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 summarised the Council’s Internal Audit activity for the period April 2022 to March 2023 against the agreed Audit Plan for 2022-23 and the Public Sector Internal Audit Standards. It provided the Chief Internal Auditor’s opinion on overall adequacy and effectiveness of the Council's risk management, internal control, and governance arrangements for the financial year 2022-23, as set out in section 2.4 of the report). Appendices to the report provided details of the audits completed in 2022-23 and a summary of findings from key audit reports.

Performance of the Service against key targets indicated that the key target was to complete 90% of its agreed work plan by 31st March 2023. The plan, originally developed on the basis of an estimated 560 available audit days, was subsequently amended to 430 days following unplanned absence in the Service from quarter three onwards. The change was reported to the Audit and Procurement Committee in March 2023 (minute 63/22 referred). The performance of the Service had been assessed against the revised audit plan and had delivered 89% of the plan. Performance was slightly below target but did not materially impact on the ability to provide an annual audit opinion. Of the six audits which formed part of the 2022-23 plan, and which were not completed by the end of March 2023, one had now been finalised, two were at draft report stage and the remaining three were ongoing/had been rescheduled.

The Service had a number of other key performance indicators that underpinned its delivery, which were aimed at ensuring that the audit process was completed on a timely basis. A table in the report detailed the performance of Internal Audit for 2022-23, compared with performance in 2021-22. Ongoing monitoring of internal audit work and identifying opportunities for improvement remained a key focus for management, in line with Public Sector Internal Audit Standards.

The Public Sector Internal Audit Standards required that the Internal Audit Service developed and maintained a quality assurance and improvement programme covering all aspects of internal audit activity. Specific improvement actions which had been delivered against the improvement plan in 2022-23 were set out in the report. It was concluded that the Internal Audit Service partially conformed with the Public Sector Internal Audit Standards, and it was recognised that there were improvement opportunities to achieve full conformance. Where improvements have been identified, it was not considered that this materially impacted on the overall scope or operation of the internal audit activity. Progress against actions would be included in the next annual report to the Audit and Procurement Committee.

Appendix One to the report provided details of the 56 audit reviews that had been carried out in the financial year 2022-23 along with the level of assurance provided. The percentage of audits with “limited” or “no” assurance in 2022-23 was consistent with the previous year and it was the Chief Internal Auditor’s opinion that providing an opinion of moderate assurance remained appropriate.

A summary of the findings of key audits that had not already been reported to the Committee during municipal year 2022-23 were included in Appendix Two to the report. In all cases, the relevant managers had agreed to address the issues raised in line with the timescale stated. The reviews would be followed up in due course and the outcome reported to the Audit and Procurement Committee.

In the Chief Internal Auditor’s view, sufficient assurance had been obtained to form a reasonable conclusion on the adequacy and effectiveness of Coventry City Council’s risk management, internal control, and governance arrangements.  This took into account the internal audit work performed during 2022-23 and other sources of assurance. In undertaking the assessment of the Council's arrangements, the Chief Internal Auditor had reviewed whether, in her opinion, there were any areas that needed to be considered when the Council produced its Annual Governance Statement for 2022-23. From a general point of view, whilst any audit where ‘limited’ or ‘no’ assurance was provided, required attention, an assessment was also made as to whether the review had a significant corporate impact and consequently needed to be considered in the producing the Annual Governance Statement, or whether the review was limited to specific working practices in service areas which did not have a wider bearing on the Council’s control environment. For 2022-23, no issues had been identified for consideration in preparation of the Annual Governance Statement.

RESOLVED that the Audit and Procurement Committee notes:

1)  The performance of Internal Audit against the Audit Plan for 2022-23.

2)  The results of the Quality Assurance and Improvement Programme and the Chief Internal Auditor’s statement on conformance with the Public Sector Internal Audit Standards.

3)  The summary findings of key audit reviews (attached at appendix two to the report) that have not already been reported to Audit and Procurement Committee during municipal year 2022-23 and which are relevant to the opinion on the overall adequacy and effectiveness of Coventry City Council's internal control environment.

4)  The opinion of the Chief Internal Auditor on the overall adequacy and effectiveness of Coventry City Council's risk management, internal control, and governance arrangements.