Agenda item

To receive the Internal Audit Annual Report 2023/24, The Audit Committee Annual Report 2023/24 and the 2023/24 Annual Audit Plan.

 The Principal Auditor and the Audit, Governance & Procurement Lead Manager presented the Internal Audit Annual Report 2023/24, the Audit Committee Annual Report 2023/24 and the 2023/24 Annual Audit Plan.

The 2023/24 Annual Report gave details of the planned Internal Audit resources for 2023/24 which was initially 671 days and included 49 days of specialist ICT audit provision provided by Lighthouse Consultancy.  During 2023/24 there had been a number of unplanned audit assignments which resulted in some planned audits being removed and replaced with the unplanned work. Deferred audits and resource challenges within the Audit Team, resulted in the plan being reduced to 432 days with Audit Committee being kept informed throughout the year.  The team achieved 90% of the planned work, although some items were due to be rescheduled and included in the 2024/2025 plan.

Based on internal audit work undertaken during the year, Internal Audit’s annual opinion provided reasonable assurance in respect of the adequacy and effectiveness of the Council’s framework of governance, risk management and internal control.

The number of green, yellow and red reports issued this year had increased from 2022/23, yet the number of amber reports had decreased. However, all gradings remain comparable over a 3 year period.  In 2023/24 there had been 244 recommendations made in total compared to 146 in 2022/23 and 256 in 2021/22. 

The Internal Audit Team has faced some resource challenges during the year but managed to complete 90% of the annual audit plan. The Internal Audit Team continued to work with services to ensure risks were appropriately managed and adequate systems of internal control were in place.

The Internal Audit Team monitor their performance using key performance indicators and the results for 2023/24 demonstrated that team performance met or exceed the targets set. 

Customer surveys were issued electronically with every completed audit report. Results showed that 100% of customers continued to think Internal Audit were a positive support and added value to their service. As a comparison to 2022/23 the team’s customer performance has remained extremely high within all areas included in the customer feedback form although improvements had been made.  

In conclusion, Internal Audit had performed well and made a positive contribution to the governance arrangements within the Council. During 2023/24, completion of the audit plan increased from the previous year despite the Council experiencing resource challenges. The statutory responsibilities of the Council’s Chief Financial Officer (Section 151 Officer) in respect to internal audit and internal control had been met and the work of the Internal Audit Team and other assurance activity had provided reasonable assurance to the Council on the adequacy of operation of the Council’s internal controls, governance and risk management processes. However, there were changes occurring both within and outside the Council during 2024/25 and beyond which could affect the team’s future activities.

The work of the Audit Committee in 2023/24 began with approval of the Terms of Reference.  The Committee had considered a comprehensive set of agendas to reassure the community and the Audit Committee that, despite significant challenges, good governance had been achieved in 2023/24. 

In relation to the Internal Audit Plan 2024/25 the Council had a statutory obligation under legislation to provide assurance and effective management of risks.  To ensure Internal Audit can provide reasonable reassurance, an annual audit was developed to directly link to the Council’s objectives and priorities and directed by the Audit Charter which was agreed by the Audit Committee in January 2024.  The plan had been drawn up based on the internal and external resources available for 2024/25 and to provide a reasonable level of assurance for 2024/25 but limited to the areas reviewed.

The planned available audit resource for 2024/25 was 610 days plus contingency. The audit plan was dynamic and based on risk and could be changed when new risks were identified.  Audit would continue to review the plan and would provide updates the Audit Committee throughout the year. 

During the discussion, some Members praised the work of the Audit Team.  They asked if meeting schedule four times per year was adequate and if the planned days were based on hours, resources and known factors. 

The Audit, Governance & Procurement Lead Manager confirmed that commercial work was undertaken and new opportunities were considered with external customers.  This had been very successful and put Audit in a good position in relation to self-financing, but this needed to be balanced against the Local Authority’s own requirements.  Benchmarking exercises were undertaken and, as the Chief Internal Auditor, he felt that they were adequately resourced.  In relation to the number of meetings, most councils held four meetings per year but there was an opportunity to hold additional meetings if they were required.

Upon being put to the vote it was, unanimously:

RESOLVED – that:

a)    the Internal Audit Annual Report for 2023/24 be noted;

b)   the Internal Audit Plan 2024/25 be approved; and

c)    the operations of the Audit Committee for 2023/24 be noted.