Agenda item

The Committee considered the Internal Audit Progress Report 2019/20.

In the ensuing debate, the following points were raised:

·         Did the outstanding audit actions at Northleigh Primary School result from a lack of accountability at the school? Jenni Morris, Chief Internal Auditor responded that the failings resulted from a period of significant change at the school together with a lack of oversight by the governing body

·         Jenni Morris confirmed that significant progress had been made with the Internal Audit Plan, particularly in reducing the number of older outstanding audit actions. Michael Hudson added that the referral of these outstanding audits to the Leadership Team Transformation Committee had led to greater ownership of the audit process by individual Directors

·         Should the Committee be concerned that the audit of the Councillors Divisional Fund remained outstanding? Jenni Morris was satisfied that work was underway to complete the audit therefore there was no cause for concern

·         Were school governors aware of their auditing responsibilities or was further training necessary? Jenni Morris advised that the Internal Audit team worked closely with the school finance team. Good practice notes and key themes identified from previous audits would be circulated to all Head teachers. In addition, an audit of the provision of governor training would be undertaken to identify potential inconsistencies in approach. She would be attending a School Conference meeting to give advice to school representatives. The audit of Worcestershire Children First would also be a beneficial exercise

·         The practicalities of undertaking an audit were a particular issue for small schools where resources were limited and personality issues could frustrate the process

·         Michael Hudson commented that the Council had responded to a Department for Education (DfE) consultation on the introduction of school audit standards. The DfE had recognised the need for greater audit engagement in school processes. The outcome of the Redmond Review into the quality of local authority financial reporting and external audit in England was awaited to see if there were any implications for schools. The Government had changed its position and schools that had previously been assessed as good or excellent would in the future be required to be the subject of further Ofsted reviews

·         In response to a concern about the recovery of funds from fraudulent activity, Jenni Morris commented that an audit would be undertaken to review Council’s policies to ensure they were fit for purpose, examine the compliance side, establish when policies had been updated and assess consistency with other policies. She hoped to report the findings of the audit to the next Committee meeting. A training session for members on fraud issues would precede the next Committee meeting

·         Would school governors be issued with a checklist to provide guidance on audit best practice? Jenni Morris responded that on completion of the thematic review, good practice guidelines would be made available to all governors. Michael Hudson added that he hoped to re-introduce School Financial Value Standards 

·         Had other elements of fraud been identified but the money not recovered to date? Jenni Morris commented that it was not always easy to prove that fraudulent activity had taken place. Approximately £30/40k of potentially fraudulent activity was currently being investigated. Michael Hudson added that a review of the resource-base allocated for the investigation of fraud was underway

·         In response to a query, Jenni Morris indicated that on occasions, genuine mistakes could be made which did not necessarily amount to fraudulent activity. The introduction of fraud prevention initiatives was being considered. There was a delicate balance to be struck between protecting the sensitivities of individuals accused of fraud and the Council’s zero-tolerance approach to fraud. Michael Hudson added that self-funded adult social care was a major fraud risk which had been a focus of recent audit work.

RESOLVED that the Internal Audit Progress Report set out in the Appendix to the report be noted.