Agenda item

Annual Report and Opinion 2020/21

To provide the Council with an Annual Report and Opinion for 2020/21, drawing upon the outcomes of Internal Audit work performed over the course of the year.  The report also concludes on the Effectiveness of Internal Audit (report of the Head of Internal Audit enclosed).

Minutes:

Consideration was given to the report of the Head of Internal Audit which provided an Annual Report and Opinion for 2020/21, drawing upon the outcomes of Internal Audit work performed over the course of the year, and concluded on the Effectiveness of Internal Audit.

 

In line with the Public Sector Internal Audit Standards, which came into force from 1 April 2013, an annual opinion should be generated which concluded on the overall adequacy and effectiveness of the organisation’s framework of governance, risk management and control:

 

·         A summary of the work which supported the opinion should be submitted;

·         Reliance placed on other assurance providers should be recognised;

·         Any qualifications to that opinion, together with the reason for qualification must be provided;

·         There should be disclosure of any impairments or restriction to the scope of the opinion;

·         There should be a comparison of actual audit work undertaken with planned work;

·         The performance of internal audit against its performance measures and targets should be summarised; and

·         Any other issues considered relevant to the Annual Governance Statement should be recorded.

 

The report also contained conclusions on the Review of the Effectiveness of Internal Audit, which included:

 

·         The degree of conformance with the PSIAS and the results of any quality assurance and improvement programme;

·         The outcomes of the performance indicators; and

·         The degree of compliance with CIPFA’s Statement on the Role of the Head of Internal Audit.

 

The Head of Internal Audit raised the following main points:

 

·         The opinion itself was detailed at section 2.2 of the report – the overall opinion in relation to the framework of governance, risk management and control at South Holland District Council was Reasonable – this conclusion was reached by considering a number of points which were detailed within the report.

·         Section 3.4 of the report outlined issues for inclusion within the Annual Governance Statement.  Management would need to advise on how these issues would be taken forward.

·         The grading was positive and the framework overall was considered stable.  It was important to note that the Covid-19 pandemic had been a considerable challenge over the past year, and the Council’s core services had not been significantly impacted.

 

Consideration was given to the report, and the following points were raised:

 

·         Members commented that rather than waiting for information on the results of audits as part of the Internal Audit report to the Committee, that members be provided with this information as soon as it was available.

 

·         With regard to External Assessment (section 5.1.2 of the report), it stated that in relation to the Attribute standards it was recognised that to achieve full conformance, an external assessment was needed.  This was required to be completed every five years, with the first review having been completed in January 2017.  Was this scheduled for next year?

o   The Internal Audit Manager confirmed that this was being considered.  A procurement exercise was to be undertaken in the autumn following which the new contract would require some time to establish itself.  The external assessment would therefore take place later in 2022.

 

·         Members commented that at section 5.2.3 of the report, it stated that ‘performance had not been in line within the boundaries of our agreed targets in some areas during 2020/21……’ but that results in the table stated performance as ‘Adequate’.  This information seemed contradictory

o   The Internal Audit Manager responded by advising that the contract was measured over a number of indicators, and that 3 and 4 had not been met.  With regard to quality, the Governance and Audit Committee Chairman had been asked for feedback and had provided this, and there were a number of improvement actions to take forward.  Performance was adequate overall but not Excellent, which was where it should be in the future.  The main points where boundaries had not been met were around timeliness.

 

AGREED:

 

a)    That the contents of the Annual Report and Opinion of the Head of Internal Audit be received and approved;

 

b)    That it be noted that a Reasonable audit opinion had been given in relation to governance, risk management and control for the year ended 31 March 2021;

 

c)    That it be noted that the opinions expressed together with significant matters arising from internal audit work and contained within the report should be given due consideration, when developing and reviewing the Council’s Annual Governance Statement for 2020/21; and

 

d)    That the conclusions of the Review of the Effectiveness of Internal Audit be noted.

Supporting documents: