To consider the Annual Internal Audit Report and Opinion for 2020/21.
Neil Pittman, Head of SIAP, presented the annual internal audit and opinion. It was acknowledged that this had been a challenging year, with competing demands. Thanks were extended to the team and all Officers across the Council on fulfilling the audits virtually.
Despite audits taking place virtually, the process had not been inhibited. The overall opinion was shown on Page 37 of the agenda pack and the Committee was informed that SIAP was able to give the opinion of “reasonable”. Key observations were shown on page 40, with an additional item in significant issues on page 42, alluding to financial resilience. It was explained that in the near future, new income streams were required, and this could not be underestimated.
In terms of SIAP’s review of Financial Sustainability, it was acknowledged that, while current financial position was sound, new income streams would not come online for some years and it was therefore questioned whether there was sufficient resilience over the medium term. The Committee was informed that the Council had healthy reserves but needed to bear in mind that these were finite. The key financial strategy was to develop sustainable sources of income. Part 1 of the Commercial Strategy had been agreed to support this and Part 2 was being produced. Officers reported that the Service and Financial Planning process had begun for 2022/23 and Executive Members acknowledged that the Council needed to see through its strategy for developing sustainable income. Fees and charges were being examined so these could be optimised. There were also a number of income generating projects that were closer to delivery and these were outlined.
A question was asked regarding the high level of suppliers (each with an aggregated spend higher than £25,000, where contract arrangements would be expected to be in place). It was explained that this was a concern as this was not in compliance with contracts procedure rules which was why it was highlighted. However, there was confidence in the actions to address the issues raised and that these were being acted on with expedience and diligence by Officers. The Interim Head of Finance agreed to provide a further written response to Members to help put the figures quoted into context .
A Councillor thanked everyone for the compilation of the report however raised concern that a fleet vehicle had been used without a valid MOT. Reassurance was sought that this could not reoccur. It was agreed that a written response on this action would be provided separately, along with further detail regarding the server room security.
In terms of the “reasonable” opinion, it was noted that this was standard wording and that reasonable was a fair outcome. The majority of Councils would sit within this category.
(i) the Committee notes the annual internal audit report and opinion as per annex 1 of the report; and
(ii) written responses would be sent to Members.