The Head of Internal Audit updated the Committee on progress of completion of internal audits since the March 2021 meeting. As part of the 2020/21 internal audit plan, it was noted that a further 19 reports had been finalised 17 of these reports provided assurance opinions, of which, reviews concluded with
• eight reasonable (positive) assurance opinions,
• seven reports with partial assurance (negative) opinions (Temporary Accommodation, Payroll, Asset Register, S106 funds, Treasury Management, Health and Safety and Whistleblowing);
• one advisory report with significant weaknesses identified impacting the year end opinion (Council Subsidiary Companies)
• the remaining report (Debtors Management) resulted in a no assurance (negative) opinion.
The Committee discussed in detail the findings of the finalised reports and made a number of comments, which were summarised as:
Debt Management Review
Members raised queries regarding the management of debt and specifically why instructions had been made to stop debt reminders and were informed that although a decision had been taken during the pandemic not to actively enforce debt recovery; this would now be followed up and an update provide to the September meeting. It was highlighted that a number of invoices dated pre Covid-19. For those relating to adult social care, the Executive Director of People (Adults) outlined how the deferred payment scheme worked. Members reiterated that over £4m debt had accumulated since 2016 which needed addressing as a matter of priority and it was acknowledged that the Council had to implement proactive measures to recover debt owed. An update on the latest position on the outstanding invoices with Arvato and First Beeline Buses would be provided at the September meeting.
Whistleblowing / Health and Safety
Head of HR / Director responsible for HR to attend September meeting to specifically respond to concern about low level of compliance in completing mandatory whistleblowing and health and safety training.
Speaking under Rule 30, Councillors Nazir and Strutton sought assurance that following recommendations issued by internal audit, senior management were not only implementing but reviewing and tracking progress of recommendations. The Director of Finance stated improved systems were being put in place to monitor actions.
Councillor Akram also spoke under Rule 30 and highlighted the importance of appropriate training for members specifically relating to treasury management and the Director of Finance informed the Committee that a programme was currently being developed.
Concern regarding expenses being approved without the necessary supporting documentation. The Head of HR / Director responsible for HR to attend the September meeting and provide details whether there were likely to be any further changes to current staffing levels and explanation regarding the weaknesses identified in payroll audit and what measures being taken to address these.
The Committee discussed the complex challenges arising from temporary accommodation and the statutory framework within which decisions were based upon. R30 Member, Councillor Strutton stated that the authority look at alternative options to address the issue and the Executive Director, Customer and Community informed the meeting that a number of preventative measures were being looked at and that the organisation would continue to strive to obtain value for money in an intensely competitive housing market.
Details were sought as to why management actions agreed for the Asset Management Property Records procedure had not been implemented since 2016 which again indicated that there was no system in place to ensure records were maintained by the organisation and not reliant on individual staff members. The Director of Finance acknowledged the importance of having an up to date asset register. It was noted that interim experienced staff had been appointed to carry out the work required.
Section 106 Funds
A Member commented on ensuring that policies and guidance on the Council’s website in relation to Section 106 Funds was current and it was noted that this would be actioned. Clarification would be provided relating to the current amounts owed in outstanding S106 agreements.
Resolved – That details of the report be noted and matters raised be reported to the 30th September meeting.
The Internal Audit Manager introduced the Internal Audit Progress Report. It was noted that all reports from the 2019/20 internal audit plan had now been finalised and from the 2020/21 plan a further 19 had been finalised since March. Of these 8 had provided reasonable assurance, 7 partial and 1 no assurance.
Members review the detailed information in the Appendix on the key findings for finalised internal audit reports and discussed the plans in place to improve financial reporting. The Section 151 Officer explained the work underway on treasury management, savings proposals, financial controls, Dedicated Schools Grant and the Collection Fund. Questions were asked about the capability of the finance team to address the issues. The Committee was assured that the Council was bringing in financial experts in key areas. There had been significant turnover of permanent staff in the finance team, particularly in senior positions. The short term requirement was to bring in the necessary expertise to SBC on an interim basis with a clear plan to recruit, upskill and develop a capable and sustainable finance team in the medium term. This was a key part of the financial action plans that would be reported to Members over the coming months.
The following updates/further information were requested by the Committee outside of the meeting or in future reports:
The Committee expressed concern that the high number of actions, repeated issues and weaknesses identified in the internal audit reports went beyond individual issues that needed to be addressed by service managers and instead reflected a wider failure of systems to effective monitor and implement internal audit actions.
Resolved – That the Internal Audit Progress Report be noted.