This matter is the responsibility of the Portfolio Holder for Communications and Corporate Resources, Cllr Benet Allen.
Report Author: Alastair Woodland, Assistant Director, SWAP Internal Audit Services
The Internal Audit function plays a central role in corporate governance by providing assurance to the Audit and Governance Committee, looking over financial controls and checking on the probity of the organisation.
The 2022-23 Annual Internal Audit Plan is to provide independent and objective assurance on SWT Internal Control Environment. This work will support the Annual Governance Statement.
Alastair Woodland, Assistant Director from SWAP presented the report:
· The update report on the 2022/23 audit plan covers progress, highlighting any significant findings to the Committee and flagging any changes to the Plan.
· Page 36 lists the reports that have been issued since the last report in December 2022. There are two follow up audits to draw your attention to - management of material supplies and procurement cards.
· Page 37 shows changes to the audit plan that have been made since the December 2022 report. Those areas of risk will be taken forward and looked at as part of the Somerset Council Audit Plan.
· Pages 41 - 44 provides an overview of the work that has been completed during 2022/23. This includes a section on Local Government Reorganisation (LGR) support work.
· The management of material supplies was given limited assurance in 2021/22. This was followed up during 2022/23 and it was found that good progress had been made on all recommendations. All but one recommendation had been completed, with the remaining one being materially complete with an expectation that it would be completed before 31 March 2023.
· There are a few recommendations outstanding in relation to the Procurement cards audit which are highlighted on page 47. There have been some staffing absences in that area which has delayed some of the recommendations. Procurement cards forms part of the risk assessment for the new authority and this will be kept under review during 2023/24 and looked at across the whole authority.
During the debate, discussion took place around:
· The churn of staff in the next few months giving concern as to whether there is a process in place for the return of Procurement cards when staff leave.
· How the process will be managed with potentially four different systems currently being used by district councils being managed under the Somerset Council process.
· Whether there is a Somerset Council card set up and ready to be used from 1 April 2023
· How the transition process will be managed and controlled to ensure that transactions don’t get lost.
· Officers confirmed that SWAP will be commencing work on 1 April 2023 looking at procurement card transactions and will do this across the year before doing a more in depth review. New authority will have a new control framework. SWT have clear details as to who currently holds cards and there is a requirement for them to be handed in when they leave the Council. There will be continuity with it moving across to the new council. Where Officer has a card now, they will continue to use this going forward to the new authority to ensure continuity and no disruption to the business. Somerset Council have set up a working group to pick up the work on procurement cards. SWT has done a thorough review of the conditions for issuing the cards which cardholders are required to subscribe to as well as the policy and guidance. All documentation has gone across to the working group to pick up as they see fit. There are currently 3 different modes of operation for procurement cards, but this will move to the point where there is one bank, one card issuer and one way for recording transactions. Responsibility for coordinating and monitoring will be given to an individual or team and the Executive Director for Finance will be keeping this under close review and will ensure that audit actions are picked up by the new authority.
· The number of recommendations listed on page 41 relating to income collection from Deane Helpline (one level 2 priority and two level 3 priority) and health and safety follow up (4 level 3 priority). The Officer confirmed that in respect of the Income Collection for the Deane Helpline, the opinion was reasonable assurance and therefore the details would not have been brought forward to the Committee. However, the Officer confirmed he would circulate the report for Members to see the recommendations. In respect of the Health and Safety follow up the audit was undertaken in 2021/22 and due to the number of recommendations it was given limited assurance. As per auditing standards a follow up must be completed and when that was undertaken there were 4 recommendations outstanding. That information was reported to the Committee earlier in the year and would also have been reported through the level 1 and 2 audit action tracker reports.
Councillors thanked Alastair Woodland and SWAP Internal Audit Service for the work they have done for SWT over the last 4 years.
The Committee RESOLVED to note progress made in delivery of the 2022-23 internal audit plan and significant findings since the previous update in December 2022.
(proposed by Cllr Steven Pugsley, seconded by Cllr Dawn Johnson)