Report from the Council’s Internal Auditors, RSM, giving a summary update on
progress against the Internal Audit Plan 2019/20.
A representative from RSM presented the Internal Audit progress report. It was confirmed that six assignments had been finalised since the last meeting of the Committee. Substantial assurance had been concluded for the Business Continuity and Emergency Planning assignment and reasonable assurance had been concluded for the Rent Collection and Arrears assignment. The Contracts and Procurement and Section 106 Agreement audits had resulted in partial assurances and a ‘no assurance’ conclusion had been given to the Repairs - Stock Control assignment. The Follow-Up 2 report would be presented later in the meeting.
High, medium and low priority management actions had been agreed with relevant service areas across the audits, where necessary. There were five remaining audits to complete and these would be presented to the Committee at its next meeting. Members were given the opportunity to ask questions or make comments relating to the report, as summarised below.
Repairs- Stock Control
The Committee expressed concern that this audit had received a ‘no assurance’ conclusion. Several questions were raised as to how the stock control system had deteriorated and how the situation could be rectified moving forward. In response to these questions, the following points were made by officers:
· The current operating system had been in place for approximately 1 year and had been initiated due to concerns around the availability of materials following the outbreak of Covid-19
· Concerns had been raised about the level of stock and the controls in place via a whistle blowing procedure with Lincolnshire County Council and on social media
· Counter fraud colleagues from a neighbouring authority had been asked to look at the arrangements around stock inventory and controls from a counter fraud perspective, in addition to the work undertaken by the internal auditors
· Following these reviews, a new staffing structure had been implemented in the Repairs team
· A new digital system was being introduced to track stock and introduce a ‘just in time’ approach to the Council’s repairs stock control
· This new system was anticipated to be ready for use from the beginning of March 2021
· The management actions raised in relation to the audit would be followed up as part of the auditors’ work in the 2021/22 period
Contracts and Procurement
A Member asked what system was in place to manage procurement and contracts information. The Interim Director of Finance explained that the Council used a software system called ProContract to manage its contract register. ProContract was an online platform that required data input from officers. The Contracts Register was available to view on the Council’s website.
Rent Collection and Arrears
Officers were asked for further explanation regarding the ‘reasonable assurance’ conclusion for the Rent Collection and Arrears audit. Members were reassured that the Council had prescribed procedures in place over specific timelines for the collection of rent arrears. However, following the temporary suspension of rent recovery during part of 2020, a period of inactivity had been inevitable. It was intended that another audit would be requested in this area, over a more normalised period in the future.
Section 106 Agreements
Members raised concerns regarding the lack of a formal process for monitoring Section 106 contributions from developers.
The Cabinet Member for Housing and Planning and officers provided the following information in response to the questions raised:
· The Section 106 process was already under review at the time the audit was carried out, due to the requirement for an Infrastructure Funding Statement to be published on the Council’s website
· The collation of this data in preparation for publication identified a need for more formality in the Section 106 process
· The Infrastructure Funding Statement was published on the Council’s website in December 2020
· Procedures were now being put in place to deliver the management actions agreed; these were anticipated to be completed by the end of April 2021
· The Interim Head of Planning was responsible for ensuring that the management actions were completed
· The Section 106 balances would be reported to the Planning Committee on a quarterly basis
Some comments were made that the overall report structure for this item was difficult to navigate. The Chairman asked that RSM consider separating the individual assignments and structuring them in a clearer way in future reports.
1) The hyperlink for the Council’s Infrastructure Funding Statement (published on the SKDC website in December 2020) to be circulated to Members of the Committee
2) A six monthly update to be reported to the Governance and Audit Committee in relation to Section 106 figures
3) The Planning Team to improve engagement with Parish and Town Councils and share appropriate Section 106 figures, where possible
4) Officers to liaise with RSM and investigate the potential for a revised structure for Internal Audit progress reports from April 2021