Agenda item

BDO Internal Audit Update

Presented By:


At the Chairman’s invitation, Gurpreet Dulay presented the BDO Internal Audit Update. He explained that the annual plan dated from March 2020 and set out the indicative audit reviews that will be carried out throughout the year. The risk register on page 4 in the report highlighted the level of risk in each of the focus areas and outlined the risk. The Head of Service for each area in the Council had been consulted with to inform the audit plan for the year, along with the Governance and Risk Manager and the Chief Finance Officer. The draft plan had been approved by the Corporate Management Board (CMB) before the Covid-19 pandemic.


As the Covid-19 pandemic has undoubtedly caused a major impact on local authorities, the risk landscape has changed as a result of the financial challenges caused by lockdown. This would mean that some reviews may not go ahead as planned, as BDO will have additional workload to complete and unprecedented levels of staff sickness caused by the pandemic.


The internal audit progress report, which had not been updated since the report had been produced in March, showed that there were three outstanding areas in the 2019/20 audit plan. Firstly the review of asset management was almost complete, it had been drafted and BDO were awaiting to receive one response before completion. The disable facilities grant review would be completed in the next few days and the safeguarding review would need to be rescheduled given the impact of Covid-19, and BDO would arrange this with the head of the service.


Gurpreet confirmed that BDO would be on track to issue a statement of accounts in July. In terms of a sector update, IT and data protection showed a critical risk heightened by the Covid-19 pandemic which highlighted an increase in a dependence on technology for remote working and the increased risk of cyber security and fraud risk. There was also an increased financial risk due to the unplanned spending caused by lockdown, a risk in respect of staff wellbeing and continuity arrangements as Covid-19 was unexpected and continuity plans should be refreshed to reflect lessons learnt from the pandemic and in the likelihood that a second wave should occur in the future. Gurpreet concluded that page 33 of the report was outdated and a full update would be provided at July’s meeting.


In response to a question if BDO had considered the impact that Brexit, Covid-19 and the move to Unitary would have on the audit plan. BDO confirmed that a number of working days had been set aside to undertake work that would relate to the move to unitary; such as the transferral of budgets. In terms of Brexit, professional scepticism had been applied in the reviews and in the risk register, but was not a key focus area proven by the discussions with the Heads of Service or CMB. In response to whose responsibility it would be to declare the local authority safe and legal for Unitary, it was felt that the government would have the authority to determine this, but this would be clarified at a later stage. A Member asked if the Chief Executive for Northampton Partnership Homes (NPH) had been consulted with the proposed audits and it was confirmed that the Chief Executive had not been consulted with the Council had been in communication with NPH.


Members expressed that they would welcome a Members briefing on the public sector update, and that this could extend to all Councillors. The Chief Finance Officer agreed to discuss and arrange this with the Democratic and Member Services Manager.


The Chair thanked BDO for the update and shared that Members would understand the situation and would allow flexibility with the reviews given the unpredicted circumstances. He explained that there would be a need for the Chief Finance Officer and Chief Executive to review the plan and a revised audit plan would be brought before the Audit Committee at the next meeting for Members to consider and approve.


RESOLVED:  That the update is noted.


ACTION: BDO to provide a revised internal audit plan and statement of accounts at the next meeting.

Supporting documents: