Agenda item

Report of the Head of Finance (Section 151 Officer).

The Head of Finance (Section 151 Officer) submitted a report reviewing progress on Internal Audit activity (Appendix 1), risk management (Appendix 2) and actions arising from the Annual Governance Statement for 2017/18 (Appendix 3).

The Head of Governance introduced the report. She began by referring to the schedule of completed audit reports, starting on page 44 of the agenda. She said that in most cases the audit opinion had been “Good”, but in one case, an audit of the Marine Hall, the opinion in the final report had been “Weak”. She said that action was being taken on the identified areas for improvement summarised in the schedule. The Senior Auditor said that, as had been agreed following the audit report, she had been visiting the Marine Hall regularly to offer support, advice and guidance to check that improved control procedures had been put in place and were becoming embedded. She confirmed that the majority of recommendations made in the audit report had been implemented, although progress in embedding the improvements and developing a new culture had been slower than had been hoped because of staff turnover. Unfortunately, in September there had been a discrepancy in a cash reconciliation. An investigation had been carried out but it had not been possible to identify how the loss had occurred. A member of the Finance Team had also been allocated to visit the Marine Hall over the summer to help support the process and provide some additional cover to ensure financial procedures were properly followed. The new Commercial Manager was now working strenuously with the Audit and Finance Teams to put make sure improvements were made and that procedures and processes were properly followed.

The Head of Governance circulated to members of the committee lists of the gifts and hospitality received by both officers and councillors since 2018. She said that there were not many entries and they did give rise to any current concerns.

With regard to risk management, the Senior Auditor reported that a review of the Council’s high level ‘strategic’ risks had been completed with the Corporate Management Team on 5 November 2018. She said that, as a result of the review, four of the identified risks had retained the same score as in the first half of 2018/19 and remained above the risk appetite; the likelihood of two risks had been reduced, removing them below the risk appetite; and, two risks had retained the same score as in the first half of 2018/19 and remained below the risk appetite. No new risks had been identified. An executive summary of the results of the review was distributed to members of the Committee.

The Senior Auditor said that she had also recently undertaken a regular six monthly review of operational risks and Heads of Service were currently in the process of sending updates to her.

The Head of Governance said that good progress was being made in implementing the actions arising from the Annual Governance Statement 2017/18, as described in the final column of Appendix 3. She said, in response to questions, that compliance with the General Data Protection Regulations (GDPR) 2018 had so far been good. She said that that had largely been because of the strong lead given by the Corporate Management Team and the commitment made by Service Managers to promoting the completion by their teams of required tasks. Significant resources had been allocated in the Audit Plan to ensuring GDPR compliance. As part of that work, two-thirds of the Council’s contracts had so far been reviewed and negotiations were currently taking place with suppliers to update some of them. Reviews of data retention schedules were also being carried out to reduce the risk of information which should have been deleted being released when responses were sent to Freedom of Information Act and Subject Access requests.

Agreed:

1.    That progress on the delivery of the Internal Audit Plan be noted.

2.    That the Commercial Manager be asked to attend the Audit Committee meeting in June 2019, when a report on the Senior Auditor’s assessment of the response to the action plan arising from the audit of the Marine Hall would be due for consideration.

3.    That progress on the management of strategic and operational risks be noted.

4.    That progress on the implementation of actions arising from the Annual Governance Statement for 2017/18 be noted.