Agenda item

To receive the Financial Governance Manager’s Report No. AUD25/04 (copy attached) which presents the Financial Governance Manager’s independent annual audit opinion for 2024/25.

The Committee considered the Financial Governance Manager’s Report No. AUD25/04 which set out the Internal Audit Manager’s independent annual audit opinion for 2024/25 on the adequacy and effectiveness of the Council’s framework of governance, risk management and internal control environment. The Financial Governance Manager presented the report as, although they had changed roles from Audit Manager in February 2025, they were best placed to share the report. With reference to Appendix 1 of the Report, the Committee noted that assurance levels had been provided for each of these areas in order to provide a clear assessment:

•         Internal Control Environment – It was noted that, in the opinion of the Audit Manager, the internal control environment for the Council was reasonable. The level of substantial assurances had decreased; however the level of reasonable has increased significantly, along with the limited assurances decreasing. No limited assurances had been given for the key financial systems across the 3-year cycle.

•         Governance - It was noted that, in the opinion of the Audit Manager, governance for the Council was reasonable. Governance issues were addressed through the corporate governance group, and it had been acknowledged that work needed to be done to improve the governance arrangements within the Council following the CIPFA and Peer Challenge reviews carried out in June 2024. As a result of the reviews, action plans had been put in place to implement the recommendations made. The Council took a view on outstanding audit recommendations given the passage of time and the evolution of processes over the years. Accordingly, a reduced number of recommendations were present to Corporate Governance, Audit and Standards Committee as still outstanding. These would continue to be followed up for implementation.

•         Risk Management – It was noted that, in the opinion of the Audit Manager, risk management for the Council was reasonable. Whilst a reasonable assurance has been provided, the process continued to require improvement to ensure that it was an effective management tool rather than just process driven. The Committee heard that the Council had in place Service Risk Registers and a Corporate Risk Register. Quarterly, the overall changes were reported to the Corporate Management Team (CMT) for review and scrutiny. Following this, the report was presented to Cabinet. CMT and Cabinet acted as layers of defence to ensure that risks had been identified and where necessary, actions taken to appropriately mitigate the risk. The Committee noted that a risk appetite statement had not been defined and agreed with Members. However, work was progressing in this area with a workshop being held and facilitated by an external consultant in order to define risk appetite for the Council.

During discussion, a question was raised regarding how the Council could gain full assurance in all areas. It was noted by the Committee that, as it was a risk-based audit, the Council needed to seek out areas of weakness, in order to make improvements and make it a better environment in terms of risk and control. Questions were also raised regarding risk management, procurement cards and an update was given on areas shown by the audit to have limited levels of assurance.

RESOLVED That:

(1)      the Audit Opinion given for governance, risk management and internal control for 2024/25 be noted, and

(2)      the self-assessment exercise against the Public Sector Internal Audit Standards (PSIAS) be noted.