URL: https://rother.moderngov.co.uk/ieDecisionDetails.aspx?ID=1707

Decision Maker: Audit Committee

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: No

Purpose: To report on Internal Audit activity in the second quarter of 2024/25 and to provide a progress update on the implementation of audit recommendations made in earlier periods.

Content: The Audit Manager led Members through the internal audit report to 30 September 2024 that gave details of audit matters and any emerging issues, not only in relation to audit but risk management and corporate governance.  Progress on the 2024/25 Audit Plan was currently running a few weeks behind schedule due to a major overrun on a Levelling Up Fund and Programme Governance audit, the results of which would be reported to the Committee at the next meeting. However, the annual Governance Audits were now well underway and it was hoped that the rest of the Plan could still be delivered.   Five audit reviews were completed in the second quarter of 2024/25, although one of these (ICT Governance) was an audit brought forward from the previous financial year. Four of these provided good or substantial assurance. The other (Estates Income) only received minimal assurance. This assessment was due to the high number of control issues found and the potential loss of income if improvements were not made. An overview of the findings arising from these audits was given in Appendix A to the report.   Appendix B to the report updated Members on progress made on implementing the audit recommendations reported at the previous meetings. There were currently 13 recommendations in the ‘Old Years’ section, six of which related to longstanding issues and the rest were from 2023/24. A total of 11 recommendations had been resolved since the last quarter, although most of these related to recommendations made in 2023/24 rather than earlier years. It was, however, encouraging to note that many of the recommendations in the table showed signs of recent activity and all were now classified as ‘work-in-progress’.   Only one of the 10 recommendations made in the first quarter of 2024/25 had so far been implemented, but some progress had been made in the majority of cases. The remaining cases were yet to move forward due to resourcing issues.   The report also provided Members with updates on resolutions made at the last meeting as requested, which included:   •     Collection of Sundry Debtor Arrears - The Head of Corporate and Strategic Services had begun a project to review and improve debt recovery, with a project group having already met once. The ultimate aim of the project was to facilitate behavioural change by encouraging line management to take on the responsibility for pursuing their own debts. •     Collection of CIL Arrears - The Interim Head of Planning was to investigate the workload and staffing requirement for the management and collection of Community Infrastructure Levy (CIL). At any moment in time, the levy 'debt' could significantly alter as individual developments became liable for CIL, therefore the proposed report detailing the number of cases and amounts owed would be misleading and unhelpful. •     Climate Emergency - Three recommendations made at the Climate Emergency audit were currently outstanding and all were recorded as ‘work-in-progress’. The audit did not make any specific recommendations regarding resourcing; however, the new management structure had strengthened the Council’s resilience in the delivery of its Climate Strategy.   Four audits were planned for the fourth quarter of 2024/25 (Treasury Management, Creditors, Payroll and Waste Contract – RDC Client Control), the timings of which might need to be pushed back depending on workload.   Members were given the opportunity to ask questions and the following points were noted during the discussions:   •     a follow-up audit on Estates Income was planned for April 2025, with a report back to the Committee in June 2025; •     a report on the collection of CIL arrears would be brought annually to the Committee, to provide an overall picture; •     the Senior Leadership Team (SLT) had agreed a further 0.5 full time equivalent (FTE) officer for the management and collection of CIL and a 0.5 FTE officer for the monitoring of Section 106 payments; •     work was underway with legal services to pursue outstanding CIL payments and further spot-checks on progress would be undertaken; •     challenges faced within the Estates department had been longstanding through years of underinvestment and the full extent of those challenges had been identified over the previous six to 12 months. The SLT had recently endorsed further support for the department by way of extra staff and commissioning of an estate management software system. A Strategic Asset Management Plan had also been produced and adopted; •     it was suggested that an update on the staffing and work of the Estates team be presented to a Member Briefing and the opportunity for further information from that brought back to the Committee; •     ‘Making the Most of our Assets’ was one of the four priorities of the Council’s Fit for the Future programme and excellent progress had been made with the Estates department, using creative solutions; •     the district-wide project group established to review and improve debt recovery using the work carried out by internal audit, would cover many issues including people, process and accountability issues. The group would be undertaking a phased approach to looking at historic debt and stopping new debt accruing but this would not be a ‘quick fix’. The group’s progress would be monitored by the Corporate Programme Board; •     a detailed report on the progress of the Estates department after a period of two years would be welcomed; •     the Audit Manager planned to undertake a corporate debt collection audit in the new financial year to provide the SLT with an update on the progress made to improve debt recovery and the challenges that lay ahead. The results of this audit would be reported to the Committee in the normal way; •     Members raised concerns about other areas of work that the Council could be falling behind in. The Overview and Scrutiny Committee (OSC) monitored the performance of the Council’s Key Performance Indicators (KPIs) and the SLT also received reports from the Performance Board. A new set of proposed KPIs would be considered by the OSC in January, for onward recommendation to Cabinet; •     Members raised concerns that further car park charges were proposed within the budget consultation whilst there was still a high amount of outstanding debt to be recovered. It was important to achieve a balanced approach and income generation was part of the budget setting process; •     Members were pleased to note that the ICT Governance and Licensing Audits had gone well but were concerned that licensing fees had been listed incorrectly on the website. The Head of Environmental Services, Licensing and Community Safety confirmed that this had been rectified as soon as it had been brought to the department’s attention and that, although the information was incorrect, fees had been paid correctly; •     the licensing audit had shown that more invoices had been sent out than there were premises, meaning that it had not been possible to confirm that all live premises had been sent an annual bill; and •     the Council were currently in discussions with Pontins at Camber.   Members noted the positives in the report and were reassured that the SLT were dealing with the debt issues.                         RESOLVED: That the Internal Audit report to 30 September 2024 be noted.   (Councillor Thomas declared an Other Registerable Interest in this matter in so far as he was Chair of the Rother DC Housing Company and in accordance with the Member’s Code of Conduct, remained in the room during the consideration thereof.)

Date of Decision: December 2, 2024