Agenda item

The Chief Internal Auditor introduced the Internal Audit Outturn Report 2021/22. Following presentation of the report, comments and questions were invited.

1.    A Member referred to the two Limited opinions in respect of Concessionary Travel and Fleet (Health & Safety / Driver Management) and suggested inviting the responsible officers to attend the Committee to better understand the pressures and circumstances.  This was agreed plus it was requested that at the meeting the S151 Officer be required to set out his view on the robustness of the control environment in this area and level of residual risk associated with not accepting the audit recommendations.

2.    A Member questioned the overall “Reasonable” opinion suggesting that the numbers point to “Considerable” as the organisation is better than 3^rd out of the four possible opinions backed by the self-assessment process.  The Annual Governance Statement would have to show considerable gaps in the control environment to justify this status.  The Chief Internal Auditor explained that the opinion was an average of the opinions issued based on work undertaken. Evidence, strengths and weaknesses identified and expected controls. Audits are conducted on a cyclical basis and can’t consider all the risks due to lack of resources.  The Annual Governance Statement and the Self-Assessment document are broader and will reflect the opinions during the year. These will be reported to Governance and Audit Committee later in the year.

3.    It was queried if there is an opportunity for managers’ views to be considered when an opinion of limited assurance is given especially in contentious areas. It was explained that, where there are Limited opinions, service managers are responsible for writing a management response. Managers’ concerns are covered in wrap up meetings and Internal Audit take on board any additional information provided. Overall, if there is evidence to support that a control is not in place, Internal Audit’s opinion will stand, and action will be taken.

4.    A Member asked about the clearance process suggesting that a member of Senior Leadership Team signs off an audit.  The Chief Internal Auditor explained that whilst there is no official signing off process, the draft report is discussed with the service manager. If there is contention, it is discussed with the Head of Service who is issued with the final report. Where a manager is deflecting responsibility, it is raised with Head of Service and Deputy Chief Executive to move the situation forward thus the organisation takes responsibility and action is taken. 

5.    A Member questioned fraud investigation and requested figures not percentages.  The Chief Internal Auditor identified that the query related to Covid related business grants during the pandemic; Internal Audit were involved in assessment and fraud review. Figures will be provided.  It was explained that no benchmarking is available. 

6.    A Member questioned if the grant work was a significant reason for the number of audits not achieved asking if lessons have been learned.  The Chief Internal Auditor explained that a key message from Welsh Government and Monmouthshire County Council was to pay out grants to support local businesses as soon as possible. Internal Audit’s role was to assess the applications and where fraud was identified, a referral was made to the Police. Our bank was contacted to recover some of the money. It was a UK wide issue.  Lessons were learnt as the team was involved at an early stage, so the systems weren’t in place immediately. The team did a very good job, robustly challenging the applications and insisting that the appropriate evidence was provided before the grant was paid out. Some instances of fraud were detected accordingly. 

7.    The Chair noted some vacancies in the Internal Audit Team and asked for an update. It was explained that there are two significant vacancies to be advertised shortly with a view to interview and appoint by September.  If under-resourcing continues external/internal assistance will be requested.  The Governance and Audit Committee will be kept updated.  Support from the Committee was offered as necessary.

As per the report recommendations, the Governance and Audit Committee received, commented on, and endorsed the Annual Report