Agenda item

To provide the Council with an Annual Report and Opinion for 2021/2022 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 Faye Haywood, Head of Internal Audit enclosed).

Consideration was given to the report of the Head of Internal Audit which provided an Annual Report and Opinion for 2021/2022, 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 result 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 3.2 of the report highlighted the summary of the internal audit work. SHDC’s positive audit culture was welcomed by the auditors;
• Section 3.4 of the report outlined recommendations for inclusion within SHDC’s Annual Governance Statement until they had been concluded; and
• Section 5 detailed the effectiveness of internal audit:
  • the majority of the planned work had been completed;
  • performance targets had been challenging for 2021/22 due to the continuing impact of Covid-19 and resulting pressures placed on teams. A recent resurgence of Covid-19 had impacted planned audits;
  • the audit team had strengthened ‘timeliness’ processes and new KPI thresholds had been introduced; and
  • two pieces of work were due to complete before the handover to the new internal auditor later in the year.

Members considered the report and the following issues were raised:

• Members referred to the effectiveness of the internal audit and noted that performance had not met agreed targets, nonetheless:
  • the positive audit culture had been constructive;
  • only three recommendations remained outstanding; and
  • the narratives on Appendix 4 were considered useful and needed to remain a feature within the report going forward.

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 2022;

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 2021/22; and

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