Issue - meetings

Report by Chief Operating Officer

24.1     The Cabinet considered a report by the Chief Operating Officer

24.2     It was RESOLVED – to note the internal audit service’s opinion on the Council’s control environment.

Reason

24.3     The report gives an opinion on the adequacy of East Sussex County

Council’s control environment as a contribution to the proper, economic, efficient and effective use of resources. Reasonable assurance can be provided that East Sussex County Council has in place an adequate and effective framework of governance, risk management and internal control for the period 1 April 2017 to 31 March 2018.

Report by the Chief Operating Officer.

7.1       The Audit Manager introduced the report. The report includes the Internal Audit Annual report opinion for 2017/18 (appendix 1) and the audit outcomes for the audit work completed in quarter 4 of 2017/18 (appendix 2). The Chief Internal Auditor is able to provide an opinion of reasonable assurance that East Sussex County Council has in place an adequate and effective framework of governance, risk management and internal control for the period 1 April 2017 to 31 March 2018.

7.2       The Committee asked how the schools audit work was organised. The Audit Manager outlined that a specific programme for the work on school audits has been developed, which focusses on financial management and governance. The programme includes an examination of governance and reporting, financial planning, income, expenditure, safeguarding of assets etc. The Committee noted with pleasure the improvement in school audit opinions, with no schools over the last 12 months receiving an audit opinion of partial or minimal assurance. This represents substantial progress in this area.

Quarter 4 Audit Opinions

7.3       The Committee discussed the audit of Personal Service Companies and use of Consultants, which received a partial assurance opinion. The Committee commented that it was surprised that the Council does not have records and asked whether the action plan agreed with management will deal with this weakness and lead to an improved opinion in the follow up audit. The Audit Manager outlined that work is underway on the action plan enabling the collection of information for existing contracts and any new ones. The records will then be retained in the procurement system. The Chief Internal Auditor clarified that the issue was not that records had not been kept, but more that there was not a central place where all records were gathered together and accessible. It is the understanding of the Chief Internal Auditor that everyone who needs access to the records will be able to gain access to them.

7.4       The Committee asked for clarification on how complaints relating to fraud and corruption are dealt with. The Chief Internal Auditor explained that ESCC operates a whistle blowing reporting system, which the Internal Audit team manage separately from the ordinary complaints system. The team will then assess all complaints and allegations and investigate or refer them to other teams as appropriate. If necessary, serious allegations will be referred directly to the Police, with the Internal Audit team acting as the main point of contact/liaison with the Council for the Police investigation.

Summary comments

7.5       The Committee did not consider that there were any significant control issues that needed to be included in the Councils annual governance statement, and considered that the Council’s system for internal audit had proved effective during 2017/18.

7.6       The Committee RESOLVED to:

1) Note the Internal Audit Service’s opinion on the Council’s control environment; and

2) Agreed that the Council’s system for internal audit has proved effective during 2017/18.