Agenda item

Report of the Service Lead (Audit and Risk) attached.

The Service Lead (Audit and Risk) presented a report which set out the programme of work to be undertaken by the Internal Audit service for the first six months of 2022-23. The report sought to remind members of the respective roles of managers and Internal Audit to maintain a sound system of governance and internal audit control within the council and details of the Internal Audit Plan and associated performance indicators.

In addition, the report also sought the committee’s approval of the Audit Plan and Internal Audit Charter.

The Service Lead (Audit and Risk) advised that the plan would ordinarily be an annual report, however it had become apparent over the past two years that the council has to adapt and change quickly. The new approach, of a six month plan, had been discussed and approved at Senior Management Team and would not have any impact on the assurance that the committee would receive.

The Service Lead (Audit and Risk) explained that Internal Audit would continue to produce interim reports and the annual auditor’s opinion in May would cover all completed work over the last twelve months. It was her view that a six month plan would provide better assurance as the work will have been specifically targeted on the risks facing the council at that time, as opposed to predicting what could happen in over the course of the year. A six month plan would also allow the Internal Audit team to tailor the plan to meet resource available.

Members considered the plan and asked for more information on how resource would be managed and expressed concern that Internal Audit would have insufficient resource for the second half of the year. In response, the Service Lead (Audit and Risk) explained that resource would be mapped at the start of the year and would take into consideration annual leave, training and corporate events. A productive time figure would be remaining and the report would be tailored to meet that level of resource. It was anticipated that there would be at least 137 audit days in quarters three and four, if not more.

The Director of Governance explained that the six month plan would provide certainty for that particular period. There had been experience previously of Internal Audit producing a 12 month report and not being able to deliver it and needing to come back before committee to ask for more resource or deferrals. The Director of Governance confirmed that the committee would still receive a full 12 month audit plan but presented as two six month plans.

Members asked what factors had contributed to changing the process for the annual plan. In response, the Service Lead (Audit and Risk) explained that the past two years, in particular COVID had been difficult. Over the last 12 months the Internal Audit Team had to give a lot of support to business grants and post assurance work, something which could not be foreseen. As a result, the team had to change and adapt. It was Officer’s view that a six month plan would make the service more flexible, with the risk assessment being re-visited in the summer months to identify the work plan for the following six months.

Members noted the Internal Audit Charter had been amended to include the work for South Ribble Leisure and asked if the uplift in audit days to South Ribble was due to the leisure trust. The Director of Governance confirmed that service level agreements were in place with the Council providing services to the leisure company and recharging them to reflect the time and cost to the authority.

Members asked if there was a conflict of interest for Internal Audit undertaking the audit work for South Ribble Leisure Trust. The Service Lead (Audit and Risk) stated that there was not. The Director of Governance added that the audit for the South Ribble Leisure trust would be provided to Governance Committee as part of the Annual Governance Statement. External audit would be undertaken of the companies’ accounts.

The committee agreed to vote separately on the recommendations within the report.

Resolved:

(For: 4 Abstain: 3)

For: Councillors Ian Watkinson (Chair), Colin Sharples, Ange Turner and Kath Unsworth.

Abstain: Councillors Damian Bretherton, Alan Ogilvie and Margaret Smith.

1.     The committee approve the Internal Audit Plan and associated indicators.

(Unanimously)

2.     That the committee approve the Internal Audit Charter.