Agenda item

The Chair, County Councillor Shedwick introduced Laura Rix, Senior Auditor. Laura Rix requested, and it was agreed, that agenda item 6 (Internal Audit Annual Report 2022/23) be presented before item 5 (Internal Audit Monitoring Report).

The report was presented by Laura Rix. The Internal Audit Annual Report summarised the work that the Internal Audit Service had undertaken during 2022/23 and the key themes arising from it. It provided an opinion on the overall adequacy and effectiveness of the systems of governance, risk management and internal control.

On the basis of programme of work for the year, the Senior Internal Auditor provided substantial assurance over the adequacy of design and effectiveness in operation of the organisation’s frameworks of governance, risk management and control.

The opinion was based on the work the Internal Audit Service performed

during 2022/23 and 2023/24 in relation to the 2022/23 audit plan,

as approved by the Audit Committee in March 2022.

Internal Audit Work Undertaken

Laura Rix highlighted that it had been a positive year with 8 (72%) agreed actions being implemented, 2 (18%) in progress and 1(10%) superseded. All budgeted days (70) had been spent in delivering the audit plan. All 2022/23 work had been completed.

Overall governance, risk management and control arrangements

A high-level review was completed in April 2023 and no areas of concern were noted. Although the introduction of Fusion had caused some practical issues, additional controls had been introduced to mitigate any risks.

Recruitment – Positive Action

The audit report was completed in January 2023.

Carbon Management Arrangements

The audit report was completed in April 2023.

Accounts payable, Accounts receivable and General ledger

Audit work across each of these three key financial systems was completed in March 2023.

HR and Payroll

The review was completed in November 2022.

Pensions administration

Assurance over the operation of the Pension Fund had been obtained from work conducted directly by Lancashire County Council’s Internal Audit Service, work undertaken by the Local Pensions Partnership (Administration) Ltd, (LPPA) Internal Audit, and by KPMG for the Local Pension Partnership (Investments) Ltd (LPPI).

Treasury Management

The review was completed in October 2022. No areas for improvement were identified.

Follow up audit activity

Training, Learning and Development

Follow up work was completed during February 2022. Six actions had been implemented.

Management of On Call provision

Follow up work was completed in June 2023. Two actions had been implemented and two were progressing.

Laura Rix highlighted that, since the last meeting in March, 2 audits had been finalised: Carbon Management and follow-up work on the On-Call Provision.

Overall, the audit provided substantial assurance regarding the adequacy of design and effectiveness in operation of the Authority’s frameworks of governance, risk management and control. No significant areas of weakness in overall governance, risk management or control had been identified.

It was acknowledged that the introduction of Fusion had caused some practical issues within LFRS and Internal Audit were satisfied that additional controls had been introduced to mitigate any risks.

Other components of the audit plan

National Fraud Initiative

Following the submission of data in October and November 2022, the resulting matches were released by the Cabinet Office in January and February 2023. The table in the report detailed the total number of matches identified. Limited action had been taken to process the matches due to the timing of the release and LFRS operational pressures such as Fusion. Action would progress later in the year.

County Councillor Singleton asked why there was no assurance opinion on the work completed on overall governance, risk management and control arrangements (page 44 of the agenda). Laura Rix explained that the work was continuous and linked to the overall opinion of the Authority’s frameworks of governance, risk management and internal control through resources reports, committee reports and external assurance received throughout the year.

County Councillor Singleton noted that the follow up work had been implemented and asked if completion dates were in place for the non-conformities. Laura Rix confirmed that there were timeframes for non-conformities to be applied but policies were being embedded and therefore, they were still progressing.

The Chair commented that he was pleased with the number of substantial assurances in the annual report.

Resolved: - That the Audit Committee noted and endorsed the report.