Agenda item

The Head of Internal Audit (HIA) introduced the report. She explained that it examined the progress made between 1 September to 30 November 2023 in relation to the delivery of the Annual Internal Audit Plan for 2023/2024 and also provided details of any outstanding internal audit recommendations. She said that to date, 41% of the Audit Plan had been completed. During the latest period, two reports had been finalised – land charges and procurement and contract management. The details of these were set out in appendix 2. In terms of outstanding recommendations, 29 were outstanding of which 5 were urgent.

The Chairman commented on the 41% completion rate and asked whether the HIA had any concerns about achieving completion by the end of the year. The HIA replied that she would expect to be further on in the plan. The contractor was currently behind and some of these was due to staffing issues. They had advised the HIA that the plan would be completed by the end of March 2024.  In terms of next year, it was hoped that a protocol could be put in place to embed timescales.

Cllr Cushing referred to appendix 2 and the finding for the Land Charges searches and asked why it was a limited assurance rather than no assurance. He also said it would be useful to understand the materiality linked to this and whether it was a sizeable sum of money involved. The HIA replied that more information could be supplied to members on this. Cllr Cushing said that this would be helpful. The DFR said that regarding land charges income, in 2023/2024 the Council was budgeting for £175k. She added that the actual service was being transferred to the Land Registry so this would result in some loss of income. The Chairman asked whether, given the transfer of this work, it was pursuing this issue at all and how it would be monitored in the future. The Policy and Performance Manager said that some elements of the work relating to land charges would remain at NNDC.

It was proposed by Cllr J Toye, seconded by Cllr C Cushing and agreed that  a review is undertaken on how land charges are monitored and how this will be reported in the future.

Cllr Cushing then referred to Appendix 6 – ‘Outstanding Internal Audit Recommendations’ and said that when he compared them to the previous update report, it was clear that some of them had moved backwards. He gave NN2213, Waste Management as an example of having a revised due date. He asked the HIA what level of confidence she had in the outstanding recommendations being delivered. The HIA replied that regarding the first recommendation for NN2213, it involved other councils too so that was adding to the delay there and with the second one, it related to staff shortages and it was therefore difficult to predict when it would be resolved. The Chairman said that he shared Cllr Cushing’s concerns, particularly about the materiality of some of the outstanding recommendations and the consequential risks if they were not resolved. He asked the HIA how significant they were and whether they could be quantified. 

Cllr C Cushing referred to Appendix 7 which set out all of the urgent outstanding Internal Audit recommendations for 2022/2023. Again, he said that it was an issue of materiality which was causing concern here. None of the items listed included an update on the situation and every one of them had now passed the due date for completion. He highlighted NN2302 and the issue of reconciliations and asked for an update on this. The DFR replied that it was partly due to the new financial system and ongoing staffing issues. She said that the bank accounts were being reconciled but there were some issues with the system. The reconciliations themselves were giving the required assurance. Other reconciliations were being brought up to date and a new member of staff was going to work specifically on addressing the reconciliation issues. Cllr Cushing asked for a revised due date for when these outstanding recommendations would be resolved. The DFR replied that it would be end of February 2024 at the latest.

The Chairman said that it would be helpful to have written responses provided for each of the outstanding recommendations in future. The HIA replied that there was a ‘Key Controls’ audit scheduled for Q4 and she would expect these items to be in the scope of work for this. Cllr Cushing asked if that future reports could include revised due dates for the outstanding urgent recommendations.

RESOLVED

1.    To note the internal audit progress and progress against internal audit recommendations

2.    To request that a review is undertaken on how land charges are monitored and how this will be reported in the future.