Issue - meetings

The Committee considered the Internal Audit Annual Report, including the Annual Assurance Statement for 2015/16.

Based on the work undertaken during the year the Head of Audit had given an annual ‘reasonable’ assurance opinion for 2015/16, which supported the review of effectiveness of the Council’s governance as reported in the Annual Governance Statement.

Key outcomes for 2015/16 included:

·         The Governance and Risk Management arrangements had been strengthened and supported the Council’s self-service agenda. Nationally austerity and the pace of change required by councils to innovate, generally saw councils accepting a higher risk appetite.

·         The Fraud Service, which had initially been impacted on by the transfer of staff along with the Housing Benefit Investigation function to the DWP, had been significantly strengthened.

·         The restructure of the Audit Service between three partner councils had been launched in April 2016 and would be implemented in September 2016. This had achieved the oneSource savings target, whilst ensuring future service resilience.

Austerity and the pace of change had enabled Local Authorities to revisit their risk appetite. The Audit Committee had adopted a roles and responsibilities approach to risk management that was in line with empowering services and embedding risk management across the organisation. This had required a mature attitude to risk management in 2016/17 with the Corporate Risk Register being considered by this Committee twice a year and reviewed by the Governance Group on a quarterly basis.

The oneSource service transformation restructure had formally been launched on the 15^th April; this had included the new partner-Bexley. It was anticipated that the structure would go live late August. This would deliver additional resilience, savings and efficiencies required in line with the Joint Committee Business Case.

The oneSource Audit Service was required to make £1.393m of savings per annum. The proposed structure for three partners would see a net reduction in the service from the 2015/16 combined staffing levels (post Fraud phase one required in April 2015 due to the statutory transfer of Housing Benefit Investigators to the DWP) from 57FTEs to 39FTEs. In anticipation of the restructure vacancies had been maintained.

The proposed Target Operating Model had been agreed by the three partner statutory Section 151 Finance Officers. The combined proposed staffing element cost for 2017/18 was £1,864,000.

The 2015/16 planned audit days was 800, which had reduced by 8% (67 days) compared to 2014/15. This was in line with the 2013/14 London average of 900 days. Looking ahead this would not be adversely impacted on by the restructure.

Post the implementation of the oneSource restructure of Internal Audit, there would be a “One Policy, Strategy and Procedure” approach, in line with the principles in the business case that would ensure duplication was removed and partners would receive the same service standard. The Committee had agreed the Havering/oneSource Anti-Fraud and Corruption Strategy at the September 2015 meeting.

The Committee noted the report.