The Audit Committee discussed updates on the progress of various internal and external audits being carried out at the council. Councillors noted four reports on School Audits, Risk Management, Insurance and Internal Audit. They also discussed the committee's work plan for 2024/25. Finally, the committee moved into private session to discuss a confidential matter.

Audit Updates

The committee received an update from its external auditors Deloitte and Ernst & Young on the progress of their audits of the council's accounts.

Based on discussions in the sector to date, we understand that we should continue with our planned approach, assuming that the government will implement a backstop.

• Jonathon Gooding, Deloitte.

The auditors expect to be able to complete their audits in line with the government's backstop date of 30 September, but this may be subject to change depending on government policy. In the meantime, the auditors will continue with their planned programme of work.

School Audits

The committee received a report on the annual school audits for 2023/24. The audits, carried out by BDO, covered 14 of the borough's 75 schools. Three schools received substantial assurance, ten received reasonable assurance and one received limited assurance. The report identified a number of themes, including personnel and payroll management and purchasing. The committee raised questions around the themes, including whether safeguarding checks had been carried out properly.

Were the demand to be greater, we'd obviously look at resourcing. If an academy school wanted to buy the audit from us, of course they can do.

• David Dobbs, Herrington and Laudet

The committee noted that the council would be willing to extend their school audit service to academy schools in the borough if there was demand for it.

Risk Management

The committee received and noted the Annual Risk Management report. This report summarises the council's risk management journey in 2023/24, and identifies a number of achievements including:

• the recruitment of a dedicated, full time, Risk Officer.
• improvements in the content and quality of the council's risk registers.

We think we're in a good position now, and it's certainly better ever than it has been before since I've been here. And the next stage and the next big thing we want to do is redevelop that risk management strategy.

• David Dobbs, Herrington and Laudet

The committee heard that the next stage in the council's risk management journey is the redevelopment of the risk management strategy. This will be supported by the council's insurers, Zurich Municipal.

Insurance

The committee received and noted the Annual Insurance report, which provides a summary of the work of the insurance function over the previous year. Key issues arising from the report included the affordability of insurance premiums and the difficulty in obtaining cyber attack insurance.

The other thing really to draw your attention to is the fact that in the report we talk a lot about claims but it is an expensive business as well in terms of premiums so I think in 22/23 we spent about 8 million pounds on premiums and 23/24 that went up to 9 million pounds.

• David Dobbs, Herrington and Laudet

Members expressed concern about high levels of claims related to motor vehicles and potholes. They also sought assurances about how the council manages insurance claims made against it.

Internal Audit

The committee received and noted the annual report of the Head of Internal Audit. The report included the Head of Internal Audit's annual opinion, which gave an overall opinion on the adequacy and effectiveness of the council's internal control framework.

The report highlighted that 44% of audits conducted in 2023/24 resulted in a reasonable or substantial assurance rating. This represents a deterioration on the previous year, which the Head of Internal Audit attributed to the turbulence associated with the council's recent reorganisation.

I think there's been some notable successes on the anti-fraud side. So in terms of insurance claims that repudiated or discontinued, those had a reserve value of 340,000. Nine right-to-buy applications were stopped. We had two criminal convictions and various other successes through a lot of the anti-fraud work.

• David Dobbs, Herrington and Laudet

The report also provided an update on the progress of the External Quality Assessment (EQA) of Internal Audit. The EQA, conducted by an independent consultancy firm, found that the council's internal audit function was operating at a high standard. The committee welcomed the findings of the EQA.