Agenda item

The purpose of this report is to present the Internal Audit Strategy and Annual Internal Audit Plan for 2023/24 to the Committee.

Under-pinning the work of the Orbis Internal Audit Service in delivering the Annual Internal Audit Plan are the key principles and objectives as set out in the Internal Audit Strategy and Charter. These are presented alongside the Annual Internal Audit Plan for 2023/24 as good practice dictates that these should be updated and reviewed on an annual basis.

Witnesses:

Russell Banks - Orbis Chief Internal Auditor

David John - Audit Manager

Nikki O’Connor - Strategic Finance Business Partner

Key points raised during the discussion:

1.    The Orbis Chief Internal Auditor introduced the report and noted that the Annual Audit Plan was risk-based, drawn from on a range of sources of information and it was fluid with time included for emerging risks; an anticipated major change concerned the go live of MySurrey and integrated financial systems run through that would need to be audited. There were challenges around resourcing and there was a clear strategy to address that through recruitment and investment in training and development. He noted that a slight reduction in the number of audit days had been made across the Orbis partners, it was a prudent estimate of what could be realistically delivered. He clarified that the Committee would receive information on the KPIs throughout the year.

2.    A Committee member asked whether the number of potential audits of maintained schools was significantly more than had been done previously, as in quarter 3 there had been five audits. The Orbis Chief Internal Auditor responded that the scheduled 30-35 school audits represented a new normal level compared to a few years ago - more than other Orbis partners - as the Council had separately funded a programme of work of school audits. He noted that the aim was not to audit every school within a five-year period, it was not a purely cyclical process, schools were targeted based on risk.

3.    A Committee member asked for the percentage of how short staffed the service was. The Orbis Chief Internal Auditor noted that there were around 38 staff and within that there were 5 vacancies. Internal Audit resourcing was expressed in the number of audit days that could be delivered, there was a challenge of trying to match the resources to the work both in terms of the days but also the calibre of staff. The Internal Audit Plan was becoming more complex, the approach of growing in-house staff took time and investment, supplemented with contractors.

4.    A Committee member referred to the Highways Contract audit which was carried forward from 2022/23, as it was a large issue for residents and Members he asked whether Internal Audit was confident that it would be audited in the current cycle. The Audit Manager confirmed that it would be delivered in 2023/24 as enough time had been given for that contract to bed in, with nine to twelve months’ worth of data to audit; it was carried forward on a predetermined basis.

5.    Following up the response to key point 3, the Committee member understood that therefore Internal Audit was down 12-15% on staff numbers and the problem was more acute than that due to the lack of senior staff members, he asked what support could be given by the Committee around improving that situation. The Orbis Chief Internal Auditor explained that Internal Audit had sufficient resources in terms of budget, the challenge concerned recruiting and retaining the right people; sharing resources across the Orbis partnership was a significant benefit, the training and development budget had trebled in the last few years, however advertising externally for more senior roles was not very successful. He noted that the partnership was doing more than others in recruitment and retention, and he was looking at growing Internal Audit by working with the borough and district councils to generate more income to create more management posts. The diversification in recruitment was welcomed by a Committee member.

6.    Referring to the General Ledger work, the Chairman asked whether any issues had ever been found with suspense accounts. The Audit Manager noted that Internal Audit had audited that and had found immaterial balances to be cleared. The Strategic Finance Business Partner confirmed that Finance was looking at all balances as part of the data cleanse moving into the new system.  

RESOLVED:

Members considered the contents of the report and Appendices, and approved the following:

(i)      The Internal Audit Strategy (Annex A).

(ii)     The Internal Audit and Corporate Fraud Plan (Appendix A).

(iii)   The Internal Audit Charter (Appendix B).        

Actions/further information to be provided:

None.