The Chief Internal Auditor as the Head of Internal Audit presented the annual opinion on the overall adequacy of the Council’s internal control environment. 

She stated that the annual opinion report gave a brief description of the role of Internal Audit, the control environment within which Internal Audit operates and provides a summary of work carried out during the period April 2015 to March 2016.  A statement of Internal Audit’s overall opinion on the internal control environment was also given in support of the Annual Governance Statement which the Council is required to include within the Statement of Accounts. 

The Head of Internal Audit reported that the purpose of the Annual Opinion report is to satisfy the requirements of the Accounts and Audit (Wales) regulations 2014 as amended and the Head of Internal Audit’s annual reporting requirements set out in the Public Sector Internal Audit Standards and she highlighted the information specified by the Standards.  She stated that the opinion contained within the report relates to the system of internal control at the Council and the overall control environment in place.  She also informed the Committee that the system of internal control is designed to manage risk to a reasonable level rather than to eliminate the risk of failure to achieve corporate / service policies, aims and objectives and can only provide reasonable and not absolute assurance of effectiveness. 

The Head of Internal Audit was of the opinion on the basis of internal audit work undertaken during the period April 2015 to March 2016 and taking into account all available evidence, that a satisfactory assurance level can be applied to standards of internal control at Bridgend County Borough Council for the period stated.

The Head of Internal Audit informed the Committee of the productive outturn which showed that the overall productive days original planned had not been achieved, resulting in a shortfall of 16 productive days.  She stated that the Section has improved on productivity and address the shortfall reported to the Committee in November 2015 where the number of productive days for the period was less than that expected by 75 days.  The Head of Internal Audit also informed the Committee that 102 reviews had been completed, of which 78 (76%) have been closed with either a substantial or reasonable assurance opinion level.  4 reviews (4%) had identified weaknesses in the overall control environment; with one recording that non assurance could be placed on the control environment, which relates to a specific investigation.  Of the remaining 20 (20%), 14 did not culminate in an overall audit opinion and 6 have been carried forward into 2016/17. 

The Head of Internal Audit highlighted the Internal Audit successes and commented on the resources, qualifications and experience of the Internal Audit Service which has a total resource of 18.5 Full Time Equivalents with 3 vacant posts.  Staff have worked exceptionally well to deliver the Audit Plan.  The Head of Internal Audit commented that one of the Section’s trainees has recently qualified as a Certified Information System Auditor qualifying in the top 5% worldwide.  She stated that the Service had recently concluded the pilot with Newport Council on the provision of Computer Audit Services; however Cardiff Council was no longer interested in using this service. 

The Head of Internal Audit informed the Committee that she had highlighted her concerns at the recent departure of the Corporate Director Resources and Section 151 Officer due to the significant challenges facing the Council.  She stated that the role of Section 151 Officer (Chief Finance Officer) is one of the key statutory functions and it was for the Head of Paid Service (Chief Executive) to ensure a suitable replacement to fulfil those requirements.  The Head of Internal Audit also informed the Committee that the Chief Executive had arranged for the Director of Finance of RCT Council to mentor the Head of Finance in his role as Chief Finance Officer.     

The Committee expressed concern as to how the ICT Strategy would be taken forward following the recent re-structure of JNC Officers.  The Head of Finance commented that the ICT Strategy would be taken forward by the Corporate Director Operational and Partnership Services, Head of Regulatory Services and Partnerships and the Group Manager ICT and that there is clear direction for the ICT service within the Strategy.

RESOLVED:         That the Committee gave due consideration to the Head of Internal Audit’s Annual Opinion covering the period April 2015 to March 2016 to ensure that all aspects of their core functions are being adequately reported.