Agenda item

To provide the Committee with an update of Internal Audit activity as at March 2025 (report of the Head of Internal Audit – Lincolnshire County Council enclosed).

Consideration was given to the report of the Head of Internal Audit (Lincolnshire County Council) which provided the Governance and Audit Committee with a progress report update on audit work undertaken.

Henceforth, for minute 70 only, all references to ‘Head of Internal Audit (Lincolnshire County Council)’ should be read as ‘Internal Audit Manager (Lincolnshire County Council)’.

The report was introduced by the Head of Internal Audit (Lincolnshire County Council) and provided the committee with the following information:

• The role of Internal Audit;
• The purpose of the document:
• Performance dashboard;
• Update on Internal Audit activity: two quarter 4 audits were at the final stages of completion; and three follow up reviews had been completed, with improved assurances given in all three cases;
• Analysis of ‘live’ audit reviews;
• Executive summaries had been provided regarding the assurance opinions given;
• Planning and resourcing;
• Work plan 2024/25 overview; and
• Appendix 1 reported on the tracking of overdue medium and low priority actions, of which there were none.

Members considered the report and made the following comments:

• Regarding the Budget Monitoring review, members queried the following results from the budget holder survey:
  • The low 39% response rate.
    • The Head of Internal Audit (Lincolnshire County Council) responded that Improvements to response rates would be sought from management however it was appreciated that officers received many requests for information;
  • That only 38% had agreed that training provided made the process effective and efficient:
    • The Head of Internal Audit (Lincolnshire County Council) responded that actions had been agreed with finance colleagues and that the issues had been quickly addressed with the undertaking of further training sessions; and
  • That only 54% were clear on their role as budget managers.
    • The Director of Finance responded that:
      • Work was underway with finance colleagues to review processes and provide beneficial adjustments and improvements to service teams and the budget holding community;
      • Ongoing training needs were to be pursued, and resolution intentions could be shared with the committee following further consideration and work in this area; and
      • It was not unusual to find challenges in this area due to staff turnover and different software systems utilised across the sector.

• Members queried when the Housing Act 2023 audit review would recommence, and when the report from the Regulator for Social Housing (RSH) was to be published.
  • The Head of Internal Audit (Lincolnshire County Council) responded that upon agreement with management, the Housing Act 2023 internal audit was paused when the RSH announced the start of their SHDC housing inspection. The internal audit would be recommenced on completion of the RSH inspection;
  • The Housing Transformation Manager (HRA) added that the RSH report would be published, as a public document, in July 2025.

• Members queried why the Governance and Audit Committee were  not shown the ‘budget versus actuals’ throughout the year, as any significant differences were not brought to their attention until the end of the year.
  • The Director of Finance responded that:
    • The regular review of the ongoing budget was a primary Cabinet function for which comprehensive quarterly financial reports were prepared and discussed in depth;
    • The Cabinet reports were publicly available and available to members who were interested in viewing the updated position throughout the year; and
    • The primary function of the Governance and Audit Committee was to give assurance that systems and processes were in place, and as such, it was important that the committee understood how well the internal audit process operated through the recommendations and updates noted within the report.

• Members queried the limited assurance given for the Finance systems – Bank Reconciliations audit review stated at page 17 of the report.
  • The Head of Internal Audit (Lincolnshire County Council) responded that the initial audit review had presented a limited assurance for this review with recommended actions for the team to implement. Progress would be reported back to the committee as part of the follow-up procedure.

AGREED:

That the Internal Audit Progress Report March 2025 be noted.