operating Officer (Section 151 Officer) that submitted the draft Internal Audit Plan for 2022-23, attached as an appendix to the report, to the Audit and Procurement Committee to allow the Committee to express its views on the extent and nature of the planned coverage.

In terms of proposed audit activities, the draft Internal Audit Plan documented the outcome of the audit planning process for 2021-22. The report set out the mechanism for allowing the Audit and Procurement Committee to discharge its responsibility but also enabled them, as a key stakeholder of the Internal Audit Service, to comment on the content and scope of the proposed Internal Audit Plan.

The priorities of internal audit activity were determined through the development of an annual risk- based Internal Audit Plan. The report documented the planning process and identified the outcome of the process, namely the draft Internal Audit Plan for 2022-23.

Key points to note from the results of the initial assessment of priorities included:

a)  The draft plan was based on an allocation of priorities against the current level of audit resources available. The resource requirements had been assessed taking into account the requirement to produce an annual audit opinion and the Council’s overall assurance framework. For 2022-23, the resources available are 560 days for audit and corporate fraud work.  This was an increase of approximately 90 days when compared with 2021-22 and reflected that all vacant posts which were responsible for delivery of the Internal Audit Plan were now recruited to.

b)  In addition to the 560 available audit days, two trainee posts have been recruited to as part of the longer-term strategic plan for the service.  Given the nature of these posts, it is not viewed as appropriate to formally include them within the assessment of resources for 2022-23, although they will provide support to the Team in delivery of audit work.

c)  In focusing the available resources to develop a plan which met the needs of the Council, the following approach had been taken:

An initial risk assessment has been undertaken, which considered the Council’s corporate risk register and any priorities identified from consultation with Directors and other senior managers, alongside other priorities linked to areas of risk which have been highlighted by the Chief Internal Auditor. Where appropriate, an assessed risk level had been included within Appendix 1 of the report submitted. Where stated as medium rather than high, this generally reflected findings of previous audit reviews in the respective area / an initial assessment of the control environment.

Resource had been allocated to support the development of an audit universe to support future audit planning.  Whilst there was no mandatory requirement to use this tool, it was a helpful model in large and complex organisations to ensure clarity and transparency around internal audit coverage.  It supported an objective approach to determining audit priorities and would provide more assurance to senior management and the Audit and Procurement Committee that coverage is sufficient and aligned to the right areas.  This activity also formed part of the Quality Assurance and Improvement Programme for Internal Audit.

A risk-based approach to the audit of schools, rather than a cyclical programme of audit work.

A flexible and responsive approach to issues highlighted by senior officers with dialogue to ensure resources were directed in accordance with their priorities.

A flexible approach to corporate fraud investigations, offering expert advice and support rather than undertaking the Investigating Officer role. 

Other areas of planned work included:

a)  Corporate Risks – the focus of audit coverage in 2022-23 regarding the corporate risk register, was aligned to those areas where it was clear Internal Audit could make a contribution to the management of the risks, including emerging issues linked to activities. This included reviews of equality and diversity in recruitment, public health funding and housing benefit subsidy.

b)  ICT – The programme of work of IT audit work was established through an IT audit needs assessment which identified areas of focus over a three-year period (subject to annual review.) In 2022-23, the areas which had been agreed were Service Desk (assessment of the new system for raising IT issues and associated processes), Software Asset Management and IT Operations.

c)  Council / Audit priorities – this incorporated audit work linked to specific priorities which had a corporate impact such as pre-employment checks, IR35 compliance and Coventry Municipal Holdings.

d)  Regularity – this included work to meet the assurance requirements of grant funding received by the Council, and co-ordination of the Annual Governance Statement and declarations of interest exercise.

e)  Directorate risks – this audit area included those issues highlighted through dialogue with Directors which could affect the achievement of operational objectives. In 2021-23 identified areas include buildings statutory compliance and the transfer of the Emergency Services Unit to Whitley Depot.

As a result, it is believed that the draft Audit Plan for 2022-23 was sufficient for the work required to report on governance, the management of risks and internal controls in the year and to prepare our annual opinion and report.

In considering the report, the Committee highlighted the effectiveness of consultation as an area for review, particularly in relation to One Coventry.  In discussion it was felt this would be more appropriate for the Finance and Corporate Services Scrutiny Board (1) to consider this matter.  It was agreed that Scrutiny Board (1) be requested to consider this as part of their work programme for the year.

RESOLVED that the Audit and Procurement Committee

1)  Notes the content and scope of the draft Internal Audit Plan for 2022-23, attached as Appendix 1 to the report, and approves the Plan.

2)  Requests that the Finance and Corporate Services Scrutiny Board (1) consider a review of the effectiveness of the consultation on One Coventry as part of their work programme for 2022-23.