The Audit Committee of Tower Hamlets Council met on Tuesday 23 April 2024 to discuss the local audit backlog and receive an update on outstanding audit accounts for 2020/21, 2021/22, and 2022/23. The committee also reviewed the Internal Audit Plan and Charter for 2024-25, received a progress report on Internal Audit and Anti-Fraud activities, and discussed the Corporate and Directorate Risk Registers. Finally, the committee reviewed the Annual Anti-Bribery Policy and the Audit Committee Work Plan.

Addressing the Local Audit Backlog and Update on Outstanding Audit of Accounts 2020/21, 2021/22 and 2022/23

The committee received a report detailing proposals to address the national local audit backlog, which has grown to an unacceptable level. These proposals, published by the Department for Levelling Up, Housing and Communities (DLUHC), aim to clear historical audit opinions and prevent future delays. The proposed measures consist of three phases: Reset, Recovery, and Reform.

The report highlighted that Tower Hamlets Council has yet to conclude the audit of its 2020/21 accounts, and the audits for 2021/22 and 2022/23 have not yet commenced. The council's external auditors, Deloitte, expect to issue disclaimer opinions on the accounts for 2020/21, 2021/22, and 2022/23 due to the tight timetable and the likelihood of not being able to complete all planned procedures. This is anticipated to be a national trend, aimed at resetting the system. The council has responded to the consultation, generally supporting the proposals.

The Audit Committee resolved to note the summary proposals for addressing the local audit backlog, Deloitte's briefing paper, the position on outstanding external audits, and the council's latest draft accounts for 2020/21, 2021/22, and 2022/23.

Internal Audit Plan and Charter 2024-25

Mr David Dobbs, Head of Internal Audit, Anti-Fraud and Risk, presented the Internal Audit Plan and Charter for 2024-25. He explained that the plan was designed to support the Council's Strategic Plan 2022-26 and the People First Transformation Programme, while also acknowledging the need for the Internal Audit service to evolve. The plan was developed following consultation with various stakeholders, including the Senior Leadership Team.

The committee resolved to agree the Internal Audit plan and Charter for 2024-25.

Internal Audit and Anti-Fraud - Progress Report

Mr David Dobbs presented an update on the progress of the 2023-24 Annual Internal Audit Plan, as well as activities related to investigations, fraud prevention, and anti-fraud work. He noted that 47% of audit opinions had resulted in Reasonable or Substantial Assurance, a decrease from the previous year's 65%. He also highlighted that the plan was ambitious and that resourcing issues, including two vacant posts, had impacted delivery.

The committee heard from Ms Karen Swift, Director of Housing, regarding a limited assurance report on Homelessness Assessments. Ms Swift welcomed the scrutiny and outlined plans to improve the process, including addressing IT system challenges.

Key points raised included:

• Councillor Blake requested that the audits on 'Management of Lettings' and 'Management of Markets' be carried forward to the next Internal Audit plan. Mr Dobbs confirmed this would be done if they resulted in a 'limited assurance report'.
• Ms Julie Lorraine, Corporate Director for Resources, mentioned a review of procurement thresholds and the consideration of CIPFA recommendations.
• Regarding staff training for the RFQ process, Mr Dobbs confirmed its existence but noted the need for review in light of suggested changes. An action was agreed for the action plan to be circulated.

The Audit Committee resolved to note the contents of the report, including the overall progress and assurance opinions for audits carried out as part of the 2023-24 Audit Plan.

Risk Management – Corporate and Directorate Risk Registers

Mr David Dobbs presented the Risk Management report, highlighting the Corporate Risk Register and the Health and Social Care Directorate Risk Register. Three new risks had been identified for the Corporate Risk Register, including emerging risks concerning rent collection, community cohesion, and the People First Transformation Programme.

Key points from the discussion included:

• Councillor Kabir Ahmed requested an update to the risk register to reflect interim leadership roles. Mr Dobbs confirmed this would be updated.
• Mr Dobbs confirmed work was underway to integrate risk registers from recently insourced services, such as Tower Hamlets Homes, into the Council's JCAD system.
• Mr Somen Banerjee, Interim Corporate Director of Health and Social Care, stated their risk register was in good shape, and Mr Warwick Tomsett, Joint Director for Integrated Commissioning, added that regular review cycles were in place.
• It was agreed that Mr Dobbs would bring back a Risk Management Annual Report to the July meeting, including trend analysis of risks.

The Audit Committee resolved to note the updated Corporate Risk Register and the Health and Social Care Directorate Risk Register, requesting risk owners to provide detailed updates on risk treatment and mitigation. They also noted the proposed changes to the Council's risk registers.

Annual Review of the Anti-Bribery Policy

Mr David Dobbs presented the annual review of the Anti-Bribery Policy, noting that it was a cosmetic update to reflect current officer contact details. He confirmed that training on anti-bribery and fraud was part of the mandatory corporate induction and that scenarios were regularly updated.

The Audit Committee resolved to note and approve the Council's updated Anti-Bribery Policy.

Audit Committee Work Plan

Members noted the Audit Committee Work Plan. The Chair, Councillor Harun Miah, informed members that a new work plan for the 2024-25 municipal year would be prepared.

The meeting concluded at 8:02 p.m.