Agenda item

(1)       2020/21 Opinion on the Adequacy and Effectiveness of the Framework of Governance, Risk Management and Control

The purpose of this report is to provide the annual opinion from the Chief Internal Auditor on the overall adequacy and effectiveness of the organisation’s framework of governance, risk management and control, taking into account the expectations of the Council’s Leadership Team, Audit Committee and other key stakeholders.

(2)       Key Outcomes from Internal Audit Reports (Issued November 2020 – July 2021)

The purpose of this report is to advise Audit Committee of key outcomes from Internal Audit reports issued between November 2020 and July 2021.

(1)      2020/21 Opinion on the Adequacy and Effectiveness of the Framework of Governance, Risk Management and Control 

The purpose of this report was to provide the annual opinion from the Chief Internal Auditor on the overall adequacy and effectiveness of the organisation’s framework of governance, risk management and control, taking into account the expectations of the Council’s Leadership Team, Audit Committee and other key stakeholders.

Mr McDonald highlighted the main points of the report for members.

Councillor Dickinson sought clarification of the position regarding the audit of Advance and whether they still needed to have their own audit following the recent change in audit arrangements. Mr McDonald advised that there was some overlap in the arrangements. Although he had not undertaken an audit he was aware of the changes and improvements being made. The Chair advised that he had had discussions with Mr McDonald and Ms Mitchell regarding how the Audit Committee would take on this function as the overseeing Committee. 

Councillor Cessford asked for further detail of what improvements had been agreed following the leaks of confidential information mentioned at paragraph 3.4.3 of the report. He asked what specific incidences Northumbria Police were investigating, about the level of importance referred to in the last line of the paragraph and about the scope of the investigation. In respect of improvements, Mr McDonald gave the example of confidential reports being shared individually to members and paper copies not issued in the post. Regarding the police investigation, he could only look at systems and procedures within the County Council and had no jurisdiction over any suspected criminality, which had to be referred to the police. He could not comment on what action the police might be taking. Regarding the level of importance, what he had done in the opinion was to acknowledge what had happened in recent months regarding leaks because the confidentiality of information was important. 

Councillor Cessford queried whether any follow up was undertaken with the police to establish what they were doing following a referral. He also asked about the scope of the investigation and asked who had been interviewed about the leak of confidential information, had this been all members and officers involved or just members at that meeting? Mr McDonald advised that whilst he had been involved to some extent in some of the instances at issue, including being questioned, it was not his role to carry out the investigations generally. His role involved ensuring that the Council’s policies and guidelines were adhered to. It was too soon to say whether the Police investigation had concluded, and it would be a question of checking with them for updates.   

Due to a technical problem, the meeting adjourned at 11.27 am and reconvened at 11.35 am.

Councillor Cessford asked about the client views and quality assessment and improvement programme and asked what cohort there had been for the client feedback and whether any comments received had been acted upon. Mr McDonald advised that feedback was always looked at and acted upon. He did not know how many responses the figures in the report were based on. A feedback form was always issued on the conclusion of every assignment, but responses were not always received. Further detail could be included in future reports if this would be helpful. The Chair agreed that some figures would be helpful to indicate level of feedback and identify where this could be improved. He asked that this be done for next time. 

Councillor Dickinson referred to para 3.44 and the response to the pandemic, he felt the measured statement in the report did not really reflect the Executive Team’s decisions and the magnitude of the response from the County Council, or the work put in by staff. The Chair commented that the measured statement was appropriate for a document of this type, but the Committee did acknowledge the work which had been done by staff during the last 15 months. 

RESOLVED that:-

(a)      the Chief Internal Auditor’s 2020/21 ‘satisfactory’ opinion on the overall adequacy and effectiveness of the framework of governance, risk management and control, attached as Appendix 1 be noted; and 

(b)      the opinion be considered by the organisation when finalising the Annual Governance Statement for this period; and by the Audit Committee, as a source of assurance at the time it considers the Annual Governance Statement.  

(2)      Key Outcomes from Internal Audit Reports (Issued November 2020 – July 2021)

The purpose of this report was to advise the Committee of key outcomes from Internal Audit Reports issued between November 2020 and July 2021. 

Councillor Dickinson referred to covid 19 compliance and enforcement and business grants scheme, and suggested that the Committee needed to look at the transactions which were made, particularly the provision of finance provided to companies which then went into liquidation or were dissolved. He felt it was important to reflect on the scale and mass of the work which had taken place and still continued. He felt it was important for the public to be able to see this. Mr McDonald acknowledged that a huge amount of funds had transferred through the Council and the work of internal audit on this continued on pre and post payment assurance. He agreed there would be a role for the Committee at the appropriate time once the ongoing procedures were finished and he would get that information together. The Chair advised that he would like to see a discrete report on this issue once the ongoing work was finished. Mr McDonald advised he could produce a summary report with a position statement for the next meeting.

Councillor Oliver welcomed this. There had been regular returns made to MHCLG so the information flow had been there throughout the whole process. This was another great example of where the Council had responded exceptionally well to the covid crisis.  

Councillor Wearmouth sought clarification about what was trying to be achieved as the criteria for funding had been quite clear. Would businesses be checked to see whether they were still operating? The Chair commented that if a large amount of money had been spent then it was up to the Audit Committee to look at the probity, efficiency and governance of how this had been done and whether there had been any gaps between policy and practice. Mr McDonald agreed that it would be about how the criteria was set and how the grants allocated and paid out. An explanation could also be given of the work done by internal audit to minimise any fraud or error, and what action had been taken in any such cases. Members supported this approach. 

RESOLVED that the key findings from good practice identified in, and management action taken in response to the Internal Audit reports issued and the summary of other work undertaken by Internal Audit in this period, summarised in Appendix 1, be noted. 

At this point Councillor Dickinson left the meeting.