Agenda item

Cllr Elliot noted the robustness of financial controls and that it is a tribute to officers involved. Cllr Elliot also noted the financial sustainability of the Council.

The Chair supported the comments made by Cllr Elliot and commended the report.

Cllr Douris referred to the suggested recommendations within the report and queried why they were just suggestions. P Lazenby advised that this refers to the SICA, the progress report, which wasn't being presented at this meeting. P Lazenby confirmed that the suggested recommendations could be transferred to 'must'. Cllr Douris advised that 'should' would be more appropriate as this would encapsulate the suggested recommendation concept. P Lazenby confirmed that this update could be made if preferred by the Committee.

P Lazenby presented the internal annual audit report, noting that this covers audits that have taken place over the last 12 months and summarise recommendations, observations and concerns as well as attribute an overall opinion in terms of satisfaction for the internal controls presented. The observations are in respect of the areas that auditors have been asked to look at, which will be discussed in more detail at the next meeting, and the Committee should raise areas of concern in respect of key risks that the organisation faces as these are the areas that an opinion can be provided on.

P Lazenby noted a reasonable level of assurance for the controls they were asked to review, as detailed on page 1 of the report, with only one report showing limited assurance. 17 audits were provided, 16 of which had a level of assurance attributed, and when benchmarked against other organisations, DBC is comfortably in the reasonable level. On corporate health and safety receiving limited assurance, P Lazenby advised that this was a known area of business.

Cllr Elliot queried what 'discreet projects' refer to as mentioned in Annex C. P Lazenby advised that this is where there is a level of hypothecation with money set aside and can't be used for other areas.

Cllr Freedman commented on the approach to the internal audit function and suggested that the approach taken last year would be the same as previous years with a focus on the council's consistency of operations. Cllr Freedman stated that they have not exploited the value added function that internal audit should bring with more pronounced changes or threats that are being considered, such as the number of senior staff positions that have changed in recent years. Cllr Freedman suggested that the internal audit process should come along with other strategic discussions to ensure this input is being given whilst these are being considered.

P Lazenby advised that TIAA is not a consultancy firm that has been engaged and an are an audit organisation, and whilst they can provide added value, their time is primarily to support the overall level of assurance provided and changing this would need to be supported by the organisation with a clearly agreed scope.

N Howcutt explained that the Committee approves the annual audit programme before it goes to Cabinet and Council for further approval and any focuses for audits is discussed by the Committee. N Howcutt noted that additional audit risk training was provided to the Committee and officers last year and will likely be taken up again this year, and if the Committee feels there is an area that requires focus, this can be included in the plan as an ad hoc item or be scheduled for next year as part of the rolling programme. C Silva Donayre added that this is also discussed by SLT so these areas can be reviewed further. N Howcutt added that the Committee need to consider if they are receiving the level of assurance they require and that the auditors can also help provide other areas for consideration.

Cllr Freedman commented that internal and external audits reviewing performance on established goals could potentially miss the opportunity for added value and that he was comfortable that the decisions on areas to focus on is being made.

The Chair referred to the separate paper outlining the areas chosen. N Howcutt confirmed that this was signed off by the Committee in February or March and that the Committee would pick up the cycle in February 2024.

Cllr Stevens queried where business resilience and continuity sits within the assurance programmes. The Chair advised that this was audited last year and was therefore not selected for this year. F Jump confirmed that another audit on business resilience will therefore be due next year. P Lazenby added that internal audit is not the only level of assurance that should be received. N Howcutt noted that there are also 3 other overview and scrutiny committees and that the internal audit will also provide a further view. N Howcutt advised that if the Committee does not feel it is receiving the correct level of assurance then this needs to be addressed.

The Chair queried when the final internal audit report will be provided. P Lazenby explained that the report is not typically issued as a final report until received by the Committee, though they will not be receiving the 2 final outstanding reports and he would discuss this further with N Howcutt. N Howcutt advised that agenda item 6 contains 2 of the final audit reports for last year and that this would be discussed outside of the meeting. P Lazenby suggested that the level of assurance was unlikely to change from the reports that have been effectively finalised.

Cllr Douris commented that he was dispirited that the internal audit report could not be signed off and suggested that the 2 outstanding reports be approved by the Committee so that the final internal audit report could be signed off. Cllr Birnie disagreed, noting that the Committee needs sufficient time to thoroughly scrutinise documents and that 3 days was not sufficient time to give the reports proper consideration. Cllr Birnie agreed that agenda item 6 be postponed until the July meeting.

The Chair noted the reference to 94% on page 3 of the report and asked if this means that the governance and risk management item remains in progress due to delays caused by elections. P Lazenby confirmed that the governance audit was moved forward due to the elections. The Chair noted that the report could not be signed off until this was received.

The Chair queried what NNDR stands for. N Howcutt confirmed that this refers to national non-domestic rates.

The Chair noted the reference to 216 days on page 1 of the report and 201 days in the summary report. P Lazenby advised that this comes from audit dates being moved into different years and that a full breakdown could be provided if required.

The Chair noted that the approval of the internal audit report depends on the approval of the SICA report. P Lazenby noted that the governance review is also outstanding, though a paragraph on governance has been included in the report to state this has been reviewed sufficiently throughout the year, though the 2 outstanding reports need to be signed off to support the finalisation of the report.

The Chair asked if returning to the internal audit report in July would cause any operational issues. It was confirmed it would not.

Cllr Douris referred to the limited assurance on corporate health and safety and asked if it being rolled forward from 2021-22 was due to Covid and why it only received limited assurance. P Lazenby confirmed that it was originally scheduled to take place in the previous year but an incident occurred in the Berkhamsted area that resulted in a high profile piece of work being undertaken, so the audit was deferred whilst this went through. N Howcutt advised that there are reports and paperwork that can be circulated on the incident if required.

The Chair noted that the Committee would review the 2 outstanding reports at the July meeting.