Agenda item

Report of the Director of Finance and Resources (Section 151 Officer)

The Audit and Procurement Committee considered a report of the Director of Finance and Resources (Section 151 Officer) which provided an update on the progress made in implementing internal audit recommendations between January 2025 and January 2026.

The Global Internal Audit Standards in the UK Public Sector requires that “Internal auditors must confirm that management has implemented internal auditor’s recommendations or management’s action plans following an established methodology.” As reflected within its terms of reference, the Audit and Procurement Committee is required to receive reports on Internal Audit’s follow up process. 

Given the number of audits that the Internal Audit Service completes every year, it was critical that it has a robust procedure in place for ensuring that it obtains appropriate assurance that audit recommendations have been implemented but does so in an efficient and proportionate way.  Where appropriate, Internal Audit defines within its audit reports the follow up process to those responsible for the system / area under review and a date is agreed by when this will take place.

The key consideration that determined the follow up procedure adopted was the level of assurance provided in the audit report, with the follow up procedure being either a self-assessment process or a formal follow up review.

Overall, it was believed that the procedure achieves the right balance between ensuring action is taken in response to risks identified by Internal Audit and allowing the Service to focus on delivering the Annual Audit Plan.

Of the 281 actions followed up, 61% had been implemented based on both the formal and self-assessment follow up method. This compared to 65% the previous year. 

The implementation rate of 45% for formal follow up reports had decreased since the previous year (53%) although it was noted that this may have reflected the smaller number of actions followed up by this process in the current period.

The implementation of 63% for self-assessment had also decreased since last year (72%).  It was noted that this may reflect that additional scrutiny was now being applied to self-assessments with clarity being sought where managers did not provide sufficient information to support their assessment. 

Directorate trackers were in place for each Director to assist them to monitor progress and ensure that actions will be implemented by the due date. In addition, the quarterly performance indicator forms part of the Leadership Board dashboard.  Further measures had also recently been taken to support the gradual improvement of implementation rates. This included further development of the directorate trackers, specific discussions at the draft report stage on the importance of the timely implementation of agreed actions, and enhancements to the follow up process to make officers more accountable for lack of progress.  The Chief Internal Auditor was due to attend Leadership Board in April 2026 to discuss the follow up process further. 

After the follow up had been completed, the results were collated within Internal Audit. If progress was not consistent with expectations, audit management would determine the next course of action.

Based on the reasons for the lack of progress, the following courses of action were available:

·  Revised implementation dates are agreed for outstanding actions.

·  Concerns raised through the management structure to ensure senior managers are aware of both the lack of progress made and the risks still facing a service.

·  As a last resort, to ask the Audit and Procurement Committee to intervene and seek prompt action from the relevant manager.

RESOLVED that the Audit and Procurement Committee, notes the progress made in implementing audit recommendations and confirms its satisfaction with this and the proposed action by the Chief Internal Auditor for audits where actions remain outstanding.