Audit and Standards Committee
Agenda Item 9
Subject: Internal Audit Annual Report and Opinion 2023/24
Date of meeting: 25th June 2024
Report of: Corporate Director, Corporate Services
Contact Officer: Carolyn Sheehan (Audit Manager)
Tel: 07795 335692
Email: carolyn.sheehan@brighton-hove.gov.uk
Russell Banks (Chief Internal Auditor)
Tel: 07824 362739
Email: russell.banks@eastsussex.gov.uk
Ward(s) affected: All
1.1 The purpose of this report is to give an opinion on Brighton and Hove City Council’s control environment for the year from the 1 April 2023 to 31 March 2024.
1.2 The report also provides members with an update on all internal audit and counter fraud activity completed during quarter 4 (2023/24) including a summary of all key audit findings.
2.1 That the Committee note the work undertaken and the performance of Internal Audit in 2023/24 and the resultant annual opinion of the Chief Internal Auditor.
2.2 The Committee note any significant control issues that should be included in the Council’s Annual Governance Statement.
2.3 The Committee consider whether the Council’s arrangements for internal audit have proved effective during 2023/24.
3.1 The purpose of this report is to give an opinion on the adequacy of Brighton and Hove City Council’s control environment as a contribution to the proper economic, efficient, and effective use of resources. The report covers the audit work completed in the year from 1 April 2023 to 31 March 2024 in accordance with the Internal Audit Strategy 2023/24.
3.2 All local authorities must make proper provision for internal audit in line with the 1972 Local Government Act (S151) and the Accounts and Audit Regulations 2015. The latter states that authorities ‘must undertake an effective internal audit to evaluate the effectiveness of its risk management, control and governance processes, taking into account public sector internal auditing standards or guidance’. Annually the Chief Internal Auditor is required to provide an overall opinion on the Council’s internal control environment, risk management arrangements and governance framework to support the Annual Governance Statement.
3.3 It is a management responsibility to establish and maintain internal control systems and to ensure that resources are properly applied, risks appropriately managed and outcomes achieved.
4.1 No assurance can ever be absolute; however, based on the internal audit work completed, the Chief Internal Auditor can provide partial assurance that Brighton and Hove City Council has in place an adequate and effective framework of governance, risk management and internal control for the period 1 April 2023 to 31 March 2024.
4.2 This opinion and the evidence that underpins it, is further explained in the full Internal Audit Annual Report and Opinion, Appendix 1.
4.3 The report highlights key issues for the year, including a summary of all audit opinions provided, key financial systems and other internal audit activity.
4.4 There is a separate report of Counter Fraud activity to be presented alongside the report.
4.5 A summary of the major findings from audit reviews completed during quarter 4 of 2023/24 is included in Appendix 2. Major findings from previous quarters have already been reported to Audit and Standards Committee.
4.6 Finally, Appendix A of the annual report sets out details of internal audit performance for the year, including details of compliance against the relevant professional standards.
5.1 The annual report has been informed by internal audit and counter fraud work carried out during the year which has included extensive engagement with officers and members.
6.1 The Committee is recommended to note the report and Internal Audit Service’s opinion on the Council’s control environment, consider whether there are any significant issues that should be included in the Council’s annual governance statement for 2023/24 and consider whether the Council’s system for internal audit has proved effective.
7.1 There are no direct financial implications arising from this report. Sound corporate governance, risk management and control are essential to the financial health and reputation of the Council.
7.2 The audit opinion has reduced from reasonable assurance to partial assurance and requires prompt and robust action to the findings from audit activities. These actions may require redirecting resources or additional resources. Additional costs, if any, that are required to address issues will be reflected in Targeted Budget Management Reports throughout the financial year.
Name of finance officer consulted: James Hengeveld
Date consulted: 31/05/24
8.1 The Accounts and Audit Regulations 2015 require the Council to undertake an effective internal audit to evaluate the effectiveness of its risk management, control, and governance processes, taking into account Public Sector Internal Audit Standards. Reviewing the work planned and completed by the Council’s internal audit function is a key part of the Audit and Standards Committee’s delegated functions.
Name of lawyer consulted: Victoria Simpson Date consulted 10.06.2024
9.1 There are no direct equalities implications.
10.1 There are no sustainability implications.
11.1 There are no other implications
Supporting Documentation
1. Internal Audit Annual Report and Opinion 2023/24
2. Internal Audit and Counter Fraud Quarter 4 Progress Report 2023/24