Agenda item

The Internal Audit Manager introduced the Report and informed Members that it covered the period from 1^st April to 21^st August 2019. She stated that a total of 26 days work had been completed to date, equal to fourteen percent of the overall plan.

Questions and Discussion

The Internal Audit Manager referred to the work summary on page 12 of the agenda, and informed Members that the Internal Audit Team were on-track with the agreed plan, meaning that the car parking and project management work had been completed. She added that quarters three and four had significantly more work planned and that she would work with officers to ensure that next year’s audit plan was more evenly spread across each quarter.

The Internal Audit Manager referred to the yet to be determined IT audit area and informed Members that after a discussion with the Head of IT Digital Transformation, a proposal had been made for a GIS application audit. This would look at the controls around access, administration and support for the software which was key to the Council’s planning function. The Chairman stated that he was happy for the audit to go ahead as soon as possible. In addition to the GIS audit, business continuity and cyber security had already been scheduled for quarter 4.

On the car parking audit, the Internal Audit Manager informed Members that six recommendations had been made of which three were important, and three needed attention. The three important recommendations included discrepancies between  monthly income reports of mobile app payments and actual income, contractual arrangements for emergency repairs, and the need for regular stock takes of season tickets to avoid losses. Cllr S Penfold asked if the income from car parking covered the costs of the service, to which the Chief Technical Accountant confirmed that the service did return a profit. The Chairman added that the Council’s car parking revenue was in excess of £2m. The Internal Audit Manager concluded by stating that a positive assurance had been given.

On project management, the Internal Audit Manager stated that the primary aim of the audit was to ensure that the framework was sufficient. As a result, the focus points were governance arrangements, management, and evaluation. The projects chosen for evaluation were the Digital Transformation Programme and the Cromer Sports Hub. The audit determined that a single location for all project documentation had been established, and that whilst project guidance was available, a recommendation for improvements had been made. It was confirmed that project budgets had been subject to detailed modelling. The key findings were as follows; proposals must be linked to the values and goals of NNDC, each project must be managed in the same way, senior management need a better overview and communication on the progress of each project, and finance expertise must be used to better manage project risks.

Cllr S Penfold asked whether a recommendation had been made for additional training on specialist project management skills, to which the Internal Audit Manager replied there was no evidence to suggest it was required. The Chief Technical Account stated that the position statement had been well timed, as the Council was currently reviewing its project management arrangements and had proactively considered training to improve in-house capacity. Cllr S Penfold replied that he had attended project management boards prior to the election, and noted that external project managers had not been in attendance. The Chief Technical Accountant stated that external project managers had reported to officer boards. Cllr J Toye stated that external project managers had been used to provide a brief on the Corporate Plan and aims of the Council. The Chief Technical Accountant added that they had also been used for the Council’s leisure strategy, and whilst there was no written procedure for this at present, it could be implemented in the future. Cllr J Stenton asked whether it was cost-effective to use external project managers, to which the Chairman replied that it would be difficult to provide specific training for the various projects.

Cllr C Cushing stated that the current project management methodology appeared fairly antiquated, and suggested that it might be beneficial to use the agile method for IT related projects. Cllr C Cushing proposed that the agile methodology be given consideration for the management of future IT projects. The proposal was seconded by Cllr J Rest.

Cllr C Cushing referred to project governance, and stated that monthly meetings with detailed reports should be established for each project, and that updates should be fed to a central Committee. Cllr S Penfold asked why the individual project board meetings had ceased, to which the Chairman replied that the election likely caused meetings to stop, but suggested that the boards should have been more robust. Cllr C Cushing stated that the allocation and release of funds for projects should be measured against monthly targets, and that standardised reports should track these targets. The Democratic Services and Governance Officer noted that concerns had been raised around the governance arrangements of the project boards, and it was possible that project updates would be brought to Committee meetings to improve these. The Chief Technical Accountant added that consideration had been given to these issues during the capability review, and the formulation of a corporate delivery unit was underway as a result. Cllr J Toye stated that project boards were constructive, but had to be comprised of the right people. He then asked whether project reports could be presented more openly at Committee meetings. Cllr S Penfold commented that lower level operational work still had to be carried-out by smaller project boards. Cllr C Cushing asked if any further work would come out of the position statement to provide greater assurance. The Internal Audit Manager replied that the position statement had provided a health check and identified the necessary recommendations.

The Chairman informed Members that he had requested a forensic audit of a select few of the Council’s major projects, and stated that Internal Audit were best placed to review these projects. He added that not all projects could be covered, as there was a time and cost implication for each. Member’s were provided with options for the review and asked which projects should be given priority. Members agreed that the projects in greatest need of audit were the Egmere Enterprise Zone and Sheringham Splash. The Internal Audit Manager stated that it was important for the auditors to remain apolitical on the projects, and noted that with both projects being high risk/profile, it was important that the terms of reference and objectives of the audit had to be clear. She added that the audits could be added to the existing audit plan at a cost, or replace existing areas that had been identified for audit this year, and push back existing planned audits to the following year. The Chairman stated that his preference was to have the audits completed as soon as possible. Cllr J Rest proposed that Internal Audit undertake an audit of the Egmere Enterprise Zone and Sheringham Splash projects. The proposal was seconded by Cllr J Stenton.

RESOLVED

1.    That the future project boards should give consideration to the use of the agile methodology for the management of IT projects.

2.       That Internal Audit undertake an audit of the Egmere Enterprise Zone and Sheringham Splash projects.