Agenda item

To receive the quarterly progress report on Internal Audit activity.

Includes the final audit opinion on s. 106 agreements.

56.1       The Head of Audit Risk Assurance (ARA) presented the report, the purpose of which was to inform the Audit and Governance Committee of the Internal Audit activity progress in relation to the Internal Audit Plan 2023-24. He stated that they had issued three reports since the previous Audit and Governance Committee meeting. He mentioned that his team had identified seven financial irregularities reported in the previous financial year, and the latest of these irregularities was due to be closed shortly.

56.2       The Chair highlighted the fact that the Benefits Team were not performing reviews of existing claims for Housing Benefits and Council Tax Reductions.

56.3       In response to a question by the Chair regarding why page 101 of the report indicated that the ARA had not participated in the National Fraud Initiative matching exercise, whereas page 110 suggested that they had, the Head of Audit Risk Assurance stated that owing to the Cyber Incident, there had been a partial attempt at the matching exercise as they did not have all data points. He explained that the Initiative collected data from various areas (such as Payroll, Council Tax, etc.) and compared it to other public bodies, but due to the incident, full participation was not possible.

56.4       In response to a further query from the Chair regarding the National Fraud Initiative matching exercise, the Financial Services Manager stated that due to the Cyber Incident, the Cabinet Office would not allow Gloucester to connect to their systems. He expressed his belief that this issue had now been resolved.

56.5       The Chair asked whether the Benefits team were aware of the extent of possible fraudulent claimants. The Audit Officer stated that he could not currently give an exact figure.

56.6       The Chair asked if the issue regarding Housing and Benefits could be followed up on as soon as possible. 

56.7       In response to a question by the Chair about s106 agreements, the Director of Communities stated that she could not provide a date regarding when the issues regarding previous S106 agreements would be updated in Exacom (CHECK). She mentioned that the Council was prioritising the S106 agreements that were new and live. She explained that all new S106 agreements were going straight onto Exacom, so it was just the retrospective work that was experiencing delays. 

56.8       Councillor Gravells noted his disappointment that not all the serious recommendations outlined in the report had been resolved. (CHECK) In response, the Head of Finance & Resources stated that he understood Councillor Gravells' concerns. He added that management accepted the recommendations in the report. In response to an additional question by Councillor Gravells, the Head of Finance and Resources stated that they had to prioritise high-level concerns, and that controls over s106 aligned closer to governance than finance. The Director of Communities noted that there were steps that needed to be taken before they could achieve full reconciliation. She stated that in relation to the recommendations that were not yet closed, a couple related to the Fees and Charges booklet. She mentioned that colleagues in Audit could not close this until after the Budget Council meeting, but now it could be closed. She stated that all of the other open recommendations related to reconciliation. 

56.9       In response to an additional question by Councillor Gravells, the Head of Finance & Resources stated that he did not intend to suggest that the financial aspect in relation to S106 was not important, but rather it was important to highlight that there was work commencing on overhauling the governance of the agreements, which would incorporate the finances.

56.10   The Chair noted that the detailed schedule of all the outstanding items was useful.

56.11   RESOLVED that the Audit and Governance Committee NOTE the report.