Agenda item

Update from the Council’s Internal Auditors

The report was presented by the internal auditors from BDO. The report sought to inform the Governance and Audit Committee of the progress made against the 2024/25 internal audit plan.

The internal auditor explained that BDO had completed three of the reviews to date. The first of which was not included within the Agenda report pack to the Committee, rather a letter which had been provided to SKDC confirming that independent grant assurance had been given in respect of the Council expenditure incurred for a grant received by the Arts Council.

The remaining two reviews being presented to the Committee were regarding staffing capacity and capability, and the Social Housing Decarbonisation Fund – a scheme implemented aiming to increase the Energy Performance Certificates (EPC) rating of social housing to at least Band C.

Concerning the staffing capacity and capability, the outcome of the review was that the ‘Design Opinion’ of the current model was rated as ‘moderate’, and the ‘Design effectiveness’ was rated as ‘substantial’.

Within this review there were several areas of good practice identified; amongst others it highlighted the Workforce Plan, training opportunities, the appraisal process, the Equality Position Statement, and the management forums.

Areas of concern identified within the review were regarding the comprehensiveness of succession plans and emergency cover. The internal auditor invited feedback from Members on how the findings of the audits were presented in the report. 

Concerning the Social Housing Decarbonisation Fund, the review rated this as ‘moderate’ in its ‘Design Opinion’ and ‘Design Effectiveness’.

The review identified that SKDC had 367 properties which had an EPC rating between Bands D-G. For this reason, £7.26 Million had been received by SKDC from the scheme to enable the improvement of these properties EPC ratings. With this funding in mind, the review found the subsequent procurement process for E.ON to be ‘robust’ and the responsibilities of each party had been ‘clearly defined’ within the contract. The review highlighted further areas of strength to be effective stakeholder management, efficient analysis of the current housing stock via digital tools, a comprehensive project plan, and sufficient reporting to the Housing Overview and Scrutiny Committee.

Areas of concern identified were the following –

-       Gaps in skills and capacity within the existing team,

-       Lack of documentation evidencing completed works,

-       The suggestion that an invoice had been raised despite the work being delayed.

-       Key Performance Indicators (KPIs) had not been identified with E.ON  

-       Inspection certificates were not retained for any of the ten Phase 1 updates that were reviewed.

-       The lack of a formal Tenant Engagement Strategy, as required by the SHDF Wave 2.1 guidance.

-       The lack of a Tenant Liaison Officer to manage engagement and communication with tenants.

-       Lessons learnt throughout the process were not documented and shared. 

For each of the above, a recommendation, management response and responsible officer were identified.

The internal auditor concluded their presentation by providing a sector update. During which they noted that there was to be sector wide changes to all procurement activity once the Procurement Act 2023 was implemented. This is likely to be an area of activity that will be included in the 2025/26 audit plan

Following the internal auditor’s presentation, Members made the following comments:

-       Whether SKDC were inspecting the work done by E.ON following their completion. The Director of Housing confirmed that SKDC do inspect all works prior to invoices being paid and an audit trail would be kept for this going forward.

-       Whether March 2025 was an appropriate timeframe for improvement to be made on the areas of concern raised in the staffing capacity and capability review. The external officer confirmed that they believed this to be a reasonable timeframe.

-       When the Homelessness Audit was to be presented. The external officer stated that the estimated timeframe was currently for the meeting scheduled to be held on 27 November.

-       A Councillor sought confirmation that a Tenant Liaison Officer had not yet been appointed. The Director of Housing confirmed this but stated that it would be a priority given the new Band Three funding and how well a similar role had worked for the Earlsfield Project.

-       Another Councillor requested clarity over the scope of the invoices that were being paid. The Councillor was under the impression that invoices had been raised for committed spending rather than actual spending. The Director of Housing confirmed that the invoices were being raised for actual spending.

Following the discussion, the Chairman confirmed that the report had been duly noted by the Committee.