The Chief Internal Auditor presented the Annual Audit Report, which specified the Internal Audit assurance opinion on key areas of the Council’s activity in 2012/2013 and the effectiveness of systems of internal control. He reported that the Internal Audit Section planned and completed audits to review all relevant areas of risk and reports, including recommendations produced following audits were presented to managers. All work had been conducted in accordance with professional standards set by the Audit Practices Board, CIPFA and the Institute of Internal Auditors. The service had been able to utilise 2617 days in total to deliver the Audit Plan and consequently was able to complete 168 audit reports, which equated to 95% of the planned work, utilising 87% of the available staffing resource.

The Annual Report identified that in summary and from the work conducted by the service over the full 2012/2013 period, the level of assurance provided by the Councils control environment had been ‘less than adequate’ with ‘adequate improvement’ identified as a direction of travel. However, he highlighted significant actions that had been taken by the Chief Executive and management team to develop and implement a more effective and embedded organisational infrastructure to improve control and governance systems across all areas of the Council’s activities. Although the actions clearly indicated that the organisation was getting to grips with many of the problems that had been identified and were highly prevalent in the early part of the year, they could not greatly influence the opinion provided as it covered a full twelve month period. He commented that although the actions taken should improve the assessment going forward it nevertheless remained that for much of 2012/2013 issues existed and arrangements were not adequate.

The Chief Internal Auditor recognised that significant good work had been undertaken to address many of the issues and that systems had either been put in place and/or were being developed. However, although the fruits of the good work were beginning to materialise, sustained improvements in those areas would need to be seen before it would impact on the assurance opinion provided.

Members expressed the view that, whilst the report identified significant areas of concern, it clearly highlighted where improvement was required and provided sufficient information for the Committee to identify which Chief Officers may be called to the Committee to explain to it the reasons for actions arising from audits not being undertaken.

In response to questions in relation to debt recovery, the Interim Director of Finance outlined the rationale for the appointment of the independent consultant to undertake the review of debt levels and uncollected income. He was a former Chief Executive of the Audit Commission and had extensive knowledge of local government. Significant progress had been made and measures were now in place to ensure that the circumstances which resulted in the accumulation of high levels of debt would not be repeated. In response to a question from a Member, the Interim Director indicated that in the longer term there may be a minimal level of acceptable debt. He expected that a view would be known by September as to what that specific level would be.

Resolved – That the report be noted.