Agenda item

(A report by Mark Harrison, Audit Manager – Lincolnshire County Council)

The Committee received the Internal Audit Progress Report for the 2025/26 year presented, by the Audit Manager, as the second interim update. Members were reminded that internal audit activity provided independent assurance on the effectiveness of governance, risk management, internal control arrangements and key financial systems across the Council.

The Audit Manager reported that substantial audit work had been completed since the previous update, with notable reviews covering Health & Safety Actions Implementation, PSPS Contract Management, Leisure Services Procurement, Section 106, and Funds & Grants Administration. The Committee noted that, following intervention by the new Section 151 Officer, all outstanding post?audit feedback questionnaires had been submitted, achieving a 100% completion rate. This represented a significant improvement on earlier performance and ensured that the audit team received full feedback from services to support continuous improvement.

The Committee also received an update on audits still in progress, audits at draft?report stage awaiting management responses, and the status of overdue and completed management actions. Overall plan delivery remained on schedule, with all work expected to be completed within the financial year.

The Committee undertook a detailed examination of the report. Members reviewed progress against the approved Internal Audit Plan and examined the assurance ratings, noting where findings indicated areas requiring strengthened controls.

A key area of focus was the Identification and Monitoring of Savings audit. Members were reminded that during the earlier review, Internal Audit was unable to confirm sufficient control arrangements due to gaps in processes at that time. A revised set of processes had since been introduced by management, and the Committee noted that the audit was being redone from the beginning, with the new methodology now in fieldwork stage. Members agreed that completing this repeat review was essential to provide assurance over the robustness of the Council’s savings delivery framework.

The Committee also examined audits at draft?report stage, noting that responses remained overdue for the Funds & Grants Administration and Planning review, despite a closure meeting having taken place in November. It was confirmed that this remained under follow?up and would be revisited in Quarter 4. Members stressed the importance of timely management responses to ensure the audit cycle remained efficient and assurance outcomes were delivered promptly.

The Committee further discussed the findings arising from the PSPS Contract Management audit. Members noted that although governance arrangements were broadly adequate, some internal control improvements had been identified, including the need for a check on whether councillor appointments to PSPS Board roles had been properly declared in published interests. The Committee requested that this be confirmed and reported back through the management action process.

During scrutiny of the Section 106 audit, the Committee noted that although allocation and monitoring processes were largely sound, the statutory deadline for publication of the Infrastructure Funding Statement had been missed earlier in the year and would now be addressed through management actions. The Committee expressed the importance of ensuring statutory deadlines were observed, particularly where financial transparency was a legal requirement.

The Committee also considered the timeliness and escalation of overdue or extended management actions. Members received reassurance that escalation procedures were proportionate and depended on the materiality of the outstanding issue. Where delays stemmed from capacity or workload pressures, these were monitored, whereas persistent non?engagement would be escalated to senior leadership and, if required, brought back to the Committee for further review. This approach was noted to support constructive improvement while maintaining accountability.

A further point discussed was the presentation of audit dashboards. Members noted that although the dashboard visuals were useful, some charts lacked narrative explanation, making interpretation challenging. The Committee requested that future dashboards include concise commentary to explain ratings, changes in status, or anomalies, to strengthen transparency and support Members in understanding complex datasets. The Audit Manager confirmed this enhancement would be adopted.

Members recognised the positive performance in several completed audits, such as Leisure Services Procurement, where substantial assurance had been given. The Committee welcomed the positive findings and acknowledged the professional support provided by internal audit in strengthening the Council’s assurance environment.

At the conclusion of the discussion, Members agreed that the report demonstrated meaningful progress and that the actions identified would continue to enhance the Council’s risk management and internal control environment.

Resolved:

That the Internal Audit Progress Report be noted.