To consider the SWAP Quarter 3 2018/19 Activity Report.
· SWAP Report of Internal Audit Activity – Q3
· The Assistant Director, SWAP, continues to meet Directors and service teams
· Some delivery issues have been encountered in arranging timely meetings or agreeing actions. Greater engagement is required.
· There is a need to ensure that clients realise the added value that can be provided by SWAP
· Three areas of work have been given partial opinions
o Section 33 Agreements – a number of agreements were not in place or signed promptly. Of seven areas audited, only one had the appropriate agreement in place. This highlights a lack of governance and oversight by the Joint Partnership Board.
o Members’ Expenses – the policy in place was appropriate and the Trent system for submitting claims was effective. A number of failed licence and insurance checks were found demonstrating a lack of governance and rigour in the checking of claims. There had also been a failure to publish online for some periods and some claims lacked key information.
o Crickhowell High School – the School had failed to notify the Authority of monthly spend and of an increasing deficit. The deficit had not been licensed. There were inconsistences in costings that were not reflective of spending.
· The Assistant Director proposed continuing to report audits with partial opinions to Audit Committee but monitoring of recommendations would be undertaken by the Internal Audit Working Group which was to be re-established
· The Internal Audit Plan, approved by Audit Committee annually, does not accommodate reactive work
· An audit of the main accounting system was to be deferred to Q1 2019/20 as a new financial system was in the process of implementation
· Overall, delivery of the Plan was on track
· The Committee challenged the partial opinion on Crickhowell High School – this had been the subject of a scrutiny meeting and it seemed as though the position had deteriorated since that time. The school had many successful aspects although there were concerns in some key financial areas, hence the partial opinion given.
· The Committee remain concerned regarding the overall level of school budget deficits. The Section 151 Officer reminded Members that a process was in place to licence deficits. However, there was the wider issue of rising deficits – individual schools could be subject to scrutiny but the wider issue could only be resolved by the Council. The Portfolio Holder informed the Committee that the Head of Schools, supported by Finance, had initiated significant intervention in some areas.
· There had been an item regarding Section 33 Agreements on the Risk Register in 2017 with a new process implemented in 2018 to mitigate that risk. It appeared therefore, that this risk had not been managed.
· It was suggested that the Authority needed to be aware of the potential impact on one area of using a successful professional to support other areas
· The Committee asked the Assistant Director if SWAP was providing good value for money and whether a better resource was being provided? The Assistant Director reported that SWAP was more inclusive with greater benefits in terms of support, systems and resources. In terms of delivery, the same resource was provided to the Authority. The Section 151 Officer confirmed that there would be no budget cut for internal audit services. The Authority was part owner of SWAP but distance was provided between the function and the Authority. Internal Audit continued to provide approximately 1000 days of service.
· Members had been aware that there had been a lack of engagement by services at the beginning of the new arrangements and questioned whether this had been resolved. Relationships were developing but there remained issues in some areas. If this continues the matter will be referred to Audit Committee. Meetings with the senior management team have improved. The Chair agreed to discuss the issue with the new Chief Executive once she had taken up post.
· The Chair would discuss issues of engagement by service areas with Internal Audit with the new Chief Executive once she had taken up her post.