Agenda item

Internal Audit Progress Report Quarter 4

Report of the Director – Finance and Corporate Services


Mr Armstrong from BDO, the Council’s Internal Auditors presented the fourth Internal Audit Report for this financial year, which reflected progress made against the annual Internal Audit Programme. The report highlighted the completion of three reports and their findings as follows:


Fleet Management – the audit received a moderate assurance on control design and substantial assurance on control effectiveness. The review had looked at the operational effectiveness of the service and the climate change element, including the Council’s objective to move to net zero by 2030. Two findings were raised, a medium finding on the operational side, regarding periodic checks of agency drivers not being undertaken. The second related to the positive work already undertaken by the Council in trying to achieve its net zero target, including the recent conversion of 21 refuse vehicles to HVO fuel, and investigating future electrification of the fleet.   


Rushcliffe Oaks Crematorium – Income – the audit received substantial assurance on both the design of controls and on the effectiveness, with two low findings. One finding related to the timeliness of payments, with one invoice paid 140 days late, although it was noted that the level of aged dates was very low, and the Council worked proactively to recover those amounts. Secondly, on the performance reporting side for income collection, and it was recommended that a new KPI should be added to monitor the timeliness of payments.


E-Financials System Controls – the audit received substantial assurance for both the design of controls and effectiveness, with three low findings. One finding related to a specific privileged user account, where regular checks were not conducted, although there had been no adverse use over the year. Secondly, around checking changes to customer data, with a recommendation to add a monthly check. Finally, the user access review process, to check that the correct permissions were in place, and it was noted that a review had been undertaken in March 2023.  


Mr Armstrong concluded by referring to the quarterly Sector Update attached to the Progress Report.


Councillor Om commented on the user access reviews and questioned if they should be done every three or six months. Mr Armstrong advised that processes were already in place and this recommendation would be in addition to what was already undertaken.


Councillor Gordon Wheeler welcomed this very positive report, which highlighted how well the Council was working, and noted that the issues raised were minor ones and Mr Armstrong concurred, stating that very few Council’s received an overall substantial assurance, which Rushcliffe had.


Councillor Birch commented on the late invoice payments at the Crematorium, noted that although it was not a huge risk, one invoice had been paid nearly five months late and questioned if there were clear terms on the contracts, and incentives to ensure timely payment. Councillor Birch felt that given this was a relatively new service, it was important to have appropriate mechanisms in place to ensure timely payments. Mr Armstrong confirmed that there was a 21 day credit period on invoices, and it had been found that often late payments from funeral directors were due to customers not paying them. The Service Manager – Finance advised that this late payment was an isolated case, in general officers were happy with the controls in place and it went through the Council’s Debt Control Policy, which was generally enough to encourage payment, and the process would continue to be assessed.


Councillor Butler asked who was responsible for issuing invoices for the Crematorium and the Service Manager – Finance confirmed that it was the Crematorium, testing had shown that invoices were correct, reconciliations were in place, and the process would continue to be monitored.


The Vice Chair referred to fleet management, the steps being taken to achieve the net zero target, and the reference in the report from the consultants CENEX that the Council had made very little progress so far to reduce emissions from its fleet and sought clarification. Mr Armstrong confirmed that the Council had set an ambitious target of being carbon neutral from its own operations by 2030, from which its vehicle fleet would contribute 25% of emissions. It was important to note that the CENEX report was at a point in time, and since then considerable progress had been made, and the Group was reminded what a challenging area this was, and that this Council had achieved far more than many other councils.


In answer to a question by Councillor Wells related to the future possible electrification of the fleet, Mr Armstrong confirmed that there would be further challenges ahead, in terms of how far they could operate given the size of the Borough and in terms of the actual size of the vehicle required, as they were currently not available.


It was RESOLVED that the Quarter 4 Progress Report for 2023/24 prepared by the Council’s Internal Auditor was accepted.

Supporting documents: