Agenda item

21-22 Opinion on the Adequacy and Effectiveness of the Framework of Governance, Risk Management and Control Annual Opinion Report

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.

21-22 Opinion on the Adequacy and Effectiveness of the Framework of Governance, Risk Management and Control Annual Opinion Report

The purpose of this report was to provide the annual opinion from K. McDonald, 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.  (A copy of the report has been filed with the signed minutes).

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

Councillor Cessford stated that he had previously asked about client views and was disappointed not to see more background detail contained within Appendix B on the feedback forms.  In response it was confirmed that there had been 15 client feedback forms received for 2021/22.  A feedback form was always issued on the conclusion of every assignment, but unfortunately responses were not always received.  The Team was looking at ways to improve responses from clients including the format of the form and the questions asked to hopefully receive more views following completion of work in the future.

Regarding the number of Internal Audit recommendations agreed with management during the 2021/22 compared to those in previous years.  The Chair requested an explanation as to why there seemed to be less audit work being carried out.  During 2021/22 110 recommendations had been made compared to 245 in 2016/17.  In response it was confirmed that there had been larger corporate and strategic pieces of work carried out in recent years which may be the reason for the lower numbers detailed within the report.  The COVID pandemic also could have impacted.  However, Mr McDonald suggested he look into this and bring back a fuller response for members.

It was noted that the Internal Audit’s work performed during 2021/22 found that the County Council’s internal systems of control and risk management were satisfactory overall.  No ‘critical priority’ recommendations were made by Internal Audit during the year, and no ‘no assurance’ audit opinions had been issued or were pending. 

However, the County Council had commissioned an independent external governance review which was currently underway. The outcomes from the review were to be presented at an extraordinary meeting of Full Council on 8 June 2022.   It was also noted that the S151 Officer had issued a report under Section 114 and 114a of the Local Government Finance Act 1988 on Monday.  The S114 and 114a report had been published and scheduled to be considered by Cabinet and then Council on 8 June 2022.

Councillor Oliver comment on the independent review and the S114 report issued and asked if discussions had started to ensure these issues could be prevented in the future. 

The Chief Internal Auditor stated there he was unable to draw conclusions on the findings of the independent review or that of the S114/114a report until both reports had been received and considered.  Once this had happened work could take place to examine if there was to be an impact on the wider framework of governance, risk management and control.

The Chair commented that there were processes that needed to be followed with regard to the S114 report but reassured members that the Audit Committee would consider it at their meeting in July. 

Councillor Dale drew members’ attention to the number of Limited Assurance opinions issued in relation to governance reviews undertaken during the last year which she felt were always a concern for the Council.  Regarding the review of the Authority’s arrangements for Delivery of Major Capital Projects Councillor Dale queried how many building projects within the last 4 -5 years were looked at as part of the review and raised a concern that the findings stated that there was no corporate project management framework to ensure a corporate and consistent approach for these schemes.

Councillor Dale also commented on the follow-up review of the Authority’s Information Governance arrangements retained the limited assurance opinion.  The review found that whilst there had been improvements to assist with GDPR compliance, the majority of the recommendations from the original review had not been fully implemented.  Councillor Dale asked if an explanation could be provided as to why recommendations from the review had not been fully carried out.

In response to Councillor Dale’s questions, it was confirmed that to meet the organisation’s objectives there needed to be a consistent approach across all areas reviewed to gain full assurance.  Improvements had been seen and it was hoped that many of the recommendations within the reviews reported would be fully implemented soon such as the Information Governance arrangements review.  With regard to the number of major capital projects it was confirmed that a sample was taken, but clarification would be provided on this to Councillor Dale. 

Councillor Dale reported that it would be of benefit to members if they could be kept informed of the progress made regarding the GDPR compliance work detailed as part of the Information Governance arrangements review.

Councillor Grimshaw commented on the Schools’ Financial Value Standard and queried if the recent increases in heating and food prices would impact on schools.

It was reported that the Schools’ Financial Value Standard helped provide all grant-maintained schools with assurance that they were meeting the basic standards necessary to achieve a good level of financial health and resource management.  However, as part of the program of work for Internal Audit a thematic review across all schools had just been finalised.  The review would look for the management of schools’ local bank account scheme with the findings being shared to all schools.  It was suggested that budgetary controls could be considered when the next theme of work was undertaken.

P. Topping reiterated the comments made about major capital projects particularly the risk if there was a dispute with a contractor following limited assurances identified by Internal Audit.  In reply it was confirmed that the department were actively working with Internal Audit to fully implement the recommendations made. 

RESOLVED that:-

a)       the Chief Internal Auditor’s 2021/22 opinion on the overall adequacy and effectiveness of the framework of governance, risk management and control, attached as Appendix 1 be considered and noted; and

b)       this opinion is 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.