Agenda item

Mr John Slater, Group Assurance & Audit Governance Manager at Nottingham City Council will join the meeting for this item.

The Committee considered a report of the Director of Corporate Resources, the purpose of which was to provide the Head of Internal Audit at Nottingham City Council annual report and opinion for internal audit work undertaken at East Midlands Shared Services (EMSS) for the year 2022-23.  The report also provided a progress update against planned internal audit work at EMSS for the year 2023-24.  A copy of the report marked ‘Agenda Item 11’ is filed with these minutes.

The Chairman welcomed Mr John Slater, Group Assurance & Audit Governance Manager at Nottingham City Council to the meeting.

In response to questions raised, Mr Slater reported that:

-         Internal Audit Service staffing levels at Nottingham City Council were not suitable for the long term.  Concerns had been raised internally, with the Chief Finance Officer. 

-         Unfortunately, staffing levels had continued to fall and recruitment had been difficult as salaries offered were not locally competitive.  This would be formerly reported to Nottingham City Council at some future date.

Arising from discussion, the following points were made:

(i)           Members expressed great concern that staffing issues continued to be having an impact on the completion of the EMSS 2022-23 audit.  This was not considered to be satisfactory, and Members raised concerns about what the implications of this were, for EMSS and for the County Council as a joint provider of that service.

(ii)         In response to a question, Members were reassured that for Leicestershire County Council’s Internal Audit Service, staffing levels had remained consistent for some time.  Whilst one member of staff had left, they were in the process of being replaced.

(iii)        It was noted that Nottingham City Council (NCC) had reported to the EMSS Joint Committee concerns about resources and plans to address these for the 2024/25 audit  However, the Joint Committee had not been satisfied and so had requested that a further report be provided at its next meeting in June.  The Director undertook to update the Committee on the outcome of those discussions.

(iv)       The Director of Corporate Resources assured members that discussions with senior officers at Nottingham City Council continued to take place on a regular basis and that the Council’s concerns had been escalated.  If the Joint Committee at its meeting in June continued not to be satisfied, it would then consider what next steps should be taken. 

(v)         Members were further reassured that Nottingham City Council’s internal audit service was not the only line of defence and that Grant Thornton had provided some assurance as part of its external audit. 

(vi)       Whilst recognising the assurance provided and plans for the 2024/25 audit, Members raised concerns that this did not address current concerns arising from the 2022/23 audit, or the outstanding audit for 2023/24.  Members suggested that urgent action was needed and that it would not be satisfactory to wait until completion of the 2024/25 audit next year. EMSS provided significant services across Leicestershire County and Nottingham City Councils, such as payroll, HR, finance and IT; all potentially high-risk areas.  Assurance that these services were operating effectively was therefore essential.

RESOLVED:

(a)  That the Head of Internal Audit (Nottingham City Council) annual report and opinion for internal audit work undertaken at East Midlands Shared Service for the year 2022-23 be noted;

(b)  That the progress update against planned internal audit work at EMSS by Nottingham City Council’s Internal Audit Service, for the year 2023-24 be noted;

(c)   That a letter be sent by the Chairman of the Committee to the Chairman of Nottingham City Council’s Audit Committee Chair outlining the concerns now raised.

(d)  That the Director of Corporate Resources be requested to provide an update to members of the Committee following the EMSS Joint Committee meeting held in June;

(e)  That a further update be provided at the next meeting of the Committee in September.