Agenda item

Internal Audit Reports - Progress; Follow-Up of Recommendations; Corporate Governance; and Flooding Risk Management

To consider the report of the Director of Resources, (copy enclosed).





      The Committee considered the report of the Director of Resources and associated appendices that covered three reports from the Internal Auditors BDO LLP, the Internal Audit Progress Report; Follow-up of Recommendations Report; Corporate Governance Audit and Flooding Risk Management Audit, all as at September 2020.


The Chairman introduced the report and deferred to the Internal Auditors to present the detail.  The Internal Audit Partner then presented the Progress and Follow-up of Recommendations reports.


He drew Members’ attention to page 17 of the Progress report noting that the two audits due for consideration today concluded the 2019/20 programme of work.  Progress on a number of other audits for this current year was currently underway despite a slow start due to COVID-19.  The internal auditors were also completing two pieces of advisory work 1) Fraud Risk Assessment that still had some actions to follow-up together with training and support and 2) Accountancy Standards IFRS 16, accounting for leases where training and support would be provided to Officers.  This would not result in an audit but form part of the work programme.


The Follow-up of Recommendations report had only one recommendation for completion, the Waste Strategy and once this had been incorporated into the Climate Strategy it would be ready for sign-off.  He felt that overall good progress had been made despite the difficulties.


In response to a question regarding the assessment of fraud as high priority and the number of fraud cases since January 2020 the Director of Resources reported that the Department of Works and Pensions (DWP) had taken over fraud related Housing Benefit issues.  Other types of fraud relating to supply or payments was low to non-existent.  The Internal Audit Partner reminded Members that at the last meeting the recommendation was for an up-to-date Fraud Strategy together with an action plan to address the strategy.  This was a regulatory requirement from the Government and incumbent on all authorities to have in place.  Given the action plan was not in place at that time the high priority rating was maintained, and all appropriate actions had now been taken.


The Director of Service Delivery in response to a question regarding the delivery of the Community Safety recommendations in October advised that work was on track and would meet the October 2020 implementation deadline.


The Lead Specialist Community in response to a query regarding the timing of the Climate Change and Waste Strategy report to Strategy and Resources Committee advised that a version with a much wider scope was currently being worked on and shared with internal partners.  It would be submitted to the Strategy and Resources Committee in December 2020.                   


The Internal Audit Manager then presented the two audits starting with the Corporate Governance Audit .  She took Members through the report and advised that they had undertook a review of arrangements and conducted interviews with key officers and members to determine the operational effectiveness of current structures.  The final assessment was moderate in both Design and Operational Effectiveness.  She reported that following Transformation committees were restructured, new Terms of Reference (TORs) established and the scheme of delegation updated to take account of the changes to the structure.  Gifts and Hospitality Registers were in place and being used.


It was noted that the Council was meeting the requirements of the Local Government transparency code on the Council’s website through the ‘Your Right to Know’ page.  A review of the committee structure, as well as a review of the Redmond Review, had resulted in recommendations being made to improve the make-up of the committees in line with best practice.  Improvements were noted in methods of performance and governance reporting, dashboards for HR and the development of a balanced scorecard. The Corporate Governance Working Group had acknowledged that whilst the Overview and Scrutiny Committee had not satisfactorily met its brief, it should continue, supported by appropriate training for all Members and that in relation to regular oversight of committees’ annual review be embedded in the respective TORs.


A debate ensued where Members raised concerns around the number of Members interviewed as part of the audit process and whether it was representative, the lack of training or discussion around skillset, incorrect reporting structures together with the need for more area specific Working Groups.


In response the Audit Manager reported that she had worked with the Corporate Governance Working Group to meet with Members and that she would circulate the list of those interviewed.  She reassured Members that it was not a case of not having the right skills rather that the structures and support mechanisms in place in other like organisations around training, development, refresher courses were not in place in the Council.


The Chairman noted that Overview and Scrutiny had not met regularly due to a lack of business and advised that a number of the issues raised would be addressed following the Statutory Annual Council meeting in November 2020.


The Audit Manager then addressed the Flooding Risk Management audit.  She reported that she had conducted a review and the assessment outcome was moderate on both Design and Operational Effectiveness.  She advised that the former lead for this area had returned on a temporary basis to support training and knowledge transfer.  Work on the Strategic Flood Protection Plan had restarted led by the Lead Specialist Community and meetings that had been halted due to COVID-19 had also recommenced.  In conclusion she said that the Council did not have roles and responsibilities identified for urban drainage systems and that this would be addressed in the revised Flood Risk Strategy document.  All outstanding issues would be reported at the next committee meeting.


In response to questions raised Officers reported as follows:-


·       That as of 15 September 2020 the Flooding and Coastal Group had recommenced meetings.

·       That given Essex County Council (ECC) was the Lead Local Flood Authority specialist support would be provided by them in respect of flood management and drainage systems.  The Internal Auditors were happy with that approach.


·       That for efficiency and effectiveness the Lead Specialist Community was liaising with one main contact at ECC namely Dave Chapman, Project Delivery Manager.


·       That the updated Flood Risk Masterplan would outline who was responsible in each area but that the Lead Specialist Community would have overall responsibility for performance management.


There being no further questions the Chairman moved the recommendations which were duly seconded by Councillor Nunn. She then put the recommendations to the Committee and they were agreed by assent.


RESOLVED that the Committee considered, commented and approved the following:-


(i)              Internal Audit Progress Report - September 2020 at Appendix 1;

(ii)            Follow-up of Recommendation Report – September 2020 at Appendix 2;

(iii)          Corporate Governance Audit – September 2020 at Appendix 3;

(iv)           Flooding Risk Management Audit – March 2020 at Appendix 4.



Supporting documents: