Agenda item

Mr Percival introduced the report detailing the communication with the Audit, Governance and Standards Committee during the Audit year 2017/18. The Committee was invited to consider the management responses and confirm satisfaction with the arrangements and that they fitted with Members’ knowledge of what had taken place.

The Chair raised concerns about what had occurred in respect of Housing Capital and further assurances were sought.

The Executive Director Finance and Resources explained that this was a sensitive issue with Officer employment implications. An internal audit report would be presented to a future meeting of the Committee detailing the various improvements that had been made. The report was currently in draft form and a specific date for when the Committee would receive it could therefore not be provided.

Mr Percival confirmed that the external auditors were aware of the approach taken in relation to dealing with the issue and the progress that had been made.

Following requests from Members for further assurances, Mr Percival confirmed that the external auditor’s responsibility was to ensure that the Council’s financial statements were free from material fraud. 

The Executive Director Finance and Resources confirmed that the amount was approximately £900k. Reassurance was provided that the report from the internal audit team would be comprehensive. This was given by internal audit and the Executive Director of Finance and Resources.

The Independent Member, referred to the onus on internal audit. The procedures for reporting irregularities and assessing the effectiveness of the system were queried and the Head of Internal Audit confirmed that the internal auditors were attuned to potential fraudulent activity and the risks associated. The internal auditors were looking at specific areas and possible trends. The National Fraud Initiative had clear policies and procedures around for example whistleblowing and anti-fraud and corruption. Areas would be assessed for risk as part of the overall review. The risks were higher in certain areas. Any identified concerns would be highlighted to management and then to the Committee.  The case was a good example of an issue being picked up during routine audit. Senior management had been involved in discussions.

The Executive Director Finance and Resources referred to the irregularities in the letting of contract. The contract and procurement rules had been revised and there had been training for staff around ordering and purchasing. Controls to identify and mitigate possible fraud were put in place but it was important to note that the audit report did not say that fraud had taken place.

The Independent Member queried the process if fraud did occur and how this would be escalated up and the Executive Director Finance and Resources explained that if any irregularity was identified the internal auditor would raise this directly with herself or the Chief Executive.

In response to a query regarding the savings that had not been identified in a high level of detail, it was clarified that this had been resolved and External Audit had been provided with a full breakdown.

RESOLVED:

That the Committee note the Auditing Standards report for 2017/18 from the Councils External Auditors, Grant Thornton and management responses.