Agenda item

The HOA updated the Committee on the Internal Audit work carried out for the year ended 31 March 2023. The Public Sector Internal Audit Standards required the HOA to provide an annual opinion, based upon and limited to the work performed, on the overall adequacy and effectiveness of the organisation’s framework of governance, risk management and control. 

The Internal Audit as approved by this Committee included 46 audits consisting of 35 risk and compliance audits, 10 school audits and a project to follow-up prior year work in schools. Except for one school audit, all planned audits were delivered.

Based on the work undertaken the HOA was satisfied that sufficient internal audit work had been undertaken allowing for him to provide an opinion that was ‘generally satisfactory’ with some improvements required in a number of areas detailed in the report, for the purpose of enhancing the adequacy and effectiveness of the framework of governance, risk management and control.

The results of the audit work programme were set out in the report, listing the each of the audits against a scale of opinion ranging from substantial, reasonable, limited and/or no assurance, together with the various categories of associated risk ranging from critical to low depending on the impact of the associated risk attached to each recommendation. In total nine limited assurances were issued, the details of each being summarised in the report.

Of the nine limited assurance audits three were highlighted, from which the following questions arose:

Leasehold Management Service Charges – It was noted that there was no key performance indictor for the recovery of debts relating to Section 20 major works. Moreover, more concerning was that management were still trying to unravel what can and cannot be charged for some of the Section 20 works, meaning that no collections had been recovered for the period of the audit. In that respect the Committee asked as to whether there was statutory guidance as to what a Council could legitimately charge for?

The HOA responded that the expectation was that work re charging for Section 20 works should have been done by now. The original implementation date for reporting on this matter was September 2023, and in accordance with the agreed process, when a manager missed a deadline, it was then escalated to the Council’s Assurance Board where managers were required to both explain why they had not implemented the IA recommendation and to identify a revised date to do so. 

Right To Buy Valuation – The statement as to the lack of detail being provided by surveyors valuing properties and a subsequent uncertainty about the accuracy of valuations leading to a possible loss to the Housing Revenue Account was concerning.

The documentation provided by the previous surveyor contractor was not sufficiently accurate to give a view on the valuation of properties. However since, and as a result of the audit, there was now a different contractor undertaking the work to a set specification under the management of My Place, who now had greater confidence that the sale of properties was based on correct valuations. 

Be First / Reside / BD Energy / My Place Relationships – With regard to the current restructuring of My Place it was noted that agreed actions arising from the audit had been implemented, with a further review earmarked for 2024/25. However, the handover process between Be First and Reside was managed by a small number of people who relied heavily on the strength of the relationships between them, and this did suggest to the Committee a weakness in the approach of relying on key staff, and that perhaps the review should be undertaken sooner than that proposed in the report?

Given the meeting had already been extended by the maximum 30 minutes allowed for in line with the requirements of the Constitution, the HOA agreed to provide a written response to the question.