Agenda item

To consider and accept the report

·       To accept the report in accordance with the requirements of the Public Sector Internal Audit Standards for the 2025/26 financial year.

The report of the Audit Manager was submitted, expressing Internal Audit's view of the general management environment within the Authority during 2025/26 providing an annual conclusion on the overall adequacy and effectiveness of the Authority's Governance, risk management and internal control framework. It was noted that, overall, on the basis of the work completed during the year, the Council's arrangements operated at a level that provided reasonable assurance of their adequacy and effectiveness and that this view was based on a wide range of audits across Council services, together with relevant evidence from other sources of assurance, including the work of external regulators.

However, reference was made to several overarching management themes that had emerged. In particular, inconsistency in the implementation of controls, lack of managerial oversight in some areas, and weaknesses in the recording and documentation of processes and decisions. It was reiterated that some services also faced challenges in terms of capacity and resources, which could affect the ability to operate controls on a consistent basis – a significant proportion of audits having received "Limited" assurances during the year. While this did not undermine the overall conclusion of reasonable assurance, it clearly highlighted the need for a sustained corporate focus on strengthening internal controls and ensuring consistency across Council services.

In the context of performance, 88% of the audit plan was completed, which was slightly below the target of 95%. In addition, approximately half of the audits received assurance of "Adequate" or better – these results were consistent with the management issues identified and showed that there was room for improvement in the strength and consistency of controls.

Looking ahead to 2026/2027, it was reported that the performance measures had been reviewed to ensure they better reflected the impact and value of the Internal Audit service. It was noted that the service intended to move towards a more balanced approach to audit with greater emphasis on the efficiency of the service, the quality and impact of the work, and the relevance of the work to the Council's strategic risks. As a result, two key new measures would be introduced;

·        measuring productive hours as a percentage of available time gave a better understanding of how we used the service's resources. This would help the service to identify any inefficiencies and ensure that they were using the audit team's capacity in the most effective way.

·        a measure around strategic and corporate risks in the audit plan which would ensure that their work was more strongly focused on the areas that were most critical to achieving the Council's objectives. This would mean that the service aligned its work more closely with the corporate risk register and the Gwynedd Plan Priorities and Ambitions and highlighted more clearly how Internal Audit provided assurance over the most significant risks.

It was considered that this would give the Committee greater transparency and enable it to scrutinise not only how much work was being completed, but also how effectively that work supported governance and risk management.

It was reiterated that the Council continued to operate on a sound footing in terms of governance, risk management and internal controls, but that further improvements were needed to strengthen consistency and effectiveness across services. It was considered that the new performance measures would support this by essentially ensuring that the work of Internal Audit continued to develop as a value-adding function, focusing on the risk areas that were most important to the Council.

The members thanked the officer for the report

In response to a question on the detailed work and the good results of the Unit despite a low number of staff, and whether any news of progress or work had been done to meet these staffing levels, it was noted that a bid for an apprentice for the Unit had been successful as part of Cyngor Gwynedd's Apprenticeship Scheme.

During the ensuing discussion, the following observations were made by Members:

·        Grateful for the work which contributed greatly to the Council's governance responsibilities

·        That the Unit was supportive of the departments – highlighted shortcomings and offered guidance

·        That the information presented to Councillors was clear and honest

RESOLVED:

To accept the report in accordance with the requirements of the Public Sector Internal Audit Standards for the 2025/26 financial year.