Agenda item
Internal Audit Annual Report
Minutes:
Members highlighted that the report referred to limited capacity at a senior level. Officers clarified that this was in relation to governance arrangements. A significant amount of time in 2024/25 was dedicated to Zero-Based Budgeting and star chambers. This focus impacted senior-level capacity but was necessary for financial recovery and service efficiency.
Members highlighted that there were fewer assurance reviews and asked if this related to available resources. Officers noted that the shift to advisory work was intentional, supporting transformation rather than reiterating known issues.
Members asked about steps taken to address issues. It was important to note that 2024/25 was a big year of change, with lots of reviews, and looking at new ways of working across services and directorates. This included the Zero-Based Budgeting and star chamber sessions. There had been developments made during the year on performance data. The Chief Operating Officer had presented to the Committee previously and there were now approximately 130 performance dashboards developed to improve data visibility.
The next step was around implementation of these new ways of working, and this was underway. In relation to performance data, this included pulling out key indicators and building these into a cross cutting strategic level dashboard. A draft of this was due to go to Cabinet. Members asked if this could be shared with the Audit Committee too, officers would look into this.
Officers further advised that just because there was a no assurance opinion did not mean that work was not underway. During 2024/25 officers looked at lots of data and went into lots of detail on the finances. A Governance Rapid Improvement Plan had been launched.
The internal audit opinion of ‘no assurance’ was noted. This referred to the formal structure of governance. Officers expressed optimism for future improvement but stressed the need for evidence before changing the opinion.
Zero-Based Budgeting was a discovery exercise to understand service operations, effectiveness and inefficiencies. Members asked if the Zero-Based Budgeting process was complete. Officers clarified that this had been a starting point. Next stages would involve fixing issues and developing new ways of working. Emphasis was placed on collaboration and cross-service improvements.
Members asked if Internal Audit had sufficient resources. Officers confirmed that they did and noted that the focus shifted to advisory work aligned with transformation.
The Internal Audit plan remained flexible to accommodate emerging risks and external assurance sources. Some reviews had been deferred or replaced with higher-priority items.
Members asked if removed reviews would be revisited. Officers clarified that this would be based on priority and availability of other assurance sources to avoid duplication.
Members also asked about the alternative assurance on utilisation of housing stock. Officers noted a review by the housing regulator.
EY noted that they viewed Internal Audit’s opinion of ‘No assurance’ as very significant. It was a serious matter when no assurance can be provided over the internal control risk management and governance frameworks. It was reiterated that a detailed report on risk assessment and budget control will be prepared for the next meeting.
RESOLVED: That the Audit Committee noted the IA Annual Report for 2024/25.
Supporting documents:
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IA1. AC Cover Report for IA Annual Report, item 146.
PDF 136 KB
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IA1. 2024-25 IA Annual Report, item 146.
PDF 475 KB