This report presents the annual assurance report of the Chief Auditor required by the Accounts and Audit Regulations and the Public Sector Internal Audit Standards.

The Committee considered a report setting out at Appendix 1 the Internal Audit Annual Assurance Report of the Chief Auditor for 2024/25, as required by the Accounts and Audit regulations and the Public Sector Internal Audit Standards.  The report gave the Chief Auditor’s opinion on the overall adequacy and effectiveness of the organisation’s internal control environment, drawing attention to any issues particularly relevant to the preparation of the Annual Governance Statement.  It also set out key themes arising from the work of the Audit Team during the 2024/2025 financial year, and compared the audit work undertaken with that planned, summarising the performance of the Internal Audit function against its performance measures and targets.

The report explained that, based on the work completed during the year, the Chief Auditor had concluded that, whilst no assurance could ever be absolute, ‘Reasonable Assurance’ could be placed on the adequacy and effectiveness of the Council’s internal control framework in the areas audited in 2024/25.  The basis for the assurance opinion was set out in section 2 of the Annual Assurance report and the key areas for improvement identified during the audit work were set out in section 4.  The opinion did not imply that Internal Audit had reviewed all risks relating to the organisation and assurances should also be taken from other appropriate sources.

The report stated that the reasonable assurance reflected a significant improvement from previous years, with only 18% of audits receiving limited or no assurance in 2024-25, compared to 44% in 2023-24, 26% in 2022-23, and 38% in 2021-22.  The report provided a comprehensive overview of internal audit activities conducted in 2024-25.  A total of 17 audits, two advisory reports, and eight grant certifications had been completed.

The Committee noted that management responses within 15 days of Internal Audit issuing a draft report had fallen from 86% in 2023/24 to 62% in 2024/25, despite having improved from 2022/23 to 2023/24.  Managers were expected to meet the 15-day target on at least 75% of occasions where a draft report had been received. 

With reference to the section of the report which stated that the most commonly used channel for submitting whistleblowing referrals was the whistleblowing@reading.gov.uk email address, accessed only by Internal Audit staff, who triaged the concerns and, where appropriate, forwarded them to the relevant service for investigation, members of the Committee queried whether this mailbox had higher levels of security and encryption than other mailboxes, given the sensitivity of the information.  The Chief Auditor said that he would need to find out and report back to the Committee.

Members of the Committee also expressed interest in having some ‘Introduction to Internal Audit’ training, similar to that provided in the previous year, possibly prior to a Committee meeting.

Resolved:    

(1)       That the assurance opinion given by the Chief Auditor and the issues raised in the annual report be noted and the Committee’s thanks to the Internal Audit team for their work during the year be recorded;

(2)       That Assistant Directors be advised that the Committee placed a high reliance on Internal Audit and hoped that management responses would be more timely in future in responding to Internal Audit draft reports within the 15-day target timescale;

(3)       That the Chief Auditor find out the level of security on the whistleblowing@reading.gov.uk mailbox and report back to Committee members via email;

(4)       That the Chief Auditor organise training on Internal Audit for members of the Committee.