Agenda item

This report summarises the work of Internal Audit included in the 2025/26 Internal Audit Plan up to the end of August 2025.  Two audits have been finalised and both received positive assurance opinions.  Two further audits have been issued in draft and will be finalised on receipt of the management responses.

Moira Mackie (Head of Internal Audit) briefed members on the update which included

a couple of draft audits and a few in progress. As the Internal Audit Plan was evolving during the year, audits for new risks identified would be included in each update.  She highlighted the school audits which involved the engagement of the schools’ finance and governance teams in developing the audit plan according to school calendar. She said her team visited the schools and met with school staff who usually became more responsive and helpful after understanding the purpose of doing audits.  Moira added that those recommendations that were not yet implemented would be mapped on the report and follow-up work would be on-going until they were sorted. Their status would be set out clearly on the final report before it was signed off.

Charlotte Moar (Independent Member) welcomed the positive report. She referred to one of the Limited Assurance audits in the June report on “Client Affairs – Draft” which had not yet received the management response and asked about any progress, as set out in the June report, about their response on actions required to address the recommendations made.

In response, Moira Mackie said the relevant audit was re-visited shortly after the June meeting and the recommendations were all agreed. The team had also agreed with the Finance Team a schedule to carry out follow-up work in January and an update would be provided in the next progress report.

Noting the issue of staff turnover was one of the challenges faced by schools as indicated across several updates, the Chair was concerned about knowledge transfer in LBHF schools and academies during the transition.

Moira Mackie acknowledged the situation and noted that there were resources within the school finance team to support schools experiencing skill set issues and help them keep on top of things like running a deficit budget. She noted there were shared resources amongst schools where, say, a business manager might work for multiple schools across boroughs.  When the shared arrangements now became clearer, there were benefits as work of different audits could also be pooled under the same business manager.

Responding to the Chair’s further concern about sharing this best practice of shared resources, Moira Mackie reiterated the helpful sharing between business managers from different schools at the school business managers’ forum she had attended previously. She said the team was mindful of ensuring the schools operated with the best finance and governance arrangements and encouraged them to share resources.  For example, schools were encouraged to do independent reviews for each other without worrying about securing additional funds to meet the cost. 

On the Chair’s further question about whether the auditors of other local authorities also tied in their audit cycles with the school calendars, Moira Mackie noted that school audits used to be carried out once every 3 years which taking into account the on-going follow-up work was almost a continuous non-stop exercise. Now the school audits were held once every 5 years unless there were specific issues warranting earlier review.   The tri-borough Internal Audit Team did the school audits across the three boroughs but only during term time when staff members were available.  The other restrictions included unexpected Ofsted inspections, or a quick turnaround for an audit report before some mergers occurred.

RESOLVED

That the Committee agreed to note the report.