The Audit Committee of Hammersmith and Fulham Council met on Monday 13 March 2023 to discuss the progress of the 2021-22 financial audit, review the council's risk management framework, and consider internal audit plans. The committee noted the progress on the external audit, reviewed the updated risk register, and approved the internal audit charter and strategy.

Audit Progress Report

The committee received an update on the external audit of the 2021-22 accounts from Andy Conlon of Grant Thornton, the council's external auditors. Mr. Conlon reported positive progress, with 75% of testing completed, although some delays were attributed to accessing information from the council's general ledger and collection fund subsystem. He noted that resourcing challenges within the public sector audit sector have impacted the timeline, but fieldwork is expected to be completed by March, with a report to the committee in June. The audit of the 2021 financial statements was nearing completion, with an infrastructure issue having been resolved. Councillor Patrick Walsh, Chair of the Audit Committee, acknowledged the hard work of council officers in supporting residents during the cost-of-living crisis.

Risk Management Highlight Report

David Hughes, the officer introducing the risk management report, informed the committee that the number of risks on the register had been reduced from 30 to 22 since the previous review. He highlighted reductions in risk scores for care standards and safeguarding, financial pressures on high needs budgets, and short-term budget pressures in social care. However, the risk score for housing repairs and contractor performance had increased, reflecting national issues with damp and mould. Councillor Ashok Patel, Chair of the Pensions Board, raised concerns about the accessibility of the council's business plan, which he stated is essential for effective risk assessment. Mr. Hughes confirmed that the business plan is published on the council's website and a link would be resent. Councillor Patel also queried the absence of whistleblowing arrangements from the risk register, which Mr. Hughes clarified is covered under the broader risk of fraud. Councillor Florian Chevoppe-Verdier, Cabinet Member for Public Realm and Lead Member for European Co-operation and Digital Innovation, commended the reduction in risk scores, particularly for care standards, and acknowledged the positive performance of nursing homes and care facilities.

Internal Audit Progress Report

Moira Mackey presented the internal audit progress report for November to February, noting that most audits had received a positive opinion. She highlighted that the committee would receive a clearer picture of school audits in June, as the council was exploring new ways to report themes and areas for improvement in schools. Councillor Patel questioned the three plus nine months audit plan, expressing concern that three months might be too short a period to identify and address issues. Ms. Mackey explained that this agile approach was adopted in response to the COVID-19 pandemic, allowing for greater flexibility and responsiveness to emerging risks. She assured members that the plan is reviewed quarterly with departments to ensure coverage of key risks and emerging issues. Discussions also focused on audit findings at Old Oak Primary School and Good Shepherd Primary School, where issues with evidence of service receipt prior to invoice payment were identified. Ms. Mackey explained that while checks are often made, they are not always adequately evidenced, and the council is working with schools to improve this. The lack of audits for the school fund since 2015 was also discussed, with Ms. Mackey explaining the practical difficulties schools face in finding individuals to review these funds. Councillor Paul Alexander raised concerns about the follow-up on issues arising from capital projects that lead to repairs, suggesting a need for more robust contract management and escalation processes.

Internal Audit Charter and Strategy

Moira Mackey introduced the internal audit charter and strategy, explaining that it sets out the purpose, structure, and reporting mechanisms of internal audit in alignment with public sector standards. She noted that the charter is refreshed annually and that the committee was being asked to approve it this year due to an upcoming peer review by a member of the London Audit Group. Councillor Chevoppe-Verdier inquired about the public accessibility of the charter, and Ms. Mackey confirmed it was part of the published agenda, with potential for greater promotion on the council's website. Councillor Patel suggested that contributions from all committee members should be welcomed for inclusion in representations regarding the charter. The committee approved the internal audit charter and strategy.

Dates of Future Meetings

The committee noted the dates of future meetings.