Agenda item

Report of the Shared Services Director for Audit, Fraud, Risk and Insurance.

7.1       The Committee received a report that summarised the work of Internal Audit in 2015-2016 and provided the opinion of the Shared Services Director of Audit, Fraud, Risk and Insurance on the adequacy and effectiveness of the Council’s governance, risk management and internal control environment. 

7.2       The Committee noted that the work carried out by the Council’s Internal Audit Service, in the financial year 2015/16 found that, in the areas audited, internal control systems were generally effective with 68% of the audits undertaken receiving a positive assurance opinion.  Members asked how the results compared with audits undertaken in the previous year.  Moira Mackie, Senior Audit Manager, reported that the number of positive assurance audits was lower than in previous years.  However, she explained this was not unexpected as there had been a significant amount of process change during the year including the implementation of the Managed Services Programme which will take time to become embedded across the organisation.    Additionally, fewer audits had been undertaken last year compared to this year which had the potential to skew the results.  It was hoped that with work planned to resolve issues relating to MSP the outcomes from audits due to be undertaken in the coming year would show an improvement on this year.

7.3       There were a few areas where control improvements were required and compliance with agreed systems could be improved.  A total of 15 audits were designated as “limited” or “no assurance”.  In each case action plans were in place to remedy the weaknesses identified. 

7.4       The Council was found to be effective, in most areas, at implementing recommendations where concerns in respect of controls were identified.

7.5       The main audits due to be undertaken in 2015/16 on various aspects of the Managed Service could not be undertaken as originally planned.  However, the Council’s Finance Team had undertaken a very significant amount of transaction testing in a number of the key financial areas which Internal Audit had reviewed and confirmed as thorough and focused on the key areas of risk. 

7.6       The Committee further noted that audits were undertaken during the year which provided satisfactory assurance in respect of the Council’s risk management arrangements and that the Council’s governance arrangements were operating effectively.

7.7       The Committee asked for an update on the implementation of recommendations for the Tri-Borough Passenger Transport - Post Procurement Review which had received a limited assurance. Members were informed that the audit had identified weaknesses in the way in which the procurement had been undertaken.  This included weaknesses in testing the resilience of the proposed bidders.  The committee was informed that the process had since improved.

7.8       Members commented that lessees of CityWest Homes owned properties have previously complained about the management and charges for major works.  Moira Mackie stated that CityWest Homes had accepted that these areas had not in the past been undertaken as effectively as they could have been.  CityWest Homes had changed a number of its processes to ensure that the management of major works was more robust and that costings were more accurate.

7.9       RESOLVED: That the report be noted.