The Audit Manager led Members through the internal audit report to 30 September 2022 that gave details of audit matters and any emerging issues, not only in relation to audit but risk management and corporate governance.  Progress on the 2022/23 Audit Plan was currently behind schedule which was attributed to resourcing issues within the Internal Audit Team.  The ICT Asset Management audit has been postponed and coverage might have to be reduced on other audits to ensure they were still deliverable. 

Three audit reports were issued in the quarter and an overview of the findings arising from each was given in the Executive Summaries in Appendix A to the report.  Both Building Maintenance and Reprographics Sales Income audits provided substantial assurance, but Property Investment only received a limited assurance rating.  This was attributed to the adequacy of the controls for monitoring the ongoing financial viability of development sites purchased under the Property Investment Strategy.  Detailed reasons were outlined in the report.

Appendix B to the report updated Members on progress made on implementing the audit recommendations reported at previous meetings.  Eight long outstanding recommendations remained; most of these were in hand.  Progress on the current year recommendations was encouraging with most implemented and the rest in the process of being resolved.

Six audits were scheduled to take place from January to March 2023, these included Benefits; ICT Governance, Main Accounting; Payroll; Debtors; and Licencing.

The Audit Manager advised that risk management issues raised at the last meeting had been reported to the Corporate Management Team.  The Corporate Risk Register would be updated and reported at the meeting scheduled to be held on 20 March 2023.

The Council’s Internal Audit Charter which defined the purpose, authority and principal responsibilities of the Internal Audit Service required revision and approval.  A few minor amendments had been made to reflect the new senior management structure.  A copy of the revised document was at Appendix C to the report.

Progress on outstanding audit recommendation continued to be monitored.

Members were given the opportunity to ask questions and the following points were noted during the discussions:

•           a report to Cabinet on the viability of the Barnhorn Green site was currently in draft form, as viability could not be established until rent on the doctor’s practice had been finalised.  The Council was currently waiting on information from the Valuation Office;

•           Members were advised that quarterly reappraisals of the Barnhorn Green project could lead to poor decisions being made on poor quality information, as the designs had changed since the original in 2019;

•           Members were advised that the Barnhorn Green project was being continuously monitored, but no documentary evidence had been provided to Internal Audit;

•           Management could choose to accept the risks highlighted by Internal Audit and not follow recommendations.  The Audit Manager had a duty to highlight these to the Committee; and

•           all Capital Projects would be reviewed in light of recent increases in interest rates and Members recommended and agreed that this be undertaken urgently.

RESOLVED: That:

1)         the Internal Audit report to 30 September 2022 be noted;

2)         the revised Internal Audit Charter shown in Appendix C be approved; and

3)         the Council carries out an urgent review of Capital Projects in light of the current financial situation.