Agenda item

Report of the Head of Shared Assurance Services (enclosed).

The Head of Shared Assurance Services submitted a report that summarised the work undertaken by the Internal Audit Service during the 2016/17 financial year. The report provided an opinion on the adequacy and effectiveness of the Council’s framework of governance, risk management and control and gave an appraisal of the Internal Audit Service’s performance, including a review of the Council’s internal control system.

The report indicated that the Council had delivered on all projects planned apart from the Payroll Project and the Health and Safety Review which were not undertaken. The Payroll Project was cancelled due to the continuation of the current arrangements and Health and Safety review was deferred due to a revised risk assessment process which was currently being developed. Therefore this review would be undertaken as part of the 2017/18 Internal Audit Plan.

It was reported that there had been a 42 day shortfall in number of planned days for both Chorley Council and Shared Services which was offset by a period of sickness absence by a member of the Internal Audit Team.

Members were advised that individual audits were awarded on separate controls assurance ratings and were reminded that the GRACE system, which used a 4x4 matrix to measure the control ratings, had been introduced. During 2016/17 a total of 20 systems/areas were reviewed, 11 of which were critical and 8 were major systems and 1 minor system. The vast majority of controls were awarded an amber assurance rating. Of the 11 critical systems reviewed during 2016/17, 10 received a score of 6 (substantial assurance). Furthermore, of the red controls assurance ratings awarded only one audit, Information Governance received a score of 9 (limited assurance). Officers were satisfied that when the individual ratings were aggregated, the Council continued to operate within a strong control environment.

In response to queries, Members were reassured that a rating of 6 was considered the best rating for a critical system. Following discussion regarding the amber rating for safeguarding, Members were reassured that the areas which needed to be developed further (non-front facing departments) were being addressed. However, the key areas where safeguarding was needed most had robust systems in place to protect this. Members were also advised that a review of fuel consumption was under control and there were numerous projects in place to monitor this and progress forward.

It was reported that all of the Key Performance Indicators were on target apart from the Audit of Health and Safety which had been deferred to 2017/18 and the Audit of S106/CIL which remained in progress. Overall, retention of standards demonstrated that Audit continued to seek improved and more efficient working practices to maintain a high quality service.

The committee concluded that the 2016/17 Internal Audit Programme of work had been delivered successfully and Members were assured that the Council’s governance and control environment continued to be effective. It was anticipated that the introduction of the Governance, Risk and Control Self-Assessment (GRACE) software, which was in the process of being implemented, would continue to strengthen the current risk management arrangements further.

RESOLVED – That the Internal Audit Annual Report for 2016/17 be noted.